Tuesday, November 18, 2008

Capitalist Theory of Corruption

The theory - first proposed by George Hiram Arbuthnot17 - that corruption has been a prime ingredient of human progress and remains an elemental component of economic development in capitalist societies.
Oxford’s famed dictionary defines corruption as moral depravity, but Arbuthnot disagreed, arguing that murder, abandoning children, and spreading AIDS were morally depraved but we wouldn’t normally describe them as corrupt. The definition he proposed was the acquisition of power or material advantage through a betrayal of trust; and he gave some intriguing illustrations: lobbying a politician was permissible, murdering him illegal, bribing him corrupt; impartiality was desirable, favoritism inevitable, nepotism corrupt; and so on.
Corruption has probably always been with us, but Arbuthnot was not concerned with tracing its origins or assessing its role in human psychology. His aim was to expose it as one of the fundamental pillars of our way of life.
The corrupt, in his view, have always been the breakers of moulds, the iconoclasts, the novel thinkers and doers, the darers, the explorers and the ruthless. Cortés conquered Mexico by lying to his host18, taking him prisoner and destroying his realm19 . Pizarro performed the same feat in Peru. England lied, swindled and murdered her way to domination of half the world with the help of carpet-baggers, slavers, religious charlatans and power-crazed politicians out to build a reputation.
Not everyone, even of their own kind, thought the pilgrim fathers such respectable creatures. “’Tis a great misfortune,” writes one of them, “that most of our travellers who go to this vast continent in America, are persons of the meaner sort, and generally of a very slender education.”20
Locals - the inaptly-named Indians - treated the newcomers well until their hospitality was repaid with such cheating, hostility and viciousness that they could do no other than try to repel the invaders. “They really are better to us than we are to them,” our author continues, “...they always give us victuals at their quarters and take care we are armed against hunger and thirst; we do not so by them, but let them walk by our doors hungry....We look upon them with scorn and disdain, and think them little better than beasts in human shape, though if well examined, we shall find that, for all our religion and education, we possess more moral deformities and evils than these savages do or are acquainted withal.” One is reminded of Rudyard Kipling’s pithy appraisal of Gunga Din:
“You’re a better man than I am...”
By the time Lawson wrote up his travel adventures in the Carolinas, the natives he described and others like them had seen their women raped, their sons enslaved, their villages burned, and vast tracts of land sold from beneath their feet “...in consideration for valuable parcels of cloth, latchets, beads and other goods...”21
Property prices on the eastern seaboard have risen a little since then.
“The conquest of the earth,” opined Conrad, “which mostly means taking it away from those who have a different complexion or slightly flatter noses than ourselves, is not a pretty thing....”22
Arbuthnot’s familiarity with the details of colonial conquest led him to suspect that modern capitalist societies stood on corrupt foundations - an idea that he was to spend most of his academic life examining. His research focused primarily on the period of fully-fledged capitalism, roughly from the late nineteenth century to the present. With the help of an admiring coterie of radical students - who idolized him - he assembled a unique collection of case studies on corporations that had benefited from corrupt practices. Regrettably, like Freud with many of his patients, he was obliged to conceal the identity of those he studied to protect himself from ruinous litigation, which meant that his results could not be independently verified. Even so, he spent much of his life at PISS fighting off law suits from firms and individuals who claimed to recognize themselves in his work.
One of Arbuthnot’s most celebrated cases involved a firm he called International Home Machinery (IHM) which began life as a manufacturer of domestic refrigerators. The company was founded by Irving Mountebank and Eric Pilfer23 two former shop floor operatives at Thornton Refrigerators which was then the dominant brand in the US market. IHM succeeded in establishing a toehold in the market but then found itself losing ground as Thornton reacted to the competition by increasing its advertising, bribing retailers with loyalty discounts and launching a price war potentially ruinous to IHM. Mountebank and Pilfer, who had taken IHM public, sold out when the going got rough; and in their place the Board appointed former traveling salesman Bert Advent as president. Advent’s qualifications for the job were unimpressive but he was known to be hard-nosed, ruthlessly competitive and unafraid of ethical compromise in pursuit of a sale. His plan to topple Thornton was ingenious. He launched an IHM product range identical in every detail to Thornton’s best selling lines - even down to the labeling. No casual observer could distinguish between the machines. Even retailers thought they were selling Thornton product. Only one problem: the IHM copies had built-in flaws: motors overheated; cooling pipes leaked, doors fell off, thermostats failed. A few months after Advent’s faulty copies reached the stores, complaints began flowing in. Before long, the press smelled blood: Thorntons, they hinted, was in financial trouble and in order to save money was compromising on product quality. The firm reacted quickly, offering a free replacement to every dissatisfied customer, but its reputation was shot. Sales plummeted, the stock price nose-dived, and within a couple of years IHM had bought out Thorntons and effectively closed it down. IHM went on to become the largest and most trusted refrigerator supplier in the world. According to Arbuthnot, IHM’s story demonstrated how ingenuity in the service of corruption can give dynamic firms the edge in competitive markets.
