Posted on by ColinTwiggs

The Impunity Trap by Jeffrey D. Sachs | Project Syndicate

Jeffrey D. Sachs, Professor of Sustainable Development, Professor of Health Policy and Management, and Director of the Earth Institute at Columbia University, highlights one of the great challenges to modern society: public indifference to dishonest and unethical behavior.

The ability of those who wield great public and private power to flout the law and ethical norms for personal gain is one of the more glaring manifestations of inequality. The poor get life sentences for petty crimes, while bankers who fleece the public of billions get invitations to White House state dinners…..

In some societies and economic sectors, impunity is now so pervasive that it is viewed as inevitable. When unethical behavior by political and business leaders becomes widely viewed as “normal,” it then goes unpunished by public opinion, and is reinforced as normal – creating an “impunity trap.” For example, with politicians in the United States now so flagrantly and relentlessly on the take from wealthy donors, much of the public accepts new revelations of financial impropriety (such as the Clinton Foundation’s morally dubious financial dealings) with a cynical yawn.

The situation in the global banking sector is especially alarming. A recent careful study of ethical attitudes in the financial-services industry in the US and the United Kingdom showed that unethical and illegal behavior is indeed now viewed as pervasive…..

Yet not all societies or sectors are caught in an impunity trap. Some societies, most notably in Scandinavia, maintain the expectation that their public officials and business leaders should and will act ethically and honestly. In these countries, ministers are forced to resign for petty infractions that would seem trivial in other countries.

What is needed is a two-pronged approach. Firstly, a “broken window pane” strategy, where strict enforcement against minor infringements will reduce the occurrence of major violations. Second, ensure that penalties imposed on major transgressors in the banking industry, politics, sports administration (FIFA), and other public areas are sufficient to act as a visible deterrent to others.

Imposing a billion dollar fine on a bank for illegal behavior penalizes shareholders not the perpetrators who generally get away scot-free. A two-year jail sentence for senior executives involved would be a far more effective deterrent.

Read more at The Impunity Trap by Jeffrey D. Sachs – Project Syndicate.

18 Replies to “The Impunity Trap by Jeffrey D. Sachs | Project Syndicate”

  1. Slightly mixed message here – although I didn’t read the extended article. Surely the first thing to do is make such practices illegal, then go after the perpetrators relentlessly and visibly. Accepting whopping political donations is legal in the US (or at least has legal pathways) to accomplish the same thing, so no one would be breaking the law in that case. To change the law now would be like asking the pigs to burn the trough and jail the farmer. Can’t see it happening anytime soon.
    What really surprises me (happily) about the Yanks is that despite guns being as common as hamburgers and poverty so crushingly endemic, there’s never been even a hint of a popular uprising/revolution/bloodbath. Is it because revolution and Russian still sound like bedfellows, invoking the anti communism mental block? Curious.

    1. The American situation is really not so surprising Frank. Most guns are owned by law abiding citizens. And the rampant poverty you cite does not exist on the basis of Census Bureau studies. Ninety percent of all those in poverty have color TV’s and satellite dishes. Eighty percent have homes and cars.
      Like most liberals in the US you confuse income (~15% below poverty line) and total expenditures that include transfer payments from the government. The liberal Brookings Institute has studied Census Data and concluded that you can escape poverty in the US by adhering to “three elementary rules for success-complete at least a high school education, wait until married before having a baby and work full-time at any job”.
      In the US, maybe all those transfer payments cause people to violate the 3 rules without real consideration of the long term implications.

      1. “The liberal Brookings Institute has studied Census Data and concluded that you can escape poverty in the US by adhering to ‘three elementary rules for success-complete at least a high school education, wait until married before having a baby and work full-time at any job’.”
        Thanks for the insight. Do you have a link for the Brookings study?

      2. Yes, I imagine you’re right Vic. I get my US “insights” from PBS News, so not exactly representative of the entire 350 million. But more to the point you’ve reminded me that if a government can keep its poor just comfortable enough in their poverty (colour TVs etc) there’ll never be an uprising. Increased secrecy helps. Clever.

      5. The so-called study does NOT exist. One person wrote his opinion. Here is the link to his opinion.

        http://www.brookings.edu/research/testimony/2015/02/11-challenges-facing-low-income-families-haskins

        Here is the relevant quote. “For well over a decade, my Brookings colleague Isabel Sawhill, a Democrat and former member of the Clinton administration, and I have been analyzing data and writing about the factors that influence both poverty rates and economic mobility.[i] We long ago concluded that education, work, and marriage are major keys to reducing poverty and increasing economic opportunity.” He cites himself as the source of his statements (and that of one woman – a Democrat).

        Here’s a sample of her recent writings.

