Europe Is Corrupt

“But just because Governments don’t regulate the important areas properly, doesn’t mean they don’t regulate other areas excessively!”

I don’t see how I can argue with that – well said!

There is merit in your point Ink.

Regulation of cross-border activities is a legal black hole – for instance, who regulates internet companies like Yahoo? The French think they do of course, but so do the Americans. The reality is that international law has lagged behind international trade.

But just because Governments don’t regulate the important areas properly, doesn’t mean they don’t regulate other areas excessively!

mongu,

I think you missed the point I was trying to make. The way I see it Liberalism, as it was growing into a true ideology, spent so much of its time making sure there were no government controls on business and on people’s lives that it forgot to control business’ impact on our freedom. Also, Liberalism could never forsee how powerful large corporations and multi-nationals would get and therefore could never come up with a philosophy for their regulation. This is why not even the US government can control the large multi-nationals which are registered in the US – they can simply pay for a congressman’s election campaign (or the president’s) and weasle their way out of any problems. Moreover, companies like Lockheed Martin or GM Motors are among the largest lobby groups in the US and anyone who knows anything about US politics will know how important lobby groups are.

Liberalism wasn’t designed with this in mind and has created an atmosphere conducive to it. Ironically, these large corporations are now impacting on the freedoms of more incividuals that any government is and the Liberal Democracies are in no position to stop it.

Ink,

You could argue that liberalism works fine in the economy, it’s just that countries shy away from it due to corruption.

The whole point of Governments is to Govern. They are self-fulfilling monstrous beaurocracies. Their raison d’etre is to invent red tape and restrictions, to introduce laws and make themselves important. The best example is the EU – those guys have wet dreams over rules and regulations governing the curvature of bananas!

So one big reason for corruption is that Governments stick their noses everywhere and make life difficult for everyone – hence bribes, to grease the wheels. As an example, if some poncey inspector comes to your shop and tells you he will close you down because your scales are calibrated in imperial not metric, you might try to pay him off. And there would be nothing wrong in trying to do that (unless you get caught ;))

So…less and smaller Government intrinsically means less corruption, all other things being equal. The trouble is, other things rarely are equal. The disparity in education and sophisticaton levels masks this effect.

At any given level of national wealth and development:

BEAUROCRACY IS DIRECTLY PROPORTIONAL TO CORRUPTION.

“How many companies put wealth back into YOUR community? Some will, but most won’t.”

Most of the local ones do, through sponsorship of sports, and arts and crafts, however I think going into a third world country where wages are pathetic, the least a company could do is improve the local infrastructure a bit… even if it is just new roads or access to clean water… they don’t have to run the place but considering the levels of poverty in some of the places they choose to do business in it would certainly be in their interests to be the good guys.

Mongu,

Basically I think what you’ve highlighted with the Zambia case-study is that when looked at from any one point of view the actions appear to be justifiable. however, when the system is viewed as a whole it becomes clear that it propogates the impovrishment of poor countries and further increases the wealth and power of the rich and powerful ones.

Liberalism is all well and good and but even liberals agreed that controls had to be put in place to control government in order to protect the individual. Applying liberalism to economy is a whole different ball-game. Nobody puts any kind of controls on large corporations, well, not ones that they can’t get around by funding a senator’s election campaign. Liberalism – great. Liberalism applied to economics – sucks.

Ivan.

I basically agree with you.

But consider this: Sometimes, the companies offering Ministers millions for tax deals – Well, they sometimes have little choice. In the Zambian privatisation process, the ZPA (Zambian Privatisation Authority) was headed by Francis Kaunda, the son of the ex-President Kenneth Kaunda.

His position was that he wasn’t really bothered which deal was best for the Country, he was more concerned by how much was diverted to him personally.

So…you’re a bidder. What do you do? If you don’t give Kaunda a few million, you will lose.

So you have to bribe a Minister just for him to do his job. Gosh, aren’t these Companies so wrong!!

As a footnote, the most serious bidder (Anglo American) pulled out citing excessive irregularities and the eventual main winner has messed everything up. They should not have been awarded the sale, but they were more amenable to paying off Kaunda.

