Free How Capitalism Will Save Us by Steve Forbes

the agencies that give building permits. More often, however, the bureaucrats originate the corruption by demanding payment. Getting a government contract may require a kickback; tips or bribes may be necessary to secure a wide variety of government services. In the Soviet Union bribes were necessary to secure everything from drivers’ licenses to medical care and even higher education, as well as goods.
    Cuba, with its controlled prices and black markets, illustrates just what Anderson is talking about. The
St. Petersburg Times
reported that
    the difficulty of making ends meet has turned ordinary Cubans into petty criminals…. Stealing from state workplaces or operating small, illegal businesses is so common that Cubans dismiss it as an almost acceptable part of daily life. 15
    Ironically, one measure being considered in Cuba to remedy the situation is an
expansion
of private enterprise. Philip Peters of the Lexington Institute observed, “These are bitter facts to air in a place where socialist state enterprises are said to represent the revolution’s values, delivering services at fair, controlled prices without the exploitation or inefficiency of capitalist systems.” 16
    One reason many people think prosperity brings more white-collar crime is that the definition of what constitutes white-collar crime changes with the political climate. In fact, some believe the government has gone too far in criminalizing economic behavior—making what are really regulatory violations into criminal offenses. Writes Paul Rosenzweig of the Heritage Foundation,
    Where once, to be a criminal, an individual had to do an act (or attempt to do an act) with willful intent to violate the law or with knowledge of the wrongful nature of his conduct, today it is possible to be found criminally liable and imprisoned for a substantial term of years for the failure to do an act required by law, without any actual knowledge of the law’s obligations and with no wrongful intent whatsoever. 17
    Prosecutors are increasingly launching criminal prosecutions of individuals who do not meet the traditional test of “mens rea,” or criminal intent. For example, in the middle of this decade nineteen employees of the accounting firm KPMG were accused of issuing “abusive” tax shelters. In the past, this would have been pursued as a regulatory matter. Instead it wound up in criminal court. But prosecutors couldn’t prove their case, and a federal judge threw it out.
    Still, wouldn’t there be fewer corporate scandals, fewer Enrons and WorldComs, with less capitalism and more state control over markets? More control, of course, means bigger government. And government is even less transparent than the private sector—and has a more dismal record of safeguarding people’s money.
    According to the World Bank, some $1 trillion worldwide are paid each year in bribes to government officials. In Africa alone, more than $400 billion has been looted by government officials and stashed in foreign countries.
    In the United States, taxpayer money is regularly pilfered for questionable and often self-serving purposes through the practice of congressional “earmarks,” allocations for frivolous spending that are slipped into appropriations bills with no hearings, examination, or oversight. We don’t usually think of earmarks as white-collar crime—indeed, many people would take exception to the idea. Yet some of the worst earmarks are indeed criminal, a result of bribes paid to legislators.
    FOX News reported on Pennsylvania congressman Paul Kanjorski, who earmarked $10 million in taxpayer dollars that ended up in a family-run company, Cornerstone Technologies, that eventually went bankrupt. Kanjorski’s story shows the double standard that can exist when determining what constitutes white-collar crime. Had the congressman’s misdeeds taken place in a public company, they would have been labeled theft.
    Yet few news organizations covered Kanjorski the way