I don't normally write about business matters because I know so little about them, but I often read the NYTimes Business section because it tends to feature some very good skeptical arguments. Businesses try sometimes to be efficient, and analysis of how to really do that tends to focus a lot on objective criteria and evidence... at least when it's done right. Energy, the environment, medicine and matters of economic justice pose hard questions that in the business world attract both the most logical arguments and the most egregious logical fallacies. Trying to keep up with both is good skeptical practice.

Gretchen Morgenson wrote recently about the failure of banks receiving Federal economic-recovery support to follow through with more loans to support small business. Her article was an example of how poorly-regulated bailout money could be - and apparently is being - held hostage by banks who care more about short term personal gain than fulfilling their ethical and legal mandate to use that bailout money to support the general welfare and secure domestic tranquility. The point is sound, but that isn't what struck me about the article. What struck me came at the end, in a quote from Frederick E. Rowe, a money manager who dealt with a microcosm version of this problem in Texas during the 1980s savings and loan crisis there.

“The banks that have taken the taxpayer’s money ought to be part of the solution, but they are acting like war profiteers,” Mr. Rowe said. “If I were in charge, I would haul them all down to Gitmo, put them in a room and say, ‘You have used the taxpayer’s money to pervert our objectives. It is morally wrong and we are not going to stand for it.’”

I was struck by how well this quote sums up why sensible regulation of the marketplace is necessary. Human nature sometimes cooperates with the aims of civilization, and sometimes it runs far counter to the maintenance of a civil society. Some people are stupid and greedy, basically... and the best and most efficient model for a thriving economy must take account of that systemic weakness. Economies are highly Darwinian, but as a general consensus most people don't desire a strictly Darwinian environment, where, say, your neighbors would be strictly free to invade your home and kill you for your stuff.

This is where I get so annoyed sometimes with libertarians. I agree with them about personal liberty, but only so far as my personal liberty is not infringed upon by theirs. That applies to individual-on-individual intrusions, and to group-on-individual pileups, such as government or private enterprise can exert upon people if they're not restrained. This is where libertarians fail to consider that if government doesn't set some limits, organized crime bosses and corporate fat cats will, to much worse results for the rest of us. The US Constitution has some wonderful material on how the government can't invade your life without a damn good reason, but it fails in many ways to address how other powerful groups treat people. That is why we need prudent regulation of business, and why the doctrinaire libertarian model is so irrational and counterproductive.

The other thing that hit me about Mr. Rowe's quote was Gitmo. Guantanamo Bay, Cuba, where the US currently holds a crop of individuals some of whom might be vile criminal masterminds. Most of the people held at Guantanamo are probably just randomly-bagged goat herders who dared to pick up a rifle to defend their country, but some of the bearded figures there are true monsters... predators on humanity.

So, why not send a few bankers there? Actually, why not send all our major white-collar criminals to Gitmo? At a certain level, criminal malfeasance in big business constitutes a clear and present danger to the structural integrity of our civilization. If people willing to fly planes into buildings are an existential threat, why aren't people who are willing to ruin the lives of millions so they can buy a seventeenth house or the world's biggest yacht? The 9/11 hijackers thought they needed to die for their heavenly reward. War profiteers and lying tycoons expect the same reward for evil... but while they're still alive.

Perhaps we should populate those chain-link cages with balding, paunchy white guys. The FTC and SEC could provide mandatory coursework on business ethics, or remedial training in high finance. Instead of the Korans supposedly given to helpful inmates now, cooperative former-millionaire prisoners could be given little rewards like access to a month-old Wall Street Journal.

Of course we'll never treat corporate criminals as the existential threats to our peace and prosperity that they actually are. It would not be possible, in a nation governed by elected corporate shills. Societies can be deeply scared by the actions of wild-eyed lunatics, but they can also crumble beneath the onslaughts of cold-eyed corporate predators. It would be very helpful if more people appreciated that.

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Comment by Planetologist on December 3, 2008 at 12:17pm
You're right. Altruism is a major functional component of human behavior, and the primary motivation behind trying to form a mutually beneficial society. We're social creatures. But without laws curbing our worst impulses, our better impulses get silenced by whoever has the biggest gun.
Comment by Father Nature on December 3, 2008 at 12:11pm
You make some good points but I object to the label "Darwinian" to describe a "free to kill your neighbors" world. Cooperation and altruism are "Darwinian" too.



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