An Economist's Sentiment

The Economist has brought up an intersting point about white-collar crimes. With regards to the conviction of Jeff Skilling of Enron, they had this to say:

Prosecutors and the public seemed delighted by Mr Skilling's long sentence. Yet there are growing worries about the severity of America's white-collar sentences, which treat bosses more harshly than drug dealers and some murderers. Twenty years ago, Mr Skilling would have got just seven years. America also treats white-collar offenders more severely than other rich countries. (http://economist.com/displayStory.cfm?story_id=8082101)

Now, just reading this w/o the whole article does not do it justice, so let me bring up an idea that is mentioned later in the article. This kind of punishment is meant to be both retributive--that is, as a punishment for the billions of dollars lost and millions of lives adversely affected--and a deterrent to others. Not to say all punishments come out like that, but this one seems to have both aspects. We must ask what the goal of deterrence is, what are we trying to avoid. Coorporate scandal and unqualified risk-taking is not least among the goals, but is this the best way to acheive that? It seems that this kind of punishment might deter cooperate heads not only from excessive risk-taking, but might even make them play safe and pass up on some potential moves. That is not good for the economy as a whole, especially when other countries do not have as harsh of punishments and their companies would eat up this potential. More comprehensive reform and accountability schemes would do more to prosecute the problematic players and keep others safe.

Two more questions (at least) arise. First, who will make up this comprehensive reform? Not me. Second, should our moral and economic decisions be influenced by others? Absolutely, because morality is hardly black and white. Furthermore, we are required to think on the macro scale when decisions will impact it. That means looking at decisions' effects on local and world economics, poverty, employment, etc. If no man is an island, then what about coorporations?

All that being said, I think that Skilling, if really guilty, got a just punishment for the lives him and his decisions ruined. I just think that it should be clearer that his punishment is his and his companies. Not cooporate America's. They just need to know that changes are coming and that they should learn a thing or two of what not to do.

powered by performancing firefox