When a peace officer takes a bribe to ignore an illegal act he is engaging in political corruption. This is merely a technical term to describe the selling of political favors. If the crime was malum in se, such as theft, he is behaving immorally. However, if the illegal act in question was merely malum prohibitum, such as smoking marijuana, then the officer is performing a positive market function. This sort of good corruption allows markets to get around oppressive state regulations that would otherwise prevent people from exercising their right to life, liberty and property.
One might argue that in both cases the officer is breaking his contract to perform specific duties. This is true in the first case, as the officer is being paid to stop unlawful activity. In the second case, however, the officer’s contract with the state does not apply, or rather, cannot compel him to restrict the liberties of innocent individuals. This is because contracts that require an unlawful act are unenforceable.
A more interesting question is whether the officer is acting morally by taking the bribe. One would think that abstaining from an unlawful act should require no payment whatsoever and that the officer is merely extorting money from a hapless victim. However, the officer is essentially being compensated for risking the ire of the State. This consideration makes his corrupt action morally and economically sound.
This mutually beneficial exchange becomes more important as the state becomes more oppressive. The modern industrial economy, and the large populations that it supports, requires functional markets in order to operate. In the worst totalitarian States, free markets would freeze and economies would crumble. The inevitable drop in living standards would necessarily be accompanied by a significant loss of life.
As Murray Rothbard explains, “… given the unfortunate and unjust laws prohibiting, regulating, and taxing certain activities, corruption is highly beneficial to society. In a number of countries, without corruption that nullified government prohibitions, taxes, and exactions, virtually no trade or industry would be carried on at all. Corruption greases the wheels of trade. The solution, then, is not to deplore corruption and redouble enforcement against it, but to abolish the crippling policies and laws of government that make corruption necessary.”