Category Archives: Obtaining income through the government – rent seeking – corruption

Various terms have been used to describe obtaining income through the government that does not provide a good or service. One of them is corruption. This typically refers to acts that people consider corrupt, such as government officials taking government money that is not theirs. People or firms not in the government can also obtain favorable treatment from the government. Taxes can be avoided, for example. This is sometimes called corruption and sometimes not. Rent-seeking is a more neutral term used by standard economics.

Transparency International defines corruption as the abuse of entrusted power for private gain. Though this definition encompasses corrupt practices in both the public and private sectors, the Corruption Perceptions Index (CPI) ranks 180 countries according to the perception of corruption in the public sector only (2020). With a scale of zero (highly corrupt) to 100 (very clean), more than two-thirds of countries score below 50, with an average score of only 43. It is fair to say that corruption is significant in most countries of the world.

The government is more than just a means of obtaining income through harm. Since the spread of greater democracy, governments engage to some degree in democratic decision-making, including action to reduce harm, such as the establishment and enforcement of anti-trust laws, and devoting a higher percentage of government income to valuable services such as education. Productive and harmful activities are present in varying ways and degrees in the governments of countries in the world.  Unfortunately, in orthodox government economics texts, governments are treated as democratic, without raising at all the possibility of, or the extent to which, there is oligarchic control of government (or other social institutions) .  This completely obscures the centuries-old struggle for democracy, which is far from over. Freedom in the World (2020), Freedom House’s annual global report on political rights and civil liberties covering 195 countries, addresses the question. Separate scores are awarded for political rights and for civil rights which, weighted equally, are used to determine the status of Free, Partly Free, and Not Free. Forty-three percent of the countries of the world are evaluated as free, while 57 percent are classified as either Not Free (25 percent) or Partly Free (32 percent).

Harm through the government 2022

Citing Orwell, judge blocks ‘positively dystopian’ censorship law backed by DeSantis Jake Johnson Common Dreams November 17, 2022 The federal judge lambasted Florida officials’ argument that “professors enjoy ‘academic freedom’ so long as they express only those viewpoints of which the state approves.”

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Actions to reduce harm 2021

(Certainly governments, corporations and other organizations do take actions to reduce harm or otherwise improve the lives of the people. This is often, even typically, the result of political action by citizens. This post gives examples.)

Deutsche Bank whistleblower gets $200 Million bounty for tip on Libor misconduct Mengqi Sun and Dave Michaels Wall Street Journal October 21, 2021
The payout is the largest ever by the Commodity Futures Trading Commission.

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Harm through the government 2021

Federal judge files recusal notices in 138 cases after WSJ queries Coulter JonesJoe Palazzolo and James V. Grimaldi Wall Street Journal November 2, 2021
Rodney Gilstrap initially argued he didn’t violate financial-conflicts law

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