August 26, 2011

Roots of corruption

Print edition : February 06, 2015

The Bedara Bhommanahalli iron ore mines at Chitradurga in Karnataka. Photo: Murali Kumar K.

New Delhi, 2011: Anna Hazare on a fast demanding the enactment of the Jan Lokpal Bill. Photo: Aman Sharma /PTI

New Delhi, April 2, 2011: CBI personnel carrying a trunk containing the charge sheet in the 2G spectrum case, at the Patiala House Court. Photo: Sandeep Saxena

THE recent exclusive focus on corruption has, perhaps inadvertently, diverted attention from the more basic phenomenon which underlies it, namely a process of “primitive accumulation of capital”. The definition of corruption according to the Prevention of Corruption Act, 1988, which is the starting point of all current discussion of it, refers to the receipt of “gratification” (not only monetary) by a public servant in excess of his or her legitimate remuneration. This, however, has an odd implication: if as a public servant I allow the appropriation of public property by a private entity and receive no gratification for it, then it is not a case of corruption; but if I do receive some gratification for doing so, then it becomes a case of corruption. The loss to the public exchequer, and hence to the public, in either case is the same, but it becomes a case of corruption only when the public servant concerned receives some gratification for the act of permitting the private filching of public property. What is more, even where there is no direct gratification involved but the public servant receives indirect gratification in more subtle forms, it would still not be considered corruption.

For instance, any public servant who privatises public property at throwaway prices, even when he or she receives no direct gratification for it, is invariably hailed for this act by the corporate media, by the Bretton Woods institutions and by the global financial community as being a “visionary”, a bold promoter of “entrepreneurship” and a “liberal” thinker in tune with the modern times. This brings in its train a host of possible rewards: sundry “best Minister in Asia” (or similar) awards, lecture tours, World Bank assignments, offers of cushy corporate placements, various remunerative advisory roles, and post-retirement sinecures. None of this, however, will be considered “corruption”. “Corruption”, in short, is confined exclusively to gratification received directly as quid pro quo; it does not cover the far more pervasive case of gratification received from the system as a whole. The current crusade against corruption, therefore, by not looking at the system as a whole, misses the wood for the trees. Of course, one should not ignore the “trees”; and hence legislation against “corruption” even in this limited sense is important. But missing the wood is unpardonable; and the wood is what Marx called “primitive accumulation of capital”.

Primitive accumulation refers to the appropriation of the property of petty producers, peasants and the people at large (through, for instance, encroaching on common property or cornering budgetary resources or buying up state property at throwaway prices) by the capitalists or proto-capitalists. It is called primitive accumulation, as distinct from the normal process of accumulation under capitalism, because it entails not the reinvestment of the economic surplus produced under capitalism but a process of filching the property of other non-capitalist segments: the peasants, the petty producers, the state and the community (“commons”). Now, corruption too entails a process of filching others' property; corruption itself may constitute a form of primitive accumulation of capital, for example, when a “public servant” demands a bribe from the common man. But big ticket “corruption”, of the sort that has surfaced of late, is not itself primitive accumulation; it constitutes rather a levy on an ongoing process of primitive accumulation.

Illegal mining

Take the case of the illegal mining in Karnataka. Mine-owners illegally extracting mineral resources and defrauding the exchequer are the ones who have been engaged in primitive accumulation of capital. The then Chief Minister of Karnataka, who is alleged to have connived with the illegal mine-owners in exchange for “gratification” and hence engaged in an act of “corruption”, can be charged with appropriating a share of the booty, that is, imposing a levy for himself on the proceeds of the mine-owners’ primitive accumulation of capital.

Likewise, the act of primitive accumulation in the 2G spectrum case consisted in the handing over of resources that should have accrued to the public exchequer, and hence to the people, in a proper auction to a bunch of capitalists on a “first-come-first-served” basis. When the Telecom Minister of the time allegedly got a “cut” from it, and hence engaged in an act of “corruption”, he was imposing a levy for himself (and his near and dear ones) from the proceeds of primitive accumulation. The expropriation of the people, however, came not from the act of “corruption” but from the act of primitive accumulation. Even if the Telecom Minister had not received a paisa of direct gratification, and yet distributed 2G spectrum on a “first-come-first-served” basis, the public exchequer would have been equally defrauded, the filching of people's property (consisting of the difference between the price at which it was made available and the price that would have been obtained in a proper auction) would have been of exactly the same order of magnitude. “Corruption” only determined who the beneficiaries of this filching were and entailed the appropriation of a share in the proceeds of this filching.

