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Re: corruption - the reason and a simple solution

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Vamsi Musunuru wrote:

 > >  > Simply put: I trust a corporation more in a free/competitive  > > 
market  >
 > > because its
 > >  > power is clearly checked rather than a monopolistic Government    >  
 > > whose power
 > >  > remains unchecked.
 > >
 > > i trust neither, as both are frequently unchecked, sometimes the
 > > power being exchanged in a collusion between the two.
 > >
 > Very good.  My trust, in the above, was a relative term.  I made no
 > reference to an absolute quantity!!

i don't think we disagree that power corrupts, we differ on the solution. if 
i understand what you're saying, your solution is, roughly speaking, to 
check the power of corporations/capital with equally big government power- 
with the government exercising power to foster competition by other 
corporate entities so that no one corporation gets dominant- this may be an 
oversimplification of what you have in mind so please feel free to correct 

my solution would be to curb the power of both government as well as of 
corporations. i've written about this before here, corporations would be 
limited in the scope of their activities and existence- in fact this is the 
way the notion of a corporation was 150 years ago in the US- a corporation 
was a temporary device to bring together resources for a particular 
enterprise and would receive a charter to do so from the state in which it 
operated- for example if someone wanted to build a bridge, a group of people 
could get a charter sanctioned by the state [i know, i know, the term 
'state' is proabaly raising your hackles! i'll get to that later] the 
charter permitted the group aka corporation to raise money, perhaps float a 
bond, buy property in its name and so on. once the bridge was built, the 
charter was ended and the corporation and its assets dissolved. corporations
that deviated from their charter were likewise dissolved.
the logic behind this is that the activities of a corporation affect
the environment in which it operates, hence the owners of
that environment, should have some control over the corporate
entities that operate among them, and as the capital collective
represented by a corporation will have power [money = power]
the public needs to be assured that the power is not misused- sort
of like the way that when we create an army and put weapons/power in the 
hands of individuals we want to take precautions that the guy in the tank is 
not going to turn the turret on us. that a corporation's goals may be in 
conflict with the goals of the community it operates in would not be 
surprising since the goal of a corporation is to make money for its owners- 
not the general welfare of the public.
if the bridge example does not illustrate this problem too well
then consider the corporate activity of forming a bank. in a laissez-faire 
environment, a few investors form a bank, [some] people deposit their money 
and the bank then siphons out the money- there are a variety of ways of 
doing this such as 'bad loans' to the bank's controllers and associates- 
then declares itself broke having robbed the public [btw this is not as 
unlikely as it sounds- think the 's&l mess' in the late 80's in the US, i 
have it on good authority that this was not uncommon in india before banks 
were nationalized]. the point is that an individual is no match for the 
collective power of a corporation and safegaurds need to exist to limit the 
power of corporations to the purpose for which they are sanctioned and to 
protect the public from the misuse of their power. in the present context, 
frequently corporations are legally considered to be
equivalent to "persons" or as a historian has put it "immortal person's of 
great wealth" and claim the same rights and protections of the law afforded 
to real persons this is by no means a 'natural' condition. at the same time 
they are immune from the notions of
punishment like imprisonment or execution- though it is arguable
that if a corporation negligently or willingly causes death it ought
to be subject to the 'death penalty' by being liquidated and having its 
assets sold for reparation.

you might argue at this point that this requires a 'state' that has
the power to match th epower of corporations, and this implies that there 
will be individuals that wield huge power, so it follows that
the power of the state will be abused. that could happen-
[well actually that is precisely what happens in licence raj] and
the individuals who are supposed to represent the interests of the
public, act solely in their own interest- which may include
colluding with the corporate powers they supposedly regulate.
the problem becomes then- who will regulate the regulators if
they fail to represent the interests they are charged with doing?
this is not a simple problem but i believe solutions to exist-
currently the solution is supposed to be that public representatives
are limmited in their power by the ballot box- ie they or their
superiors can be voted out of office every 4-6 years. i would
suggest that that is too long a time-constant in the system, that
the system would benefit from mechanisms for easy and swift
recall and dismissal of elected and appointed representatives percieved by
the public/electorate to be acting against the public interest.
it also requires a great deal of transparency and availability
of information on government action [as argued here by many]
and it will also require a public awareness and intolerance of
corrupt behavior of those entrusted with power- this does not
necessarily mean an equivalent and parallel power structure,
for example we do not have a parallel miliratry to check the
power of the existing military, but we do have a strong cultural
sensibility that for the military to use the power it wields against
the public is wrong [and though this this happens in the context of
insurgency for example it is a lot less than in say, pakistan where
military coups are a regular occurence].
the idea is to not concentrate public power in the hands of a few
individual who will then inevitably misuse it but to limit their power
by making it easier for the public to recall them when they misbehave-
just as we would limit the power of corporate capital by instituiting
limit to their activity and power.

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