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The price of corruption - Views on News from Equitymaster
 
 
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  • Nov 15, 1998

    The price of corruption

    India is a corrupt country. And we Indians are now paying the price for it. On our way to achieving the "commanding heights" of a planned economy the financial institutions, the bedrock of the modern-day economy, became puppets in the hands of powerful ministers and bureaucrats who had favours to grant. The able men who ran these institutions witnessed the benefits that their political bosses accrued and probably began to think: if my boss can do all these things and get away with it, why can't I? Those small thoughts became actions and, pretty soon, large parts of these institutions became corrupt. It was too easy, too profitable, too tempting to say "No". The institutions no longer treated the money available with them as a way to seek investments that generated profits but, rather, saw the money entrusted with them as a pool upon which they could generate personal wealth. That is why the chairmanship of many institutions is decided by the political bosses and industrialists lobbying for access to easy money and not on merits.

    And every day we stupid Indians stood by and said nothing. Many times the cycle of corruption was to our benefit and silence was good. Many times we participated in it. From the money we paid to a watchman to let park a car illegally, to the money paid to middle-men to clear government applications, to the money paid for your phone connection or the school admission we institutionalised corruption and gave it a reason to exist. The "more harmful" corruption was when we got the guys with the knives and guns involved. The real estate developers, the mill owners, the shop keepers, the landlords who wanted to evict their tenants - they all used muscle power to make more money. We are smart because we know these things happen but we are stupid because we believe that there is no cost to corruption. No cost to those who encourage it - only a benefit.

    But the time seems to have come to pay the bill for the great party. For the man who paid the watchman, his car may no longer be there when he returns. For the man who paid the toughies money to clear his land of unwanted tenants, the guns have been turned on them. For the financial institutions who supported scandalous transactions, they may not be around tomorrow as those they supported begin to sink. And for the silent majority, guilty by association and caught up in their own little daily winks of form-pushing and paper-stamping, they are paying the price for accepting the low standards of morality.

    Corruption is not a monopoly of socialism or communism but it does seem to occur at more levels in controlled societies. And in societies which have low moral and ethical standards. Lobby groups in countries like the United States are set up to push for specific causes to influence the decision-making process by donating funds for election campaigns. Influence in the more developed societies seems to be restricted to the higher levels. If religion is the opium for the masses that Lenin saw as a numbing agent to keep the ignorant, ignorant then sports and chat shows are probably the numbing agents used on the capitalist Americans. The Political Action Committees (PACs) in the United States spend millions of dollars befriending politicians and using their firepower to run television campaigns that often makes one forget what the issue was in the first place.

    So, the movement that warned against the health hazards of smoking is now losing television time to a campaign that cries for the legitimacy of the right to smoke - a kind of constitutional right. President Clinton wins approval ratings from his citizens as the question no longer is "did the President lie under oath" but has been turned into a "it is his personal affair and leave him alone" attitude. Immorality and corruption may be linked somewhere down the line. Societies that are willing to adopt a chalta hai attitude, probably end up being corrupt societies. Immorality may not have been influenced by the use of money but it is something against a "good" and, probably once you pay someone money, immorality becomes corruption.

    India is had its share of embarassments what with purchases of Bofors, Howitzers, fertilisers, and edible oils all being scrutinised at one point in time or the other. But, I guess it does not matter. As Mrs Gandhi said many years ago when deflecting allegations of corruption: "Corruption is an international phenomena". She was right. It is. It is not right, but it exists everywhere. And wherever it does, at some point in time the citizens of that country pay a price for it. India is paying the price now.

     

     

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