Focus only on corruption

This is a simple and obvious point; but a most disingenuous attempt is being made, by the stalwarts of both the Congress and the Bharatiya Janata Party, to obfuscate it. Since the mechanism of filching people’s property was the adoption of the “first-come-first-served” route, all political leaders who followed this route are culpable of abetting this filching, whether or not they received a paisa of direct gratification for doing so. This would make several Congress and BJP Ministers who had either preceded A. Raja in the Telecom Ministry and advocated this route, or had concurred with his decision to follow this route within the United Progressive Alliance (UPA), open to the charge of attempting to make private entities defraud the public exchequer. To ward off this charge, a chorus is emerging from both camps that “the policy was right but its implementation [by Raja] was wrong”. Their focus, like that of many “anti-corruption crusaders”, is exclusively on “corruption”, and not on primitive accumulation, that is, the defrauding of the public for which they are responsible and which provides the basic pool from which the proceeds of “corruption” are drawn.

Primitive accumulation entails a theft of the people's property; it thrives therefore whenever a change in property regime is being attempted. The process of privatisation which has been a part of the neoliberal policy has been accompanied by, and created the conditions for, the massive process of primitive accumulation of capital and the upsurge in corruption that thrives upon such accumulation that we are witnessing today.

The introduction of “free markets” in lieu of the controls that characterised the earlier dirigiste regime, often derided as the “licence-quota-permit raj”, was supposed to bring down “corruption”. This supposition was not far-fetched either: any rationing regime where prices are necessarily lower than what the “market will bear” creates conditions for those who can afford to do so, to alter the distribution of the rationed goods in their own favour by paying a bribe. The freeing of markets and hence the removal of rationing, while it may be abhorrent because it excludes the poor from access to the rationed goods, should certainly bring down the necessity of such bribes and hence the scale of “corruption”. If the pursuit of neoliberal policies, which were expected for this reason to bring down corruption, has on the contrary been accompanied by a steep escalation of corruption to levels unparalleled in our recent history, the reason lies in the change in the property regime that has accompanied the freeing of markets, the thrust towards privatisation which has given a boost to primitive accumulation of capital and hence to the “corruption” that it nourishes.

The escalation of “corruption” in the recent period is indicative of the fact that the proceeds of the primitive accumulation that has been unleashed by neoliberalism are being shared pervasively by the political class (and the bureaucracy). It is not only the monopolists, the financial oligarchy, the land sharks and the multinational corporations that are raking in the proceeds of primitive accumulation but also the government echelons at the highest level, which are recruited from the political class. But things are even worse. Significant segments of even those elements of the political class which are not “corrupt”, in the sense that they do not receive any direct gratification for conniving with the primitive accumulation of capital, are nonetheless actively complicit in the process: they belong very much to the system that promotes primitive accumulation and benefit from the indirect systemic gratification mentioned earlier. We are in short institutionalising a regime of primitive accumulation, with the bulk of the political class (barring a few honourable exceptions, notably the Left) being incorporated into this regime.

Primacy of the political

This has serious and disturbing implications for democracy. Democracy, if it is to be authentic, must presuppose the primacy of the political over the economic so that people do not become mere hapless victims of the immanent tendencies arising from the economic system but can collectively intervene through political praxis against such tendencies. The struggle against “corruption” is important but insufficient since it looks at corruption in isolation from primitive accumulation, and hence restricts the concept of “corruption” itself, by focussing only on direct gratification and ignoring systemic indirect gratification. What is more, even the struggle against “corruption” in this narrow sense will not be successful if it aims only to penalise the “corrupt” and does nothing against the process of primitive accumulation. At least three steps, to start with, are necessary for this. The first is anti-corruption legislation. There is no reason why the serving Prime Minister or the higher judiciary should be exempt from such legislation, as is being suggested by the government, though of course the modalities of their inclusion (for example whether the judiciary should be covered under the Lok Pal or a separate judicial commission) should be carefully worked out. The second step is a restriction on the privatisation of public property. The privatisation of state property should be resorted to, if at all, only in rare cases, and every single instance of such privatisation should be subjected to parliamentary scrutiny in all its details. Any privatisation without a “fair auction”, on the basis of “first-come-first-served” or other such “principles”, must be absolutely proscribed. Parliamentary scrutiny must enforce such proscription.

The third step is that the ownership and operation of all exhaustible resources must be with the state. State ownership alone, say of mineral resources, is not enough; if state-owned mines are handed over to private operators, then the scope for illegal mining increases. To prevent this, even the operation of mines must be a state responsibility, which was in fact India’s official policy not too long ago. Likewise, there must be not only social control over the use of scarce resources like land but also the monopoly right of the state (through an appropriate state agency) to be the first buyer in any transaction involving a scarce resource, at a “fair price” fixed on some pre-specified principles. This would help in breaking land speculation, which is a major source of corruption, and also act as a restraint on primitive accumulation via the snatching of land from the peasantry.

A powerful popular resistance against primitive accumulation must be built, which alone can provide a bulwark for democracy. Fasts unto death by anti-corruption messiahs who substitute themselves for the people and obviate any need for popular intervention, no matter how well-intentioned they may be and no matter how successful their fasts may turn out to be in drafting wholesome legislation, can never succeed in thwarting either corruption or primitive accumulation.

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