Earlier I posted that I was glad to have read The Source by James Michener even though I found it tedious and disjointed. Here are two passages that interested me for what they have to say about the importance of reducing red tape and corruption.
- "What was exceptional about Tabari's operation was that he accomplished it with ease and even urbanity. Each underling who collected baksheesh for him was allowed to keep a portion for himself, while those in superior positions found themselves receiving unexpected contributions." [p732]
- "By applying constant pressure and bribes whose number he had lost count of, Shmuel had advanced his case to a point where Emir Tewfik in Damascus was willing to sell the useless acres for the not exorbitatnt sum of nine hundred and eighty English pounds, but the baksheesh required to reach this agreement already totaled more than seventeen humdred pounds. And still the Turkish government would announce no decision." [p753]
Part of the vague system of baksheesh seemed to be a mechanism for implementing price discrimination -- extract as much consumer surplus from the buyer as possible. But it seems from these passages that most of the system was a deeply ingrained form of rent-seeking. And all the labour, capital, and natural resources used for pure rent-seeking have alternative, productive uses which are lost due to the system that requires so much time and effort in securing and providing baksheesh.
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