Day 64 The political corruption

The political corruption

Ever since human formed society, the corruption of a governor has been an inevitable issue that concerns every country. No matter how well the society structured nor the ethical standard established, there will always be some people accept a bribe. In 2014, Chinese anti-corruption commission  proceeded to investigate over 680 government officials. Even the U.S. government experiences the scandal of political donations. In my opinion, the corruption can only be controlled but not eliminated, because it is our human nature to pursue more benefit if we are granted enough power. The  impediments to stop governor being corrupted are their own conscience and harsh penalties by law.

Why does corruption have become a serious problem which exacerbates social stabilization? Sure thing people are fuming due to their tax contribution was misused. However, the most severe sabotage dealt by the corruption is on the contry’s economical order. As a matter of fact, the economic growth is generated through the demand-supply process in the market. The corrupted official will simply destroy this balance, by inducing unfair competition. For instance, several companies are tendering for a contract, but one of the governors uses his/her power to influence the result on behalf of his/her own benefit. That will simply violate the norm of fair competition and destroy the equilibrium in the market. Actually, the social optimal value is defined by this market equilibrium, so the interference of the corrupted governor turns part of the economy surplus to his/her own gain, and creates a deadweight loss to the economy. This is a typical ‘smart for one, dumb for all’ situation, where on person’s gain hurt the whole society, therefore the social optimal level output can never be reached. In addition, once the government taken the bribe, they will not deposit the money in the domestic bank, because they cannot explain the source of this income. Hence they will tend to transfer that dirty money to overseas bank or store the cash at their house. Russia is one of the countries suffering immense capital loss every year, and most part of it is from the corrupted governor. As we know, capital loss leads to problems such as diminishing economic growth. Even though the corrupted officials decide to hide the cash in their house, that amount of money will create no value at all. Deposit taking institutions cannot utilize that money to make loans and circulate it in the payment system. Thus there will be no extra economic surplus created. Moreover, taxpayers and firms will not trust the government any more, so they have no propensity to invest in new capital and purchase domestic assets. Which leads to the further recession in the future.

I am not advocating for the corrupted. However, in my opinion, it is unavoidable for people to take advantage of their political power. Thereby  we might have to tolerate that, unless this official is wasting the country’s resources for his/her own good but not creating anything of value to the society,