Which industries are corrupt?

March 3, 2009 8:17 PM

With the current financial crisis highlighting corruption within the banking and auto industries, I'm starting to wonder about other industries that might be a little below the radar. What industries are generally corrupt?

The chemical industry?
pharmaceuticals?

Here's how my mac widget dictionary defines corrupt: having or showing a willingness to acct dishonestly in return for money or personal gain.

posted by roxegirl to society & culture (26 comments total)

The financial crisis is highlighting corruption in the auto industry? I thought it was more along the lines of a poor product at high cost in those cases -- am I mistaken?
posted by SirStan at 8:27 PM on March 3

It's not an industry, but many pension plans will need a bailout due to mismanagement and bad estimates/assumptions.
posted by Frank Grimes at 8:29 PM on March 3

The insurance industry. Remember Katrina and how suddenly people's home insurance policies were null and void?
posted by slepore09 at 8:38 PM on March 3

SirStan, I guess I was thinking more about their private jets. Not sure if everyone would count that as corruption, but I think it is reasonable to when their employees are being laid off and their companies are going out of business.
posted by roxegirl at 8:44 PM on March 3

Regarding the chemical industry, see The Real Store on Bisphenol-A from Fast Company.
posted by alms at 8:45 PM on March 3 [1 favorite]

Homeopathy, alternative medicine, vitamin pill industry, etc.
posted by turgid dahlia at 8:48 PM on March 3

roxegirl: "SirStan, I guess I was thinking more about their private jets. Not sure if everyone would count that as corruption, but I think it is reasonable to when their employees are being laid off and their companies are going out of business."

I think that's more just plain greed and selfishness over ethics and the good of the company. It probably happens anywhere that executives have disproportionate control of their pay and benefits. Corruption, as you defined it, implies flaunting the law, like at Enron, or making products just slightly less safe than regulations require. These things tend to stay hidden or become major news stories, so it's hard to tell...

This isn't really an industry, but I think the peanut company that knowingly shipped tainted products and then resisted investigations is a good example of corruption by my definition, but few food companies would act that way in this day and age, as far as I've read. If a food harbors infectious disease or dangerous chemicals, the companies are quick to disclose the information and demand recalls and are very apologetic.
posted by mccarty.tim at 8:53 PM on March 3

I think you can claim that the Big Three have been poorly managed, but I also agree that lumping the auto industry in as corrupt is a bit much. Corporate jets are hardly unusual at the senior executive level and let's be honest the shareholders of most firms like to hear about layoffs as they typically result in reduced costs and increased profits.

In terms of outright corruption I think most energy companies that have operations in third world countries tend to engage in outright corruption/bribery in order to win contracts. Yes, it's a required part of doing business but it still is undermining accountability in those nations.

The agricultural/food processing/meatpacking industry definitely seem to be complicit in using undocumented workers to pick the crops, staff factories, etc. They no full well that the bulk of their labor is not working with valid work visas and in many cases seem to prefer that.
posted by vuron at 9:06 PM on March 3

Garbage. (organized crime)
Food. (monopoly control).
posted by webhund at 9:24 PM on March 3

Also, this article about slave labor in the U.S. tomato business published in, of all places, Gourmet magazine is getting a lot of buzz in the blogosphere and foodie world. I think it's a great, contemporary example of what vuron mentioned. Also, Gourmet is to be applauded for having the guts to print something this honest and brutal in such a mainstream publication.
posted by webhund at 9:29 PM on March 3

Interesting comments everyone, thanks. I'm thinking the media companies (Vicom/Clear Channel/Fox/ect?) are corrupt too.


I agree with mccarty.tim that in many ways it's hard to separate industry-wide corruption from individual greed. Oil companies might be a clear example.


I bet if we cranked out some stats we'd find a high positive correlation between general profitability in an industry and its level of corruption. ...but I'm no economist ;)
posted by roxegirl at 9:48 PM on March 3

OK. Moderator cut this out because I guess I was being "too silly," but I was still serious...

1) Big Media Industry
2) Health Insurance Industry
3) Porn Industry

Oh.. & I'll throw in the Coffee industry for fun.
posted by eli_d at 9:54 PM on March 3

... having or showing a willingness to acct dishonestly in return for money or personal gain
By this measure, I believe all industries are corrupt to varying extents. Can anyone name an entire industry where at least the significant majority of players are not prepared to lie to suit their own purposes?
posted by dg at 10:05 PM on March 3

Good point dg, hmm... how about the organic industry (if it counts as one), the restaurant industry, fashion industry(?).

