PrintMay 4, 2012
The Permit Plague
Two scandals are currently in the business headlines. The Justice Department is investigating Walmart for paying millions of dollars in bribes to Mexican government officials. Such payments were made so that the Mexican officials would approve the permits Walmart needed to open stores throughout Mexico. In addition, the Securities and Exchange Commission is investigating some major Hollywood studios who allegedly bribed Chinese government officials to gain permission to show movies in China. Those payments are illegal under the Foreign Corrupt Practices Act and can incur fines of up to $5 million and 20 years in jail.
However, the untold scandal here is that businessmen, at home and abroad, are compelled to secure government permits. When corrupt officials use this (illegitimate) power to shake down companies, one should blame not the businesses that are attempting to be productive, but the statist idea that such permissions are a proper function of...(Read Full Article)
