The FT has an article this morning on corruption in South Africa in which it is said:
What is it about South Africa that is so toxic? And what, if anything, links these four corporate car wrecks? The answer is to be found in a single term: state capture.
To South Africans, it is a frequent topic of radio phone-ins and even inspired a hip-hop song. Yet outside South Africa, the term, first used by the World Bank in about 2000 to describe how former Soviet economies were being bent to the will of oligarchs, barely registers.
If it does not then it should. As the FT notes:
Transparency International, the anti-corruption watchdog, defines state capture as “a situation where powerful individuals, institutions, companies or groups within or outside a country use corruption to shape a nation's policies, legal environment and economy to benefit their own private interests”.
As usual, Transparency International is too generous to those engaged in corruption by offering a definition that makes it too easy to restrict consideration of the issue to what might be called the more obvious suspects. The FT actually does better when saying:
State capture is more systematic than plain vanilla (banknote-stuffed envelope) corruption, which seeks to exploit existing opportunities. State capture goes one better by changing personnel, regulations and laws to work in one's favour.
But they do acknowledge:
As well as eastern Europe, says Transparency International, examples of state capture exist elsewhere, including the US, Singapore and South Korea.
But here the FT is also guilty of complicit involvement. Failing to mention that the UK has a government very largely dedicated to the interests of big business and those who run it, and not mentioning the extensive revolving doors that now characterise the relationship between UK business and government, means the FT unforgivably fails to note that state capture is happening here on its doorstep in the UK.
Shame on it.
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Well said that man!
Teapot calling the kettle back and all of that.
Since the entire existence and mission of this government is based on Brexit, which is opposed by almost all big business, your thesis seems to have a bit of a contradiction to deal with.
The injection is largely from multinationals
Gerald Tasker
“Since the entire existence and mission of this government is based on Brexit, which is opposed by almost all big business, your thesis seems to have a bit of a contradiction to deal with.”
Hmmmm? Interesting point. A couple of doubts in my mind however: Theresa May called a snap election seeking (and I think expecting) an increased majority in order to establish a working majority within her own party. We know she was a ‘remainer’. What sort of mandate do we think she was seeking?
If you wanted a policy to be successful would you put David Davis in sole charge of it?
I haven’t a clue what’s going on behind the scenes and I guess you don’t either. I just watch and join the dots.
More than one contradiction to deal with lurking around here.(?)
Oh! Look. A squirrel
City of London, we’re looking at you here.
The original definition of fascism is the capture of the machinery of the state by corporate interest I believe.
All the holocaust stuff and ethnic cleansing and state stormtroopers is symptomatic rather than causal. And not even exclusive to ‘technical’ fascism.
So… we have had to invent a new name and call it ‘State Capture’.
And , yes. Britain is in the forefront. Sad but true and the FT does us no favours pretending otherwise. This is a spade that needs to be called the ‘bloody shovel’ that it is.
There is some truth to this
Andy
Don’t agree. The horrors of the Holocaust &, before that, the African slave trade, come from racism. By which I don’t mean simple prejudice, but the pseudo-scientific idea that one group of Homo Sapiens is, for whatever reason, inferior to a nother.
That is separate from, although perhaps helpful to, the market forces that encouraged europeans (say) to acquire a slave work force.
eriugenus,
I don’t think there is much of substance we are disagreeing on.
The racist supremacy stuff comes out of Nietzsche (?) et al misunderstanding the implications of Darwin’s revelations on the mechanism of evolution, and the fundamental misunderstanding (or willful distortion) of the meaning of the phrase ‘survival of the fittest’. A whole pseudoscience of phrenology was spawned out of that. And in the minds of some people, justified policies of eugenics. For some proponents of these (now largely off limits and always flawed) policies and philosophies the motive was financial gain, but there was also a following that believed that it was possible (and in their opinion desireable) to speed up the process of evolution towards the development of Homo Superior.
All I was really try to say, I suppose, is that the word ‘fascism’ now has a lot of baggage attached which has little to do with politics and economics hence the new moniker of ‘State Capture’ which need not have any racist overtones. (Though it may have; dependant on the promoters specific agenda, it isn’t inherent.)
Brexiteers see the EU as the very essence of state capture. In light of events in Catalonia etc am inclined to agree…
I thought that was Spain?
Have I misse3d something?
Teflon Don,
“Brexiteers see the EU as the very essence of state capture. In light of events in Catalonia etc am inclined to agree…”
You’ve got me there. I don’t follow that at all I’m afraid. Am I being thick?
