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US Freedom Threatened By Elite Crime, Greed

A new study commissioned by Ernst & Young has startling results that are cause for real concern in the business world. In a survey of 1,758 corporate professionals from across the world, 15 percent of respondents thought an economic downturn was enough justification for using immoral and misleading business practices, a rise from 9 percent in 2010.

More appalling are the responses from the 400 CFOs included in the study: 47 percent found it was warranted to lie and bribe if it helped their company survive a downturn.

One suspects that if anything such statistics understate the true problem. If I were planning to lie, cheat and steal to build my corporate empire, I doubt that I’d start out by confiding those plans to some random pollster from Ernst & Young. Somehow one thinks that people who have no problem with lying and stealing are OK with lying about their plans to steal.

That the survey is global offers Americans a small degree of comfort; certain corporate cultures abroad are known for their tolerance of shady behavior, and we can hope that the figures for American business are a little better. But that is no cause to be smug. A pervasive culture of dishonesty in business is more than a nuisance; it is a threat. There are always a few bad apples out there, but if we reach a tipping point where enterprise is habitually and routinely dishonest, the world will grow nasty and poor with surprising speed.

A pervasive culture of dishonesty forces everyone to deal defensively and to think only of the very short term. Systemic dishonest exacts huge costs; it also leads to a commercial environment where avaricious lawyers and ham-handed regulators have the upper hand.

It is for these reasons that Via Meadia favors harsh treatment for prominent businesspeople convicted of dishonorable, illegal and dishonest behavior in the administration of their business concerns. Their crimes do not just hurt the individuals of the companies they defraud. They damage society as a whole by setting a bad example and by communicating a signal that these practices are widespread.

To pay their true debt to society, their punishments must set an example as well.  We favor long prison terms and savage confiscatory fines that make crystal clear to everyone in the business world that crime does not pay. (The laws defining this behavior need to be carefully drafted; sloppy and loose laws that give prosecutors too much discretion can be as damaging as crime itself.) Shame, the loss of status and security for themselves and for family members reduced to penury by confiscations, restitution and fines: prominent businesspeople who betray the public must pay a price so shockingly high that others will be deterred — and the public’s belief in the law will be renewed.  If pro-business, pro-market politicians don’t introduce some reasonable and well crafted laws along these lines, we must expect that anti-market activists will exploit the opportunity and ultimately pass laws that are so broad and so sketchy that prosecutors will have the whip hand over every business in America.

This isn’t just about economics. A free society must be a virtuous society or it will fail. Without strong personal ethics (which usually, though not invariably, are cultivated from a faith in God) free markets crumble and free societies do not stay free. Any decline in the ethical standards of our political, business and cultural elites is a clear and present danger to the freedoms we cherish, and society must have the capacity to defend itself against these powerful and destructive enemies within.

One way to combat such a business culture and re-inject strong personal ethics into our business lives is through education. Ambitious men and women need more than just one semester of Business Ethics—learning ethics and attaining a moral compass comes from constant learning and a reconnection with religion and morality throughout one’s upbringing. Helping your child cheat on the SAT to increase their chances of admission to a prestigious college, for example, is the kind of behavior that, if widely tolerated and allowed to spread, will slowly poison our common life.

American schools and colleges, especially those who teach the most talented and the best connected, need to reconnect with their religious and ethical roots. Almost every school in America held its students and faculty to higher personal standards fifty years ago than it does now; one result is the pervasive erosion of business ethics among the top banks and institutions at the commanding heights of our society.

We need teachers, headmasters, principals and college presidents and deans who are ready to stand up for (and be held accountable by) serious moral standards beyond the tepid green PC pablum that substitutes for serious ethical and religious discourse in many contemporary educational institutions.

Tolerance of unethical personal and business behavior among the rich and the powerful needs to be recognized for what it is: a deadly threat to all we hold most dear.

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  • Philip Larson

    Why such unhappiness with those who violate the Eighth Commandment? Why not a similar aversion to those who violate all the others?

  • Richard S

    All good points. But where, in 2012, would businessmen learn the relationship between liberty and virtue, and free enterprise and liberty? How many historians teach that? How many economists teach that? Or, perhaps I should say, how central are those ideas to the textbooks and basic courses Americans take when they are young? And pop culture certainly doesn’t help. As a rule, Hollywood presents businessmen as selfish, cheating S.O.B.s.