I can't think of many honestly.
posted by roxegirl at 10:17 PM on March 3

I pulled Coffee industry out on one major factor: 1) cost of final product delivery to cost being charged to the consumer - I think this is the same reason why the music and movie companies are corrupt. They've got a profit margin which is just obscene ... we've got technology and 3rd world labor forces making things CHEAPER and CHEAPER for them, but the consumer's price in industries such as Coffee and Music has either stayed relatively the same or even increased. Because they know they have something that is so easy to profit from, they will do their best to make stuff up that protects that obscene profit margin or even makes it more obscene.

More specifically... Coffee retailers in America probably charge their customers about 30-40x what their actual product costs to grow, ship, package, and serve in a shop to their consumer. Now... it IS arguable that what the consumer is paying for at most of these places should be found in the "service" or "the atmosphere of the place", etc... but to me it's just inhumane abuses of end consumer's and the laborer's from which the product originates. Maybe the consumer's are just dumb, ignorant, or addicted to the product? Or maybe they just actually really like the product and find a value that it's 30-40x what it should actually cost?

I've never looked for specific "abuses" of the bigwigs in the coffee retailing industry though. And maybe the consumer isn't so dumb... because recently the old STARplace had to shut down a bunch of stores and are now serving up something like a 99 cent cup of joe.

I think you can see this pattern of abuse throughout all industries in our global economy. I just picked coffee because I think they're an excellent example of that abuse.
posted by eli_d at 10:33 PM on March 3

By this measure, I believe all industries are corrupt to varying extents.

Let's just say that the degree of adherence to ethical standards varies widely. How much corruption would you expect to find at a company like Apple?

pharmaceuticals?

A recent New York Review of Books article: Drug Companies & Doctors: A Story of Corruption, by Marcia Angell, former editor in chief of the New England Journal of Medicine. An article from a local alternative paper on pharmaceutical sales reps.

Another one that comes to mind: the tobacco industry. Their funding of the so-called "sound science" campaign, attacking scientific findings as "junk science", makes for fascinating reading. American Journal of Public Health. TobaccoArchives.com. The tobacco industry also appears to be funding climate change denial.

I pulled Coffee industry out on one major factor: 1) cost of final product delivery to cost being charged to the consumer.... They've got a profit margin which is just obscene ...

I think you're failing to consider other costs (like labor, for example, or the fixed costs of operating a store). According to Google Finance, 2008 revenue for Starbucks was $10 billion, but after subtracting expenses and taxes, its net revenue (i.e. profit) was only 3% of that--$300 million. Return on average assets: 5.73%.
posted by russilwvong at 10:53 PM on March 3

I guess we could argue that corporate capitalism is inherently flawed as an easily corruptible economic system. Maybe we need to come up with some economic strategies for preventing corruption, analogous to coming up with democratic methods to moderate political abuse of authority.

I think limited liability is one specific culprit, it makes it easier for people to take advantage with their company, then just walk away.
posted by roxegirl at 10:53 PM on March 3

I'm having trouble with your definition of corruption. I don't count executives flying private planes as corruption, as it wasn't something that their bosses (the stockholders) gave much of a whig about. The views of the employees about such profligacy are valid, but somewhat irrelevant. The theory is not meritless that these executives' time is more valuable than the money saved flying commercial. (But of course Warren Buffett drives an Oldsmobile (maybe not anymore, though) and eats at Dairy Queen. Frugality has its place as well.)

Corruption is something that does have technical definitions, created for such studies as the Corruption Perception Index. One of the most active organizations studying corruption is Transparency International, which created the CPI. They define it:

The CPI focuses on corruption in the public sector and defines corruption as the abuse of public office for private gain. The surveys used in compiling the CPI ask questions relating to the misuse of public power for private benefit. These include for example: bribery of public officials, kickbacks in public procurement, embezzlement of public funds or questions that probe the strength and effectiveness of anti-corruption efforts, thereby encompassing both the administrative and political aspects of corruption.

In a strict sense, an auto exec would only be corrupt in the case of a) bribing an official to allow them to break the law, or b) swindling shareholders. There are certainly examples of both to be found in collapses such as Worldcom and Enron, but not so much in the auto industry.

But using a broad definition as you seem to be fishing for (and as eli_d attributes specifically) you edge toward condemning not corruption per se but capitalism. To many those are identical, or at least closely related, things, but this is far from a universal sentiment.

