Socialist and mixed economies encourage corruption

April 30, 2008 11:09am CST
This is not necessarily because the politicians running countries with mixed and socialist economies are inherently more dishonest than those running governments that take a more hands-off, laissez-faire approach. The reason large, centralised governments are more prone to bribery and corruption is because there is much more incentive for businessmen and other interested parties to try to influence government decisions. To take an imaginary example: Imagine Country A is a libertarian, capitalist paradise where people are free to own property and trade with each other, and the government has no power to seize property - it's simply there to protect people from crime etc. Country B, on the other hand, is a mixed economy where private businesses exist but the government has the power to intervene in various ways if it believes it's for the "greater good". In each country, the supermarket chain Greedy Moneygrubbers R Us wants to build a new supermarket in a location that's currently occupied by a housing estate. In Country A, the supermarket chain would have to negotiate with the home owners and try to persuade them to sell their property. No doubt they would have to offer a lot of money to do this, which would cut into their profits, but there's no other way to proceed. The government can't help them. In Country B, the supermarket chain can go to the government and request that they acquire the housing estate by way of a compulsory purchase order (Americans call this "eminent domain") and then turn it over to the supermarket chain to develop. The argument advanced would probably be that the good done by generating extra jobs in the area would outweigh the harm done by kicking people out of their homes. If that argument didn't work, the supermarket chain could very well be tempted to bribe the minister responsible - either directly or through the usual very large donation to the ruling party's funds. They wouldn't want to spend that money, but it would almost certainly be a lot cheaper than offering the home owners the market price for their houses. So in a laissez-faire capitalist economy, there's a lot less incentive to bribe the government, whereas in a command economy the temptation's always going to be there. I'm not saying a libertarian government would be completely free of corruption, because human nature's not perfect and there's always going to be some scope for dodgy dealings (military contracts etc), but there'd be a lot less than is typical at the moment. If you want less government corruption, you need less government.
4 people like this
4 responses
@esecaira (27)
• United States
1 May 08
I goes hand by hand. A market system allows its citizens to vote everyday and therefore allocate resources efficiently. A mixed economy allows bureaucrats to take those decitions and distorte the market and corruption is just part of everyday distortion...naturally. Socialism lacks the everyday ability to allocate resources efficiently and then disrupts your cost calculus. If you do not manage your own resources and are resposible for them...corruption becomes a form of government and I mean not simple corruption..but the worst kind that becomens and entity of it's own
1 May 08
Very true. Thanks for replying.
2 people like this
@cheongyc (5075)
• Malaysia
4 May 08
I think corruption does not relate directly with the type of government. It's related to the culture of that civilization though. It's human nature to fall to temptation and it is human virtue that resist it. So, regardless of that government background, corruption still happen, just that it appears in different form, depending on the government type. As what is in the example mentioned, the supermarket chain will still have its own way of getting the land eventually. If they fail to do it the legal way, filthier way could be deployed, even if it's in the libertarian society. The corruption still happen, but not to the government alone, but to the property owner or the other related parties. Therefore, I would say that it depends more on the culture and moral of the people that run the government, and not the type of government that encourage corruption and bribery. It's human weakness, and that's why until today, it's still happening everywhere in the world.
4 May 08
Partly true, but the more centralised a government is, the more scope for corruption there is - especially in economies where there's less social mobility, because it becomes more necessary to influence the government your way.
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@cheongyc (5075)
• Malaysia
4 May 08
In fact, I agree on this part as well. I mean, the more powerful a government, the more likely it attracts bribery. But the libertarian government is not weak as well. Just that its implementation are less vulnerable to bribery. Corruption still can finds its way to manipulate the law amendments and political scandals (filthy tactics that mentioned earlier) to alter the authority and community decision. If the corruption reach its peak, any change could be realized by classifying the land claiming case into national security level. Therefore, it's really depends on the society virtue to battle corruption. Not only changing the type of government alone will help. If a non-corrupt civilization adopts sociology, it will be close to utopia where the distribution of wealth and benefits are equal and fair. If a corrupt civilization adopts capitalism, the bribery is still on-going, under the table.
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7 May 08
I agree that corruption will never be done away with completely, and it is partly a cultural problem. As far as equal division of wealth goes - well, people don't work equally hard, and they're not equally intelligent, so it's immoral to penalise the people who manage to do better by being smarter and harder working, as long as they've used honest means. Put it this way, it doesn't bother me a bit that Bill Gates has a lot more money than me, because he's earned what he's got.
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@gewcew23 (8012)
• United States
30 Apr 08
Let citizens have a chance to control their own destiny what a concept. Even in countries that say they are capitalistic they have governemnt control over it. Of course they say it is to protect the small guy. The funny thing is when an economy of a country that uses mixed economic fails, the government just blames it on the remaining privite companies, and tries to nationalizes them. I like the yard my neighbor has can I go go over there, kick him off of his land, and move my house onto his land. No then why can big business do it. The funny thing is big business likes big government. Big business can get big goverment to do its dirty work. If I truly own my land I should be able to do whatever I want to with it. What is wrong with that. Let say I own a restaurant, I would want to allow smoking and drinking of adult beverages in it. I do not smoke, that is not the reason for it, I am tired of government telling privite business what it can and cannot do. In a laissez-faire capitalist paradise if you do not want to eat in a restuarant that allows smoking or drinking in it go some where else. If I want to serve food cooked in transfat or not is not the government business, it is the consumer right to deside. If I want to drive I truck that gets 4 gallons to a mile and I am willing to pay for the gas, no big deal. The price of gas should dictact what kind of automoble we are willing to drive. I want a government small enough to fit into the Constitution.
1 person likes this
1 May 08
Absolutely. Property ownership and freedom of choice are the foundations of a civilised society.
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@flowerchilde (12520)
• United States
14 May 08
Amen! Less government!
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