    There’s an irony at work here. Critics of the market economy are not good teachers of boys and girls who will grow up to participate in a market economy. If one believes that becoming a businessman or businesswoman is selling out, one is inclined to think that cheating is part of the game. But if one is taught that businessmen are, as a rule, good human beings, and that the market, as a rule, is the best way to produce prosperity and (gasp) fairness, one is probably more likely to be honest in business.

  • Jim.

    Colleges and Universities must make it clear to their students that holding to the faiths of their fathers needs to take a higher priority than dilettantish experimentation, frivolous wastes of time, or even dedication to worthy pursuits that can already be attended to six days out of seven.

    Universities especially need to raise their students’ consciousness that today’s students are tomorrow’s deacons and deaconesses. Current PC thinking is to turn students against their religion; the only healthy, balanced, and strong country is one where students realize they will take their own place in the steady stream of generations, and that they must live up to this responsibility.

    How they’ll learn this from the disruptive and degenerate run-of-the-mill Boomers that occupy Academia is not clear… hopefully there’s enough native intelligence in my generation and the ones to follow to realize how badly we need to get back on track before unethical behavior (like massive and prolonged peacetime budget deficits) destroy us.

  • Larry, San Francisco

    Although I totally agree with the sentiments in this article, I am not sure harsher penalties are the solution. The problem is that prosecution is much too political and capricious. Why is Jon Corzine not facing years in prison for fraud and negligence. Probably because he is a well connected Democratic supporter of the president. Contrast that with what is going on with Gibson Guitars who have been raided several times for breaking the Justice department’s interpretation of Indian law on the importation of guitar parts (on the other hand the Indian government does not seem to have an issue with Gibson). Is that because the president of Gibson guitar is a Republican?

  • Anthony

    The mystery WRM, if such it ever was, finds denouement by carefully inspecting American business ethos (Horatio Alger model of getting ahead); in the great American quest for property (or getting ahead), ethics/morality is often times talked up publicly (even in 1st tier business schools) but in practice a rarely considered inhibitor – cf. The History of the Great American Fortunes.

    Further, in a society where money is assumed evidence of personal worth then many persons (businessmen/women) are out to prove they are as worthy as anyone in commerce (wall street). So, WRM emulative behavior of the type critiqued in your Quick Take has a historical basis in United States. Questions becomes how do we constraint the aims of a free people – Religion needs supplement?

  • Raymond R

    Here is a thought: manadatory death sentence for all frauds greater than $1 million. Such frauds usually prey on people’s pension savings or other life-savings. For such a crime, the noose, the chair or the needle is appropriate, especailly given the delibrate and rational choice of the fraudster who perpetrates the crime.

  • Kris

    “47 percent found it was warranted to lie and bribe if it helped their company survive a downturn.”

    Lie and bribe? How atavistic! These days, the proper course of action is to exploit your political connections in order to pick the taxpayer’s pocket for the benefit of your company. And this is the height of morality, of course, because this saves or creates jobs.


  • cubanbob

    The same standard should be applied to all government officials and employees at all levels of government.

  • John Burke

    Sorry, but I’m sticking with smug. It matters a great deal that this is a global study with respondents from 43 countries. Not surprisingly, Chinese are way up there when it comes to bribery (as apparently are other BRIC countries). It may be due to strict American laws, or to tougher enforcement of laws and regulations, or to an aggressive, independent press, or to the unwillingness of the American public to tolerate unethical corporate conduct, or to all of the above but I have no doubt that US company executives expressing indifference to responsible behavior in this study were very few.

    That is not to say that we don’t have business scandals. Obviously, we do, but misconduct that rises to the level of provoking media interest, much less official attention is a lot more rare than Mead seems to think. And most of our scandals involve skirting the edges of complicated regulatory requirements.

  • Kenny

    It is clear to the average person that the government, financial, media, educational, and business elite are pretty corrupt and self-serving.

    The one institution that is still respected because it is head & shoulders more honest and trustworthy than the rest is ….. no, sadly to say, it is not religious organization.

    It is the U.S. military.

    That is something you should clue your kiddies in on, Mr. Mead.