It may be closer to the mark to redefine your terms and ask about corporate ethics.
posted by dhartung at 11:01 PM on March 3 [2 favorites]

dhartung, I think you're right. The more I think about this question the more I see myself criticizing capitalism in general. Despite that, I am still interested in knowing what industries people think are corrupt, with the new CPI definition here operationalizing corruption.
posted by roxegirl at 11:09 PM on March 3

how about the organic industry (if it counts as one), the restaurant industry, fashion industry(?)
You scratched the restaurant industry (which I would define as part of the hospitality industry anyway). The fashion industry (I think) is fairly well known for various forms of corruption and general deceit. I'm not sure what comprises the "organic industry", but there have been plenty of examples in the press about false claims of organic produce (for example), which I am too tired and lazy to search for, so I'm not sure that they can be held up as a pargon of virtue either. Certainly, I would concede that there is less chance of an individual organisation in that industry being corrupt, because of the types of people it attracts and the perceived required ethical standards of their consumers being visibly greater. The cynic in me says that, the moment something becomes an "industry" corporations move in with their win at all costs attitude and their obligations to shareholders to increase dividends.

Of course, my opinion on this is based on the definition given at the start of the thread, which I think is a little broad. The actuality of what corruption means is much more nebulous and there are lots of grey areas around what constitutes ethical or moral behaviour and where the line is between that and actual corruption. if you set the benchmark at acting dishonestly, you pretty much have to include every corporation that has been established for more than 5 minutes. If you use the more accurate (to my mind) concept proposed by dhartung, you narrow the field a great deal and introduce a much greater knowledge of wrongdoing prior to the act.
posted by dg at 11:25 PM on March 3

Art/antiques industry is definitely one of the more corrupt. Reasons:

- a handful of experts that decides what art is "real/authentic" and what's not
- rare/valuable antiques are mostly from regimes/regions that aren't politically stable (Middle East, Far East, Africa, South America)
- art is mostly a cash, no questions asked business
- art is highly movable, and "possession = title" unless proven otherwise for movable objects in most Euro-American legal systems, which means that as long as you can get your hands on something, by whatever means, it's basically yours unless someone else can prove it's theirs (which is usually very hard to do).
posted by NekulturnY at 2:15 AM on March 4

I am still interested in knowing what industries people think are corrupt, with the new CPI definition here operationalizing corruption.

Unless you're willing to limit your question to some defined sort of corruption, your question is indistinguishable from "Which industries do things that some people don't like?" Every industry and organization does something that somebody doesn't like.
posted by jon1270 at 3:09 AM on March 4

Construction/infrastructure-related industries, specifically asphalt and concrete, and the disposal of construction waste. This would be tangentially related to corruption in politics I suppose, since a lot of larger contracts are for government work.
posted by SuperSquirrel at 8:52 AM on March 4

it wasn't something that their bosses (the stockholders) gave much of a whig about.

Citation, please? If stockholders ever got an up-or-down vote on selling the corporate jets, I wouldn't be surprised to see the votes going either way. But that's never going to happen, is it? Decisions that could get up or down votes get no vote at all, and decisions that should get real contested elections just get up or down votes. The best you can do is eat the loss and "vote with your feet" when you're unlucky enough to own stock in a company that was run in shareholders' interests but subsequently got subverted by the old boys' club.

Yeah, I know, "boo capitalism". But the exact same phenomenon seems to apply to most congressional elections, except in that case voting with your feet can be orders of magnitude harder.
posted by roystgnr at 9:08 AM on March 4

Long term acute and chronic care facilities - aka nursing homes. Of course this isn't across the board. Some are good places. But others pay unlicensed, uncertified care takers so little that they attract a large percentage of morally corrupt people who steal from the patients, or worse, are delinquent in their health care. Or the facility expects the licensed and certified healthcare workers to care for an excessive and impossible number of patients, thus the healthcare suffers. If you ever want to really see how healthcare in the US is broken, look at some of these places.
posted by dog food sugar at 11:55 AM on March 4

Unless you're willing to limit your question to some defined sort of corruption, your question is indistinguishable from "Which industries do things that some people don't like?" Every industry and organization does something that somebody doesn't like.

How about we limit it to illegal behavior carried out on an institutional level (ie not just a rogue individual)? Ironically the first example coming to me is the police. http://www.popcenter.org/problems/street_prostitution/PDFs/Newburn_1999.pdf
posted by roxegirl at 11:56 PM on March 4