        “Here’s my hypothesis. When the rungs of the income ladder get too far apart, it is harder to climb. If the ladder had no rungs at all—in other words were there perfect income equality—there would be nowhere to climb and nothing to worry about: an egalitarian’s utopia. At the other extreme, if the rungs were miles apart, only a giant could climb above the clouds. In the US the ladder is still scalable, but we are arguably beyond the point where the incentive the rungs provide to get ahead outweighs the difficulty of the climb. ”

        http://www.brookings.edu/blogs/social-mobility-memos/posts/2015/05/27-inequality-great-gatsby-curve-sawhill

      6. Ron Haskins testimony before the Human Resources Subcommittee:

        “….The increase in the proportion of children in female-headed families contributes to substantial increases in poverty by virtue of the fact that poverty rates in female-headed families are four to five times as great as poverty rates in married-couple families.[ii] If the share of the nation’s children in female-headed families continues to increase as it has been doing for four decades, policies to reduce poverty will be fighting an uphill battle because the rising rates of single-parent families will exert strong upward pressure on the poverty rate.[iii] But perhaps of even greater consequence, children reared in single-parent families are more likely to drop out of school, more likely to be arrested, less likely to go to college, more likely to be involved in a nonmarital birth, and more likely to be idle (not in school, not employed) than children from married-couple families.[iv] In this way, a disproportionate number of children from single-parent families carry poverty into the next generation and thereby minimize intergenerational mobility.”

        Makes good sense to me. But we will not make much progress unless we can reverse this trend. “So far public and nongovernmental programs have not been able to reverse falling marriage rates or rising non-marital birth rates…..”

        What kind of incentives could we create to turn this around?

    2. “To change the law now would be like asking the pigs to burn the trough and jail the farmer.”

      I agree that changing laws regarding political donations, lobbying and political advertising would not be easy. But imperative.

    3. A further thought on the subject, Frank. Tackling the political snouts in troughs issue head-on via legislation may be futile, but it could be undermined through increased agitation for direct democracy through referendums.

      Gay marriage for example. No politician campaigned on a gay marriage platform so why should they have the final say on this sensitive subject. The same goes for euthanasia/assisted suicide and the death penalty.

      Interesting that assisted suicide is legal in Switzerland. According to Wikipedia this was the subject of a referendum on 15 May 2011 in the Canton of Zurich. Voters “….overwhelmingly rejected calls to ban assisted suicide or to outlaw the practice for non-residents. Out of more than 278,000 ballots cast, the initiative to ban assisted suicide was rejected by 85 per cent of voters and the initiative to outlaw it for foreigners by 78 per cent.”

      1. I really like the idea of frequent referenda and have written about it before on a blog sometime ago. We already have the electronic tools to do it but even here it would be a case of Pollies potentially working themselves towards redundancy. It may be a gross (even unfair) generalisation on my part but observation tells me that most people who go into politics do so to represent their own agenda rather than that of their constituents. It’s only during campaign time that they appear to overlap (ie when they make promises). I suppose one way to get frequent referenda on the table would be to ensure Pollies somehow get rewarded for it. Maybe by making their personal votes public, with only those who vote with the winning side accumulating preferences for the next election. Just a thought.

      2. …”but it could be undermined through increased agitation for direct democracy through referendums.”

        Have you seen the Youtube videos of how dumb Americans have become? They think the religion of Israel is Muslim. They think there were three World Wars. They think Star Wars is based on a real story. They think Jesus would have been “shot” even if there were strong gun laws.

        You want these people to decide how to run a country? or the world? You give us too much credit if you think Americans value information or intellect.

        We have one party that hates science (and math). How do we govern when they get to make up their own science?

      3. If we agree that voters are too dumb to make an informed decision, who decides for them? You or me?

        The best argument against democracy is a five-minute conversation with the average voter. ~ Winston Churchill

  2. I think most people have become disengaged partly because we are pretty much powerless to do anything about it and also because most people are preoccupied with their day to day obligations. Combine that with the fact that there isn’t anyone to vote for that would genuinely represent the people.

    So sadly the powerful crooks will continue to get away with it until the system breaks completely. By that time it’s too late.

    1. This is where the Swiss are ahead of most other countries. Direct democracy, through public referendums, keeps the political system in line. It forces greater consensus-building and less “winner takes all” as in the Westminster system – where you only have to keep 51% of voters happy and only every fourth year.

    2. The reason our political system in the US is a cesspool is because of one law created by the Supreme Court called “Citizens United.” It allows individuals and corporations to spend whatever they want under the insane belief that they and only they have “free speech.”

      The conservatives on the court know the American people do not and have never supported the conservative party. Polls show us that their congress never get the support of even half of us. As of now they get approval from 17% of the American people.

      http://www.pollingreport.com/cong_rep.htm

      If you look at the top poll, from Quinnipiac University, we see their highest approval rating was 34%. The US does not live in a country where the majority is heard or listened to. The congress is controlled by two men, the Koch brothers.

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