Ill-Gotten Gains Is What Politics Is All About. By Michael Baker.
Rigged is the work of two economists, Cameron Murray and Paul Frijters, both of whom either currently or previously plied their trade in Australian academia….
The book tells the story of how networks of individuals in government and the private sector, referred to collectively as “James” in the book, collude to divert into their own pockets as much as half the wealth of the country from ordinary Australians, collectively named “Sam.”
What exactly does James do? What is his “game,” and how does he siphon off so much wealth for himself and the other Jameses in his network, while hardly even being noticed, much less restrained, by regulators, watchdogs and us ordinary Sams, whom he is robbing in broad daylight?
As the authors point out, the word ‘robbing’ is meant not in the sense of outright theft because theft and fraud are criminal offenses that are apt to be uncovered and punished. Rather, James, in his various positions within politics, regulatory agencies, corporations, law firms, consultancies, trade associations, and so on, takes advantage of his power to grant discretionary favours to his mates (the other Jameses in his network) who in turn, over time, return those favours to James, not in cash but in kind. These favours are called “grey gifts.” In the authors’ own words:
Sam’s pockets need not be picked in a legally criminal sense, since the grey gifts are often within the scope of the law. Sam simply never gets the income, and never really sees that they are losing out from it. No one in the Game of Mates asks for direct trades, with the wealth stolen being shared through many repeated indirect favours. The Game is cronyism writ large.
Examples:
Grey gifts can be zoning decisions by town planners that favour certain property developers; they can be guaranteed returns to private companies, embedded in their contracts with government, that shift all their risk for large infrastructure projects onto the taxpayer; they can be mining licenses dished out at mates’ rates; they can be regulations to prevent competition for retailers or banks; they can be loopholes that shift the cost of environmental cleanup from corporate perpetrators to the taxpayer; they can be mandates for additives in petrol to support local farming and boost grain prices. And on and on.
The number and magnitude of the rorts are, respectively, limitless and staggering. In the mining industry, corporate Jameses conspire with Jameses in government to get Sam the taxpayer to cough up the money for a railway to his mine, or for an airstrip or harbour to handle the comings and goings of James’ products and personnel, all under the pretext that these installations are for the public benefit and that James is only an incidental beneficiary.
The regulators and watchdogs that are supposed to be keeping an eye on all of this for Sam are often peopled by James himself. The fox is in charge of the hen house. Purported advocates for Sam in government (both in the political class and in the bureaucracy) frequently form part of the network of Jameses and are participating in the rigging. Even when they are not, it is ultimately the politicians who need to act to clamp down on the rorts, and they, alas, are also apt to be playing the Game. And if they aren’t and they want to do something to combat the rorts, they are easily neutered by media campaigns orchestrated by James and his mates the minute they put their heads above the parapet. …
Western corruption is rife:
Readers from any country in the West will recognize the same shenanigans in their own countries, be it the Game of Pals in the US or the Game of Chums in the UK. James’ grubby fingerprints are on the regulatory and corporate levers everywhere. …
The authors cite Mancur Olson’s observation from way back in the early 1980s that in the process of diverting wealth to themselves, groups are willing to impose external costs that “exceed the amount redistributed by a huge multiple.” So James will keep on playing the game until he is forced to stop, and not before. …
To tackle the game effectively, a critical mass of Sams have to be woken up and made to feel indignant enough to squeal.
An interesting listen:
The new ruling class can be regarded as a rigged game of mates, sharing grey gifts amongst themselves. Insiders sharing gifts from government. It merges naturally with the left, of parasites using politics to gain at the expense of the rest of us.
