[Marxism] Arno Mayer on corruption

[Louis Proyect]

(Arno Mayer is the U.S.'s most distinguished and brilliant historian, as 
far as I am concerned.)

Counterpunch, February 4, 2009
A Feast of Vultures
On Corruption

By ARNO J. MAYER

At irregular intervals the U.S. is shaken by high-profile cases of 
political and financial corruption. Every time the media indignantly 
denounces the miscreants as if to reaffirm that except for them America 
remains unspotted and innocent. There is barely a mention of the corrupt 
practices and conventions inherent in contemporary finance capitalism.

Rod Blagojevich, governor of Illinois and would-be grifter, and Bernard 
Madoff, worldly moneyman, momentarily capture the headlines. With his 
alleged offer to auction off a U.S. Senate seat to the highest bidder, 
Blagojevich followed in the steps of Plunkett of Tamany Hall and is a 
piker compared to Madoff, whose alleged $50 billion Ponzi scheme is 
apparently history’s largest private financial fraud. Ex-chairman of the 
Nasdaq Stock Market and one of its major players, for decades Madoff 
lubricated his venture by making strategic political contributions and 
mixed business with philanthropy, in the process raising his social 
status and soothing his conscience.  The explosion of Wall Street’s 
government-condoned financial bubble exposed Madoff’s pyramid scheme, 
which can only be understood in the context of the larger praxis and 
culture of corruption that makes it so difficult for President Barack 
Obama to separate the wheat from the chaff as he forms his cabinet, 
White House staff, and inner circle of advisers.

Corruption is a highly polemical word-concept, its rhetorical use 
adapted to political warfare. Its charges—including bribery, extortion, 
nepotism—are leveled to mobilize popular and partisan support against 
incumbents or rivals. A phenomenon of group psychology and action, the 
meanings attached to the word corruption have changed from one 
civilization to another, from one century to another, and from one 
country to another.  To think critically about corruption is to think 
about venality not only in politics but also in economics, finance, 
religion, sports, the arts, education, and social intercourse. Even so, 
private individuals who tender bribes are judged and penalized much less 
severely than politicians, government officials, and bureaucrats who 
solicit and pocket them, presumably because they betray a public trust. 
The imbalance is greater in societies where the richest of the rich, 
both individual and corporate, are in a position to corrupt public 
servants of modest means.

If man is innately venal it is hardly surprising that elected 
politicians and state functionaries are corruptible. Political society 
is not ruled by angels mindful of prayer books. By the nature and logic 
of things, and in the words of Lord Acton, “power tends to corrupt, and 
absolute power corrupts absolutely.”

Since corruption is chronic in political and civil society (and at 
certain moments, as Bertolt Brecht observed, “to find an official who 
accepts a bribe is to find humanity”), the issue is not corruption as 
such, but its scale and virulence and pervasiveness. So-called primitive 
societies may well have been the least open to corruption, since there 
was little if any separation between the private and public sphere, 
which is a precondition for bribery to subvert non-venal gift-giving. 
But there was bribery, especially of judges, among the ancient 
Egyptians, Babylonians, and Hebrews. In Greece, by the fourth century 
B.C.E., bribery developed along with the growth of city, economy, and 
government, as well as with the need to pack public assemblies. Ancient 
Rome was never free of venality, though it only began to suffuse civil 
and political society during the late republic and with imperial 
expansion: sale of public offices, contracts, and concessions, capped by 
clientage and the buying off of the plebs with “bread and circuses.” 
Even the office of Emperor occasionally went to the highest bidder.

Whereas ecclesiastic simony was probably the most common graft of the 
Middle Ages, the purchase or sale of public places, especially judicial 
and tax offices, became not uncommon in France and England in early 
modern Europe, as a complement to hereditary offices. Europe’s overseas 
colonization provided new avenues for corruption in the metropole as 
well as in distant imperial provinces. Corruption has always been part 
of and necessary to imperialism, involving the purchase and sale of fat 
charters, concessions, and contracts for the economic and fiscal 
exploitation of colonies, particularly for the extraction of 
nonrenewable resources and commodities.