Would you care to elucidate?
Clearly you don’t know much about state capture in South Africa. It’s Zuma and his political cronies looting the state owned enterprises – Eskom, Transnet, Denel and so on.
But of course, you want the UK to nationalise the equivalent industries in the UK.
And you are making accusations that people in our government are somehow corrupt and in cahoots with so called “big business” when you literally have no evidence to speak of.
I respect your right to an opinion
I’ll stick with mine
Samuel
I’m not sure where you’re going with this. You say:
“And you are making accusations that people in our government are somehow corrupt and in cahoots with so called “big business” when you literally have no evidence to speak of” & then say;
‘It’s Zuma and his political cronies looting the state owned enterprises — Eskom, Transnet, Denel and so on.’
So…. is S Africa clean or isn’t it?
I would wish it were. I always feel positive about S Africa because of the wonderful test team. How could anyone not want the best for a team that includes Steyn, Morkel, Philander, Amla, Du Plessis, Bavuma & De Villiers?
Samuel,
I don’t know what colour hat Jacob Zuma wears. I guess if it’s not ivory black it’s perhaps lamp black. Nobody earns as much as he is reputed to have, so he’s stealing it from somewhere. It’s very much the pattern in former European colonies that the lessons of colonial exploitation were seen as a model. We trained ’em well.
“But of course, you want the UK to nationalise the equivalent industries in the UK.”
I find that a curious non sequitur.
“making accusations that people in our government are somehow corrupt and in cahoots with so called “big business” when you literally have no evidence to speak of.”
Are you saying you haven’t noticed the procession of cabinet ministers retiring into board positions of the privatised industries and contracted-out service companies? And they are not all Conservatives by any means.
You presumably haven’t noticed that national democratic governments do not govern with the consent of the people but with the consent of global corporations. That Goldman Sachs alumni hold most of the significant financial posts across Europe and beyond.
If Jacob Zuma isn’t being advised by Goldman Sachs a) I’ll be surprised and b) he’ll be getting his advice form a similar organisation. These guys (and a few gals) don’t just run the UK and a handful of former European dictator states; and supervised the destruction and disbursement of the Soviet estate assets; and occupy the influential roles in the IMF and World Bank and Central banks they run the only remaining global superpower.
You, like the rest of us are either ‘on the take’ or you are being shafted. Neoliberal economics is a bit binary that way.
Samuel,
“Clearly you don’t know much about state capture in South Africa.”
What is clear, going by your comment, is that you know little or nothing about state capture at all and haven’t even bothered read (or comprehend) the FT’s observations on that subject. To avoid repetition I refer you to my comment below.
In the meantime these might give you some idea of what the hell it is you are talking about:
https://www.bloomberg.com/professional/blog/fed-said-to-weigh-steps-to-prevent-regulatory-capture-by-banks/
https://www.reuters.com/article/us-usa-fed-probe-exclusive/exclusive-u-s-watchdog-to-probe-feds-lax-oversight-of-wall-street-idUSKCN0W62C0
Some, well at least one, commenter here seems to have missed the point massively . Conceptually, State capture is a relative of an older term “regulatory capture” and, arguably, for the most part that’s what it is.
To be clearer, state or regulatory capture is more insidious than it is overbearing and it affects the way that institutions operate. The rules rather than the outcomes. As such, it is ridiculous to suggest that most big businesses didn’t want Brexit therefore we don’t have state capture.
State capture doesn’t directly determine the outcome of a specific referendum . It becomes manifest through changes to the rules that govern business and the extent to which they are enforced. As for the UK. I think that we saw a good example recently right here:
http://www.taxresearch.org.uk/Blog/2017/09/22/how-could-the-frc-have-decided-kpmg-were-in-the-clear-when-the-issues-were-known-at-the-time/
The Financial Reporting Council lets an obviously culpable KPMG off the hook and:
‘An FRC spokesman said: “We undertook a thorough investigation which included the opinions of external experts. Our conclusion is that the test for misconduct was not met.”’
Richard Murphy said: “Then the test was wrong is the only conclusion I can reach.”
To find the devil of state capture in this detail I wouldn’t checking for brown paper bags in the brief cases of FRC members. I would be looking at “the test” and how it came into being. As a general rule for understanding state capture one should look for the sort of regulatory changes that create moral hazard and those put the fox in charge of the hen house.
“…state or regulatory capture is more insidious than it is overbearing ..”
Yes, I like that, Marco.