  • Luke Lea

    If corporations are persons how come they never go to jail? They always settle but never admit wrong doing. Personally I’m tired of the Securities and Exchange Commission and other federal agencies letting them get away with it. Where’s hope we can believe in?

  • rkka


    When Mead writes about MERS, I’ll know he’s serious about this.

    For the uninformed, MERS is an electronic registry for securitizing mortgages that allows banks to trade mortgages without ever filing the transactions with local governments…

    As required by the law in every single state…

    No legislative act authorized bankers to do so. They just did it. And they withheld billion$ in fees legally owed local governments. Which was the whole point of the exercise. They even say so:

    “MERS is an innovative process that simplifies the way mortgage ownership and servicing rights are originated, sold and tracked. Created by the real estate finance industry, MERS eliminates the need to prepare and record assignments when trading residential and commercial mortgage loans.”

    And then they screwed it up.

    So now, neither MERS, nor county governments, knows who owes what, to who.

    Like I said, we’ll know Mead is serious about elite criminality when he tells us about MERS.

  • Eurydice

    What’s missing here is the other side of the equation – to whom are those intended bribes going? You make some vague references to regulators and politicians, but it’s as if they’re secondary players who will fall in line if only those ummoral business people are purged from the system. As the maker and defender of laws, government is a primary player.

    Also, the intimation here is that those CEOs responding “yes” to corruption are honest players who are only considering crime because of poor economic conditions. That’s different (though, not more acceptable) than “planning to lie, cheat and steal to build my corporate empire.” This difference begs for a different conclusion – that harsh economic conditions force humans to do things that are against their ethical training.

    As for ethics through education, that sounds fine, but if you’ve made to college without already knowing that it’s wrong to cheat people, no number of ethics courses is going to change your mind.

  • Eurydice

    *sigh* Of course, it’s “immoral” – I like like to think I’m so very moral that I don’t know how to spell the alternative. 😉

  • lhf

    When my children were in public school in the 80s and 90s, a teaching method called “values clarification” was in vogue. I suspect it still is.

    The idea is that if you can demonstrate external consequences for unethical acts, you can deter them. The clear message was, however, that if there were no external consequences – in other words you could get away with lying, cheating or stealing – it was ok.

    Internal controls (creation of a virtuous society) must be instilled early and I don’t see any way to do it except by parents with reinforcement from public institutions, like schools. However, moral relativism (every act has a context that can justify it) is still the order of the day.

    As a person who is not religious, I do not believe that religion is required, but I don’t know either how else you establish a moral code that everyone can agree on.

  • Butch Knouse

    Insider ecomonic crime is VERY low risk, considering that if you get caught you have to give back the money and do 2 years in Club Fed. Even identity theft, (a crime that wreaks havoc on the victims) is still considered a minor crime with short sentances. Until these crimes are taken seriously, they will continue to florish.

  • thibaud

    Odd that when the problem is dishonest people in government, WRM identifies the problem as systemic ie the “blue model.” Yet when rampant dishonesty occurs in business, the root problem somehow becomes one of individual character.

    A more honest approach would be to compare similar nations’ records re. honesty, integrity and transparency, in both public administration and in private business, and see whether there are systemic patterns.

    Given that several advanced nations far outscore the US for public and private business integrity, it’s very strange that this blog’s author continues to ignore what would seem to be some rather obvious systemic differences.

    Those nations are Holland, the nordic countries, New Zealand/Australia and Canada. Transparency International, the gold standard for measuring corruption at the country level, ranks these countries far ahead of the US – specifically, scores of 8.5 or better for this group, all of whom are at the very top of the world league tables for integrity, vs. 7.1 for the US, which places 24th in world rankings.

    Also interesting is that, among the advanced nations, those that provide the highest amount of religious instruction and religious influence on political life – ie the US, Ireland and Israel – score very poorly relative to their non-religious peers. Again, Ireland’s secular neighbors in northern Europe far outscore Ireland, as seen most egregiously in the corruption-induced Irish real estate fiasco; Canada far outscores the US; all of the European nations except Italy outscore Israel.

    Funny, then, that nations which are overwhelmingly secular AND that have very robust regulations and state intervention – ie, that are “blue” in the WRM lexicon – would do so much better than our own religion-soaked, anti-regulation model.