That this is well understood in the world of commerce will be clear to any attentive reader of the business pages of the serious newspapers which are riddled with hints, suggestions and occasionally - where the evidence is clear - accusations of malpractice by company executives and government officials.
Early objectors to Arbuthnot’s theory pointed out that if he was right, then capitalism would be at its best in the most corrupt societies - a patent absurdity. But Arbuthnot responded that this was a misunderstanding. Universal corruption simply ruined everyone and produced either chaos or its obverse, repression and tyranny - circumstances directly opposed to the stability needed for a properly functioning market economy. Capitalism, by contrast, required most corporations and most of society to observe the unwritten laws of honesty and integrity. Few prospered in the long run; but their general probity was what allowed the creative few to bend the rules; and what gave rise also to the commodification and exploitation of labour, and to the triumph of wealth concentration over wealth distribution, of resource extraction over environmental conservation, of Mammon over Mankind.
Arbuthnot himself was a complex and somewhat eccentric figure. Born in South East London, the son of an Ethiopian father and Vietnamese mother, he grew up in a multi-ethnic community of working-class, first-generation immigrants and refugees. His fascination for languages and the use of language began early; and his mixed racial origins gave him entry to many different ethnic and social groups in the area of his home. By the time he won a scholarship to Oxford - only the third to do so from the inner-city school he attended between the ages and twelve and eighteen - he was fluent in Amharic, Vietnamese and French as well as English, and had acquired the rudiments of several other languages including Punjabi, and Polish. He met his wife Greszyna at Oxford where she was employed as a college cleaning lady. She later, of course, became one of the most successful plastic artists of her generation as well as a successful actress and founder of the influential Art Renouvelé movement of the sixties. Commenting on the marriage after his wife’s death in a car accident at the early age of fifty-eight, Professor Arbuthnot had this to say: “Greszyna and I made love the first time she came to clean my room at Oxford. And we made love an hour before she died. Throughout thirty-four years of mutual support and companionship, we never tired of bonking each other. It was the basis of our relationship. Men dream of having a sexual companion like Greszyna, and I was lucky enough to have the dream fulfilled. If I have ever in my life attracted envy, she was the reason.”
After taking a brilliant first in Amharic language and literature24 and gaining a fellowship at All Souls, Arbuthnot came to international prominence with two books, “The aetiology of allophylian languages - a study in the decline of meaning,” and its sequel, “From multicolour to monochrome”, a historical analysis of the impact of language on vision which concluded shockingly that, after a long efflorescence between the dawn of history and the mid 1950s, our imaginative and intellectual horizons, as reflected in what we say and see, are now shrinking at roughly the same rate as the polar ice caps.
Arbuthnot would probably have remained at Oxford had it not been for the commotion that followed this second work, which aroused a volatile blend of controversy and ribald mockery. Students in Oxford demonstrated noisily outside the gates of All Souls, and hurled eggs at him during his weekly lectures at the Taylorian Institute. Opinion columns in the media prosecuted and defended him with equal vigour. Pickets at the West End theatre where Gryszyna was appearing as Madame Ranevsky shut down performances, forcing the management to replace her with an understudy. In the end Arbuthnot gave in to pressure from his university colleagues and resigned his fellowship.
As so often happens, American academic institutions proved less squeamish than their staid British counterparts, and Arbuthnot’s disgrace resulted in a flood of offers for his services from across the Atlantic.
After a brief spell as a visiting professor at Yale, he was offered a tenured professorship at PISS, initially in the department of linguistics. Two years after taking up the post, in an open letter to the Connecticut Journal of Palaeography , he announced that he had abandoned linguistic science, having concluded that the store of meaningful statements about language was exhausted and replenishment improbable. The remainder of his life he devoted to corruption - the field for which he is best known. At first PISS reacted adversely to this unilateral role change and tried to revoke Arbuthnot’s professorship; but his employment contract, leak proofed by New Haven litigation guru Max Sprackett, would have made the cost of paying him off ruinously expensive for the institution. Later, Arbuthnot took delight in recalling PISS’s failed efforts to fire him which he cited as corroboration of his corrosive view of capitalism. “I reneged on my contract, but I won anyway,” he was fond of saying. “I myself am corrupt insofar as corruption is available to me.”
