Institutionalised Corruption in Neoliberal Britain

by David Whyte, Tom Mills

Britain is a society dominated by powerful and largely unaccountable institutions which have corrupted the public interest for private gain.

First published: 13 April, 2015 | Category: Corporate power, Democracy

The notion that Britain is a democratic society governed by the rule of law is deeply embedded within elite political culture.  Indeed, the Conservative-led Coalition Government has declared that both 'democracy' and the 'rule of law' are British values against which 'extremists' are to be judged.  But the contributors to a new collection from Pluto Press – which include activists and experts from Corporate Watch, Democratic Audit, the High Pay Centre, the Hillsborough Justice Campaign, Spinwatch and other organisations – argue that far from being a nation of 'fair play' and equality before the law, Britain is a society dominated by powerful and largely unaccountable institutions which have corrupted the public interest for private gain.  NLP's Tom Mills spoke to the editor of How Corrupt is Britain?, David Whyte, about the book and institutionalised corruption in neoliberal Britain.

Journalists are often preoccupied with the idea of corruption in the sense of the powerful deviating from their own rules and norms.  But the left less so.  Perhaps this is because we see inherent problems with powerful institutions when they function as they should.  Why do you think corruption is a useful concept for understanding neoliberal capitalism?

One of the points that the introduction to the book makes is that one of the great misconceptions is that corruption is peripheral to most British institutions, or is generally a flaw in the way that those institutions are supposed to work.  In fact, for our most powerful institutions in the corporate and public sectors, corruption is part an parcel of their everyday operation.  In terms of the left seeing the inherent problem as residing in the normal function of powerful institutions, I agree.  What the book stresses is that corruption is now part and parcel of the everyday and routine function of those institutions.

Corruption is still useful as a concept only in so far as we can portray the various practices that deceive, defraud and rip off the public as a general feature of neo-liberal societies.  And this is the argument of the book: a key feature of the neo-liberal period is the green light that has been given to particular institutions to deceive, defraud and rip off the public.

There are populist right-wing understandings of corruption – the idea that politicians are all immoral and greedy, for example – and there are also neoliberal versions – which more or less define corruption as a deviation from market processes.  How much does your understanding share with these kind of ideas?

One idea that is found across neo-liberal counter-corruption initiatives is that corruption is predominantly a public sector problem, precipitated by the unnecessary concentration of economic decision making in the hands of governments.  Corruption of the market can, the argument presupposes, be eradicated by encouraging the ‘hidden hand’ forces of the market, expressed in the decisions of competing, self-interested participants.  In other words, from a neo-liberal perspective it is privatisation, competition and de-regulation that will produce less corruption.  Yet this is not our historical experience of the neo-liberal period.  What appears to be unfolding in many of the cases explored in the book is a different type of violation: the development of neoliberal policies that reduce the aims of ‘public policy’ and ‘public interest’ to the pursuit of the interests of private profit-making corporations.   Perhaps the most visible example of the way that the public interest is being reduced to the interests of business is found in the revolving door of senior appointments between business and government.  It is this dynamic – a more open attempt to subsume the public interest to the interest of private corporations – that has brought the rationales, practices, and even the morals and values, of the private sector into the public sector, and at the same time is further undermining the independence of policy-making and regulatory processes.

Although elite corruption is apparently threatening to become a national stereotype, the commonly repeated assumption that ‘we are not Afghanistan or Russia’ is a persistent one.  This assumption is normally justified on the basis that there is no routine bribery in the police or in other public services; money does not change hands between individuals to avoid a discretionary traffic violation or to secure the statutory protection of the police.  The truth is that we (and I am referring here to both the mainstream press and the left press) have failed to highlight the problem of institutional rather than individual corruption.  By the former I mean the corrupt practices that further the interests of institutions.  LIBOR or FOREX rate-fixing in the banking sector does not necessarily benefit individuals.  It is of course possible that some individuals involved in such fraudulent activity may benefit and may be better positioned to further their careers, but the real purpose and effect of this activity is to extend the power and reach of the financial institutions involved.   The same principle is at work in range of police evidence-rigging cases and cover-ups that have recently risen to the surface.   Police forces have been shielded by the manipulation of evidence that has either protected their reputation or prevented criticism of police practices.  Some of the recent cash-for-access exposes would clearly have boosted the bank balances of politicians, but just as many of those cases involved donations to political party coffers.  Thus, it is a principle of institutional rather than individual corruption that we need to understand in the context of advanced liberal democracies like the UK.  If we accept this, then we accept that corruption is not merely a pathological defect of the political and economic systems that we live in, but is a routine method of maintaining and extending the power of corporations, governments and public institutions. 

