Corruption and It’s Costs.

              So how is corruption like a leaky pipe? Answer: stuff goes in one end but it doesn’t all come out the other. We use the word “corruption” to mean a lot of different things, but commonly to mean dishonesty in organizations—particularly government. “Corruption” generally means people stealing stuff or taking bribes to do their jobs. So, here’s the pipe:

              An organization, say, the Boy Scouts or your local town, has a job to do: give out Eagle Scout Badges or pick up your garbage. In a healthy organization, people in authority make decisions on facts and legal process: if you meet the requirements, you get the badge or on Wednesday, your trash is gone. But in a corrupt organization, it doesn’t work that way. You want to make Eagle, you pay off the Scoutmaster. You want your trash picked up, you bribe your local councilman. The bribes can be illegal, or lawful as in additional permits and bureaucratic hurdles.

              First off, this means the folks with Eagle badges aren’t the best, just the crookedest. It also means that citizens have to pay an extra “tax” for city services. Even worse, in a corrupt organization, resources don’t all go where they should. Imagine Crooktown, where government is corrupt. To get anything done required extra money to bribe the officials, so the cost of doing business goes up. If building a house cost $100K, it now costs $100K plus the bribes, let’s say $140K. You may have spent $140K but you didn’t get $140K worth of house.

              The effect is greater when it’s a big project with lots of money. Say there’s a road to build, and you budget one million dollars. But the money gets stolen, diverted, contracts given to cronies who inflate the bill and keep the balance. In the end you don’t get a million dollars’ worth of road, you’re lucky to get a $400K road.

              This is the Leaky Pipe. You start with resources: money, people, equipment. You want to accomplish a goal: pave a road, build a building, equip an army. Between the bank and the goal is the crooked system, which is a leaky pipe. Folks help themselves. Money and resources are diverted and stolen out, like holes in a water main, until what comes out the end is a lot less than what came in. You can call it ‘waste and fraud’ but somebody got that money.

              The result: everything costs more than it should, because you have to allow for the “shrinkage” or theft. People are deterred from doing business because stuff costs more, and because corrupt officials invariable get greedier. Another result is more subtle: nobody really has what they think they have. You may believe you bought a million-dollar road or building. Wrong! You only have a $400K building. Dictators like Vladimir Putin and Xi Jinping have learned this: they thought they had big strong militaries, and found out their expensive buildups had been diverted out the leaky pipe. Both Putin and Xi are forever firing generals on corruption charges, which doesn’t stop the problem.

              When corruption in a society becomes common, the entire structure becomes rotten. Everything is for sale, law is a bad joke, police are just another gang, process and government are just a racket. Playing by the rules makes you a sucker, and everybody cheats. Wealth and resources don’t go to their best and highest use, but are simply loot to be stolen by the strongest and craftiest. These places are poor, because who’s going to invest wealth where it’s fair game to be stolen? If everyone’s a crook, why do honest business?

              A very good source is Transparency International, and it’s “Corruption Perception Index. Corruption Perceptions Index 2024 – Transparency.org. It rates all the nations of the world: top is Denmark, bottom is Somalia. US is up there but not the top! You can see in the bottom third, the scheisshole nations, and none will surprise you. There’s a reason why they’re on the bottom, and it’s not Greedy Capitalism or White Supremacy. Corruption correlates with poverty.

              Corruption can come in a lot of different ways legal, illegal, and grey: money and property stolen, cash bribes, jobs for pals, crooked law and law enforcement, government grants for cronies and their companies or NGOs. All of it has one thing in common: it’s theft. Water goes in the It’s stealing your money, which you earn honestly and pay expecting people to use it as they say they will. It’s like cancer, which eats healthy bodies until the entire being is sick and dying. It’ll go on until people demand it stop.