The Ethics of Bribery

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This article
is excerpted from chapter 17 of The
Ethics of Liberty
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in the case of blackmail,
bribery has received a uniformly bad press, and it is generally
assumed that bribery should be outlawed. But is this necessarily

Let us examine
a typical bribe contract. Suppose that Black wants to sell materials
to the XYZ Company. In order to gain the sale, he pays a bribe to
Green, the purchasing agent of the company. It is difficult to see
what Black has done which libertarian law should consider as illegal.
In fact, all he has done is to lower the price charged to the XYZ
Company by paying a rebate to Green. From Black’s point of view,
he would have been just as happy to charge a lower price directly,
though presumably he did not do so because the XYZ executives would
still not have purchased the materials from him. But the inner workings
of the XYZ Company should scarcely be Black’s responsibility. As
far as he is concerned, he simply lowered his price to the company,
and thereby gained the contract.

The illicit
action here is, instead, solely the behavior of Green, the taker
of the bribe. For Green’s employment contract with his employers
implicitly requires him to purchase materials to the best of his
ability in the interests of his company. Instead, he violated his
contract with the XYZ Company by not performing as their proper
agent: for because of the bribe he either bought from a firm which
he would not have dealt with otherwise, or he paid a higher price
than he need have by the amount of his rebate. In either case, Green
violated his contract and invaded the property rights of his employers.

the case of bribes, therefore, there is nothing illegitimate about
the briber, but there is much that is illegitimate about the bribee,
the taker of the bribe. Legally, there should be a property right
to pay a bribe, but not to take one. It is only the taker of a bribe
who should be prosecuted. In contrast, left-liberals tend to hold
the bribe-giver as somehow more reprehensible, as in some way "corrupting"
the taker. In that way they deny the free will and the responsibility
of each individual for his own actions.

Let us now
use our theory to analyze the problem of payola, which repeatedly
arises on radio programs that play popular records. In a typical
payola scandal, a record company bribes a disc jockey to play Record
A. Presumably, the disc jockey would either not have played the
record at all or would have played Record A fewer times; therefore,
Record A is being played at the expense of Records B, C, and D which
would have been played more frequently if the disc jockey had evaluated
the records purely on the basis of his own and/or the public’s taste.

in a moral sense, the public is being betrayed in its trust in the
disc jockey’s sincerity. That trust turns out to have been a foolish
one. But the public has no property rights in the radio program,
and so they have no legal complaint in the matter. They received
the program without cost. The other record companies, the producers
of Records B, C, and D, were also injured since their products were
not played as frequently, but they too, have no property rights
in the program, and they have no right to tell the disc jockey what
to play.

Was anyone’s property rights aggressed against by the disc jockey’s
taking of a bribe? Yes, for as in the case of the bribed purchasing
agent, the disc jockey violated his contractual obligation to his
employer – whether it be the station owner or the sponsor of
the program – to play those records which in his view will
most suit the public. Hence, the disc jockey violated the property
of the station owner or sponsor. Once again, it is the disc jockey
who accepts payola who has done something criminal and deserves
to be prosecuted, but not the record company who paid the bribe.

if the record company had bribed the employer directly – whether
the station owner or the sponsor – then there would have been
no violation of anyone’s property right and therefore properly no
question of illegality. Of course, the public could easily feel
cheated if the truth came out, and would then be likely to change
their listening custom to another station or sponsor.

about the case of plugola, where one sponsor pays for the
program, and another company pays the producer of the program to
plug its own product? Again, the property right being violated is
that of the sponsor, who pays for the time and is entitled therefore
to have sole advertising rights on the program. The violator of
his property is not the maverick company that pays the bribe, but
the producer who violates his contract with the sponsor by accepting

N. Rothbard
(1926–1995) was the author of Man,
Economy, and State
, Conceived
in Liberty
, What
Has Government Done to Our Money
, For
a New Liberty
, The
Case Against the Fed
, and many
other books and articles
. He was
also the editor – with Lew Rockwell – of The
Rothbard-Rockwell Report

Rothbard Archives

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