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Swindling/Selling, Bribing/Contributing, Extorting/Taxing

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15 Responses

  1. A.J. Sutter says:

    Not having read the book, I can comment based only on your descriptions, but here goes: Each of these descriptions eliminates important context.

    Swindling/selling: Has Alice misrepresented certain facts about the thing being sold? While there might not be a bright-line distinction, certainly it would be easy to distinguish between some cases of swindling and selling based on this criterion, as a matter of degree at least.

    Bribing/contributing: Does Bob’s action benefit Alice alone? If so, no matter how it is positioned legally, people might interpret this as a bribe. Does Alice contribute to Bob’s campaign, and then Bob sponsors a healthcare bill that could benefit Alice, along with lots of other citizens? Easy to see it’s a contribution. Analysis of the middle case, where the action benefits a very narrow group of people that includes Alice, could hang on additional facts. One might be whether the members of the group acquired their membership voluntarily, and without coercion. This might help distinguish between victims of a rare disease, on the one hand, and members of an industry group, on the other. Contributions from the latter are less likely to pass a smell test for corruption. That the legal sanctions, esp. in this middle case, might be weak says more about our anti-corruption laws than anything about the inherent morality of the transactions.

    Extorting/taxing: It is not just “existence of bureaucracy” but the formal political legitimacy of that bureaucracy that enables an easy legal distinction, from the viewpoint of positive law. There is also another fairness issue (or appearance-of-fairness issue) that’s ignored by the example: is it fair that Bob as a government employee should not pay tax, while all other citizens do?

    If Leff’s arguments are no subtler than what you’ve described, I will save my 125 bucks.

  2. Matt says:

    “Here is the definition of selling: “Alice sells something to Bob that Bob thinks has value.” See? The exchange is identical – Bob hands Alice money. The difference is sociological (what society values) and economic (can Bob resell the item).”

    I wonder if this can be quite right as-is, or on its own. Consider this case: I am (let’s say) very interested in wine corks. I want a complete collection of wine corks from Australian wine from 2010, in a particular condition. I’m willing to pay $100/cork to the first person who will provide me with a cork I need in the condition I want. Alice sells me the Little Penguin Merlot Magnum cork I want for $100. Society thinks this is nuts, and I can’t resell the cork for anything like that amount (or perhaps for anything at all.) But it seems far from obvious to me that I’ve been swindled in this case. I think that a swindle needs to involve something like that I think I could re-sell the item, or I think that society at large values it, for around the price I pay, but I’m mistaken about this, and my mistake isn’t just my own, but brought about by Alice in some way. But now it’s not obvious to me that the “exchange is identical”, unless we want to say that the “action is identical” when I stumble and hit someone with my head, and when I head-butt them. But that would just be a confusions. In both cases it seems to me that we only think the actions are “identical” if we under-describe them in important (and fairly obvious) ways.

  3. Matt says:

    (A.J. posted while I was typing, but is getting at pretty much the same point, I think.)

  4. Brett Bellmore says:

    Yes, per A.J., you’ve left out critical context. In order for it to be “swindling”, the seller has to have misrepresented what’s being sold. “Swindling” is a type of fraud.

    For bribing/contributing, the relevant context is, was Senator Bob going to do whatever it was anyway? If Senator Bob ran on a campaign promise of enacting a particular tax break, you can’t “bribe” the Senator to enact it.

    On extorting/taxation, things get a bit more complex, because taxation, if you don’t look at the governmental status of one of the actors, does actually meet all the normal criteria for extortion. That is to say, taxation really IS extortion, only given a different name when governments engage in it.

  5. Howard Wasserman says:

    As to the bribe/contribution, distinction # 1 does not work. It is the *promise* to do the act that is the crime, not the doing of the act. And, at least in the context of federal legislators, the Speech or Debate Clause includes an evidentiary prohibition, preventing the use of any evidence of legislative activity.

    So how does that play into your distinction?

  6. Peter Swire says:

    All very interesting. Some observations:

    1. As for Leff’s book, it is precisely a wonderful piece of writing about sociological context, and con games, and my two-sentence summary understates its virtues.

    2. Leff wrote the book in part based on his work with the FTC, where defining “misrepresentation” and “deception” were precisely the tasks that he showed are difficult. Contract law allows a great deal of “puffery”, which is a polite term for saying “misrepresentation but not enough to be a swindle.” If you are bargaining in the bazaar, we expect an enormous amount of puffery, with a lot of buyer beware.

    3. The Australian wine cork example I think actually supports the Leff-style point. We sometimes have idiosyncratic preferences, so the resale market price is not necessarily a good measure of whether it was a swindle or sale.

    4. I think “the politician would have done it anyways” test is extremely hard to apply. Politicians initially run for office, these days, with something like a business plan — here are the companies/sectors/individuals whose water I will carry, and I will act in ways that are loyal to their interests. Some of those politicians are sincere (“I think what is good for oil companies is good for America and jobs for my district”) and some are corrupt (“I hate the oil companies, but they call the shots around here.”) But we won’t find out what mix of sincere and corrupt is in the heart of the politician who links himself/herself to that industry.

    5. As for a bribe requiring a promise, I agree that the prosecutor wins if there is an explicit promise of a quid pro quo. A promise is a sufficient condition for the crime — “I will do this action if and only if you give me at least $10,000.” The problem, however, is that almost all cases involve raised eyebrows and implicit promises. So we see the contribution, but are left guessing about whether a quid pro quo exists.

