Marcel Mauss notes in the conclusion to his classic of economic anthropology, The Gift, that even though his examples come from ethnographic accounts of pre-industrial peoples, his arguments speak to modern westerners. In one sense, understanding the centrality of gifts to most of human history provides a contrast to the exceptionalism of market-based societies, but in another sense we still see the atavistic logic of generosity and reciprocity bleed through at the margins of markets. Notably, Mauss describes rational calculation as aspirational, since “homo oeconomicus is not behind us, but lies ahead, as does the man of morality and duty, the man of science and reason.” And so we modern people take for granted that we both produce and consume through markets. The idea that we might acquire groceries because the butcher, the baker, and the brewer owe us favors rather than because we hand them cash or a Visa card seems primitive.
Nonetheless, there are circumstances where we modern westerners consider prestations more appropriate than purchases. This preference extends well beyond obvious matters of intimacy like sex and Christmas presents and even reaches into business interactions. I developed an interest in this problem through the research for my book on radio. The radio industry has long featured consultants (usually called “independent radio promoters” or “indies”) who help record labels get airplay for their music and often do so by channeling material resources to radio stations. In the 1980s indies simply paid radio staff in cash. By the 1990s a new generation of indies cultivated radio stations through in-kind gifts (e.g., concert tickets) for the stations’ promotional campaigns. Radio staff who participate in the new system convince themselves that they had not been corrupted, since reciprocity is tacit, not explicit. Something about treating airplay explicitly as a commodity to be bought makes it feel more clearly immoral, even though the statutory definition of payola includes both the money that changed hands in the 1980s and the in-kind “valuable considerations” that have been given ever since. That the new system for record labels influencing radio stations is considered more professional and palatable than the old is not despite, but because, of its being less explicitly economically rational.
In my research I have identified four different forms of obfuscation that people use to disguise the fact that they are purchasing something normally excluded from markets. Gift exchange is when a contested commodity is not explicitly sold but is instead given with the expectation of reciprocity. Bundling otherwise legitimate exchanges can effectively synthesize an exchange in a disreputable commodity through cross-subsidization. Brokerage allows the primary to an exchange to delegate moral responsibility to an intermediary. Pawning lets someone treat as collateral something they would be loath to sell outright. These structures do not entirely cleanse an exchange, but they do transport a clear moral transgression to an area of mere suspicion where it can be met with plausible deniability.
All of these structures are exemplified in how Lyndon Johnson used the Austin radio station KTBC to become wealthy while in the House of Representatives.
- Gift exchange: LBJ acquired the option to purchase the station because a businessman owed him a favor for letting his son into the Naval Academy. He got regulatory approval to buy the station and move to a much better broadcasting frequency because the FCC was under severe threat of hostile legislation and desperately needed supporters in Congress.
- Bundling: Businesses that needed such favors as military contracts or exemptions from wartime rationing would buy advertising on KTBC, even if they had no customers for their products in Austin. “Although they were ostensibly buying airtime, what they were really buying was political influence. They were buying—and Lyndon Johnson was selling.”
- Brokerage: Since broadcasting was a highly regulated industry, owning a radio station presented a conflict of interest over which LBJ placed the fig leaf of Ladybird being the nominal owner and day-to-day manager. Moreover, rather than directly demand the purchase of airtime, LBJ relied on political fixers like Ed Clark to inform supplicants that this was a good way to solicit favors from the Congressman.
- Pawning: LBJ expected fanatical loyalty from employees, which he secured by offering large open-ended loans, but not the salary to pay them off. This effectively put employees in a position of debt slavery.
These practices are common in political and commercial bribery, going well beyond LBJ or payola. Brokerage was key to the Abramoff scandal and a majority of prosecutions under the Foreign Corrupt Practices Act. Likewise Duke Cunningham served the longest ever prison term for a Congressman after engaging in bundling by selling his house at a hefty markup to a defense contractor. Nor are these practices limited to bribery. The distinction between a prostitute and a sugar baby (what scholars call “commercial sex work” versus “transactional sex”) is largely one of cash payment versus gift exchange. Likewise, in discussing Simony, Thomas Aquinas argues that seeming examples of legitimately buying spiritual services are gift exchange, not quid pro quo, and thus do not contradict the general ban on Simony. A long tradition in Sharia law debates whether gift exchange, bundling, and brokerage really distinguish such Islamic financial institutions as bai’ al-‘inah, murabaha, tawarruq, and takaful from otherwise similar but clearly forbidden practices of interest-bearing loans and insurance. Nor should these examples imply that obfuscation only occurs for violations of secular or religious law. Offering models as arm candy to wealthy customers at nightclubs would be legal even if it were done on a cash basis, but it nonetheless involves bundling (of bottle service with companionship), brokerage (with promoters mediating between customers and models), and gift exchange (promoters do not pay models a wage, but woo them with gifts).
