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The Uses of Corruption

from the magazine

The Uses of Corruption

Summer 2001
Politics and law
Economy, finance, and budgets

I first went to Italy as a boy in 1960, the year of the Rome Olympics, and it was still recognizably a poor country. The standard of living was not very different from that of Cuba before the overthrow of Batista. In one town in Sicily, the country’s poorest region, 3,404 humans shared 700 rooms with 5,085 animals, among them pigs, goats, and donkeys. Animal dung, still used as fertilizer, was piled up in the Sicilian streets awaiting use. Visitors from Britain to the Italian peninsula had to treat the water supply with suspicion. My first Italian sojourn ended abruptly when, aged ten, I became delirious from fever and had to be moved to Switzerland to recover; despite the many and dire warnings, I had drunk the Italian tap water. I had not liked to ask my parents all the time for acqua minerale.

The infant mortality rate in the year in which I was born was at least three times higher in Italy than in Britain. Now, half a century later, it is lower than in Britain, and Italians in general live longer and healthier lives than Britons. Not only is Italy noticeably richer than Britain, but it is also considerably cleaner. Recently, the newspaper La Repubblica carried an article wondering why the British food supply was so unclean and unsafe.

This is an astonishing reversal: for two and a half centuries at least, Britain was much richer than Italy in almost everything except its past. Britons pitied and condescended to their Italian contemporaries. Italy was a country of inexhaustible charm, sybaritic pleasure, and cultural wealth, of course, but it was not to be taken quite seriously in an economic or political sense. Even Mussolini concluded toward the end of his life that Italy was not really a serious country.

According to most published figures, Britain and Italy are now about equal in gross national product per head. No two sources agree on the precise numbers, and of course fluctuations in the value of currencies can alter the relative wealth of two countries without anything else having altered. No source suggests that the difference between the two countries is very great, though. In 1950, the same sources put Italy’s per-capita GNP at about 40 percent of Britain’s.

I have learned, however, not to trust such measurements entirely. It is all too easy to suppose that a precise figure represents an indubitable fact, like a bank account balance. But the very precision of these figures is suspect. I have been to countries (such as Rumania) whose economies were said by professional GNP-measurers to have been growing at a phenomenal rate for many years, where people nevertheless had to line up for several hours to buy a few rotten potatoes, on the rare occasions when they were available. How many years of breakneck growth would it have taken for potatoes to become generally available in Rumania? Common-sense observation as well as statistics are necessary for assessing the success of an economy.

And by common-sense comparison with Britain’s, Italy’s economy clearly is very successful. Merely to have caught up with Britain would represent its greater success, but il sorpasso, the overtaking of Britain, is evident almost everywhere you look. For example, you do not see in Italy the miles of urban desolation and squalor that characterize so much of Britain. Squalor, upon which British visitors to Italy used to remark with effortless and eloquent superiority, is now far more prevalent at home. The Italian population does not look nearly so gray or crushed by circumstance as the British. The shops in every small provincial town in Italy, even in Sicily, offer luxury goods of a range and quality not to be found even in the largest British cities outside London. Bari is incomparably richer and less dilapidated than Dover.

In 1950, the British owned 12 times as many cars as did Italians: now the Italians own more cars than the British. In that year, the British car industry was the second-largest in the world, but now the only British-owned car manufacturer, Rover, makes a mere 200,000 vehicles a year, and Italy has three car manufacturers, one of them, Fiat, among the largest in the world.

How has the reversal of fortunes come about, and what accounts for it? The two countries are almost identical as far as population density is concerned, and natural resources play a very small part in their economies. If anything, Britain is at an advantage in this respect: for more than 20 years, it has extracted large quantities of oil from the North Sea, partly offsetting its other difficulties in paying its way in the world.

A comparison of the two countries’ political stability clearly favors Britain. Silvio Berlusconi, recently elected Italy’s prime minister, heads his country’s 59th government since the end of the war. This is a rate of government formation and dissolution equaled only by Bolivia. British governments, by contrast, last at least six times as long. The stable alternation in power of two well-established political parties appears, even now, to be a permanent feature of Britain’s political landscape.

Nor does economic policy explain the two countries’ different growth rates. Italian economic management—or mismanagement—has not differed much from British. Italian inflation has, if anything, been worse; the lira has declined in value nearly twice as far as the pound in the last 40 years. Income distribution in Britain and Italy is very similar, with the top and bottom centiles receiving the same proportion of the national income. Neither greater economic equality nor inequality explains the difference.