Corruption, then, is not equally prevalent always and everywhere.  In 
moments of radical economic transition and social change, when 
governmental and legal structures are inchoate and social conventions 
are in flux—in the United States from 1865 to 1890; in the new states of 
post-colonial Middle East, Africa, and Southeast Asia; in the lands of 
the ex-Soviet Union and its former satellites since 1989—corruption 
becomes rampant and glaring by virtue of unhoped-for opportunities for 
tempter and tempted alike. Grand corruption overtakes petty graft.

With its moving frontier, particularly from the time of the Civil War to 
beyond the fin-de-siècle, America excelled in corruption. The legendary 
robber barons and captains of industry, retrospectively celebrated as 
the founders of modern American capitalism, built their business empires 
with calculated recourse to the massive corruption of government—local, 
state, federal—for private gain.  In a climate of relative and widely 
condoned moral laxity, fraud and graft ran wild, particularly in the 
frenetic race for rights of way for railroads; for land grants from the 
public domain for the exploitation of timber, minerals, and oil; and for 
favorable tariffs, taxes, and business regulations. To achieve their 
ends, Cooke and Gould, Vanderbilt and Rockefeller, Huntington and 
Stanford, Frick and Carnegie spent vast sums to “fix” things. They 
competed in bribing senators and representatives of both parties, in 
suborning elections, in buying newspapers, and in seducing public 
intellectuals.

A few magnates, hoping to cut the cost of fixing things, themselves 
stood for public office, using their wealth to secure political power. 
The giants of certain industries, rather than fight each other in the 
face of relatively toothless government controls, colluded to form 
lobbies and, eventually, to merge their firms. As of the late 1870s, 
because of his fraudulent and illegal practices in building up Standard 
Oil, John D. Rockefeller became a notorious fugitive from justice. To 
elude process servers he kept crossing state borders until, fearful of 
being arrested and extradited, he holed up in his estate in Pocantico, 
New York, surrounded by security guards, to fend off servers of 
subpoenas. With time, eager to improve his image and status, the oil 
mogul began to funnel some of his tainted wealth into philanthropic 
works, prompting Mark Twain’s assessment that through “all the ages 
three fourths of the support of the great charities has been 
conscience-money.”

In the twentieth century, America’s emergence as an imperial power could 
not help but bring about an efflorescence of corruption. Compared to the 
directly ruled Roman and overseas European empires, the indirectly 
linked U.S. empire gave rise to a military-industrial complex which 
became cause and effect of constantly rising public expenditures for 
enormous military contracts which, historically, have been exceptionally 
conducive to jobbing. The growth of this mighty “defense” establishment, 
with military bases and subaltern allies the world over, goes hand in 
hand with imperial America’s global reach for critical and invaluable 
commodities entailing enormously lucrative but also highly corruptible 
contracts. This grab is facilitated by the American lead in aeronautics, 
telecommunications, pharmaceuticals, and computer technology, all of 
which call for licensing, fraught with influence-peddling.

In this era of universal finance capitalism, yesterday’s pork-barrel and 
log-rolling politics has been overtaken by hyper-corruption, both 
straightforward and circuitous, legal and unlawful. With the sweeping 
deindustrialization of America, there is no longer a senator to 
represent the state of Boeing nor a corporate CEO—and future defense 
secretary (GM chief Charles Wilson)—to proclaim that “what is good for 
General Motors is good for America.” The objectives have become 
altogether less insular: bribes, in the form of campaign contributions 
and gifts, are designed to influence, if not buy, legislative and 
administrative decisions to benefit giant interests, many of them 
transnational. Indeed, with the globalization of economy and finance, 
corruption has become global as well. Suitors and supplicants resort to 
it in the quest for business contracts and political leverage.

