Sunday, February 04, 2007

Honesty is Stupidity

Rarely do you hear the positive sides of corruption, you only hear the negative.

Corruption is merely a market for power. Some have power, for example traffic police have the power to punish speeding drivers (supply). Some need power, i.e. one can purchase a traffic cop's discretion when caught (demand) in effect he has purchased some of the cop's power. The bribe is the price of power.

Of course when you purchase or sell something, you should keep in mind the net profit of the transaction. The purveyor of power could factor in the cost of the sale, e.g. will he be punished by superiors? Could he lose his job? The buyer also has to think about laws on bribery and perhaps his own job would be on the line if his bribe was made public.

So as with any market, corruption only occurs when the transaction gives a net benefit to both parties.

If I get caught speeding in Mumbai I would be a fool /not/ to pay a reasonable amount to the traffic cop.

If I get caught in an embrace with an illicit lover in a Sharia jurisdiction, I and my lover would be idiots /not/ to buy our way out of some sort of corporal punishment.

If I get caught by police on Bali with a funky weed, I would be on a par with any Catholic or Muslim martyr if my principles didn't allow me to stump up some cash to the arresting cop.

In these situations being honest is clearly irrational. Honesty only becomes rational when trying to bribe an official will land you in deeper waters - otherwise be corrupt and be proud.

There are more subtle forms of everyday corruption. For example:

If I see pirated PlayStation2 games in Jakarta being sold at 100th the price they are sold in Ireland I would be completely bonkers to /not/ buy them.

If my sister sees a cute fake (but great quality) designer watch in some shopping mall in Jakarta, she'd be mad /not/ to snap it up.

If someone offers me some cheap cocaine in a club or a pimp offers me the chance to sleep with some hookers, and I (uncharacteristically) think I might give it a try -- why on earth shouldn't I? -- no one's ever going to know the better anyway! -- the chances of getting caught are minimal!!

Again, all these products and services are supplied and demanded. These markets are supplied by huge organised (criminal) industries, which drive corruption (and selected other vices). The industries in these supply chains are not any more moral or immoral than those who demand their produce, they are /completely/ rational in the societies we all belong to.

Complete honesty is irrational or just plain stupid. Moreover, in societies which are largely corrupt, even being a little more honest than average is irrational. E.g. being a bit more honest than your corrupt bosses will ensure you won't be promoted too often.

The rational response to corruption in corrupt societies is more corruption. What is needed above of all in those societies is bloody-minded irrationality.

5 comments:

DeniCaa said...

nice point as always. it's cool to see you synthetizing this and that with economic theories.

but yet i still think that honesty is still crucial in a nation so corrupt like this. if not now, then when? until when will corruption overcome the nation.

still, your points are so much agreed. small scale (petty corruption), yes. large scale, a huge disadvantage to the underpriviledged.

johnorford said...

yeh, corruption is often a disadv to underprivileged - but it is rarely if ever a bad for the ppl involved in the corruption -- and that's what really counts, cos they're the ones involved...

i suppose you could connect rationality with morality... if something is rational and moral, then ppl are moral. if something is rational and immoral, more often than not ppl are immoral.

i suppose in a place like ireland rationality and morality often coincide - and rationality and immorality are can often be good bed partners in corrupt countries...

johnorford said...

The point is that you gotta give people the incentives to be honest - otherwise, be they Christians, Muslims or Falun Gong, they'll more than likely end up being dishonest.

Dewi Susanti said...

I guess honesty goes along with affordability isn't it? Whether or not we can afford something financially and/or morally, and whether we are willing to risk the punishment in order to gain the reward for less than what we have to 'pay' otherwise.

johnorford said...

yeh, dewi it's about the net expected loss or profit to be had from your decision.