January 28, 2002

6:46 AM

Wealth Spawns Corruption. Socialist economies could be more at risk from corruption than Liberal ones. Ironically, wealth condensation poses the greatest danger to economies that impose constraints on the accumulation of great wealth - broadly speaking, Socialist economies. Liberal economies that maintain free and unrestricted trade are less susceptible.
posted by stbalbach (8 comments total)

This piece might be more convincing before or long after Enron scandal fully investigated and explained.
posted by Postroad at 6:55 AM on January 28, 2002

Looking at the Enron scandel, the accumulation of wealth into the pockets of a very few by way of corruption, one has to question how Liberal our economy really is. Republicans have traditionally been the watchdogs of a liberal economy yet are at the heart of the corruption. Are we becoming more socialized?
posted by stbalbach at 7:01 AM on January 28, 2002

"A society does not need to be rolling in cash before gross inequality sets in. But in an abjectly poor society there is simply not enough money around to sustain a growing fortune for any corrupt individual."

counterexamples: Zaire (now the PR of Congo)- Mobutu.
Haiti- Duvallier

"Below the threshold, money distribution follows the power law. For a liberal economy, on the other hand, this threshold is infinite. So corruption, theoretically speaking, does not occur."

So Sweden should be more corrupt than Italy. And Russia after liberalization has less corruption than under communism... Yeah... better check your assumptions again fellow physicists- and do stop presuming that the statistical
mechanics of polymers have much to do with human societies or economics...
posted by talos at 7:06 AM on January 28, 2002

All this talk of physicists and mathematicians is BS, but totally unsurprising. It's supposed to make this seem a lot like science, and therefore "objective" - as if it's untainted by the opinions of politicians with interest in specific outcomes.

Trouble is, using Pareto is itself a decision based on opinion and skews the whole thing. Just cause mathematicians were involved is insignificant. Economics has been trying to prove itself a science for years. But just cause other scientists work with economic models doesn't make the field any more objective or any less subject to opinion and political dogma than, say, 30 "Bomb-throwing anarchists" would be.
posted by mikel at 7:14 AM on January 28, 2002

That study was done in a country that doesn't rank well in the corruption game itself and where many people still have a strong reaction against all things supposedly socialist; maybe the researchers took a bribe from corrupt Republicans to make socialist policies look bad. Sweden, according to the same ranking, is one of the least corrupt nations on earth. The USA, as one might expect, is about even with Chile.

By the way, I love that statue of Ozymandias in the linked article -- "Look on my wife's shoes, ye mighty, and despair." -- and I'm beginning to like this Enron thing. Tell me more about corrupt Republicans and corrupt corporations.
posted by pracowity at 7:23 AM on January 28, 2002

if i understand the point, this seems to be saying that there's a greater mathematical probability that ONE person will end up super-rich (and therefore corrupt) in an economy that is socialist. that could be true (the point of socialism is that there shouldn't be a CLASS that will be super-rich), but it ignores that any socialist economy would have some sort of government or politics to go along with it. i can't imagine an economy based on shared wealth without some sort of governing body or set of rules and punishments to prevent corruption...without something like that there would surely be corruption, just as without any sort of checks on free market economics, the world would quickly be ruled by a tiny handful of Enrons. oh wait, it is.
posted by fsck the police at 7:38 AM on January 28, 2002

this model does not allow for the fact that the total wealth of a society is generally either fixed or limited by those of the other societies with which it trades.

...at which point economists all over the world sprayed their morning coffee all over their desktops.
posted by UncleFes at 7:44 AM on January 28, 2002

Does anyone have access to the paper (there's a link at the bottom of the Nature article, in the bibliography - it leads to another site, but you need subscription to read the whole text)? If so, could you email me it (currently acooke_org at yahoo.co.uk - I can't acess my normal account at the moment). Thanks (and don't feel guilty - you're probably helping to keep information condensation out of the hands of rich institutions ;-)
posted by andrew cooke at 10:32 AM on January 28, 2002