Perhaps the bribery of individuals is not common in British police forces, public services or in government.  We do know, however, that it does exist: money does change hands at some times for some purposes.  There is more than enough evidence from parliamentary inquiries into the role of News International and other media groups into ‘phone-hacking’ to show that private investigators and journalists have in a very wide range of circumstances regularly made payments for information to former and serving police officers, and to other public officials.  The phone-hacking scandal is essentially a bribery scandal. 

Is the kind of institutional corruption detailed in the book a new feature of British society?

Institutional corruption is not a new characteristic of the British ruling class by any means.  Few historians would be very surprised by the present-day litany of corruption cases.  The history of the British establishment is, in many ways, a history of corruption.   Yet corruption is becoming institutionalised in a different, more routine forms.  The book argues that neo-liberal ideas have supported on one hand, the concentration of power in particular institutions (for example in police and security services and the finance sector), and on the other hand have supported the deepening of a culture of impunity in those institutions.  This culture of impunity clearly protects politicians, corporate executives and for some state servants such as police officers.  If particular groups of people in those institutions deviate from their own rules and norms then it doesn’t matter too much, since they will only be held to account only under exceptional circumstances. 

We've seen some remarkable revelations around institutional corruption in the last few years, vindicating claims about state and corporate power which were previously very marginal How significant do you think these have been?

Very significant.  Only in the past few weeks, we have had news of yet another investigation into the UK’s largest retail outlet Tesco, by the Groceries Code Adjudicator.  This comes on top of current investigations of the same company by the Serious Fraud Office and the Financial Reporting Council.  Mirror group is now being investigated by Scotland Yard after allegations about bribery and phone hacking that may yet exceed the depth of the News International scandal.  HSBC are embroiled in yet another financial scandal, this time involving a tax avoidance scheme.  And in the past 6 weeks, it was disclosed that the Bank of England is now under investigation by the Serious Fraud Office for its conduct in the bank bailouts.  In politics, there have been more major exposes of ‘cash for access’ allegations involving prominent members of the three main political parties.  In the police, the recent announcement of a fresh IPCC corruption investigation of the Met for its role in a child abuse cover up comes on the back of a very long line of cases of evidence manipulation and cover up (Plebgate; falsification of police evidence following the Hillsborough disaster; a corruption in the original investigation of the Stephen Lawrence case; and even evidence of corruption in the Mets’s own anti-corruption unit).

Yet despite this conveyor belt of cases, the British establishment clings desperately to an enduring national myth: that we are not like the majority of countries across the world.   Although there are some peripheral problems with corruption in public life, our institutions are basically fair and democratic.  It is one of the foundation stones of our self-written national heritage.  Historically we have constructed corruption as something that is exclusively a problem in developing or economically ‘primitive’ societies, rather than our own.  Yet the almost daily reporting of all manner of corruption cases in our most prominent and powerful institutions is beginning to unravel the idea the British establishment is predicated on civilised values of ‘fairness’, ‘openness’ and ‘transparency’.  As the façade shatters, it reveals the residual racism in the claim that we are not corrupt like other countries in the Global South, or indeed that we are not like our Southern European counterparts.    

David Whyte is professor of socio-legal studies at the University of Liverpool, where he teaches and researches the relationship between the rule of law and state-corporate power.  His other books include Crimes of the Powerful (Open University Press, 2009) and The Corporate Criminal (with Steve Tombs, Routledge, 2015).

Tom Mills is a researcher at the University of Bath and a co-editor of New Left Project. He tweets @ta_mills.

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