In praise of… corruption
Last night I was speaking to an Australian lawyer friend who does a lot of business with China and other countries in Asia. He said that one problem in some Asian countries is the corruption — that in order to get something done you need to give people backhanders, which then percolate their way to the top, sometimes to the office of the prime minister. So I advanced my theory about embracing corruption. It’s a very shaky theory, so perfect for this blog…
Theory is that we shouldn’t complain about corruption, because the extent to which it’s bad for business will be corrected by the marketplace — bad decisions will lead to loss of performance (of a company, or a government).
Let me explain how I got here. To begin, why is corruption so bad? Three possible answers: it’s immoral, it’s unfair, it’s bad for business.
If there’s a morality question, then I think that’s really the same as the fairness issue — all players should be given an even playing field. The argument is that you shouldn’t have an inherent advantage because you employ the son of the UN secretary general, or you’ve been sweet-talked by the PM, or you’ve got strong connections to the vice president. But while I deplore these things, it’s only one end of a sliding scale. Companies are routinely at an unfair advantage because they can afford smarter sales people, or because they hold regular conferences on the subject, or because they personally know the influential people in the field. What if those conferences were invitation only? Or the sales people were paid with something other than money? Or the influential people were furthering their own agendas, too? What if those experts and sales people were aviation experts, or political experts, or friends of ministers, or related to former ministers? What if they were the son of the UN secretary general, or the vice president of the USA, or the prime minister of Britain? If your rival can field the prime minister to talk to the man who signs the cheque, then isn’t it time you readdressed your sales strategy rather than call them names?
The thing is there isn’t a single point at which you can say “Anything before this is okay, anything after this is wrong”. You wouldn’t want to stop rich companies buying their advantages in terms of smart sales people or clever marketing campaigns (would you?), so why stop them sending over the prime minister or calling up their contact in the White House?
So if the morality argument is the same as the fairness argument, and the fairness argument doesn’t have a solid base, then the argument against corruption is left to it being bad business. And if that’s the case then it’s perfectly okay to let it happen, because market forces will simply eliminate it. Bad business decisions (those based on greased palms rather than hard facts) will show themselves up eventually. The company will lose market share, the government will be voted out (or overthrown), and so on.
In response to this my lawyer friend said that in practice the bad business decisions are not felt by the people who made them (the corrupt leaders of corrupt countries), but by the country’s citizens via taxes and poverty, and that any hint of revolution in China would be swatted instantly. But that’s an argument for democracy, not for outlawing corruption.
I’d dearly love this pro-corruption theory to be wrong, but I can’t see it. There’s no use fighting corruption — we should embrace it.
