Corruption on 4 Corners and the importance of morality in economics.
 

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2158 K Mon 22 Jul 2002

I watched 4 Corners on TV tonight. Chris Masters interviewed police involved in corruption. It was a good insight into the pressures and thinking that lead to the corrupt practices.

These problems are also addressed in a book I have started reading today: Economics - A New Introduction by Hugh Stretton. I am particularly impressed by this section:

NECESSARY MORALITY

Some built-in individual and social morality is a necessary condition of almost any economic system. It is specially necessary to the efficiency of a complicated, pluralist, market economy. Such a decentralized system, with millions of daily actions and transactions, has to rely on most of the people most of the time willingly behaving themselves: telling the truth, giving fair measure, keeping promises and contracts, observing customary obligations, working reliably, cooperating sensibly, not cheating or stealing.

Those requirements certainly have to be reinforced by formal law and enforcement, or the bad will prey on the good and the good be diverted from production to self-defence, to the point of anarchy and breakdown. But it is a great mistake to conclude from this hard fact of life that legal enforcement will work without a social morality. It is impossible to supervise all or most of a modern society's actions and transactions; and if it were possible, what would guarantee the honesty of such an army of supervisors? If everybody including the police and government will steal whenever they can get away with it, then they will mostly get away with it, and there will be very little economic efficiency. 'Internal' morality and 'external' enforcement are necessary to each other, and both are necessary conditions of orderly society. Law enforcement cannot replace a substantial social morality.

On the contrary, its function is to reinforce the morality and protect the people who abide by it - as most people most of the time in most societies want to do.

There is a simple reason why voluntary or customary good behavior helps economic efficiency: it is cheap. Bad behavior has costs, and institutional measure to prevent it have costs. ...

It highlights to me the importance of the Roman Rite's liturgical laws. Most people would want to follow them, but somehow there are pressures so that many do not. By observing Canon 846 and faithfully following the liturgical books there would be greater efficiency for the Catholic Church. By failing to do this this is a loss of trust and culture of corruption develops.

Posted by J.R. Lilburne, 22 July 2002. Extract from Hugh Stretton, "Economics - a new introduction", UNSW Press, 2000, pages 165 - 166.

Other sites:

4 Corners "Undoing the Badness"