The new corruption
by Tom Sullivan
It doesn’t take a rocket scientist to figure out the system is rigged. Sen. Elizabeth Warren makes that point at every opportunity. But her most recent interview about that with Thomas Frank in Salon shifted too quickly from philosophy to process. Warren would rather talk about how the rigging hurts working people. She wants to explain how the system is rigged and by whom:
The system is rigged. And now that I’ve been in Washington and seen it up close and personal, I just see new ways in which that happens. But we have to stop and back up, and you have to kind of get the right diagnosis of the problem, to see how it is that—it goes well beyond campaign contributions.
Indeed it does. But “the question that lies at the heart of whether our democracy will survive” isn’t a matter of process or policy.
Janine Wedel comes closer to the mark in an excerpt (also in Salon) from her book, “Unaccountable: How Elite Power Brokers Corrupt our Finances, Freedom, and Security.” Everyday people know the system is rigged better than the elite. Wedel sees it in the comments section of Transparency International’s annual rankings of corrupt countries. “Ordinary people have an instinctual grasp of the real nature of corruption and the inequality that often results.” The United States, they believe, is “grievously under-scrutinized.”
Research out in 2014 shows just how gamed it really is. Two political scientists looked at 1,779 policy issues hashed out from 1981 to 2002 and found that policies widely supported by economically elite Americans were adopted about forty-five percent of the time. If these same Americans indicated little support? Eighteen percent. They write: “The central point that emerges from our research is that economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while mass-based interest groups and average citizens have little or no independent influence.” Lest you blame the typically business-oriented Republicans, consider what one of the researchers said in an interview: “Both parties have to a large degree embraced a set of policies that reflect the needs, preferences and interests of the well to do.”
That the system is rigged resounds worldwide. There’s a documented and striking loss of confidence in formal institutions, from governments, parliaments, and courts to banks and corporations, to the media. Apparently, people feel that their public institutions and leaders now merit even less confidence than in the past.
The source (or at least the symptom) is the unaccountability at the top, Wedel argues.
Whether it’s the behavior of public figures or the behavior of public institutions, the new corruption is anchored in unaccountability. Unaccountability, as we shall see in the next chapter, is structured into the DNA of many of today’s corporate and governmental organizations. It is an essential but incomplete condition for the new corruption—the violation of the public trust.
Not having read that chapter for Wedel’s view of organizational DNA, here’s mine. Limited liability—the veil of personal immunity—is a core feature of the modern corporation most of us spend our lives working for. The all-holy Market may impose some external economic discipline on business. But personal unaccountability holds together the strands of corporate DNA. It is no small irony that the most well-heeled servants of the dominant business model so vigorously promote personal responsibility—for others. The corporate form has become the water we swim in but can no longer see when seeking a diagnosis for the widespread corruption both Wedel and Warren identify. If capitalism contains the seeds of its own destruction, as Marx believed, are those seeds produced by the very way we structure our businesses?
Can we immerse ourselves for years on end in a modern business culture suckled on the “morality” of Ayn Rand now taught in business schools, where the self answers to no one, where greed is good, where the bottom line rules, where human beings are “resources” to be consumed, and not be corrupted by it? Think a few motivational posters, a lofty mission statement, or an hour at church each Sunday seeking a higher power will neutralize 50-60 per week spent in service to a different god?
Professor Donald McCabe’s 2006 Rutgers study of cheating behavior found that at the business school level:
Fifty-six percent of graduate business students admitted to cheating … while only 47 percent of their non-business counterparts confessed to it.
Both figures should be shocking.
Duke’s Fuqua School of Business disciplined 34 students for cheating in 2007. McCabe explained to reporters:
“They’ll argue that they’re just emulating the behavior they’re seeing in the corporate world; they’re acquiring a skill that will serve them well when they’re out there,” McCabe, 63, said in an interview. “Getting the job done is the important thing. How you get it done is less important.”
Yves Smith went further, sniffing at the idea that ethics courses would make any difference:
“… American elites are openly corrupt. You can see it with the revolving doors between regulators and top industry jobs, the way CEOs and top politicians tell astonishing lies whenever they are in trouble, the weird combination of precision on inconsequential details versus the carefully coached combinations of misleading but not untruthful answers and “I don’t recall” when you sure as hell know they do remember, the way the press is so thick with propaganda that it takes an Enigma machine to pull out any real messages. So with those role models, why should we expect business school graduates to be paragons of virtue? The are aspiring Masters of the Universe. They are smart enough to see what the real game is, and the message conveyed by the business press and who rises to the top in large organizations today is far more powerful than any lecture, no matter how well or frequently delivered.”
Especially when Democrats and Republicans and authorities across the globe let them get away with anything so long as the donations keep flowing, the doors keep revolving, and accountability is for suckers.