Friday, April 27, 2012

Wal-Mart's Mexican "Bribery" is Really Political Extortion

The New Jersey Star-Ledger Editorial Board demanded; Criminal Investigation Needed Into Wal-Mart's Mexico's Bribery Scandal

Citing a New York Times investigative article, the editors said, "Wal-Mart de Mexico slipped cash-stuffed envelopes — more than $24 million worth — to corrupt officials to speed construction of new stores." This, say the editors, explains "at least part of the company’s south-of-the-border success."

Saying the penalties for such "crimes" are way too weak, the editors called for a "knockout Punch" against Wal-Mart and other "corporate felons," including massive fines and jail time.

I left the following comments

April 27, 2012 at 10:03AM
First, Wal-Mart didn’t reap “the multibillion-dollar profits of their crimes.” Those profits were legitimately and morally earned by the value they brought to the millions of Mexican people who voluntarily patronize their stores. This great American company should be lauded for that business success, not smeared and condemned.
As to Wal-Mart’s “crimes,” the shoe is on the foot of the government officials who were extorting protection money in exchange for allowing the company’s stores to be built. The root of the problem is the government’s illegitimate power to force private citizens to seek permission from it in order to build in the first place. It’s a prescription for political abuse. What’s the essential difference between a “bribe” and a permit fee, aside from legal technicalities? Both are rent-seeking payments demanded by government officials, without which they will hold up legitimate economic activity.
The problem is unjust law, not “Corporate felony.”
The government’s proper function is to protect the rights of landowners to build on their property what they please, as long as they do not infringe on the rights of others.
Whose rights did Wal-Mart infringe, either before or after making those payments? Nobody’s. What, exactly, was the “human toll” the editors speak of? Wal-Mart is a victim, not a villain. It’s bad enough that more money could be extorted from the company in the form of monetary fines. It would be a grave injustice if any Wal-Mart employees are jailed, as the editors suggest.

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