We had a server outage, and we're rebuilding the site. Most of the site features won't work. Thank you for your patience.
imc indymedia

Los Angeles Indymedia : Activist News

white themeblack themered themetheme help
About Us Contact Us Calendar Publish RSS
Features
latest news
best of news
syndication
commentary


KILLRADIO

VozMob

ABCF LA

A-Infos Radio

Indymedia On Air

Dope-X-Resistance-LA List

LAAMN List




IMC Network:

Original Cities

www.indymedia.org africa: ambazonia canarias estrecho / madiaq kenya nigeria south africa canada: hamilton london, ontario maritimes montreal ontario ottawa quebec thunder bay vancouver victoria windsor winnipeg east asia: burma jakarta japan korea manila qc europe: abruzzo alacant andorra antwerpen armenia athens austria barcelona belarus belgium belgrade bristol brussels bulgaria calabria croatia cyprus emilia-romagna estrecho / madiaq euskal herria galiza germany grenoble hungary ireland istanbul italy la plana liege liguria lille linksunten lombardia london madrid malta marseille nantes napoli netherlands nice northern england norway oost-vlaanderen paris/Île-de-france patras piemonte poland portugal roma romania russia saint-petersburg scotland sverige switzerland thessaloniki torun toscana toulouse ukraine united kingdom valencia latin america: argentina bolivia chiapas chile chile sur cmi brasil colombia ecuador mexico peru puerto rico qollasuyu rosario santiago tijuana uruguay valparaiso venezuela venezuela oceania: adelaide aotearoa brisbane burma darwin jakarta manila melbourne perth qc sydney south asia: india mumbai united states: arizona arkansas asheville atlanta austin baltimore big muddy binghamton boston buffalo charlottesville chicago cleveland colorado columbus dc hawaii houston hudson mohawk kansas city la madison maine miami michigan milwaukee minneapolis/st. paul new hampshire new jersey new mexico new orleans north carolina north texas nyc oklahoma philadelphia pittsburgh portland richmond rochester rogue valley saint louis san diego san francisco san francisco bay area santa barbara santa cruz, ca sarasota seattle tampa bay tennessee urbana-champaign vermont western mass worcester west asia: armenia beirut israel palestine process: fbi/legal updates mailing lists process & imc docs tech volunteer projects: print radio satellite tv video regions: oceania united states topics: biotech

Surviving Cities

www.indymedia.org africa: canada: quebec east asia: japan europe: athens barcelona belgium bristol brussels cyprus germany grenoble ireland istanbul lille linksunten nantes netherlands norway portugal united kingdom latin america: argentina cmi brasil rosario oceania: aotearoa united states: austin big muddy binghamton boston chicago columbus la michigan nyc portland rochester saint louis san diego san francisco bay area santa cruz, ca tennessee urbana-champaign worcester west asia: palestine process: fbi/legal updates process & imc docs projects: radio satellite tv
printable version - js reader version - view hidden posts - tags and related articles

Capitalism and Corruption

by Michael R. Kratke Monday, Feb. 12, 2007 at 6:23 AM
mbatko@lycos.com

Until recently, the bribes paid by German firms abroad were deducted from the corpor-ation tax as operating expenses..The neoliberal dogma doesnt need any religion since it makes capitalism into a religion.. The cult of abstract riches cannot replace morality Mergers and takeovers are central.

CAPITALISM AND CORRUPTION

On the Political Economy of Fraud

By Michael R. Kratke

[This article published in: Ak-analyse & kritik, 2/01/2007 is translated from the German on the World Wide Web, http://www.linksnet.de/drucksicht.php?id=2834.]




“Enrichissez vous” – Enrich yourself! The Juste Milieu of the upper middle class, the money aristocracy, once came to power in France with this slogan, an unbeatable program of ingenious brevity… Whoever enriches himself however shamelessly does not only benefit himself but does an inestimable service to the Fatherland. Managers and owners of capital liked to hear this message.

Morality became shaky because whatever brought private profit, corruption and buying and selling what was really not for sale were now deemed sensible and meritorious. Deceit and fraud were ordinary practices in the competition of enrichment-fanatics. Tradition, reputation and businessmen’s honor lost all respect. One can read in Balzac and Flaubert how capitalism undermines civil society.

Corruption, bribes, illicit cash, organized swindle and accounting forgery are current business practices in German big business, not only abroad in developing and threshold countries. Corporations use frauds and manipulations. The most prominent businesses of the German export industry, world corporations like VW, BMW and Siemens are suspected of corruption and their managers put on trial.

Peter Hartz, originator of the “Hartz reforms” that failed grandiosely, has stepped down on account of suspicion of corruption. He is only one of many in the corruption quagmire. The scandals mount up and are repeated – in Germany and other capitalist countries. They increase in all branches and all countries. There can be no talk of isolated cases and “black sheep.” Big European businesses including many German corporations were and are keen on bribing foreign government officials and politicians.

ENRICH YOURSELVES – LIKE CRAZY!