Obfuscation also characterizes actions of the state itself and in this respect overlaps with the “submerged state” or “kludgeocracy” thesis. The nonprofit sector relies on state munificence, and nonprofits in human services are often state contractors in practice, but civil society is understood as an alternative to the state since state support occurs through tax exemptions and grants rather than direct provision. When a state transfer is particularly suspect, it can be obfuscated further. For instance, the Elementary and Secondary Education Act of 1965 mitigated concerns about establishment clause violations in federal support for parochial schools by relying on local public school districts to broker this support. Rent-seeking is usually obfuscated as well. Although public choice models treat rent-seeking as petitioners seeking rents, the state rarely gives direct payouts to rent-seekers, as this would make rents too obvious and illegitimate. Rather, a rent will be bundled together with a prima facie legitimate procurement contract to build a highway or naval vessel. Unraveling obfuscation can make state actions suspect, which is why it was so embarrassing to the Obama administration when opponents circulated video of PPACA’s chief policy entrepreneur explaining that the law passed thanks to a “lack of transparency” accomplished by a “tortured” design to hide from the “stupidity of the American voter” that the law was effectively a transfer program.
Regardless of sphere, obfuscation is never total. To take a disreputable exchange is to make it plausibly acceptable, but the action remains vulnerable to denunciation. If the Malaysian prime minister claims that a $681 million transfer from Saudi Arabia to his personal bank account was not a bribe, but a gift, he is giving people who hear this the option to choose to believe him, but obviously nobody who is skeptical of Mr. Razak is compelled to accept such an absurdly minimal obfuscation. In other cases obfuscation can make a disreputable transaction less conspicuous, but a dedicated accuser can reveal and draw attention to the exchange. For instance, political corruption scandals usually involve the FBI, the US Attorney, or a Congressional committee revealing heretofore unknown transfers.
That obfuscated exchanges, or even interactions that could be understood as such, are vulnerable to denunciation suggests that the process involves not only the parties to the exchange, but those of us who observe it. And this makes the role of obfuscation political. All of us sympathize with some exchanges and some participants to transactions, and not with others. If we support an unpopular exchange, we are more likely to accomplish it if we make it less obviously an exchange. For instance, consider the proposal to pay patients who voluntarily choose cheaper options among medical care. This may very well be a good idea, but it is extraordinarily vulnerable to denunciation by stakeholders in medicine. In this respect even if non-earmarked cash transfers would be the most economically efficient practice, it might be more politically astute to find other ways to reduce spending on expensive treatments, such as allowing burial expenses to be bundled together with hospice care, but not with traditional heroic interventions.
When writing for a forum like Cato Unbound, it is worth noting that libertarians tend to be more tolerant of such voluntary exchanges as prostitution, low-wage work, or even baby-selling than others, but most libertarians would still balk at many exchanges, from political bribery to debt slavery. Moreover, in a world where libertarian tolerance for voluntary exchange is a minority position generally, in making their case they need to be aware of the need to assuage or evade the concerns of the rest of us. Whether from the perspective of tolerating exchanges they sympathize with (e.g., prostitution) or suppressing those they object to (e.g., political bribery), libertarians should be aware that obfuscation provides both opportunities and threats.
Conversely, from the perspective of a moralist opposed to a set of exchanges (or a partisan seeking to opportunistically denounce an opponent), recognizing an obfuscation provides the opportunity to denounce it as essentially equivalent to a disreputable exchange. For instance, proponents of campaign finance restrictions see contributions to candidates as a form of gift exchange to acquire favors from them and the use of Super PACs as a form of brokerage to obfuscate large-dollar contributions to candidates. Opponents of such restrictions need to be cognizant not only of their own principles, which hold that it is wrong to restrict political speech, but also to rebut the accusation that political contributions are obfuscated bribery by showing, for instance, that contested contributions are ideological and not transactional.
