September 29, 2019 Reading Time: 5 minutes
Politicians are Corrupt

It’s been a very strange week, the end result of which is that political institutions have lost more of their remaining credibility, if that is possible. This is probably worth cheering, whoever comes out on top in this latest brouhaha. That is because, as I’ve argued, the more disreputable the institutions of government, the less capacity they have to govern with impunity. The state’s power is enabled and extended by the extent of trust the public places in leaders to do the right thing; conversely, the less states are trusted, the more they are limited.

And because today is the birthday of Ludwig von Mises, I will offer this summary of the point from his pen:

It is a double-edged makeshift to entrust an individual or a group of individuals with the authority to resort to violence. The enticement implied is too tempting for a human being. The men who are to protect the community against violent aggression easily turn into the most dangerous aggressors. They transgress their mandate. They misuse their power for the oppression of those whom they were expected to defend against oppression. The main political problem is how to prevent the police power from becoming tyrannical. This is the meaning of all the struggles for liberty.

Let’s put this observation in the current context. 

The push for the impeachment of the president – no question that even if 100% justifiable this is entirely driven by politics  – has been going on for many months. Then finally, it appeared that the smoking gun had arrived. The US president had a conversation (we have a rough transcript) in which he appears to hold out hundreds of millions in aid as a bribe for dirt on his main political opponent. 

When I read that memo, my first thought was that the president has finally been caught. It was so brazen. The exchange stops short of a full shakedown but not much. We’ve all seen The Godfather and we know how this works. 

But then a few days went by and another narrative came to dominate. The president was merely trying to ferret out corruption, and correctly placing restrictions on US aid, as one would expect and demand when taxpayer dollars are at stake. While no one else seems to care about high-level corruption by his political opponent, this thinking goes, the president alone is willing to dig and set the record straight. Far from being evidence of wrongdoing, this transcript proves what a great job the president is doing. 

Then the familiar slugfest began: the bitter fights on TV, on Facebook, on Twitter, with every side screaming at every other side. Much of the debate surrounding these two stories actually comes down to the following. My favorite person might be bad but he is not as bad as your favorite person. If you are going to come down hard on my guy, you should be even harder on your guy. The evil in the system is widespread, this thinking goes, but my evil is not as egregious as your evil. 

My rule of thumb in all these debates over corruption: presume that everyone is right about everyone else. You can’t go too far wrong with that. 

People like me have written a million times that power inexorably invites corruption and this is precisely why we need government to have less power and less money, and, indeed, why society needs to be walled over from the mess of politics. These partisan debates seem no longer about which side can do good for society but rather which side is more corrupt, more brutal, more egregiously immoral. From a libertarian point of view, it seems like this is a decent setup to make all the right points about the superiority of freedom relative to these birds who imagine that they can do better. 

But wait, isn’t the private sector filled with corruption too? 

I asked my friends about a private-sector analog to this great Ukraine fiasco. I suggested the following: The CEO of Amazon works secretly with a Goldman-Sachs account executive handling WalMart to dig up dirt on the CEO’s son, holding some big deal in the balance.

Another friend offered a more complicated scenario: 

It’s like if a company, ABC Inc, was under threat of hostile takeover from another company, XYZ Corp, and needed help to keep their business afloat. Their biggest lending partner, LMN Bank, has a rogue CEO. He is trying to gain information about a man who is actively going after his role as CEO of LMN. The rogue company CEO demands the head of ABC Inc to investigate the son of his rival, who has business dealings with them, in an attempt to discredit their family and cause a scandal to help him stay in power. The rogue CEO also has ties to XYZ Corp in some nefarious way as well. He demands the information in exchange for critical funding and the company might fall victim to the hostile takeover without getting it.

Whew, that’s complicated. 

Or here is another that might be clearer: A loan shark makes a loan to a police officer who is desperate for cash… and then in that context says, “I have a favor to ask of you… can you open an investigation into my loan shark competition?”

Or you can go full pro-Trump/anti-Biden and say it is like the following: “A CEO asks the attorney general of a different city/country to investigate a COO who was fired from the company because internal (and external) documents show there was malfeasance.”

And this is not entirely crazy: the Biden family connection to Ukraine, and the intervention about which Biden himself publically bragged, is problematic in the same way that Trump’s own interventions have been. There are no angels and certainly no saviors in this saga. 

Note the common lines in all of these allegories: double-dealing, lies, corruption, blackmail, crookery, and ruthlessness. No matter which side you take, you have to dabble in the dark arts to get a sense of what is going on here. 

There is another factor here too: there really is no private-sector analogy. Private companies are not corruption-free but there is a price to pay when it is revealed. People lose their jobs. The stock hits the skids. Shareholders demand answers. The public is outraged and consumers punish the company in the markets. Not always but generally that is the trajectory. 

Private-sector markets are fixable in a way that politics is not. This is precisely what makes these convoluted times of political upheaval so frustrating for the rest of us. Some bad guy will win and some bad guy will lose but there seems to be no getting rid of the whole lot of them and the power they wield. 

It’s a good thing to have revealed to us in such a brazen way precisely what we are talking about when we consider giving up our liberties and properties over to the political class to manage. It never ends well. 

The only really good ending to this story is that the public becomes ever more realistic about the real affairs of state. As Mises says: “It is a double-edged makeshift to entrust an individual or a group of individuals with the authority to resort to violence. The enticement implied is too tempting for a human being.”

Jeffrey A. Tucker

Jeffrey A. Tucker served as Editorial Director for the American Institute for Economic Research from 2017 to 2021.

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