Lindy Syson finds that neoliberal capitalism extends corruption across society and the economy, reviewing the collection of studies, How Corrupt is Britain
David Whyte (ed.), How Corrupt is Britain? (Pluto 2015), ix, 198pp
Recent years have seen a litany of corruption scandals, just some examples are: MPs expenses;lobbying scandals inside parliament; phone tapping in the media; price-fixing by the utility companies; LIBOR rate-fixing in the banking sector; and police evidence falsification recently coming to light at the Hillsborough enquiry. Such scandals have mainstream commentators seemingly puzzled and outraged in equal measure. One common response is to argue that individuals are inherently greedy, or that corrupt individuals are surrounded by those acting in the same way which normalises the situation. Either way, corruption tends to be psychologised and seen as an aberration in a liberal democracy, one that can be and must be rooted out.
That view is challenged in How Corrupt is Britain?’ a book that emerged out of a conference of the same name at Liverpool University in 2013. The editor, David Whyte, argues that not only is corruption endemic in contemporary Britain, it is: ‘…actually a routine practice that is used for maintaining and extending the power of corporations, governments and public institutions’ (p.5). In other words, corruption is institutionalised and normalised in neoliberal Britain.
Although corruptionis not new, the central argument of the book is thatsince 1979, neoliberal policies pushed through by UK governments have seen an increased blurring of the lines between the public and private sectors.This alternative view of corruption sees it not as a public or private sector problem, but as something likely to happen when the public sector is distorted by private interests. Increased privatisation means that the logic of the market now pervades health; education; housing; social care; utilities; public transport and many other local authority provisions. All governments since 1980 have supported a light touch regulation as controls on business or red tape are seen to get in the way of economic growth. Although this policy has an anti-state ideology at its core, the state has actually become more centralised since the onset of neoliberalism. Furthermore, the bank bailouts after the crash of 2008 gave the lie to arguments about the demise of the nation state.
‘Structural adjustment’: preconditions of corruption
Although the book focuses on corruption in Britain it also considers Britain’s imperialist role in the world economy along with institutions such as the World Bank and the IMF. For the World Bank and the IMF, corruption is seen as part of ‘weak governance’ and regarded as a public-sector problem. The response from the neoliberal perspective of the World Bank is for more competition and de-regulation, not greater state control. What this occludes, argues Whyte, is that it is actually the policies of the World Bank itself that creates the preconditions for corruption. The imposition of ‘structural adjustments’ - shorthand for opening up markets to privatisation and de-regulation - creates the conditions in which corruption can flourish.
Whyte gives the example of post 2003 Iraq, where US talk of Saddam’s corruption was a cover for a neoliberal transformation of the economy and the entry of foreign capital. Corruption flourished under the occupying government, with new market rules and privatisation providing a structural advantage for Western corporations, what Naomi Klein has termed ‘disaster capitalism’. In addition, this type of approach usually focuses attention on corruption as a problem of the Global South, which both perpetuates racist assumptions as well as turning attention away from the fact that corruption is endemic in world capitalism.
Whyte sets out four features of ‘the political economy of neo-liberal corruption’ (p.25), which tend to map onto the four sections of the book. The first feature, discussed in the introduction and chapters 1-3, is that under neoliberalism, not only has the market invaded the public sector, but the values of the market have become increasingly dominant in the social and cultural spheres. It is argued that self-interest, wealth creation, aggressive competition, and individualism have become increasingly pervasive; and these are values conducive to corruption and fraud.
So, the normalisation of fraud is part of wider changes in a moral economy where norms and values are distorted by neo-liberalism. Furthermore, ‘revolving door’ politics has seen a significant increase in appointments to the civil service from the private sector as well as private-sector appointments to advisory groups and commissions. Along with a rise in political lobbying, these developments have undermined the independence of policy making processes and regulations.
