Crony capitalism and Pakistan
LAST week I heard Bernie Sanders, a respected Democrat with strong Socialistic views (but very real and true), with solid reasoning, based on ground realities, warning about exploitation of working class, in the “ Crony Capitalistic” system, we are living in.
Speaking at Congress and addressing his countrymen and people in Europe, he warned them about excessive control of big corporations on resources and alarming concentration of wealth in the hands of “oligarchs” who rule the country/countries (USA and many elsewhere) and deprive working class of fruits of their due share in production, economic development and prosperity as they remain at the mercy of big multi-national Corporations, in perpetuity and coming out of this “bondage” remains a wishful thinking for them.
Worst part is that two distinct classes this system creates, get bigger and bigger. The percentage of wealth that is accumulated by “big businesses” and “multi-national Corps” grows astronomically while the share of working class nose-dives, every year.
This is precisely what Bernie Sanders was pointing in his address at the Congress. He expresses his views openly and candidly which irritate the big corps and they never want to see him in the White House.
Just the reason, he was perhaps asked to withdraw in favour of Hillary Clinton in fight against Trump.
Capitalism is a good economic system to practise and the very notion and motive of personal profit is its main driving force.
The theory of free economy and liberal economic and business-cum-investment policies of the state generate un-matched zeal and interest in running a private enterprise and the owners know that the fruit of their efforts are going to be theirs and not shared by state.
However the Capitalistic system has some inherent and fundamental flaws too. It encourages concentration of wealth in a few hands and the rich keep on becoming richer.
The gap between the rich and poor keeps on widening and ultimately it creates two distinct classes- “haves” and “have-nots”.
This precisely is the situation which develops into “class-conflict”, as described by Karl Marks and decried by socialists, who believe in equitable distribution of wealth.
Capitalistic system also creates an environment where competition between business enterprises and individuals to acquire more and more wealth and control the resources, become a permanent feature and thus the race to become more wealthier, ensues.
Socialist abhor this very idea, as according to them the system creates a class and individuals who are “blood suckers” and become rich at the cost of exploiting the working class.
They call it “crony capitalism”. According to them, the system also encourages “Kleptocracy” and “Thievery” and this form of thievery creates a society that can induce a “culture of systematic fraud” and has been described as “political and corporate kleptomania.
” In this case the plunder and looting enriches not only high government officials, but a narrow class of plutocrats, who usually represent wealthy individuals and families who have amassed great assets through the usage of political favouritism, special interest legislation, monopolies, special tax breaks, state intervention, subsidies or outright graft.
This type of economic system of political spoils is referred to as crony capitalism. The effects of a kleptocratic regime or government on a nation are typically adverse in regards to the welfare of the state’s economy, political affairs and civil rights.
Kleptocratic governance typically ruins prospects of foreign investment and drastically weakens the domestic market and cross-border trade.
As kleptocrats embezzle money from their citizens by misusing funds derived from tax payments, or engage heavily in money laundering schemes, they tend to heavily degrade quality of life for citizens.
In addition, the money that kleptocrats steal is diverted from funds earmarked for public amenities such as the building of hospitals, schools, roads, parks – having further adverse effects on the quality of life of citizens.
The informal oligarchy that results from a kleptocratic elite subverts democracy (or any other political format).
According to the “Oxford English Dictionary”, the first use of the word in English occurs in the publication “Indicator” of 1819: “Titular ornaments, common to Spanish kleptocracy.”
In early 2004, the German anti-corruption NGO, Transparency International, released a list of “top ten” self-enriching leaders in the two decades previous to the report.
They did not know if these were the most corrupt and noted: “very little is known about the amounts actually embezzled” by them.
In order of amount allegedly stolen in USD, they were: Former Indonesian President Suharto ($15 billion – $35 billion), Former President of Zimbabwe Robert Mugabe ($4 billion – $8 billion),Former Philippine President Ferdinand Marcos ($5 billion – $10 billion), Former Zairian President Mobutu Sese Seko ($5 billion), Former Nigerian Head of State Sani Abacha ($2 billion– $5 billion),Former Yugoslav President Slobodan Miloševiæ ($1 billion),Former Haitian President Jean-Claude Duvalier ($300 million – $800 million), Former Peruvian President, Alberto Fujimori ($600 million),Former Ukrainian Prime Minister Pavlo Lazarenko ($114 million $200 million), former Nicaraguan President Arnoldo Aleman ($100 million), former Philippine, President Joseph Estrada ($78 million – $80 million).
The list is not exhaustive. There are many more who should be part of this “renowned” list, having stolen millions from their country-men and stashing it in their off-shore and numbered accounts, overseas.
There are some critics who blame democracy for this situation and rightly so, to some extent.
“Government of the people, by the people and for the people” if practiced in true spirit might be the ideal political dispensation but it has its drawbacks too.
We have seen it fail in countries where the level of education is dismal, political awareness is low and people are not aware of their rights and obligations to the state and are swayed by catchy slogans.
Threats to cost vote in favour of a particular person (though unfit to hold public office due to tainted past), is rampant.
People sell their votes due to poverty, petty favours and quid-pro-quo. These are the factors which create, flourish and nurture crony capitalism and nascent democracies are their best breeding grounds.
For an ideal democracy to function successfully, education, awareness and freedom are sine-qua-non.
—The writer is former Civil Servant & Consultant: ILO and IOM.