A plague we must stop before it is endemic

If Britain was ever an uncorrupt society, those days are long passed. MPs and police officers work in small, closed societies where bad practices easily flourish
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I used to boast that Britain was a relatively uncorrupt society. Look at France, I would say, where a high proportion of recent presidents and prime ministers had faced criminal charges after leaving office. Or Italy, where the tentacles of the Mafia reached deeply into civil society. Or Greece, where it was a point of honour not to pay taxes.

What explained our supposed immunity? Perhaps it was a result of our Protestant inheritance. And from that had also come the less tribal nature of our society than many others. For tribal loyalties can sometimes rank ahead of obeying the law.

I was, of course, wrong. Long ago, the claim could have been justified. But not any longer. There are too many examples of corrupt behaviour; they seem to come to the surface on a daily basis. We can make a quick list. Members of Parliament who abused their system of expenses and, in some cases, submitted false claims. National newspapers where, since 1999, 90 people have been arrested in conjunction with illegal acquisition of confidential information. Of these, 80 were arrested since police investigations were renewed in 2011, and, of these, 15 have been formally charged with crimes. Two more journalists and a serving policeman were arrested yesterday.

Or look at the drug companies. The British multinational GlaxoSmithKline was recently fined £1.9bn for bad practices in the US. The company cheerfully marketed its drug Wellbutrin for the treatment of conditions for which it had not been approved. Its sales methods comprised spending millions of dollars to persuade doctors to speak at meetings, sometimes at lavish resorts, at which the non-authorised uses of Wellbutrin were routinely promoted, and GlaxoSmithKline also used sham advisory boards to promote the drug. Glaxo is not alone. According to the WHO, unethical practices such as bribery, falsification of evidence, and mismanagement of conflicts of interest are “common throughout the medicine chain”.

We cannot leave out British banks. Some of them have been implicated in the practice of falsifying one of the key interest rates in the financial markets, the so-called Libor (or London Inter-Bank Offered Rate). The Serious Fraud Office has stated that it is “considering whether it is both appropriate and possible to bring criminal prosecutions”. Then, more recently, the fraudulent behaviour of the police following the Hillsborough disaster has dominated the headlines. Criminal charges are being considered.

I have listed only those cases where the courts are involved, either resulting in conviction (four MPs), or awaiting judgment (journalists) or where the authorities are contemplating bringing charges (the banks and Hillsborough police officers). Consider the range this legal activity covers, from bankers to politicians, from business executives to constables. Where has this corruption come from?

In distant times, corruption was mainly confined to contracts where bribes were sometimes paid to land jobs. Town hall officials were sometimes implicated. Now corruption seems to be penetrating all levels of society. What explains it?  

In fact, different explanations are needed. The banks and the drug companies can be grouped together as large companies operating all over the world. MPs and police officers are in a very different situation. They both alike work in small, closed societies where bad practices can easily flourish. As Robert Chesshyre noted of the police in these pages last Saturday: “the instinct… is to close ranks and regard criticism as calumny”. Exactly the same observation could be made about MPs.

In distant times, corruption was mainly confined to contracts where bribes were sometimes paid to land jobs.

Professor David Beetham has produced for Democratic Audit the best analysis I have seen of corruption in the world of multinational companies. Prof Beetham puts in first place what he calls the triumph of market fundamentalism in the Anglo-Saxon world since the 1980s; the idea that unfettered markets constitute a self-regulating and self-correcting device to maximise efficiency and economic growth. This led to major programmes of business and financial deregulations in the US and Britain, originally launched by the Reagan and Thatcher governments. I would prefer to say that a large volume of poorly designed regulation was swept away but there remained a need to act against the strong collusive instincts of business executives. They don’t actually like competition and will always try to limit it or control it. But right-wing governments left the door open to market fixing.

A second factor is globalisation, which, like deregulation, isn’t intrinsically bad. But the movement of work from advanced economies to less developed ones, where wages may be low, corporation taxes lighter and social security costs minimal, has the consequence of diminishing the power of the governments in First World countries relative to private markets and firms. Then there is the ability of financial trading businesses to move out of places like London and New York to low-tax zones, leaving national governments vulnerable to threats of transferring valuable business overseas if regulation becomes onerous.

These are some of the explanations for the march of corruption. But there is little sign that action is being taken by governments to reverse the trend. I don’t expect to make my old boast again any time soon.