Political economy of corruption
The second feature of the political economy of corruption, outlined in chapters 4-6, is the fact that a structure of impunity still protects ‘special case’ institutions of security and policing.Whyte says that notwithstanding the cuts in policing, the police and security services such as GCHQ have a ‘comparatively isolated status’ (p.18), and are not subject to the same levels of scrutiny as other bodies. Examples are given of Special Branch undercover operations, authorised at the highest levels, to infiltrate environmental campaign groups and of the surveillance of Stephen Lawrence’s family. The police still investigate themselves in corruption cases, before deciding whether to pass the case to the Independent Police Complaints Commission (IPCC). As a result, between 2008 and 2011, 8,542 allegations of corruption were recorded against the police, but only 21 were passed on and resulted in an investigation by the IPCC (p.19).
Third, levels of corruption in Britain relate to the way that institutional power is concentrated. This has meant that some industries and corporations are deemed ‘too big to fail’, prompting government bail-outs. Whyte notes that Allister Darling’s 2008 bailout deal of £500 billion was not debated in Parliament but agreed behind closed doors with leading bankers, politicians and civil servants. Nor has anyone been disqualified or faced charges in the wake of the 2007/08 financial crisis.
Huge salary increases for fat-cat executives continue with impunity at a time of continued savage welfare cuts and falling wages for working people. The pay of CEOs is now 160 times that of the average wage earner.Chapters 11-14 consider corruption in the finance and corporate sector where the evidence shows that the re-configuring of the neoliberal economy serves the interests of a super-rich elite. All of this leads Whyte to argue that: ‘… corruption operates as a form of class power’ (p.28). He discusses white-collar crime and contrasts the impunity protecting institutional corruption versus punitive measures against the poor in Britain. For example, in 2013, the UK Serious Fraud Office prosecuted twenty individuals, whereas the Crown Prosecution Service prosecuted 40,000 burglars.
Privatisation and management by targets
The fourth feature of the neoliberal economy of corruption,discussed in chapters 7-10, looks at corruption in government and public institutions. Here, the focus is on corruption which emerges when particular policies and practices are seen as ends in themselves. An example of this is the philosophy of ‘New Public Management’, where standards and performance indicators intensify the push for results and the pressure to achieve targets by any means available. In the NHS examples are given of Trusts where waiting lists are amended with people taken off as ‘unavailable’ within an hour of being contacted. Another tactic is to pay private hospitals to absorb the waiting lists. Chapter 9 looks at the scandal of the Private Finance Initiative (PFI) where private investment in the public sector is now commonplace particularly in transport, education and housing. This is a system loaded in favour of private companies where operating systems are shrouded secrecy as contracts are deemed commercially sensitive and so fall outside of public information requests. Another feature of PFI contracts has been the transfer of staff from the public to the private sector. In 2004, 35,000 ancillary staff were transferred to the private sector typically on lower wages and poorer terms and conditions.
This is a fascinating and meticulously researched book. The disparate content of the chapters means it is difficult to generalise about an underlying analysis of power and corruption. However, in many sections, neoliberalism is often presented as all-encompassing, particularly the view that market logic has permeated all areas of life. This is a view that can see apathy and alienation as dominant responses to neoliberalism and downplays challenge and resistance. There is, in fact, growing anger against austerity strategies and continued privatisation and corruption.Although many of the book’s contributors stress the need for a radical response to neoliberal austerity, what this might mean in practice is not articulated beyond the need to return to a distinctive ‘public realm’ or move towards a genuinely moral economy.
That said, this book is a powerful indictment of neoliberalism and its effects. Whyte notes widespread resistance against corruption in the business and political elite, with movements and campaigns as part of this fight back.He argues that struggles against corruption are: ‘… invariably struggles against the use of class power’ (p.29). Published before the last election, there is now even more reason to accelerate the resistance that Whyte describes, given that the Tory government, without a mandate, is intent on pushing through billions of pounds in cuts to the welfare budget with disastrous consequences. This book shows that the fight against corruption is a fight against neoliberal austerity. The People’s Assembly provides a significant opportunity,uniting local and national campaigns, to organise the broadest possible fight back against austerity.
Lindy is an ex-teacher who now works in higher education. She is also studying part-time for a PhD. Her research topic is critical pedagogy and academic activism. Lindy is a member of Counterfire.