Bribery of Government Officials
“Bribery” of a private firm is not actually bribery at all, but simply payment of the market price for the product. Bribery of government officials is also a price for the payment of a service. What is this service? It is the failure to enforce the government edict as it applies to the particular person paying the bribe. In short, the acceptance of a bribe is equivalent to the sale of permission to engage in a certain line of business. Acceptance of a bribe is therefore praxeologically identical with the sale of a government license to engage in a business or occupation. And the economic effects are similar to those of a license. There is no economic difference between the purchase of a government permission to operate by buying a license or by paying government officials informally. What the briber receives, therefore, is an informal, oral license to operate. The fact that different government officials receive the money in the two cases is irrelevant…
[W]e must distinguish between an invasive bribe and a defensive bribe. The defensive bribe is what we have been discussing; that is, the purchase of a permission to operate after [a peacefully and voluntary] activity is outlawed. On the other hand, a bribe to attain an exclusive or quasi-exclusive permission, barring others from the field, is an example of an invasive bribe, a payment for a grant of monopolistic privilege. The former is a significant movement toward the free market; the latter is a movement away from it.
- Murray Rothbard, Power & Market
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tofamoustocare said:
I just want to say that though I dont always agree with you, you have won a fan. Your posts are usually something intelligent and/or insightful. When you post articles or excerpts, they are always something that I forgot I read.
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