As for the Italian state, it has consumed for many years more of the Italian economic product than has the British state. With officially equivalent per-capita GNPs in 1992, the Italian state spent about 25 percent more than the British.

At first sight, you might think this fact vindicates economic dirigisme—but only if you had no idea what the Italian state is actually like. The Italian bureaucracy’s sole product is seemingly insuperable obstacles to productive activity, even more of them (because the bureaucracy is larger and more convoluted) than its British equivalent. The simplest procedures that involve an Italian bureaucracy rapidly turn—for the uninitiated—into a maze of byzantine complexity, from which it is almost impossible ever to emerge. Foreigners who have lived in Italy invariably recount their epic struggles with public utilities, the legatees of state monopolies, to have a telephone connected, for example, or to pay the gas bill. How can a modern economy not only function but flourish in such circumstances?

The Italian public administration has traditionally had one saving grace by comparison with its British counterpart, however: its corruption.

Admittedly, corruption is a strange kind of virtue: but so is honesty in pursuit of useless or harmful ends. Corruption is generally held to be a vice, and viewed in the abstract, it is. But bad behavior can sometimes have good effects, and good behavior bad effects.

Where administration is light and bureaucracy small, bureaucratic honesty is an incomparable virtue; but where these are heavy and large, as in all modern European states, Britain and Italy not least among them, they burden and obstruct the inventive and energetic. Where bureaucrats are honest, no one can cut through their Laocoönian coils: their procedures, no matter how onerous, antiquated, or bloody-minded, must be endured patiently. Such bureaucrats can

neither be hurried in their deliberations nor made to see common sense. Indeed, the very absurdity or pedantry of these deliberations is for them the guarantee of their own fair-mindedness, impartiality, and disinterest. To treat all people with equal contempt and indifference is the bureaucrat’s idea of equity.

In such circumstances, the use of personal influence or bribery by a petitioner at the bar of bureaucracy may actually represent an increase in efficiency. It would be better that the bureaucracy did not exist at all, of course; but it does exist and is unlikely soon to disappear. (My experience in Britain suggests that all official attempts to reduce bureaucracy actually increase it.) The man who can bribe or call upon the illicit influence of his brother-in-law is not obliged passively to await a decree from the bureaucratic Olympus: he retains some control over the situation (and also, therefore, some self-respect).

Where the state looms large in everyone’s life, a degree of corruption exerts a beneficial effect upon the character of the people. Only up to a point, of course: when the state is all-embracing and official corruption becomes total, both together stifle wealth creation, and general impoverishment results. In the end, the demonetarization of the economy ensues, as under communism. Italy never came near this stage, however, and Italian bureaucrats were astute enough not to kill the goose that laid the golden eggs. The richer the society around them, the more they could themselves extract from it. What was good for business was good for them. (Officials in China’s relatively flourishing Guangdong province appear to have grasped this principle, too.)

The thoroughly obvious corruption of Italian officials convinced the population that the state was their enemy, not their patron or protector, and they regarded it with profound mistrust. Accordingly, people of all classes evaded taxes, without moral opprobrium; everyone regarded the idea of revealing one’s entire income to the authorities and paying the taxes upon it as laughable in its naïveté. As far as possible, people concealed their economic activity from the eyes of the state, giving rise to Italy’s notorious "black" economy, a kind of parallel market, which is by common consent larger and more sophisticated than in any other European state. The size of this parallel market probably explains why the country, with an official per-capita GNP the size of Britain’s, looks very much more prosperous than Britain.

The need to evade the depredations of the state and to make alternative arrangements for functions (like social security) that the state claimed, but usually failed, to carry out, meant that the Italian population had to fend for itself. With governments that fell like skittles—and quite long periods without any government at all—no Italian could possibly imagine that the politicians or the state they governed held the key to their prosperity. Necessity in Italy was not so much the mother of invention as of economic flexibility, opportunism (in the best sense), and family solidarity. Not coincidentally, the Italian divorce and illegitimacy rates are a sixth of the British—a product not only of Italy’s Catholicism.

In Britain, by contrast, the financial probity of the public administration, a legacy of the Victorian era (in which the state hardly impinged on the lives of individuals at all) misled people into a fatal misapprehension. They supposed that, because no public official ever asked for or expected a bribe, or could be easily swayed by other forms of illicit influence, public officials actually worked both for the public good and the good of individuals. People therefore came to believe in the beneficence, or at least the benevolent neutrality, of the state. Its officials were honest and fair, and therefore it was good.

