How Much of What We Call Corruption Is Actually Embedded in the Monetary Architecture?
Corruption dominates public debate.
Every election promises to eliminate it.
Every government claims to fight it.
Every major scandal reinforces the belief that corruption is the principal obstacle to prosperity.
Illegal bribery.
Kickbacks.
Favouritism.
Influence peddling.
Abuse of public office.
These deserve condemnation.
But there is another question that is rarely asked.
How much of what we call corruption is actually embedded in the economic architecture itself?
Consider housing.
When families struggle to buy a home, the explanation often begins with corruption.
Land speculation.
Approval delays.
Bribes.
Regulatory capture.
These undoubtedly increase costs.
But another large component of housing cost is rarely questioned.
Interest.
Every increase in policy interest rates raises borrowing costs.
Higher borrowing costs increase EMIs.
Developers face higher financing costs.
Businesses face higher financing costs.
Commercial rents rise.
Households ultimately bear much of these costs through higher prices, higher rents and higher mortgage payments.
Unlike illegal corruption, these transfers are not hidden.
They are built into the monetary system itself.
They are authorised by policy.
The distinction is important.
One transfer is condemned.
The other is accepted as normal.
Yet both affect the cost of living.
This is not an argument against central banks.
Nor is it an argument that interest has no role in every conceivable financial arrangement.
It is simply an invitation to ask a question that public debate seldom asks.
If we are concerned about the affordability of housing, education, healthcare and everyday living, should we examine only illegal corruption?
Or should we also examine policy choices that systematically increase financing costs across the economy?
Warren Mosler has long argued that the natural rate of interest for a sovereign currency issuer is zero.
Whether one agrees with that conclusion or not, it forces us to reconsider a basic assumption.
Perhaps positive interest rates are not an inevitable feature of a monetary system.
Perhaps they are a policy choice.
And if they are a policy choice, they deserve the same scrutiny as any other public policy.
This also changes how we think about corruption itself.
Public debate often assumes that eliminating corruption is primarily a matter of stronger enforcement.
Certainly, laws matter.
Transparency matters.
Accountability matters.
But what if part of the problem lies not merely in individual behaviour, but in institutional design?
What if some of the transfers that burden households are not illegal at all?
What if they are embedded within the architecture of the monetary system?
This does not mean that illegal corruption becomes acceptable.
It does not.
Nor does it mean that interest alone explains rising living costs.
It does not.
Housing prices are influenced by land availability, planning regulations, infrastructure, urbanisation, construction costs and many other factors.
The point is more fundamental.
Public policy should examine all major sources of economic burden, whether they arise from illegal conduct or from institutional arrangements.
The Resource Standard approaches this question from a different direction.
Its central concern is not merely how financial claims are distributed.
Its central concern is how society continuously expands productive capacity.
When employment is abundant...
When productive investment is encouraged...
When infrastructure expands...
When basic economic security is assured...
When villages and cities continuously create new productive opportunities...
The economy becomes capable of producing more goods and services at lower real cost.
Development then becomes the principal mechanism for improving living standards.
Perhaps that is where the debate should begin.
Not simply with the question:
"How do we eliminate corruption?"
But with the larger question:
"How do we design institutions that minimise unnecessary economic burdens while continuously expanding society's productive capacity?"
Because prosperity is not created merely by punishing corruption.
It is created by building an economic architecture in which productive activity, rather than financial extraction, becomes the dominant path to progress.
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