Medium-size firms diligently join in the business with corruption like world corporations Henkel, Daimler-Chrysler, Degussa, Siemens and Schering. Two simple facts must be confronted. Firstly, a whole branch of professional mediators lived and live from the constant corruption practiced everywhere. These mediators act as representatives of German firms abroad and pocket juicy commissions as corruption intermediaries. Secondly, up till recently the bribes paid by German firms abroad were deducted from the corporation tax as operating expenses. This embarrassing state of affairs was ended in Germany in 2002 (on pressure of the UN) but bribes are still deducted from taxes in several European countries. Thus corruption is seen as normal legal business practice – as long as it happens abroad.

The current line of defense in the latest scandals in Germany and elsewhere is one of heart-stopping insolence. Every chairman of the board of a big concern must be put in prison, declared the highly paid lawyers specializing in economic criminal law. These ladies and men blab out a truth that they keep under their hat. Corruption and fraud are common. The protagonists of concrete capitalism act criminally everywhere in the world today.

From the start, capitalism was a very moral arrangement and is still today for its believers. The neoliberal dogma doesn’t need any religion any more since it makes capitalism itself into a religion and changes the imperatives of capitalist economy into universal moral norms. Walter Benjamin saw coming the elevation of capitalism into a universal cult religion in which market exchange plays the role of the cult and the homo oeconomicus transformed into nature plays the role of God. (1) Whoever practices the cult of the market day after day and submits completely to competition acts morally good and right.

Historical capitalism has lived from religious and moral resources that present-day capitalism seems to destroy or has already destroyed. Adam Smith regarded the “invisible hand” of the market as effective only as long as a social morality based on empathy and sympathy ensured that private persons regarded one another and in no way sought to enrich themselves unscrupulously and boundlessly at the expense of their fellow-citizens. However this middle class social morality is no longer what it once was.

The loud cry for an “economic ethic” that suits capitalism, as the everyday religion is not by chance. The elites of middle class society feel the deficiency. Pure capitalism is not an adequate foundation for a viable community. The cult of abstract riches cannot replace morality. When the resources are used up, they cannot be replaced. Capitalism faces this problem with morality and with nature.

Everyday corruption, the systematic fraud, is part of present-day capitalism like internationally organized community and “crony capitalism,” the “capitalism of dirty hands.” The friends of “pure theory” would sneer at this but criticism of political economy cannot renounce on criticism of fraud and the “illicit” economy.

THE MORAL ECONOMY OF MODERN CAPITALISM

There were and are structural causes for fraud and corruption as well as for their heyday in recent times. Capital exploitation is a strenuous and risky business. It costs time and effort and can bring losses. Bankruptcy threatens. Therefore capitalists of all kinds since time immemorial were susceptible to the “craving to enrich themselves through the theft of foreign wealth, not through production.” (MEW 7,14). The laborious production process that is full of risks appears to capitalists only as “a necessary evil to the end of moneymaking.” As a result, “all nations with capitalist modes of production…are periodically seized by fraud when moneymaking is carried out without the incursion of the production process.” (MEDA 11).

We witness thriving fraud today in the boom years of the “new economy.” Since the productive part of the capitalist world economy has long been in a situation of structural over-accumulation, fraud seizes industrial production now and then and becomes permanent. Organized corruption and fraud are attempts at avoiding the traps of the market and controlling market events – a rational conduct in an irrational system of increasingly expensive general competition.

In structural over-accumulation, surplus capital presses on the finance markets. Mergers and takeovers become the most important forms of “real” (direct) investment. Both strengthen the tendency to fraud and manipulation. From the start, capitalism is an expropriation economy. Dispossession through fraud, swindle and skillful financial maneuvers instead of open use of force is trump today.

In many countries, a form of capitalism prevails in which corruption, fraud and criminal intrigues have become routine, firmly institutionalized and standardized business practices without which nothing happens. Russia and the successor states of the Soviet Union, China, Brazil, Mexico and Indonesia are usually called homelands of “crony capitalism.” However the US or at least some sectors of the US economy like the energy sector, the military-industrial complex and the entertainment industry also belong there. In many European countries, we know a milder variant of this type where the “old boys networks” pull all the strings. In every case, organized market power and access to public power and public wealth are central. Corruption is a tried and tested means of keeping the regulators and controllers of markets on all planes under check since unregulated and unorganized markets only exist at the margins of the real world of capitalism. Buying officials, unionists and NGOs is faster and costs less than fighting them.

MONEYMAKING WITHOUT THE DANGERS OF PRODUCTION

Corruption becomes a customary system thanks to an organized “elite change,” a constant and easy exchange of positions between “private” and “public,” “politics” and “economy” as in the Russian and US variants of “crony capitalism.” This has consequences: organized election fraud, buying politicians and parties, influencing the media, buying newspapers and television stations, systematic intimidation and corruption of journalists and systematic disinformation with all means and on all channels.

