| Power loves money and money loves power. Their mutual attraction has defined government for millennia. Modern democracies try to restrain this everlasting love with ombudsmen, auditors and regulation, but it slips away to find more subtle forms of expression.
Only the most naïve believe that there was ever a time when powerful business interests had no influence over our governments. The past 30 years have seen the rise of liberal economics – free markets, free trade, deregulation and privatization. With government getting out of commerce’s way, business should be less interested in setting the public agenda. Instead, money and power’s true love grows because government remains an economic player with its purchasing and regulatory powers. Industries now work even harder to set the government agenda and influence decision makers.
Governments pass conflict of interest rules and we live in an age of inquiries and commissions. Yet, the litany of high-profile leaders who have fallen prey to temptation is long. More insidious are those who avoid the most obvious crimes and ensure a wealthly retirement by nurturing their business connections when possible.
With the end of the Cold War, the U.S. government chose spreading free-market economics and democracy as the ideological cloak for its strategic interests. The U.S., with the help of the World Bank and the International Monetary Fund (IMF), pressures alternative forms of capitalism such as those in East Asia to become more like the U.S. system. They claim East Asian countries are guilty of crony capitalism; a system where the government works closely with and protects large business conglomerates. Free-market dogma states this assistance and protection produces inefficient businesses and leads to problems such as the 1997 economic meltdown. Many Asian economies, especially South Korea, have reduced their crony capitalism since then by addressing corruption issues and breaking up large conglomerates.
In the meantime, the Bush-Cheney administration typifies crony capitalism American-style. The laissez-faire U.S. economy is a myth. There is less regulation and more competition in some areas than in the Canadian economy, but there are also deep links between the business and political elites that do more to set government direction than millions of voters.
The military-industrial complex is always a good place to start. The Clinton administration handed out export permit after export permit to defence contractors to save the industry the pain of a post-Cold War contraction. The industries in a federal politician’s riding are a better indicator of how a representative or senator will vote than any espoused principles or values.
The Carlyle Group is a company that buys struggling companies, many of them weapons manufacturers, turns them around and sells them for large profits – a 34 per cent rate of return on its investments. A big part of their success story has been hiring former politicians and senior bureaucrats to help them improve the fortunes of their struggling companies. George Bush Sr. and John Major are both involved in the company, which likes to keep a low public profile.
Dick Cheney’s Halliburton connections are better known. The defence contractor hired Cheney as CEO when he left his position as Secretary of Defense to Bush Sr. despite Cheney’s lack of business experience. From 2002 to 2003 Halliburton’s U.S. government contracts increased from $500 million (U.S.) to $5.9 billion; mostly courtesy of a series of contracts for the reconstruction of Iraq awarded without a public tender process.
The Bushites also love the oil and gas industry. Cheney is still fighting to keep the deliberations of his energy task force secret and Bush is ready to open up any and all public lands for oil and gas companies while asking for little in return. All of which is hard to swallow knowing that the industry made a pastime of bailing out Junior’s failed businesses and lending him money to invest in new ones.
In France, the senior managers of the national oil company are now in jail for benefiting from slush funds they claimed were meant to further French oil policy and benefit certain African leaders. Italy’s Silvio Berlusconi ran for prime minister with the sole purpose of avoiding corruption charges levelled against him and his companies.
The Liberal sponsorship scandal – or "Liberal mismanagement" if the Martinets are your flavour of politician – reminds us that a fair dose of corruption remains in Canada. The sad case of Jean Pelletier, right down to his whining about being dumped for being a Chretien loyalist, is a lesson in the dangerous nature of cronyism. Live by the crony, die by the crony. Name the next crony please, Mr. Martin.
As for East Asia, U.S. companies such as the Carlyle Group are now snapping up the assets of the former conglomerates and making a killing – good stuff for the Bush family fortune.
Web resources
· Crony capitalism defined – www.artpolitic.org/infopedia/cr/Crony_capitalism.html
· The federal NDP thinks more rules might make a difference – www.politicswatch.com/martin-mar4-2004.htm
· Stories on the Carlyle Group – www.thenation.com/doc.mhtml?i=20020401&s=shorrock |
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