The Three “C” Sins

Bailout City

Quoted from WSJ, Daniel Henninger, Capitalism’s Corruptions:

The plight of the world’s poor can be summed up in three truly ugly C-words: corruption, collusion and cronyism. All three may be kissing cousins but each in any language makes a mockery of both capitalism and justice.

Some 20 years ago economists began asking why so many countries, especially in Africa, never get better, even amid periods of global growth. An enormous body of economic literature now exists confirming that corruption keeps the poor down. A survey of this work for the International Monetary Fund concluded that countries get stuck in a “vicious circle of widespread corruption and low economic growth.”

Corruption suppresses growth because citizens in time recognize that honest work produces a lower return than spending one’s energies gaming the system. And, they’ve also found, the vicious circle worsens when real productivity falls alongside an inexorably expanding public sector.

Global poverty persists because corruption kills capitalism. History’s most recent exhibit is the Arab Spring, a product of economic exasperation, especially in Egypt. In time, corruption accelerates political instability, erodes democratic order if it exists, and someone from the outside has to clean up the mess. Think Syria or Mali.

Free enterprise and free markets are always taking the hit for man’s corruptions.


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