Britain's New Corruption

“Old Corruption has passed away, but a new, and entirely different, predatory complex occupies the State... with its interpenetration of private industry and the State... its control over major media of communication, its blackmail by the City, its reduction of the public sector to subordinate roles, and its capacity to dictate the conditions within which a Labour Government must operate...”

E P Thompson, “The Peculiarities of the English”, 1965.

Have we, as David Whyte asserts at the outset, “historically construed corruption as something that is exclusively a problem in developing or economically ‘primitive’ societies, rather than our own”? I don’t think so.

E P Thomson’s warning sounded fifty years ago in a reflection on the home-grown political corruption of an even earlier age. The corruption engendered in Britain by the relationship between corporate bodies and state institutions, the chief focus of Whyte’s book, has been explored regularly since then in fiction, film and on TV not because we think it never happens here but because we know it does.

So Whyte sets off with a wobble. But he soon finds his stride, arguing a case for corruption to be understood in broader terms than commonly. Fourteen short and highly-accessible essays follow, written in the main by academics. These consider corruption in relation to four broad areas: the effect of neoliberal policies; policing; the workings of government and public institutions; and elements of the corporate and financial sectors.

The World Bank defines corruption as “the abuse of public office for private gain”. A prominent counter-corruption organisation, Transparency International, offers “the abuse of entrusted power for private gain”. But for Whyte, “[c]orruption is always related to the way that dominant notions of the ‘public interest’ are constructed and then put into practice in policy and politics.”.

Whyte argues for re-framing corruption as “the distortion of the public realm by private interest”, or as David Beetham has it in a later essay, “the distortion and subversion of the public realm in the service of private interest”. This shifts attention from an individual’s moral choices to the political conditions which encourage or normalise within institutions actions properly seen as corrupt.

For Whyte, the prevailing political and economic conditions are shaped by neoliberal ideas, and in particular by what a later contributor calls a “project which demands that the role of the state must be reduced to policies that encourage the market...”. This project’s realisation has created”a new opportunity structure for institutional corruption”.

In contemporary Britain, Whyte argues, private, corporate, interest increasingly infiltrates and shapes political practice, and subsumes public interest. For neoliberals, corruption is a problem not of weak government but of markets rendered imperfect by regulation. Were the economy fully deregulated, and hence made fully competitive, these people believe no corruption could occur. Alternatively, corruption can be made to vanish by recasting private interest as entirely consonant with the public interest.

For most of the contributors, such a cure is just another name for the disease. When neoliberal ideas and practices colonise the public sector, re-configuring it in market terms, what results is not less but greater scope for corruption. “Contemporary understandings of corruption must therefore start with an understanding of what has changed in the relationship between the ‘public’ and the ‘private’.” This requires renewed thinking about the relationship between corporate power and state power, particularly in strong states.

For Whyte, the contemporary iteration of the institutional corruption that involves state power (rather than the petty corruption engaged in for individual self-advancement or enrichment) stems from the Thatcherite era.

Anti-statist rhetoric, and the prolonged assault on institutions (most notably, trade unions) capable of defending the public interest as formerly conceived, are important here. But most significant has been the policy of privatisation.

Privatisation breached the space of the public sector to enable and legitimise the siphoning into private pockets of public monies on a vast scale. At the same time, the values and ethos of the corporate sphere began to drive out a contrary set which had informed the workings of the public sector. Individualism, self-aggrandisement and the ungainsayability of the bottom line attempt to render obsolete or pointless a sense of public service, selfless duty to others, and collective solidarity.

What the public interest is, who decides it and how, are foundational issues for a democracy. The merging of public or collective interest with private interest, or rather the fading-out of a discrete public interest, threatens democracy by curtailing what can be spoken about in ways that gain a hearing, and by redoubling already-powerful voices. Furthermore, the merger serves, according to David Beetham, “to undermine the capacity and integrity of government itself. The hollowing out of government at central and local levels that results from so much outsourcing deprives government of the skills, experience and personnel that flow from providing services directly, and gives the private sector a key advantage when negotiating contracts.”

Other harms accrue. They include: the attempt to valorise each of us primarily as consumers and as “entrepreneurs of the self”; the vast losses incurred by the public purse now and in the future from such policies as PFI/PPP; and the increasing and morale-sapping sense that the corrupt keep getting away with it.

Powerful people wield corporate might in familiar ways to mould public debate about policy and the formulation of “the public interest”. They do it through large donations to governing parties, through preferential access to ministers, through funding of politicians’ private offices, through lobbying and the capture of regulatory bodies. Whyte concludes with a recognition of the class dimension in play: “The function of the political economy of institutional corruption in Britain today [is] to extend and embed the class power of elites.”

Phil Scratton races through a socialist history of the police, exploding the notion of “policing by consent” and highlighting how and why the police have always been used to repress working-class communities. Other contributors review the Hillsborough cover-up, the killing of Mark Duggan, the pattern of responses by the BBC to the sexual abuse allegations made against Savile and Stuart Hall, the “revolving door” process by which senior figures move between government and boardroom, and the contested ruling in 1978 by the European Court of Human Rights that the British government was not guilty of torturing 14 IRA suspects.

An essay in the final section presents a clear and concise account of how Britain’s tax-havens and “secrecy jurisdictions” operate. The City of London controls about a quarter of the global market for offshore financial services. The legalised secrecy associated with this market enhances the likelihood of fraud and cloaks all manner of corrupt practices. Other essays in this last section look at the scandal of stratospheric boardroom pay, the involvement of the Big Four accountancy firms in corrupt practices, and the waves of mis-selling of financial products which have defrauded millions since the Big Bang deregulation of 1986.

One of these concluding essays argues that in the banking and financial sectors: “normal” business is now “corrupt business”. The writer asks: “What can now surprise us about the corporate world? About the state? And is it not a reasonable response simply to slide into apathy, alienation and atomisation?” He implies the answer is no, but does not elaborate.

The left must do so. Against the “anaesthetising effects of the routine nature of bank crime” we must persist with the demands to open the books, strip back secrecy, regulate proactively, expose the deals done. You don’t have to endorse the view that corruption is now politically institutionalised to be convinced of this. Wide layers of the public continue to respond with anger rather than indifference to revelations of sleaze, fraud and corruption. People see in such corruption their collective interest worked against and undermined, and their good faith exploited if not mocked. The central clash the left identifies within capitalism still resonates. The interests of the great majority who must sell their labour do not align with the interests of the minority who must buy it.

This book’s caustic, detailed and eye-opening analysis of the structural dimensions of Britain’s New Corruption brings home once more the truth of the old hunch: something is rotten in the state.