A new phase of Arbuthnot’s career now began which eventually led to a reconciliation with PISS and accession to the Chair of Semiotic Casuistry which was created specially for him. Over the following years, he produced a stream of books and monographs, the most important of which is his seminal “Double Dealing and Double Dutch” a monumental two-volume attempt to demonstrate that capitalism flourishes best in societies openly hostile but covertly tolerant of corruption. Most of the first volume is devoted to addressing what he called the “blithe assumptions” of Max Weber and later Richard Tawney in their attempts to equate the rise of capitalism with the Protestant Ethic.25 Weber thought that protestantism sanctioned wealth as the reward of ascetic devotion to work. Tawney, who disapproved of acquisitiveness, tried to reverse the equation by positing an accommodation of religion to the capitalist ethos. According to Arbuthnot, neither understood the power in the European Christian tradition of biblical strictures against wealth. Every Christian in Europe was brought up with the idea that personal enrichment was sinful. It was easier for a camel to pass through the eye of a needle than for a rich man to enter into the Kingdom of God.26 Love of money was the root of all evil.27 He that hastened to make riches should not go unpunished.28 Etcetera.
Jews, who interpreted their Torah differently, had no problem with believers getting rich provided they observed the requirement to share a portion of their good fortune with those who had too little wealth or none at all (a mitzvah). Hence why Jewish prosperity, which is open and generous, struck Christians as the moral equivalent of an alliance with the devil; and also why lovers of gold like Shylock, Volpone, Uriah Heep, and Scrooge - are counted among the villains of European culture.
Protestants - and puritans most of all - advocated not personal enrichment but cooperative productivity: work for the good of all. Even Adam Smith’s invisible hand was supposed to promote the general welfare.
If opulence was illicit and its getting corrupt, the desire for it had to be concealed, or at least cloaked in dark puritanical cloth. And so riches were best accumulated underground, out of sight of men - and of God.
In the United States, home of capitalism, the founding fathers and their descendants rebelled against their puritanical forefathers (as children do) and publicly set personal enrichment on a pedestal next to holiness. But since they remained among the most religious people on earth, their wealth needed to be justified in the eyes of the Lord. For, as Orwell noted, “Even the millionaire suffers from a vague sense of guilt. Like a dog eating a stolen leg of mutton.”29 No accident, then, that in the United States charitable donations became big business, for they were a salve of conscience - a bulwark against the schizophrenic paradox of being at once richer and holier than everyone else.
By the same token and for the same reasons, corruption became bigger, bolder, and ultimately more ruthless than elsewhere, on a par with the size of the country and the bluster of its history.
One of the most interesting sections of Volume II of Arbuthnot’s great work deals with money-laundering - which he interpreted as a desire on the part of those who had transgressed in amassing great wealth to return to the way of heaven and to the path of probity here on earth. For, he argued, most great fortunes rested on some kind of skulduggery at their origin, even if with the passing years their possessors had acquired an aura of graceful respectability. The trick with ill-gotten gains, then, was to disguise their origin by re-deploying them in a legal activity.
At the end of his life, Arbuthnot wrote a series of valedictory essays30 , somewhat in answer to his many critics, in which he explained that far from considering corruption a necessity of life, he saw no reason why humanity could not progress happily without it. As a scientist, however, he did not see himself as an advocate of one mode of being over another. “People talk to me of morality,” he wrote, “and accuse me of a dreadful neglect of duty because of my refusal to condemn the corruption in capitalism. I recognize no such duty. Human nature is what it is; and insofar as I am human, I share humanity’s foibles. If that makes me a scandalous reprobate, a vile apologist for evil, so be it. If the Maker of all things exists, I can expect shortly to encounter Him. When that moment arrives, perhaps He will take the opportunity to acquaint me with His views.”

17Professor of Semiotic Casuistry at the Princeton Institute of Semantic Sciences (PISS) (2012 - 2039)
18 Moctezuma.
19 Tenochtitlan, “the world’s most beautiful city,” according to the Spaniards who burned it.
20 John Lawson, A New Voyage to Carolina, London 1709.
21 Shaftesbury Papers and other records relating to Carolina and the first settlement on Ashley River prior to the year 1676,” Langdon Cheves (ed), 1897
22 Joseph Conrad, Heart of Darkness, 1902.
23 All names have been changed.
24 As the only Amharic expert in Oxford, he was obliged to examine himself and mark his own papers.
25 See Max Weber, Protestant Ethic and the Spirit of Capitalism, 1902; and R.H Tawney “Religion and the Rise of Capitalism, 1926.
26 Matthew 19:24.
27 1 Timothy 6:10.
28 Proverbs 28:20.
29 George Orwell, Essay on Dickens, 1939.
30 Notes for the nether world, Plainsboro Paperbacks, 2038.

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