Originally posted by GarryB
“Do you still blame the Western companies for all these problems?”

All, no, I never said they were responsible for all of the problems.
Considering most of the countries they take the wealth out of, very little is put back into the communities it is taken from don’t you think perhaps the locals might use force to get bribes to spread the wealth around?
Not every country has personal greed in their culture yet, sometimes communal needs should be recognised. I see it took the women of a village to threaten to take off all of their clothes and wander around completely naked before Shell would give in to their demands that some money be used to build schools and hospitals nearby. (It worked because in the local culture such an act would be outragous and very embarrassing for the largely male local workforce).
With it spending billions every year to explore new cleaner fuels and on pr to look like a nice friendly company, you’d think they’d have done it on their own initiative…

How many companies put wealth back into YOUR community? Some will, but most won’t. That’s why companies pay taxes. And in Zambia, corporate tax is very high (nearly half the profits).

Also, in this particular case, the Mine funds the local school, funds the local road repair programme, runs a few community facilities (bowling club, tennis club, golf club). As a freebie, all local workers are entitled to (and receive) subsidised housing as well as toilet paper and a nig sack of meal. And a final salary pension.

The reason, is that without these “perks” the workers would not be able to work effectively. They are paid enough to buy what they need, but the economy is too inefficient. You actually can’t buy toilet paper in a town of 100,000 people unless a local shop finds a “bargain” purchase.

Starting to appreciate how “grey” the situation is?

Hence the fundamental unfairness of all and sundry blaming “greedy” or “exploitative” Western companies all the time. Of course, they can’t REALLY have a go at the government – all the ministers are black so are therefore beyond reproach!! I’m not being sarcastic (much) about that. It’s a deportation offence to criticise the government in Zambia.

I totally agree Ivan!

Mongu,

“So…government can’t afford to pay policemen, so they get money in other ways.”

True.

“Same bankrupt government thinks nothing of ministers mysteriously having millions, or Presidents flying around on a Gulfstream V.”

Some companies think nothing of paying government officials in client states large sums of money in order to win better tax deals and sometimes to illegally breach local employment and minimum wage laws.

“Do you still blame the Western companies for all these problems?”

The way I see it the blame should be divided three ways:

1. The governments of the countries, like Indonesia, in which large multi-nationals operate.

2. The companies themselves.

3. The governments of countries in which large multi nationals are registered who put pressure on the governments of weaker countries in order to gain a better deal for their multi-national companies and therefore increase their economy and tax revenues.

Hang on – might have a fourth to add:

4. The world bank and the IMF and the WTO which punish stringently any debt or trade abuses by little nations but allow countries like the UK and the US to massively subsidise their own manufacturers, agri-business etc and to evade debt repayments for decades on end.

“Do you still blame the Western companies for all these problems?”

All, no, I never said they were responsible for all of the problems.
Considering most of the countries they take the wealth out of, very little is put back into the communities it is taken from don’t you think perhaps the locals might use force to get bribes to spread the wealth around?
Not every country has personal greed in their culture yet, sometimes communal needs should be recognised. I see it took the women of a village to threaten to take off all of their clothes and wander around completely naked before Shell would give in to their demands that some money be used to build schools and hospitals nearby. (It worked because in the local culture such an act would be outragous and very embarrassing for the largely male local workforce).
With it spending billions every year to explore new cleaner fuels and on pr to look like a nice friendly company, you’d think they’d have done it on their own initiative…

Yes, I agree. The rights of the worker are important.

But we’re back to square one – its up to the governments of these countries to protect its people, not Nike or Gap.

Governmental failure is the main reason for all the problems. Let me give you a real world example:

A copper mine is privatised in Zambia. It spent 20 years loosing money under Government ownership, because the state took cash out of the business and didn’t invest any back.

