Corruption has fallen out of Dingwall Equilibrium
So, Old Moneybags Martin is going to give Dingwall his 500,000 dollar golden handshake, eh?
Why wouldn’t Martin use this Dingwall affair as an opportunity to prove to the public that he really is “Mad at Hell” about corruption and lavish spending? Why didn’t he say to Dingwall through the media, that he’s not getting his severance come “hell or high water” and taunt him to sue the government. A publicized legal battle of Martin trying to stick up for taxpayers would definitly score him some points with Joe Q Voter.
The answer is simple: Liberal corruption is out of Dingwall Equilibrium.
In the discipline of economics, which I study, conspiracies occur in certain industries – oil, let’s say. It’s a little technical, but supposing everyone colludes to keep the price of their oil or gasoline high. A rational business can usually make more money selling at a lower price and higher quantity, implying that it is rational for any one business to deviate from the collusive outcome. Therefore, many people conclude that there are no conspiracies because they are not rational.
However, this assumes the other group has no recourse to punish deviants. The collisive outcome can be enforced through punishment mechanisms.
Look at it this way: suppose you, me and another guy are all running in the Federal Election to rule Cannuckistan and we want to conspire to enforce high taxes on Canadians to feed our bloated budgets. Any one of us can shoot up in the popularity rankings by pointing to the taxing tendencies of the other guy in the group. Any one of us would like to have high taxes while in office, but none of us wants to actually propose high taxes during the election. One rationl means is to propose low taxes and then renege on the promise after the election. If voters know this will happen, based on past performance and general stereotypes of politicians, then they might not fall for our promises of low taxes. Some of them might think that the guy who proposes the lowest tax is the one who is most likely to renege on his promises, so the politician with the most realistic proposal stands the best chance at winning.
As a politician, one way to maximize the expected benefit is to reduce variance. Variance is the source of uncertainty, so you’ve got to come up with ways to hedge your bets, should you not actually get into power. One way of accomplishing this is to form a club with a hazing ritual that is extremely embarassing.
“Men of the same profession never gather together except to conspire against the general public.”
- Adam Smith
Let’s say we form the Brotherhood of the Expected Benefit, an informal gathering of ‘like minds’ who get together periodically to conduct ‘business’. We name it so that people will expect to benefit by being a part of our little club. In order to enter the club and ‘prove one’s worth’ a person has to have sex with a watermelon on camera, and copies of the videos are given to all members of the club. Should anyone deviate from the goals of the Brotherhood, these incriminating details will be ‘leaked’ by those in the group who are close to the media.
This serves as an enforcement mechanism of the group’s goals. If anyone tries getting into power by proposing low taxes, the front page of the newspapers will immediately read “Mr. So-and-so a Watermelon Rapist?”, which will essentially destroy all prospects of gaining power through low taxes.
This will only work, however, if all those who are running for election are members of the group. If there is a wild card entry whose past is murky or clean, we will have to work hard to dig up and/or invent things about their past to give the impression that he is not a worthwhile candidate. If members of our club who are in the media fail to tow our line, their watermelon rapist photos get sent to their significant others. We will work hard to recruit any new ‘wild cards’ into the fold and if they don’t join we will work our hardest to dig up everything we can about them that’s dirty and keep it on file. We really only need this dirt if we have determined that they threaten our power status.
Confident that nobody is actually going to propose high taxes, we agree on an ideal level of tax, chosen from a now narrower band of taxes. Our communal backscratching begins at our annual “Orgy of Cronyism” where we shake hands on deals, confident that if any of them are broken, the watermelon rapist pictures will be released. If any one of us gets into power, all or most of us will benefit due to strings and strings of little backroom deals made along the way.
Politics now becomes a popularity contest rather than a debate about real economic preferences. If it turns out that I am more popular than you and I shoot ahead in the polls, you could threaten to release my watermelon raping pictures to the general public. But I can threaten to do the same, thereby bringing both of us down, which works to the benefit of the third candidate. We each have an incentive to try to ge the other two politicians to fight it out and reveal their watermelon pictures to the public.
Ah, Machiavelli!
So is it rational for a politician to join a conspiracy or engage in corruption? Yes and no. If a politician’s nose is squeaky clean, he will not join a conspiracy because he has nothing to fear. The only thing he has to worry about is the perception of truth. If someone made up some pictures of him screwing a watermelon, all he has to worry about is proving the pictures to be fakes.
The dirtier his nose, the more appealing the corruption of conspiracy becomes. Corruption, in a sense, becomes a form of political capital. Whether it is a liability or an asset is unclear. If everone knows me to be a corrupt and dirty guy, and they want something covered up, then they will hire me to do their dirty work because they know they have the goods on me. I can get what is called “Bagman” work, based on a resume of what I have been able to cover up thus far. In this sense it is an asset. But if they have the goods on me, and I don’t have the goods on them, I open myself up to blackmail. They can force me to do dirty work against my will by threatening to release the details of my dirty misdeeds.
Hence the Dingwall Rule of Corruption Equilibrium:
Corruption is in equilibrium when no one politician knows any more details about the involvement of any other politician in corruption than any other politician knows about them.
It could be that nearly every Liberal patronage appointee has spending habits similar to Dingwall, but they pose little or no threat to the Martinite Brotherhood.
Dingwall’s got dirt, and its value is 500,000 dollars. Martin can lower its value by finding dirt of corresponding value on Dingwall, or perhaps he has already.
The 500,000 dollar payout could be a negotiated net value of ‘dirt’ on Martin. So far, it has been alleged that Dingwall knows ” that Martin had illegally fed contracts to Earnscliffe“, and the fact that this was leaked is why Dingwall’s spending habits came under scrutiny by the media.
However, the fact that Dingwall is seeking 500,000 dollars represents the net value to the Liberals of whatever Dingwall knows.
Instead of harping about whether or not the law requires it, (in some non-existent theoretical world) Mr. Harper should offer Dingwall $600,000 to reveal everything he knows.
As MKBraaten writes agian:
“Could it be that David Dingwall may know details about the sponsorship program that Mr Martin does not want the public to know? Or perhaps he knows something about the allegations of how the Martin linked Earnscliff consulting funded Paul Martin’s leadership campaign with money earned through government contracts? Would this explain why the Liberals are so insistent that Dingwall get paid? To keep his mouth shut?”
There is a core group of Liberals who are a bunch of watermelon rapists, so to speak. Corruption is the tie that binds them together.