I see the deleterious consequences of this mistaken belief in many of my patients. They often devote their lives to trying to extract what they believe is their due from the authorities, whose failure to provide it is to them inexplicable, since no one appears personally to benefit from it. If only someone in the administration would say to them, "Give me £100 and I’ll do it," all would make sense to them: but no one ever does. The illusion thus persists, sometimes for years, that the authorities are genuinely looking into it. The British national pastime is Waiting for Godot.

My patients who live in public housing, for example, inhabit a world of endless, inexplicable official delay and prevarication. The rhetoric of politicians and the financial integrity of the housing department have convinced them that public housing exists for the benefit of those who live in it, so they suffer from paralyzing cognitive dissonance when problems arise. I see this often. When a damp patch appeared on the living-room wall of one of my patients and then spread throughout his apartment to such an extent that the electricity blew out and he and his family had to live in the only room not yet affected, he found the authorities distinctly—and mysteriously—unhelpful. For 18 months, he sought their assistance, but they lost his letters, denied they had ever received them, sent an inspector who said there was no damp present despite the fact that black mold was attacking everything in the affected rooms, sent a contractor who simply covered the damp walls with cardboard that the mold soon ate away, and finally accused the tenant himself of being responsible for the damp because he had overheated the rooms with the windows shut. Therefore, they declared, they could do nothing further to help him. Because it had not occurred to him that there might be other forms of dishonesty than financial, my patient persisted in his search for satisfaction for a long time, believing himself to be the isolated victim of bad luck rather than of systematic neglect.

When finally he realized that bad luck alone could not explain his experience, his willing and patient dependence gave way to angry resentment: but neither dependence nor resentment is constructive. A large and honest, but indifferent or incompetent, state bureaucracy creates expectations that give rise to this dialectic of dependence and resentment, which does not exist in Italy, where no one would assume the honesty and therefore the benevolence of the public administration in the first place.

The vast and seemingly benevolent state has completely eroded the proud and sturdy independence of the British population, once remarked upon by visitors. Forty percent of Britons now depend on government subsidy, receiving direct payment from the public purse as part, or all, of their income. Even so, the government regularly mounts advertising campaigns to ensure that people claim all their entitlements. Moreover, the British state has removed several important areas of human life from the responsibility of individuals to arrange for themselves or their families: health, education, social security, pensions, and (for at least a quarter of the population) housing. The income left to them after taxation—or received from the government dole—is thus a kind of pocket money, the more serious, if more vexatious and boring, aspects of a personal budget having been already taken care of by the government. This explains why, whenever the British government considers a tax cut, almost all newspapers, no matter of what political tendency, describe the measure as giving money away—indulging in a handout, like a parent doling out a weekly allowance to children.

The entrapment of people in the psychologically and economically debilitating dialectic I have described is not a marginal, but a mass, phenomenon. It addles the brain and paralyzes action. It helps to explain the degradation and lack of self-respect that is so obvious in the streets of Britain but so absent from those of Italy.

When I worked in East Africa, I saw an instructive contrast between an Italian and a British construction project within a few miles of each other. The British construction workers were drunken, violent, debauched, and dirty, without shame or dignity. Utterly egotistical, yet without much individuality, they wrecked hugely expensive machinery when drunk, without a moment’s regret, and responded with outrage if reprimanded. They intimidated their managers, who made little attempt to control them. They were truly representative of a population that has lost any pride in itself or in what it does, and that somehow contrives to be frivolous without gaiety.

By contrast, the Italians were hardworking, disciplined, and clean, and could enjoy themselves in a civilized way even in the African bush, drinking without drunkenness or that complete loss of self-control characteristic of today’s British. Unlike the British, they never became a nuisance to the local population, and everyone saw them as people who had come to do a job of work. At once more social and more self-reliant than their British counterparts, they were men whose dignity had not been destroyed by a culture of dependence.

Italy’s public administration vastly surpasses Britain’s in only one area: the preservation of the country’s urban heritage. This single bureaucratic success is crucial, however, for it greatly elevates Italy’s standard of living over Britain’s. The destruction of Britain’s urban patrimony and its replacement by hideous modernist multi-story parking garages and office buildings, while inflating the GNP, represent a lowering of every Briton’s quality of life.

You would think that Britain, with a less rich architectural heritage to preserve than Italy, would preserve what it had all the more zealously. But no: Britain’s townscape, once civilized and gracious, has fallen prey to an ideological pincer movement. At one end of the political spectrum, the rawest and shortest-sighted commercial interests demanded and won freedom to do whatever they wished with the inherited townscape, in the cheapest and most profitable way, so that harmonious assemblages of buildings centuries old suffered the most philistine and incongruous redevelopment that ruined them beyond hope of restoration. At the other end of the spectrum, radical reformers fanatically hated the architectural symbols of the past, merely because they were symbols of the past, whose despised elitist culture supposedly rested solely on exploitation, racism, slavery, and so forth.