Understanding that obfuscation, so long as it remains intact, can shape the moral reputation of exchange provides a set of options to people who favor or oppose the exchange. Someone who favors the exchange can ratchet up the acceptability by obfuscating that it is an exchange. And conversely, someone who opposes an interaction can denounce it as essentially venal and basically equivalent to a quid pro quo.
Regardless of whether one wants to enforce or relax limits on exchange, one confronts the issue of direct challenge of norms versus evasion of them. In this respect it is worth considering the historic example of taboos on usury. In the middle ages, both Christians and Muslims had taboos on charging interest on debt. As mentioned above, Muslims developed various financial institutions for circumventing the taboo. In contrast, many Christians tackled the taboo head on. Double-entry bookkeeping has its origins as an apologetic device for rebutting Thomistic concerns about usury. Later, apologetics relied on the Parable of Talents in Luke and Matthew and a loophole in Deuteronomy to argue the taboo out of existence.
The result is that at present Christians are hardly aware that Christianity ever objected to interest-bearing debt. In contrast, the long-standing Muslim practice of acknowledging but circumventing a taboo on interest allowed for twentieth century Muslim fundamentalists to vociferously denounce interest, including obfuscated versions, and Islam now has a resurgence of equity-based and other interest-free finance. I am not suggesting this to argue for a taboo on usury, and indeed I myself have no qualms about having both a credit card and an interest-bearing savings account. Rather, my point is that if one wishes to relax a moral or legal limit on exchange, such as that which both Christians and Muslims once had on interest, that there may be a trade-off between short-term evasion and long-run liberalization.
 Mauss, Marcel; Lock, Sharyn (2015-11-07). The Gift: The Form and Reason for Exchange in Archaic Societies (Kindle Locations 1527-1528). Kindle Edition.
 Rossman, Gabriel. 2012. Climbing the Charts. Princeton, NJ: Princeton University Press.
 Dannen, Fredric. 1990. Hit Men: Power Brokers and Fast Money Inside the Music Business. New York: Times Books.
 Ahlkvist, Jarl A. and Robert Faulkner. 2002. “‘Will This Record Work for Us?’: Managing Music Formats in Commercial Radio.” Qualitative Sociology 25(2):189–215.
 U.S. Code 47 § 317.
 Rossman, Gabriel. 2014. “Obfuscatory Relational Work and Disreputable Exchange.” Sociological Theory 32(1):43–63. Note that in that article “pawning” is only dealt with in a footnote.
 Caro, Robert A. 1990. Means of Ascent: The Years of Lyndon Johnson. New York: Alfred A. Knopf. Ch. 6.
 Caro 1990:104.
Silvio Berlusconi seems to have followed the same model decades later. DellaVigna, Stefano, Ruben Durante, Brian Knight, and Eliana La Ferrara. 2016. “Market-Based Lobbying: Evidence from Advertising Spending in Italy.” American Economic Journal: Applied Economics 8(1):224–56.
 United States Senate, Committee on Indian Affairs. 2006. “Gimme Five”: Investigation of Tribal Lobbying Matters. Washington, DC: US Government Printing Office.
Sanyal, Rajib. 2012. “Patterns in International Bribery: Violations of the Foreign Corrupt Practices Act.” Thunderbird International Business Review 54(3):299–309.
 Kuran, Timur. 2004. Islam and Mammon: The Economic Predicaments of Islamism. Princeton, NJ: Princeton University Press.
Thanks to Ryan Calder for clarifying some points of useage.
 Mears, Ashley. 2015. “Working for Free in the VIP: Relational Work and the Production of Consent.” American Sociological Review 80(6):1099–1122.
 Mayrl, Damon and Sarah Quinn. 2016. “Defining the State from within Boundaries, Schemas, and Associational Policymaking.” Sociological Theory 34(1):1–26.
 Shear, Michael D. 2014. “Affordable Care Act Supporter Ignites Fury With a Word: ‘Stupid.’” The New York Times, November 14. Retrieved May 18, 2016 (http://www.nytimes.com/2014/11/15/us/politics/affordable-care-act-suppo…).
 Carruthers, Bruce G. and Wendy Nelson Espeland. 1991. “Accounting for Rationality: Double-Entry Bookkeeping and the Rhetoric of Economic Rationality.” American Journal of Sociology 97(1):31–69.
 Nelson, Benjamin. 1969. The Idea of Usury: From Tribal Brotherhood to Universal Otherhood. 2nd ed. Chicago: University of Chicago Press.
Weber, Max. 1958. The Protestant Ethic and the Spirit of Capitalism. New York: Scribner.