Neoclassical economists regard corruption and fraud as harmful when they lead to “misallocations” of capital. Corruption and fraud are dangerous – not only because of the loss and the rapidly growing number of victims of the “new” expropriation economy. The popular myth that the wealth of the upper classes, managers and entrepreneurs was gained honestly and lawfully as deserved wages for special achievements and efforts is undermined in the long run when corruption and fraud take place routinely everywhere and the criminal economy spreads. Even the holy of holies, middle class private property, appears in a different light when everyone knows or suspects that the constantly swelling private assets are not genuine. Property is theft. This venerable formula of middle class radicalism can come back to favor again. In the lands of “crony capitalism,” it is obvious for everybody that “politics” and “economy” are by no means separated worlds. Thus the belief in the state as a protective power of the poor and exploited is weakened.

Can corruption and fraud be removed? Can capitalism still be saved, not before the indignation of the exploited and oppressed of all countries but before the greed and folly of its protagonists? Yes, if something like an “ideal capitalist” still exists who would defend this historical economic order against the shortsighted stupidity of its profiteers. However that has been thoroughly denied in the course of the neoliberal revolution. The insight seems temporarily confirmed: Capitalism belongs to its “elites.”
Report this post as:
Share on: Twitter, Facebook, Google+

add your comments


Local News

Change Links September 2018 posted S02 10:22PM

More Scandals Rock Southern California Nuke Plant San Onofre A30 11:09PM

Site Outage Friday A30 3:49PM

Change Links August 2018 A14 1:56AM

Setback for Developer of SC Farm Land A12 11:09PM

More problems at Shutdown San Onofre Nuke J29 10:40PM

Change Links 2018 July posted J09 8:27PM

More Pix: "Families Belong Together," Pasadena J02 7:16PM

"Families Belong Together" March, Pasadena J02 7:08PM

Short Report on the Families Belong Together Protest in Los Angeles J30 11:26PM

Summer 2018 National Immigrant Solidarity Network News Alert! J11 6:58AM

Watch the Debate: Excluded Candidates for Governor of California M31 5:20AM

Change Links June 2018 posted M28 7:41AM

The Montrose Peace Vigil at 12 Years M22 8:01PM

Unity Archive Project M21 9:42AM

Dianne Feinstein's Promotion of War, Secret Animal Abuse, Military Profiteering, Censorshi M17 10:22PM

CA Senate Bill 1303 would require an independent coroner rather than being part of police M10 9:08PM

Three years after OC snitch scandal, no charges filed against sheriffs deputies M10 8:57PM

California police agencies violate Brown Act (open meetings) M02 8:31PM

Insane Company Wants To Send Nuke Plant Waste To New Mexico A29 11:47PM

Change Links May 2018 A27 8:40AM

Worker-Owned Car Wash on Vermont Closed A27 5:37AM

GUIDE TO REBEL CITY LOS ANGELES AVAILABLE A13 12:39AM

lausd whistle blower A11 6:58AM

More Local News...

Other/Breaking News

test O06 10:01AM

test O06 9:59AM

test O06 9:59AM

100 Ways GOP Have Stolen Elections Since 1876 O06 12:03AM

Proximospective de l'univocité réifiée O05 6:27AM

“Kava-no!!!” O04 6:42PM

Trump & Palestine vs. Genesis, Rashi & The Land of Israel O03 6:29PM

The Criminality of the Elites O03 11:35AM

Business de l'inhumanitaire O03 7:51AM

Marriage Rape/Date Rape Highest Rapes O02 2:59PM

Women I Know Get Raped - Too Many Times To Count! O02 2:55PM

Women In USA Have Stockholm Syndrom O02 2:50PM

Shooting Drill's Are Political Actual Shootings O02 2:47PM

Dr. Ford's Father Works With CIA O02 2:44PM

Weaponizing Frequencies O02 2:41PM

Google Abuses: Worldwide Spying, Censorship, War Promotion, Spying On Children, Etc O02 11:08AM

Paraphysique de l'administration O02 8:34AM

Paraphysique O02 8:31AM

Affordable Rents? A State of Emergency Intensifies O01 11:36AM

A Few Of Many Impeachable Acts by Trump Sessions And Others O01 4:41AM

Désengrammation, l'éloge de la suite S30 7:01AM

someone Should Work In Hollywood - Good Acting! S28 2:55PM

Ford Gives Psych Drugs To Lower Class To Shut Them Up? S28 2:51PM

Hilllary Calls Ford Trailer Trash? S28 2:47PM

Most Rapes Are In Marriages S28 2:43PM

Nice Boys Dirty Deeds S28 2:41PM

Minnesota 2nd Largest Rape State S28 2:39PM

Paraphysique de la plus-value S28 7:18AM

More Breaking News...
© 2000-2018 Los Angeles Independent Media Center. Unless otherwise stated by the author, all content is free for non-commercial reuse, reprint, and rebroadcast, on the net and elsewhere. Opinions are those of the contributors and are not necessarily endorsed by the Los Angeles Independent Media Center. Running sf-active v0.9.4 Disclaimer | Privacy