Less regulation, less government, less political power would also be the most important measure against corruption for the EU.
The relationship between money and politics is problematic in countries where wealth does not primarily depend on entrepreneurial ideas, but rather on political influence and access to the hubs of power. The more power the state has, the more lobbying and corruption flourish.
This is the case, for example, in Russia, where after the collapse of communism some oligarchs seized the sources of raw materials – mainly oil and gas – and where the rent-seeking industries play the crucial role. These are often the countries where corruption also plays a major role. Russia, for example, ranks poorly at 136 (out of 180) in Transparency International’s Corruption Perceptions Index and even ranked first in The Economist’s 2016 Crony-capitalism index. In the ranking of economic freedom, the Capitalism Index of the Heritage Foundation, Russia is far behind at 113th place. The example of countries like Russia makes it clear that we need more capitalism, not less, in order to ensure that politics and reduce economy.
Rainer Zitelmann has a doctorate in history, sociology and has been a member of the FDP for 28 years. He is also the author of the book “Psychology of the Super-Rich”.
Many people associate “capitalism” with “corruption.” “Criminal offenses such as bribery can be private or public and are commonplace in many countries. But they are most commonly found where government officials have the greatest authority,” wrote American economist Alan H. Meltzer. The view that corruption is particularly widespread in capitalist countries is wrong. The opposite is true. This is shown by comparing Transparency International’s Corruption Perceptions Index CPI with the Index of Economic Freedom.
On the critique of the critique of capitalism
The Index of Economic Freedom, which the Heritage Foundation has been compiling since 1995, is considered a “capitalism scale”. The countries with the least corruption are countries with a high degree of economic freedom. Without exception, all of the ten countries with the lowest levels of corruption are in the “free” or “mostly free” categories on the Economic Freedom Index. Denmark, Finland, New Zealand, Switzerland and the Netherlands are among the ten countries with the least perceived corruption in the world – and they all also belong to the ten countries with the highest degree of economic freedom!
Conversely, countries that rank among the bottom ten in the corruption index are also countries that are not economically free. The two bottom performers in the Economic Freedom Index, North Korea and Venezuela, are also among the bottom performers in the Corruption Perceptions Index. The more the state intervenes in economic life, the more possibilities there are for bribing government officials. Anyone who wants to limit the unethical or even criminal influence of the rich on politics should not advocate for more, but for less government.
I was recently in Georgia, a country where corruption used to flourish. The economist Professor Gia Jandieri, who played a key role in concepts for fighting corruption, told me what had been done about it (apart from dismissing all of the approximately 35,000 police officers in one fell swoop). “At least as important for combating corruption was the fact that numerous superfluous regulations and regulations were eliminated through reforms.” An important lesson for other countries too: the fewer state regulations there are, the fewer starting points there are for corruption. As recently as 2004, Georgia was ranked 133rd in Transparency International’s Corruption Perceptions Index, and in 2021 it was 45th out of 180.
What does that mean for the EU? The EU regulates more and more. This means that there are more and more starting points for lobbying by special interests or even corruption. One will not be surprised if the cases of corruption that have now been uncovered are only the tip of the iceberg. Less regulation, less government, less political power would also be the most important measure against corruption for the EU.