    Why so, Mr. Mead?

    This is not intended as a jibe; just desiring a sincere, non-sarcastic and thoughtful response as to why all the international evidence we have so clearly refutes your core thesis.

  • Duncan Frissell

    Two words – “Mandatory Chapel”.

  • Benjamin W.

    I’m not sure that ‘business ethics’ are really something we can say have completely declined as a result of one study.

    On the one hand, we may be looking at white-collar crime differently now than we used to, but we’ve also come a long way in many other areas: intimidation of labor, polluting public waterways, discrimination against minorities and women are all moral values that businesses definitely are more aware of today than they did 50 years ago. I think that on many fronts, and at least the ones I’ve mentioned above, American businesses are much more ethical than they were 50 years ago.

    We’ve got to make sure we’re comparing moral apples to moral apples. Some of the things we take for granted now as part of being ethical were very much NOT in the mainstream of business values many years ago. Even if business ethics are changing, the results of one study shouldn’t indicate a collapse across all fronts.

  • Jim.


    Look up the “Catholic / Protestant split” if you need more information on your post.

    Also, if you wonder whether traditionally Protestant countries are trending upward or trending downward with regards to ethics, I would point you towards their mega-popular mystery writer (whose name escapes me at the moment — he wrote “The Faceless Killers”) who is striking a chord with his tales of how previously unthinkable crimes were being committed in his Nordic homeland. The obvious answer, secularization, somehow eludes them.

  • thibaud

    Jim – America is a Protestant nation par excellence. In their social attitudes especially, American Catholics have far more in common with their US Protestant neighbors than they do with Catholics outside the US.

  • Bill Reeves

    Perhaps the increasing cynicism of CFOs relates to the fact that they know that they are – every single one of them – criminals already. There are so many thousands of laws and regulations that they are subject to that they don’t even know about. The only thing that keeps every CFO in America out of jail is a lack of ambitious prosecutors to prosecute (persecute) them.

    And when everything is against the law and everyone is a criminal, then the bright line between moral and immoral behavior is obliterated.

    Everything was against the law in Soviet Russia – and it turned people into animals.
    We need a lot less law, not more. And less vindictive punishments, not more. Self righteous point scoring is beneath you, Prof Mead. Stick to what you know.

  • Angel Martin

    good article !

    in the corporate insider fraud world, they operate under the 10-80-10 assumption.

    that is, 10 percent of people will always steal, 10 % never will and the other 80% will if the correct motive, rationalization and opportunity is present.

    the goal needs to be to try to expand the 10% who will never steal to a larger percentage, and reduce the opportunities and rationalizations for the 80%.
    Oh, and get the other 10% in jail where they belong.

  • stan

    And what about climate scientists who commit fraud to advance an agenda costing trillions? Or government fraudsters like Holder? Does his lying about his role in giving guns to murderers require a punishment with teaching value? When the president viciously slanders private citizens, what punishment is appropriate?

  • Jim.

    A brilliant perspective on this was written up by none other than C S Lewis, fifty years ago or more. The Abolition of Man is cited by many Conservatives as a book whose wisdom can help save Western Civilization. (Or indeed any civilization that heeds its warnings and adopts its precepts.)

    The Abolition of Man — it’s worth going out and buying right now.

  • thibaud

    Jim – so why is it that the secular advanced societies, ie the ones that have most firmly rejected CS Lewis and evangelical Christianity, are those that leave the US far behind when it comes to public integrity and ethical business behavior?

    Funny, isn’t it, that ethical behavior is most positively correlated with secular political culture and social democracy.

  • Jim.


    The answer is inertia, plain and simple. Lewis anticipates this in a passage from Abolition of Man, when he talks about preferring to play cards with someone raised to believe cheating was ungentlemanly, rather than a moralist raised by card sharps.

    Look at the trajectory, though…. those countries you admire are headed in the wrong dirction, while countries that are increasingly getting their acts together (Korea, Vietnam, even China and Africa) are Christianizing at an impressive pace.

    While there are short-term benefits to living in a place thoroughly infused by Christian values in the past, if they have since abadoned the faith, it’s no place to build a future. The future will belong to others.

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