
Lockheed Bribery Scandals - simonebrunozzi
https://en.wikipedia.org/wiki/Lockheed_bribery_scandals
======
pmichaud
I think bribery is probably bad. I am curious though, when I try to put on my
super naive hat, how it's very much different than a normal market
transaction? Like sure if bribes are part of the transaction then it stops
being completely about the quality of widgets delivered, but you do get some
additional information, right? Like how skilled the company is at politics or
how deep its pockets are? Isn't that valuable info?

~~~
brownbat
While I think some of the larger industrial cases are clearer, it's perfectly
reasonable to wonder about this.

Richard Posner wrote about the difficulties of rigorously studying or even
clearly defining corruption in this essay:

[https://www.becker-posner-blog.com/2005/08/economics-of-
corr...](https://www.becker-posner-blog.com/2005/08/economics-of-corruption--
posner.html)

I've heard some people say the Russian and Chinese cultural contexts make it
difficult to talk about corruption in terms of Western ideals. There are
social expectations of gift giving and tipping that are offensive to break,
but might appear to outsiders like people are paying others for ordinary
services. I haven't lived in either country, so I can't say how accurate or
apologist that take really is though.

~~~
consumer451
> Richard Posner wrote about the difficulties of rigorously studying or even
> clearly defining corruption in this essay:

I found that piece a bit thin, overtly partisan, and I also have to agree with
"David's" comment on the blog.

>> Corruption is motivated by the same force as most crime: greed. People with
power abuse that power to extract illegal gains for themselves. It's no
different, really, than embezzlement, insider trading, Enron-style accounting
tricks, or any other sort of white collar crime. The corrupt official uses his
position to exact a premium from the "customer."

>> I agree with Posner that a weak rule of law leads to corruption, because
the corrupt official has nothing to fear. Similarly, a weak SEC leads to
insider trading, and a weak police force leads to rampant street crime. If the
criminal perceives little chance of getting caught, there is little incentive
to refrain from crime.

>> Corruption has nothing to do with markets or with "excessive" gov't
regulation. Nor does it have anything to do with the party in power. Both
Republicans and Democrats have been guilty of corruption, and good prosecutors
of both parties have zealously pursued corruption. Some state prosecutors have
been even more zealous than federal prosecutors. For instance, Eliot Spitzer
of New York has cracked down on corrpution on Wall Street, while the
Republicans in Washington have largely looked the other way.

>> The problem with Posner's analysis is that he views corruption as a
"voluntary transaction" rather than a pure crime. Bribery is never voluntary.
No one wants to bribe an official or a waiter at a NY club. But in corrupt
cultures it is necessary, so it is done. Bribery is as voluntary as extortion.

You also stated:

> I've heard some people say the Russian and Chinese cultural contexts make it
> difficult to talk about corruption in terms of Western ideals.

As an immigrant to the USA from a Soviet controlled satellite state, let me
say that just because corruption is so endemic that from the outside it looks
like their "culture", does not negate the fact that it is still corruption.
Aside from you and officials receiving the bribe enjoys this "culture." It is
not mysterious at all. In my experience corruption is usually extremely easy
to define and detect. For example, do you have to give "black money" to an
official to get your business license? This has never happened to me in the
USA, and has certainly happened to me in less democratic places. Now I have
only worked internationally on the SMB level, when you get to "national asset"
level of business, then corruption seems just as rampant here in the USA.
Fortunately it is still SMB that is the opportunity and heart of the US
economy. The lack of official(bribes) and private(mob) corruption in most of
the USA is America's greatest appeal and advantage when running a business.

The difference is mostly a strong Liberal Democracy[0]. That is why I came
here, that is what separates the USA from Russia and China. Even the USA's
wavering democratic processes are still generations ahead of Russia, China,
and many former Soviet satellite nations. Please do not take Liberal Democracy
for granted and ignore that major difference when comparing the USA, China,
and Russia. I _am_ really worried about the USA's financial corruption of
elected officials via Citizens United, and the seeming lack of holding elected
officials to the letter and spirit of the law. Both of these seemingly recent
changes in the USA are really beginning to remind me of Soviet times. None of
the documented high-level corruption is mentioned in your linked blog, but he
does manage to find time to blame immigrants for local corruption in some
cities.

[0]
[https://en.wikipedia.org/wiki/Liberal_democracy](https://en.wikipedia.org/wiki/Liberal_democracy)

> Liberal democracy is a liberal political ideology and a form of government
> in which representative democracy operates under the principles of classical
> liberalism. Also referred to as _Western democracy_ , it is characterised by
> elections between multiple distinct political parties, a separation of
> powers into different branches of government, the rule of law in everyday
> life as part of an open society, a market economy with private property and
> the equal protection of human rights, civil rights, civil liberties and
> political freedoms for all people.

For readers in the USA, I just want to clarify the meaning of "liberal" in
this context as it seems to have different meanings to different people:

> Liberalism is a political and moral philosophy based on liberty, consent of
> the governed and equality before the law. Liberals espouse a wide array of
> views depending on their understanding of these principles, but they
> generally support limited government, individual rights (including civil
> rights and human rights), capitalism (free markets), democracy, secularism,
> gender equality, racial equality, internationalism, freedom of speech,
> freedom of the press and freedom of religion.[

~~~
brownbat
Yeah, fairly compelling, I appreciate your points. I might still quibble in a
couple places, but I think we're not actually that far apart overall.

> As an immigrant to the USA from a Soviet controlled satellite state, let me
> say that just because corruption is so endemic that from the outside it
> looks like their "culture", does not negate the fact that it is still
> corruption.

I appreciate hearing that. I had previously endorsed a more black and white
view here, but faced some pushback from Russia scholars. I'll hold my ground
more next time.

I had originally found the Ikea experience pretty compelling:

[https://www.rbth.com/business/2016/08/29/losing-the-good-
fig...](https://www.rbth.com/business/2016/08/29/losing-the-good-fight-ikeas-
struggle-to-remain-honest-in-russia_625167)

I was a little more taken aback at your description of the essay as...

> overtly partisan

He notes that divided government with opposing parties controlling different
levels of government contributes to combating corruption.

I could see a narrow reading of it as him saying "we need Republicans to
police these Democrats!" But having read him previously take shots at both
sides, I don't think that's what he was going for. I think he just meant that
having a competitive political environment helps prevent the consolidation of
power generally.

> Corruption has nothing to do with markets

This point was hard for me to understand. It's like saying that the moon has
nothing to do with physics. Sure, you can exclusively look at the moon
poetically if that's your preference, but there are tools in physics that are
going to help you understand some phenomena related to the moon. Same for
economics and various human activities.