The official architect and town planner of the city in which I live, for example, wanted—quite literally—to pull down every single local building that dated from before the second half of the twentieth century, including entire Georgian streets and many masterpieces of the Victorian gothic revival. Fortunately, he retired when perhaps a tenth of the old buildings still remained: the rest having by then been replaced by Le Corbusian leviathans so horrible and inhuman that many of them are now scheduled for demolition in their turn, less than 30 years after their erection. The Georgian spa city of Bath offers an even more startling example: in the 1950s, the city council wanted to raze it to the ground and replace it with something more in tune with the times.

Such barbarous thoughts would never have occurred to any Italian, however corrupt or politically extreme he might otherwise have been. As Giorgio Bassani observes of the street of palaces where his protagonists live in The Garden of the Finzi-Continis: "[The] Corso Ercole I d’Este is so fine, and such a tourist attraction, that the left-wing council that has been running Ferrara for nearly fifteen years has realized it must be left as it is and strictly protected against speculative builders and shopkeepers; in fact, that its aristocratic character must be preserved exactly as it was." Never in England.

Actually, Italian municipal policy has been even more enlightened than this passage suggests. Commercial enterprises in old towns and cities must conform to aesthetic standards, so as not to do violence to the appearance of buildings, with the result that the Italians are not, like the British, modern barbarians camped out in the relics of an older and superior civilization to whose beauties they are oblivious. Italian municipalities have also kept their cities vibrant by capping the local taxes of small businesses, thus nurturing a variety of shops that in turn nourish many crafts, from papermaking to glass-blowing, that might otherwise have died. Thus, an uneducated man in Italy can still be a proud craftsman, while in Britain he must take a low-paid, unskilled job—if he takes a job at all. Italian downtowns are not as British city centers are, the location of depressingly uniform chain stores without character or individuality, plate-glassed emporia hacked into the ground floors of historic buildings without regard to the original architecture. The Italians have solved, as the British have not, the problem of living in a modern way in ancient surroundings that, looked at in economic terms, constitute inherited wealth.

The preservation of the aesthetic quality of Italian life, but its utter destruction in Britain, whose streets have been coarsened to a degree unequaled in Europe, has had profound social and economic consequences. Where all is ugliness and indifference to aesthetic considerations, it is easy for behavior to become ugly and crude and for collective municipal pride to evaporate. It seems not to matter how people conduct themselves: there is nothing to spoil. Attention to detail, important in both the manufacture of goods and the provision of services, attenuates in an environment of generalized ugliness. What is the point of wiping a table, if the world around it is irredeemably hideous? To be sure, self-respect can encourage people to make the best of a bad job, but dependency on the state has destroyed the basis of self-respect.

In a world grown richer, aesthetic quality has obvious economic benefits. Given the gulf between the excellence of Italian design, educated by the beauties of the past, and the unremitting tastelessness of British modernity, it is not a coincidence that Italy has one of the largest trading surpluses of any nation, while Britain has one of the largest deficits.

Italy has long cherished a certain Anglophilia, or at least an admiration for the supposed uprightness of British life, which Italians considered a model worthy of imitation. This uprightness, Italians believed, characterized the conduct both of the government and of the population, which was too proud and self-reliant to stoop to dishonesty. Alas, this is a vision of the past, not of the present.

In any case, the Italians know themselves well enough not to believe wholeheartedly in the possibility of honest government in their country: which is why the allegations of dishonesty hurled against Prime Minister Berlusconi before his election were beside the point. Even if such accusations were true, the new prime minister would only have done on a grand scale what most Italians have done on a small one. The electorate probably appreciated that a leviathan state is harmful because it is leviathan, not because it is corrupt. An uncorrupt leviathan state is, in fact, more to be feared than a corrupt one. Indeed, if the Italian state were to turn honest without a simultaneous reduction in its size, the result would be an economic and cultural catastrophe for Italy.

The British, by contrast, are still attached to their state as calves to the udder. They have just voted massively for a party and a man who claim to be responsible for everything—whose government has recently issued, for example, an official booklet to every engaged couple outlining the advantages and disadvantages of marriage, as if the population were incapable of thinking for itself even about those things that most intimately concern it (which, under a regime like this, is increasingly the case).

What can be the future of a country whose government believes that the population needs to be told that marriage can sometimes result in marital disharmony?

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