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.