Corruption

When Distrust Goes Viral

In 1919, the Chicago White Sox and the Cincinnati Reds played a nine-game World Series that illustrates what happens when business and political leaders lack integrity.

The 1919 Chicago White Sox

The 1919 Chicago White Sox

Numerous players on Chicago’s team agreed to accept large bribes from gamblers to throw the series and lose. Indeed, the Reds won and the gamblers took home a fortune. The full story can be reviewed in the Ken Burns documentary on the history of baseball.

As a result of the corruption in the sport, which was already a national pastime in America, distrust went viral. No one could trust the game. No one knew when a game was fair or foul. Across the two major leagues, attendance at stadiums plummeted. Teams lost huge sums of money, even when they were completely honest.

Worse yet was what the corruption did to young boys who looked up to baseball stars as role models. Kenesaw Mountain Landis, a federal judge who in 1920 was hired as the first baseball commissioner to attempt to restore trust in the game, eloquently conveyed the impact on kids in this statement: 

“Baseball is something more than a game to an American boy,” Landis said. “It is his training field for life work. Destroy his faith in its squareness and honesty and you have destroyed something more—you have planted suspicion of all things in his heart.”

The same outcome happens when business leaders and politicians, for selfish gain and power, lie and cheat. Distrust goes viral. And when “suspicion of all things” is in our hearts, little parts of society die. Soon widespread distrust causes the breakdown of commerce, the erosion of community, and the atomization of individuals.

What happens on the baseball field doesn’t stay on the baseball field.

The Human Toll of Corruption

Statistical portraits of commerce and economics are important, but big numbers gloss over the impact of economic trends and policies on individual lives and families.

The same occurs when talking about corruption, perhaps because it is so widespread. We talk about the global problem in abstract terms—about the amount of money siphoned away from economies—rather than in human terms.

Unemployed in Recife, Brazil. Photo by Tom McMahan

Unemployed in Recife, Brazil. Photo by Tom McMahan

So, here’s a human story. During a recent trip to Brazil, where corruption is creating social chaos and taking down high-level business and political leaders, I stopped in the northeastern coastal city of Recife. There I spoke with an executive of a private bus company that provides public transportation in this city of about four million people.

He told me that four years ago his company had close to 400 buses circulating through the city. Today, he said, the company is down to 80 buses. This number shocked me, because Brazilians are so dependent on public transportation. I asked him what accounted for the reduction.

“Corruption,” he said. “The federal corruption scandals have caused tens of thousands of people in this region to lose their jobs. With those job losses, there was a domino effect in other industries and even in small businesses. Fewer people are riding buses because they don’t have anywhere to work.”

No newspapers are paying attention to what’s happening in one bus company. But 300 idle buses sitting in a hot parking lot are tangible symbols of corruption's impact: people without jobs, families with no income, children who can’t get to school, a rise in emotional depression, and increased crime.

In today’s Wall Street Journal, we read that Brazil’s president, Michel Temer, has been formally charged with corruption. He could end up being the second Brazilian president forced out of office in 18 months. It’s estimated that 60 percent of Brazil’s lawmakers are either under suspicion of, being investigated for, or formally charged for corruption. The money lost from the economy is in the billions of dollars.

But it is in the homes of Brazilian families, in the lives of children, and in the stress of unemployed men and women that we see the full brunt of corruption.

At the core, corruption is a lack of love for fellow human beings. Without love in commerce, people suffer. Corruption dehumanizes economics and imposes suffering on people. 

For more on this topic, we encourage you to work through a book by Tom Petersen called The Economy of God, which can be purchased on Amazon in print or digital formats. 

A World of Corruption

During an election cycle in which cynicism about politics is increasing among most Americans, it is quite disturbing to see several recent academic books claim that the entire global economic system is based on corruption. These books are based on serious research and journalism.

Since the Panama Papers (11.5 million global financial documents) were leaked, more than 400 journalists have been working in a consortium on the documents to unveil what is happening in the global financial system. Here’s the conclusion of one correspondent for The Guardian:

“Previously, we thought that the offshore world was a shadowy, but minor, part of our economic system. What we learned from the Panama Papers is that it is the economic system (The New York Review of Books, October 27, 2016, p. 33).

Hopefully that is an overstatement, but for anyone interested in learning more, we encourage you to read these independent-minded books: The Panama Papers, by Basitan Obermayer and Fredrick Obermaier; The Offshore World, by Ronen Palan, Cornell University Press; The Hidden Wealth of Nations, by Teresa Lavender Fagan, University of Chicago Press.

The books show how the increase of globalized corruption continues to wreak havoc on ordinary people. Here's just one example: According to a report by Global Financial Integrity in 2010, “total illicit outflows from the African continent were anywhere between $854 billion and $1.8 trillion.” The consequences for national economies, jobs, education and healthcare are devastating. In Liberia, where Ebola devastated the nation, the Council on Foreign Relations says that there is only one doctor for every 75,000 people.

Commerce, like all of life, is essentially relational. And trust is the foundation for all relationships. Political and economic corruption erodes the trust that is necessary for commerce to function, including on a global scale. Austan Goolsbee, writing in Foreign Affairs (January/February 2013, p. 170), put it succinctly: “Capital markets can function only when people trust the system.”