Anyway, said mine is now in private hands. The new owners mine the copper in the form of “crushed” ore, that is lots of small boulders. It needs to be concentrated (finely crushed) as the next step in the process. So the boulders are loaded into lorries and driven about 20 miles to a concentrator owned by another company. The mine does have a private railway line, but all the locos are broken (they were broken when the new company bought the mine and they haven’t fixed them yet). Every four or five miles on the road, though, there are armed police roadblocks. Around the time of the month the police get paid, the roadblocks expand in number. They stop the lorries and fabricate reasons for fines to be paid. The sort of “oh look, your rear offside indicator lamp is broken” accompanied by the sound of a boot smashing the lamp.

At least, that happened at first. Now, they just ask for cash outright.

So….privately owned, Western managed company ends up paying hundred of thousands of $’s a year in bribes to the police, otherwise they would suffer big production losses. A bright manager from the UK decides to buy the police a few portakabins, well outfitted, as a “gift”. They provide shelter from sun and rain and are well received. So the bribe payouts are less now; the police even wave through the white managers and their families, because they know what side their bread is buttered.

So…government can’t afford to pay policemen, so they get money in other ways. Same bankrupt government thinks nothing of ministers mysteriously having millions, or Presidents flying around on a Gulfstream V. Do you still blame the Western companies for all these problems?

“Eg. the average Shell worker in Alaska or the North Sea is pretty certain to get better terms and conditions than their Nigerian counterpart. Same applies to Reebok, Nike, Gap or whoever.”

Yes, but at the end of the day Shell can only go where the oil is… Reebok, Nike, Gap or whoever are targetting countries that are both poor and have weak or “negotiable” unions and/or trade or health and safety laws.

Also Alaska and the North sea would be bound by US and UK trade laws, which improve safety and conditions for the workers.
Perhaps instead of just trying to spread democracy to the world it would be better to spread better working conditions and health and safety laws and proceedures…

So, the job of the government is tough. Did you ever think it was otherwise?

Equally, governments in development countries are immensely pressurised by allowing Reebok-like behaviour because such a company at leasts ‘invests’ in that country. No matter how badly the workforce is exploited, at least it keeps a large number of slum dwellers occupied with other things than either crime or hustling (either micro-corruption or living by the darkest pit of no-currency black economy) to stay alive.

Nice byproduct is that those workers are effectively banned to organise in any way by their employers, and that they spend most of the time in the factory. Not much chance for them to organise a truely proletarian-style revolution against the government.

Mongu,

“Yes, but the point is that Reebok only does these things because they can. A business is amoral – it merely seeks to make money. The task of regulating business and safeguarding individual rights, in any country, is the job of the government.

So the blame is at least 50/50 – Reebok do if through greed, but the governments involved also do it through either greed, tribal/religous malice, or incompetence (take your pic).

It’s funny that campaigners don’t ask for say, the Indonesian Government, to be held accountable but they don’t hesitate to condemn Reebok.”

I beleive that the Indonesian Govt. and others are under immense pressure from the WTO, the World Bank and the host governments of those companies (like the US and the UK) to maintain “Free Trade Zones” where there are almost no employment rules. It would be more appropriate to demand accountability from your own govt (if you happen to live in a powerful western economy) if it is forcing less powerful nations to do amoral things.

Any “morality” a business has is pragmatic. Businesses behave differently in different countries, according to what is acceptable.

Eg. the average Shell worker in Alaska or the North Sea is pretty certain to get better terms and conditions than their Nigerian counterpart. Same applies to Reebok, Nike, Gap or whoever.

“A business is amoral – it merely seeks to make money. The task of regulating business and safeguarding individual rights, in any country, is the job of the government. “

Bull.

A business has as many moral responsibilities to its employees as it does to generating returns for shareholders… if you can’t hold onto your staff you won’t be in business very long… or you won’t be able to do a good job… high turnover companies (ie high job turnover) are the worst… always working with newbies…

Good businesses are not amoral.

Not every company has its products made in sweatshops in countries with high unemployment rates.

It’s a “perceptions” index based on feedback from people doing business in each country. A full breakdown of the methodology is given on Transparency International’s website:

http://www.transparency.org/cpi/2002/dnld/cpi2002.methodology.pdf

Interpol reports maybe ?