  7. Matt says:

    The Australian wine cork example I think actually supports the Leff-style point. We sometimes have idiosyncratic preferences, so the resale market price is not necessarily a good measure of whether it was a swindle or sale.

    I think it’s (usually) right that re-sale value alone won’t tell us if there’s a swindle or not, but that doesn’t seem to be what you put above. If this is Leff’s point it seems right but a bit banal, but also in contradiction to this:

    The difference [between a swindle and a normal sale] is sociological (what society values) and economic (can Bob resell the item)

    I read that as saying that, in the case of a normal sale, Bob could re-sell the item (That would be sufficient, perhaps, and not necessary.) My example was one where neither condition holds, but we’d not say it’s a swindle. So now I’m quite confused, given your original statement and your replay, what you and Leff think the difference is. My thought is that the difference involves a sort of fraud. (Alice makes me think there’s a market when there isn’t one.) That’s sometimes hard to prove, but so what? The fact that we can describe two transactions in “physical” language where one is a swindle and the other is a sale in the same way (by leaving out intentional facts) is mildly interesting, but I don’t see how it’s more than that. If it were important, there would be no difference between accidents and assaults, for example.

  8. Joe says:

    “taxation really IS extortion, only given a different name when governments engage in it”

    Yes, as noted, if we ignore that the government is authorized to tax to serve public needs, taxation can be deemed “extortion.”

    The Alice/Bob thing can follow the same model. If it is agreed upon at hiring that 10% will go to the employer (let’s say, one works at a church, and a tithe is set up), it is not “extortion” unless you have to be employed there or have no right to refuse.

  9. Howard Wasserman says:

    Peter: Agreed. But then how do you prove the case without the explicit promise? You need some official action. Given the Speech or Debate limitations, no evidence will be offered from which to infer the quid pro quo. Now this only applies to members of Congress, so there are no such limits on bribery prosecutions of any other public official at any other level. So maybe we have just carved Congress out as a unique exception in which more is demanded.

  10. Brett Bellmore says:

    “I think “the politician would have done it anyways” test is extremely hard to apply. Politicians initially run for office, these days, with something like a business plan — here are the companies/sectors/individuals whose water I will carry, and I will act in ways that are loyal to their interests. Some of those politicians are sincere (“I think what is good for oil companies is good for America and jobs for my district”) and some are corrupt (“I hate the oil companies, but they call the shots around here.”) But we won’t find out what mix of sincere and corrupt is in the heart of the politician who links himself/herself to that industry.”

    Yes, so? Look, if the politician upon getting elected does what they said they were going to do when they were running for office, who cares if they’re sincere or not? The voters have gotten the information they needed to cast their vote.

    What’s objectionable about “buying politicians” is that you’re buying changes in their policy. Creating an electoral bait and switch situation which denies the voters their power to effect government policy. If “buying” a politician kept them from changing their policy after being elected, then from a standpoint of the functioning of democracy it would actually be a GOOD thing!

  11. Joe says:

    A possible problem with “buying politicians” is those with lots of money, often a small number at the end of the day, will have special power to control who will be in power.

    The people will have a more limited pool of candidates and the voters in general will have less power as compared to the small number of people who money who have a large say on what their choices will be. This “denies voters” power too.

    Having only people beholden to rich people, even if they were consistent, is not ideal. Representatives should be “beholden” to a diverse electorate based on various interest groups other than $$$$.

  12. Peter Swire says:

    Responding to Brett and Joe’s most recent comments:

    1. If we only object to buying politicians if the money “changes” their policy, then that captures only a small subset of cases we may find objectionable, plus it’s very hard to prove. At least my moral intuition is that a broader range of “buying politicians” is objectionable and we should seek ways to limit that.

    2. I agree with Joe’s last comment, highlighting the problems with plutocracy, or power by the rich only. This spring, it seemed that each Presidential candidate had to have a pet billionaire to compete. That is an odd version of one person, one vote.

    3. The trick is how to write rules that channel the influence of money into politics in ways that reduce the most virulent forms of corruption and special interest policy. The challenge, as the initial post tried to say, is that merely “following the money” and seeing the transaction itself doesn’t say much about what is bribing and what is contributing.

  13. Brett Bellmore says:

    “The challenge, as the initial post tried to say, is that merely “following the money” and seeing the transaction itself doesn’t say much about what is bribing and what is contributing.”

    Or, for that matter, what is extortion.

    “Money changes hands, politician’s actions change.” can be bribery on the part of the donor, but it can also be extortion on the part of the politician.

    This possiblity shouldn’t simply be blown off by people who contemplate giving incumbent polticians vast new powers to regulate political expenditures. Because if the corruption you’re seeking to deal with is actually originating with those self-same incumbents, you’re empowering exactly the wrong people.

  14. Ken Rhodes says:

    To amplify Brett’s point … There are two potentially conflicting questions we need to answer about politicians we vote for (or against):
    (a) What are his positions on the issues?
    (b) Do I trust him to follow his positions?

    That, to both Brett and me (and, I suspect, to a great majority of American voters these days), is what’s so frustrating about this upcoming election. It’s bad enough that we have to cut through all the B.S. to try to discern the positions of the candidates. Then, when we think we’ve finally got that figured out, they prove to be tumbleweeds, blowing every which way in the wind.

    At least with somebody “bought and paid for,” all you have to do is find out whether it’s your side that bought him.

  15. Mls says:

    With respect to Howard’s point about proving bribery, I don’t think the Speech or Debate Clause has been much of a barrier. Either the payment itself is so clearly illegitimate or there is other evidence besides the ultimate legislative action which demonstrates the quid pro quo.

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