Ethics, Capitalism and Power

Murari Sharma

Research has proved that the  richer are more unethical than the poorer and are likely to cheat, lie and break the law.

ABC News quoted Paul Piff, a doctoral student at the University of California at Berkeley who published an article in the prestigious Proceedings of the National Academy of Sciences, “We found that it is much more prevalent for people in the higher ranks of society to see greed and self-interest . . . as good pursuits.”

In the wake of the anti-capitalist and anti-bank Occupy Movement — triggered by the filthy bank bonuses so soon after the reckless banks gave us the 2008 recession, and started in New York and spread across many cities around the world – a debate has ensued about why people in high society demonstrate unbridled greed for money and power.

Piff’s study illuminates only a half of the story. The other half can be deducted through logic and reasoning: People with questionable ethics and fraudulent behavior are more likely to become rich and powerful. Nepal’s experience bears it out very well.

Greed is integral to human nature, but capitalism has taken it to an unprecedented height. Charbak, one of the South Asian philosophies, said some 5,000 years ago, that there was no god, no heaven and hell, and no rebirth. It encouraged unencumbered material pleasure: यावत जीवेत सुखम जीवेत रिणं कृत्वा घ्रितम पिवेत, भष्मीभूतस्य देहस्य पुनरागमनम कुतः (As long as you live, live comfortably, borrow and enjoy, because the cremated dead body will not come back). But religion and society restrained the adherents of this philosophy.

Mentioned for the first time around the 13th century, capitalism gave the freedom for making money and accumulating wealth to all. It allowed people to do almost everything they wanted to make money and to keep what they earned. As a result, capitalist societies in the west produced enormous wealth, secured prosperity, and reduced poverty. Capitalism blended with compassion created prosperous western welfare societies.

Now compassion has been eroding fast and welfare societies have been crumbling steadily in the west. Amartya Sen, a Nobel Prize winner in Economics, in his book The Idea of Justice, says that niti (fair laws and institutions)is important but not sufficient for justice; you need nyaya (justice or fair outcome) as the ultimate societal goal. While the niti part remains in place in western societies, the nyaya part has been significantly weakened.

Several factors — such as the decline in religious values such as piety, abstemiousness, and mutual sharing; growth in urbanization; rise in deregulation; increase in indebtedness; and arrival of militant conservatism — have contributed to this erosion. Growing secularism frayed ethical and moral fabric and increased urbanization gave anonymity to individuals and loosened society’s control over them. Then came the deregulation– promoted by US President Ronald Reagan and UK Prime Minister Margaret Thatcher and spread by the World Bank and IMF – that did three things.

First, it, together with the decline in religion and ethics, transformed greed from grotesque to glorious and allowed reckless accumulation of wealth with few religious or legal controls. This has produced such evils and crises as the widening gap between rich and poor, stratospheric bank bonuses at the cost of depositors and taxpayers, Maddoff swindle, and economic crises, including the sub-prime mortgage scandal and the resultant 2008 recession.

Second, deregulation spurred globalization and enhanced global prosperity by opening up markets and off-shoring and outsourcing production to inexpensive locations by multinationals to rake in higher profit. Developing countries benefited from their comparative advantage and BRICs – Brazil, Russia, India, and China – became important economic players but millions in the west lost their jobs.

To boot, western countries fought the Iraq and Afghan wars without raising taxes sending their debt through the roof. The 2008 recession aggravated the situation further, as revenue dwindled while expenditures continued to soar. Countries like Ireland that did all the right things and Greece that was profligate needed bailing out to keep them solvent.

All this gave grist to the militant conservative mill in the west to advance their long-cherished ideological agenda — small government, tax cuts for the rich and benefit cuts for the poor in the name of promoting investment and balancing the budget. Now the rich are getting richer and the poor are getting poorer, as the job losses and sluggish economic recovery hit the poor hard. Consequently, social and economic nyaya has eroded fast.

It seems that western conservative parties, relying on money and support from the rich, have increasingly begun to view democracy for the rich, by the rich and of the rich, because only few poor support them. This is not something Nepal should accept but, unfortunately, the country’s politics seems to be taking this very road.

Nepal is not in the same league as western countries by a barge pole. Despite the claim and rhetoric, it has been neither truly capitalist, nor credibly democratic, nor substantively compassionate. But politics-business nexus is getting so thick that it raises a litany of ethical and legal questions in the Himalayan country, more serious than they have ever been in the west.

In Nepal, the nexus between corrupt politics, crony capitalism and crimes is getting much thicker than in the west. Most government contracts go to businesses with strongly political connections. Politicians protect rogue businesspeople and criminals when they are caught breaking the law. No businessperson has gone to jail, for instance, for pocketing more than 3 billion rupees in VAT reimbursements using falsified bills and invoices. Criminal gangs operate under the protection of political parties. Businesspeople and criminals pay politicians handsomely for such favors.

Politics has become business by another name, a means to make money and remain in power forever, in Nepal. Plato must be turning in his grave in discomfort witnessing how his putative philosopher guardians have turned into a rapacious lot. No party is above the water. But the new political arrivistes, the Maoists — the self-proclaimed champions of the poor and proletariat who are raking in money not just through corruption but also through coercion and crime — are ahead of the pack.

Evidently, Nepal has been democratic mostly for political leaders and their supporters who treat themselves as above the law. When caught in a criminal act, their case is withdrawn tagging it as political, something for which all parties are guilty – some more than others. Nepal is a country where a sentenced murderer serves as a member of parliament rather than serving time in jail and the police have to apologize for enforcing the traffic rules. It is a shame that the thief, as the adage goes, chastises the constable.

The government bleeds with compassion only for political leaders, their kin and close supporters. For instance, it sends them abroad for minor treatments while people die in local hospitals for the lack of saline water and belittles real martyrs by declaring, for money, their dead supporters in gang fight or traffic accident. If you are a prominent communist leader’s son, you could get 20 million rupees just by pledging to climb a mountain – a very quick way of getting rich — that so many others have scaled on their own. Actually, the government exists to serve the politicians and their cronies, not ordinary people.

Corruption, crony capitalism and crime have made politicians the second richest group, after businesspeople. Before 1964, landowners had that honor, but the land reform slashed their wealth. After the 1990 political change, politicians have displaced landowners from the second position. If the situation continues as it is now, they could edge past businesspeople in next several years.

Paul Piff’s study has proved that the richer are more likely to be more unethical and break the law. We also know for sure that those who sell ethics and break the law are more likely to become rich and powerful, for which the evidence is already overwhelming. But some restraint on their greed will certainly elevate the status of Nepali politicians in public eyes.

London

29 February 2012

(Published in Republica of 24 March 2012)

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