While reading through Steve Benen’s post concerning the Trump Administration’s desire to permit American companies to engage in bribery overseas, it occurred to me that Trump adherents might find his post unconvincing, because he doesn’t address the issue in any sort of depth. First, for background, here’s Steve:
In fact, NBC News’ Richard Engel appeared on The Rachel Maddow Show a couple of years ago and highlighted a 2012 quote from Trump, in which the future president said, in reference to FCPA [Foreign Corrupt Practices Act], “Now, every other country goes into these places, and they do what they have to do. It’s a horrible law and it should be changed. I mean, we’re like the policeman for the world. It’s ridiculous.”
The New York Republican didn’t forget about his opposition to the law after taking office. A new book from the Washington Post’s Philip Rucker and Carol Leonnig reports that Trump clashed with then-Secretary of State Rex Tillerson in early 2017 because the new president wanted to get rid of the Foreign Corrupt Practices Act. “It’s just so unfair that American companies aren’t allowed to pay bribes to get business overseas,” Trump reportedly said at the time.
The same book added that Trump directed Stephen Miller to draft an executive action to repeal the law. (Executive actions cannot simply repeal federal laws, though the president apparently didn’t care.) [Maddowblog]
So let’s talk about how bribery distorts the basics of economic transactions.
First, the use of bribery removes the question of quality from the equation of selling a product, instead substituting the metric, if you will, of the size of the seller’s wallet. If an inferior quality product has a worst case result – it causes the death of a customer – then the blood of that customer is on the hands of both the entity that offered a bribe and the entity that accepted it. If, thank heavens, it does not, the end consumer still must suffer with an inferior product.
Second, the same reasoning as in (1) applies if the briber’s product isn’t really appropriate for the task at hand.
Third, in a corrupt environment, security risks are magnified. Please do not inspect this delivery closely, here’s $10,000. Think about what could be snuck in to the bribed entity’s manufacturing plant. The entire culture of bribery replaces any sense of physical security of the bribed entity with the price tag of those who must be bribed.
Fourth, it has the potential to magnify costs. Simply consider the competitive bidding situation in which the low bid didn’t submit the biggest bribe.
Fifth, crappy inferior products inevitably reflect poorly on those who bribe, and, with enough instances, their country of origin. Does the United States really want to be known for making cheap shit that doesn’t work? The answer had better be Of course not! And, yet, that’s what is at risk here, because the metric isn’t which product is best, but who paid the bribe – rather than exposing it.
Sixth, one bribe leads to another, and they can go up in price.
Seventh, someone in position to take a bribe isn’t necessarily motivated only by money. Maybe he or she is a racist, or doesn’t like your meal choices, or, say, the fact that the salesman offering the bribe has a little golden cross hanging around his neck. Taking focus off the question of price vs quality, one of the most essential equations in all of economics, and replacing it with the arbitrary whims and prejudices of someone in power is an upsetting and unfair way to do business – just like simple bribery, but with factors that are even more difficult to influence.
Eighth? Why, that’s easy. If we repeal the FCPA, what’s to keep that same culture from becoming acceptable RIGHT HERE IN THE UNITED STATES? How many of my readers think it’s perfectly ok to grease the outheld palm in order to get any service at all? Yeah, it’s an awfully small group. Yet, that’s what we’ll face if we decide to repeal the FCPA: A country not based on Law, but on bribes.
This, of course, comes from observed fact that President Trump’s only, not primary but only, metric is money. Money, money, money, screw the national reputation, screw the problems of fixating on money and what other countries might or might not owe us. There’s all that profit we’re not getting because we’re not willing to debase ourselves!
That asinine fixation is a rotten way to run a country, and this issue brings out that fundamental failing into the bright light of day.
