Economic Crimes Against Humanity
The financiers at AIG were awarded millions in bonuses because their contracts were based on the transactions they completed, not the consequences of those transactions. A 32-year-old mortgage broker told me: “I figured my job was to get the transaction done…Whatever came after the transaction—that was on him, not me. ” A long list of business executives have reaped sumptuous rewards even though they fractured the world’s economy, destroyed trillions of dollars in value, and disfigured millions of lives.
Most experts now blame a lack of regulation and oversight for this madness. Or they point to misguided incentive programs associated with the push for shareholder value that tied executive rewards to a firm’s share price. These factors are surely important, but they ignore the terrifying human breakdown at the heart of this crisis. Each day’s economic news leaves me haunted by Hannah Arendt’s ruminations on Nazi war criminal Adolf Eichmann as she reported on his trial in Jerusalem for The New Yorker 45 years ago.
Arendt pondered “the strange interdependence of thoughtlessness and evil” and sought to capture it with her famous formulation “the banality of evil. ” Arendt found Eichmann neither “perverted nor sadistic,” but “terribly and terrifyingly normal. ”
Remoteness from
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The economic crisis is not the Holocaust but, I would argue, it derives from
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This institutionalized narcissism and contempt for the “other” found its ultimate expression in the subprime mortgage industry, and the investment business derived from
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As in war, that emotional distance made it easier to operate in one’s own narrow interests, without the usual feelings of empathy that alert us to the pain of others and define us as human. The narcissistic business model provided the modern day “circumstances” that enabled individuals to ignore the poisonous consequences of their choices. This paved the way for a full-scale administrative economic massacre. Despite Arendt’s deep understanding of the Nazi system to which Eichmann conformed, she insisted that the central moral issue—not only of the trial but of all time—came down to the nature and function of individual human judgment.
What we have demanded in these trials, where the defendants had committed ‘legal’ crimes, is that human beings be capable of telling right from
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It is relevant to the relationship between individual judgment and institutional processes in any situation. It’s a message that says: you can’t just blame the system for the bad things you’ve done. Yet to the world’s dismay, thousands of men and women entrusted with our economic well being systematically failed to meet this minimum standard of civilized behavior. They did not capably discern right and wrong. They either did not judge, or they did not act on their judgment. This failure defines the raw heart of the public’s outrage at each fresh disclosure of outlandish bonuses.
It is less a thirst for revenge than it is a rebellion against this banal evil. The public’s indignation reflects a sense of morality that points deeper and truer than the laws devised to protect self serving business practices. The call now is to take back our community, to return to a place where people are capable of telling right from
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Edward Liddy, the Paulson-appointed chairman of AIG, initially recommended that the bonuses given to its employees go forward, though he found it “distasteful and difficult. ” Mr. Liddy missed what could have been the shining moment of his career by failing to insist from
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By now the existential security of millions of people has been threatened or destroyed. No one is safe from
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Since the days of Eichmann in Jerusalem, our understanding of human rights has evolved to include economic, social, and cultural rights. The Universal Declaration of Human Rights adopted by the U. N. includes “the promotion of social progress and better standards of life in larger freedom. ” The U. N. Commission on Human Rights has called the business community to account, stating that “transnational corporations and other business enterprises, as organs of society, are also responsible for promoting and securing the human rights set forth in the Universal Declaration of Human Rights. The economic crisis has demonstrated that the banality of evil concealed within a widely accepted business model can put the entire world and its peoples at risk. Shouldn’t those businesses be held accountable to agreed international standards of rights, obligations, and conduct? Shouldn’t the individuals whose actions unleashed such devastating consequences be held accountable to these moral standards? I believe the answer is yes.
That in the crisis of 2009 the mounting evidence of fraud, conflicts of interest, indifference to suffering, repudiation of responsibility, and systemic absence of individual moral judgment produced an administrative economic massacre of such proportion that it constitutes an economic crime against humanity. Shoshana Zuboff is the author of The Support Economy: Why Corporations Are Failing Individuals and the Next Episode of Capitalism. She was the Charles Edward Wilson Professor of Business Administration at Harvard Business School.