With corruption systemic in the U. S., not just mega-corporations and 
financial companies practice it but so do rating agencies and accounting 
firms. And it festers in the Old World where the Vivendi, Parmalat, and 
Afinsa/Escala scandals are analogous to the Enron and WorldCom scandals 
in the New World.

Obviously not all the culprits are big-time corporate executives. There 
remain super-wealthy individuals who fix things as a matter of course. 
Bill Gates and Sergey Brin, Warren Buffet and George Soros do so 
aboveboard; the likes of Marc Rich and Boris Berezovsky act 
surreptitiously.  The latter know no national loyalty: Rich renounced 
his American citizenship to acquire Spanish, Swiss, and Israeli 
passports to facilitate staying ahead of the law; Berezovsky fled to the 
United Kingdom to escape Russian courts. Confirming Mark Twain’s maxim, 
all make large bequests to philanthropic causes.

Overall, however, most of the great tempters are faceless CEOs who seek 
to advance corporate fortunes along with their own. Together with 
well-funded lobbies and pressure groups it is they who do most of the 
giving to both political parties, leaving organized labor and civic 
groups far behind. Increasingly, business-friendly Republicans and 
Democrats, their elections and advancements heavily financed—hence 
swayed—by big corporations and trade associations, are hegemonic in the 
legislative, executive, and administrative branches of government at the 
federal, state, and local levels. The symbiosis between corporate 
business and corporate government is made possible by the revolving door 
between the private and public sector. Without severing their links to 
the Beltway the insiders become outsiders promoting interests pending an 
eventual return to power. To bolster their pedigrees many seek and 
secure affiliations with elite universities or think tanks.

While out of power the highest-level and most visible politicos and 
functionaries monetize their experience and connections in government, 
corporate business, and high society at home and abroad. Jimmy Carter 
apart, ex-presidents today seek and command huge fees for oily corporate 
speeches. Former cabinet members and top advisors set up, join, or 
counsel high-powered consulting firms that engage in transnational 
influence-peddling and lobbying on behalf of domestic and foreign 
corporate clients, charging fees in keeping with their vaunted access to 
the inner corridors of political and corporate power: on the Republican 
side, James Baker III, Henry Kissinger, Thomas McLarty, Peter Peterson, 
and John W. Snow; Democrats include Madeleine Albright, Sandy Berger, 
William Cohen, Carla Hills, and Richard Holbrook.

James Baker’s Carlyle Group, with ex-President George H. W. Bush as its 
senior advisor, is prototypical of these corruption tanks, which, in 
collaboration with major law, investment, accounting, and public 
relations firms, constitute a formidable nexus of influence and power. 
Retired senior officers of the armed forces similarly cash in on their 
credentials and access by advising defense contractors and performing as 
military analysts in the media.

The 21st century is witnessing the birth of a new concert of nations to 
be dominated by several great powers, not just one. Although their 
political systems differ radically, they are all anchored in and driven 
by a new form of state capitalism. The rivalries among the major state 
actors will be intensified by sharpened competition for access to or 
control of increasingly scarce resources—energy, food, and water. In 
addition population growth will continue to be centered in chronically 
unstable countries racked by poverty and malnutrition. Not a few of 
these wretched states are endowed with valuable natural resources 
controlled by narrow and venal inveterate elites.

The reversion to a multinational world system dominated by several great 
powers practicing a new kind of mercantilism is a boon to corruption. 
The corruption-mongers of state finance capitalism are working 
hand-in-glove with the creatively destructive robber barons and fixers 
of emerging and failing states. The former decry the latter for their 
crude and blatant corruption and nepotism all the while they wheel and 
deal with them. As for the likes of Blagojevich and Madoff, they will 
continue to figure as colorful supernumeraries while serving to deflect 
attention from the feast of vultures.

Arno J Mayer is emeritus professor of history at Princeton University. 
He is the author of The Furies: Violence and Terror in the French and 
Russian Revolutions.