The Republic of Virtue. F. H. Buckley

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      Source: GDP per capita, PPP International Monetary Fund World Economic Outlook (April 2015); Transparency International Corruption Perceptions Index 2014.

      It’s easy to see how public corruption can impose costs on a country’s or state’s economy. The fraudulent or criminally irresponsible firm that escapes prosecution harms everyone touched by its actions. The honest and efficient firm might fail in the market, while the corrupt, inefficient one flourishes. Even if he plays by the rules, the crony capitalist who milks the system will draw resources from better firms that fail to invest in politics. By schmoozing with Obama and his green-energy appointees, Solyndra was able to score a $570 million loan guarantee from the federal government. The company manufactured solar panels and lost money on every panel it sold. It was like the old garment industry joke where the boss’s son wonders how they stay afloat when they lose money on every suit they sell. “We make it up on volume,” says the boss. For Solyndra, making it up on volume meant passing the loss on to the American taxpayer.

The Rule of Law

      If Transparency International isn’t terribly impressed with American integrity, the World Justice Project (WJP) has no better opinion of us. The WJP, cofounded by a former head of the American Bar Association, collects data from the general public and from legal professionals to rank countries according to their adherence to the rule of law.³¹ Among the factors considered are equality before the law, an efficient and honest judicial system, and the absence of corruption. Russia came in at 75th place out of 102 countries on the Rule of Law Index in 2015, way behind former communist countries that invested more heavily in the rule of law: Estonia (15), the Czech Republic (20), and Poland (21). What about America? It’s not Russia, not by a long shot, but it still doesn’t rank all that high, coming in at number 19. On the particular measure of an absence of corruption, the United States ranks 20th.

      Until fairly recently, the rule of law wasn’t on economists’ radar screens. To explain why some countries were wealthy and some not, they would refer to natural endowments, such as valuable minerals or oil; or point to a country’s infrastructure or to human capital investments, such as those provided by a public education system; or note differences in culture or religion. Over the last forty years, however, economists have increasingly pointed to the role of institutions, such as a legal regime that protects property rights and enforces contracts, in explaining a country’s wealth. That’s the difference between North Korea and South Korea, one country desperately poor and the other rich, but alike in all respects except for their political and legal institutions.³²

      A corrupt country might be rich in natural assets such as farmland, or oil and minerals, or in capital assets such as plant and machinery, but these aren’t the most important sources of wealth. The World Bank estimates that natural and capital assets amount to only 23 percent of a country’s riches. The other 77 percent is composed of intangible assets, the difference in institutions, of which the most important element is adherence to the rule of law. Remarkably, this accounts for 44 percent of a country’s total wealth, according to the World Bank.³³

      The United States may be one of the richest countries in the world, but we still pay a price for corruption. If we could somehow make the country more honest, we’d want to do so, and if the cost of corruption is as high as it appears, we should make it one of our chief goals—ahead of changes to the tax code, entitlement reform or fixing our health-care system. But just how might this be done?

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       The Dream of a Virtuous Republic

      THE IDEAL of a corruption-free republic is an old one. It lay behind Socrates’ answer to Polemarchus and the design of a virtuous government set out in Plato’s Republic. It inspired John Winthrop’s vision of a City on a Hill, which he described aboard the Arbella in 1630 during its voyage to the new land. Once there, he imagined, the settlers could begin building a country whose citizens would be “knitt together . . . as one man.” There can be no corruption, he said, where people

      delight in eache other, make others Condicions our owne, rejoyce together, mourne together, labour, and suffer together, allwayes haveing before our eyes our Commission and Community in the worke, our Community as members of the same body, soe shall wee keepe the unitie of the spirit in the bond of peace, the Lord will be our God and delight to dwell among us.¹

      A century and a half later, Maximilien Robespierre proposed a dechristianized but not dissimilar republic of virtue for revolutionary France:

      In our country we want to substitute morality for egoism, honesty for honor, principles for customs, duties for propriety, the empire of reason for the tyranny of custom, the contempt of vice for the contempt of misfortune, pride for insolence, greatness of soul for vanity, love of glory for love of money, good people for fashionable people, merit for intrigue, genius for wit, truth for showiness, warmth of happiness for boredom of sensuality, greatness of man for pettiness of the great; a magnanimous, powerful, happy people for a polite, frivolous, despicable people, that is to say, all the virtues and all the miracles of the Republic for all the vices and all the absurdities of the monarchy.²

      Who could reject this happy harmony, universal honesty and magnanimity? Who would not wish to banish all insolence, intrigue, pettiness, all the vices we find annoying in our neighbors? Well, some people wouldn’t, and the question is what to do with those who fail to live up to the dictates of the most exacting virtue. For Plato, the answer in The Republic lay in a fantastically illiberal tyranny of virtue, under the rule of philosopher kings. In John Winthrop’s Puritan Massachusetts, dissenters from Dissent such as Anne Hutchinson and Roger Williams were simply driven from the colony. For his part, Robespierre believed that the republic of virtue required stern measures of protection from internal enemies, and thus the Terror. Virtue is impotent without the guillotine, he said. “Terror is nothing but prompt, severe, inflexible justice; it is therefore an emanation of virtue.”³

      In the pursuit of virtue, there are things we wouldn’t do, such as abandon the principles of a liberal society. There are also things we can’t do, insofar as corruption is driven by cultural norms, by what is socially accepted. Andrew Breitbart memorably said that politics is downstream from culture. But what is upstream from culture? How might the culture itself be changed? We might want to make Americans less willing to accept sordid backroom deals. But just how is that to be done without sacrificing personal liberties? David Hume was not far off the mark when he observed that “all plans of government, which suppose great reformation in the manners of mankind, are plainly imaginary.”⁴

      The Framers of our Constitution were hard-nosed realists about the manners of mankind, and they weren’t about to launch a moral rearmament crusade when they set out to design a corruption-free government in the summer of 1787. The notes of their deliberations at the Constitutional Convention in Philadelphia were kept secret and not published until all the delegates had died, which allowed them to state their opinions of their fellow СКАЧАТЬ