An Economic Crime Against Humanity

Believe it or not, there was an article, Wall Street’s Economic Crimes Against Humanity, circulating about a year ago that believes the hate crimes committed by the Nazi’s and those by Wall Street are similar in nature. At first, I felt that a comparison between what the businesses did in the subprime mortgage industry and what the Nazi’s did was outrageous.  However, after a closer reading, a comparison is not that ridiculous at all.

Crime Against Humanity

The Nazi’s performed atrocious hate crimes, or as Shoshana Zuboff states “crimes against humanity” through mass genocide.  Many Nazi’s of the time did not commit these hate crimes and genocide independently.  Instead, they were wrapped up in a psychological whirlwind whereas they performed their horrible crimes because they were too scared to stand up and do the right thing.  They performed their crimes without thinking about the consequences of their actions because their entire nation was committed toward the same thing.  As strange as it is to compare Nazi’s to the subprime mortgage industry, they both understandably committed immoral acts through a common goal of domination, or profit maximization.

The Economic Crime

The subprime mortgage industry is indeed guilty of performing “crimes against humanity” for through their actions they neglected or ignored to make sure they were doing the right thing for everyone.  Sure, in our capitalistic structure of an economy, it is always a company’s goal to make more money.  However, the people involved in this industry simply made money by being socially irresponsible.  They made their money at the cost of millions of people losing their lifetime investments, their houses, and more importantly their livelihood.  Just as the Nazi’s were too scared to be the “whistleblower” and do the right thing; the people and companies involved in the subprime mortgage industry were too scared as well.  Either out of fear or sheer greed, these companies did the wrong thing.  They simply focused on making a lot of money and while one could say focusing on money and committing mass genocide are completely different things, I would, like the author, argue that they are not so dissimilar.

The key to understanding this comparison is not focusing on the actual acts that were performed by either party, for killing and maximizing profits are indeed different.  The key is focusing on the inactions of both the Nazi’s and the subprime mortgage industry.  There were investors and companies involved in the subprime mortgage industry that at some point had to have realized that what they were doing could have major economic repercussions.  However, due to fear or greed, they simply kept their defunct industry going.  Afterall, the entire industry was making a ton of money off this idea and if it’s good for everyone else, it is surely good for them.  They, like most humans, followed the flock without thinking for themselves.  Once they got involved and saw their profits rise, it became too difficult for them to exit.  They became addicted to the money, like everyone else in their industry, and due to this greed they kept pushing the subprime mortgage industry further and further until it eventually crashed.

The Nazi’s Crime

In Nazi Germany, the citizens out of fear or nationalistic pride (greed) followed the flock as well.  Once the Nazi’s came into power under Hitler, Germany was the most profitable it had ever been in its history.  Just as in the subprime mortgage industry, the Nazi’s were enjoying the value that was added to their nation.  Due to this addiction to value maximization, both parties, through inaction, did the wrong thing.  Regardless, if their inactions were based on fear or greed or pure ignorance, they both committed “crimes against humanity”.  The Nazi’s directly killed millions of people, while the inactions destroyed peoples’ lives.  The effects of the subprime mortgage industry could have indirectly killed people through suicide or heart attacks.  The subprime mortgage industry destroyed the infrastructure of the U.S. economy, as well as destroyed the trust of the public regarding businesses.  Both the Nazi’s and businesses, at large, acted without regard for the consequences that could follow.

Change Is In Order

Companies, more specifically people, need to change.  People shouldn’t be afraid of thinking for themselves and standing up to do the right thing.  If you think that what you or your company is doing is immoral, then you should be the “whistleblower” and act with moral confidence, regardless if you lose your job or profits.  For far too long, companies and people alike have ignored moral principles in the business world and created an environment where people are brainwashed into falling into line.  It seems that companies have only one thing in mind and that is profit maximization.  While I agree that profit maximization should be the goal of every organization, companies put unnecessary pressure on their employees to ensure that this is realized at any cost.  While these companies are surely to blame for their negligent actions, I believe that these crimes can be further generalized into how a company is valued.Wall Street and the business world generally judge and value based off financial statements, i.e. the income statement.

Companies are truly a victim of circumstance for they want to be the best and for them to be the best they have to show they have the most money.  Due to Wall Street using financial statements to value a company, companies in general will do whatever they can to ensure they are the best, at any cost.   Companies need to practice moral principles when dealing with making money.  However, for companies to change and act with moral fiber, Wall Street (the business world) needs to change their valuation methods.   Wall Street should give more credence to the value that the companies are adding to benefit people and the world.  Of course, they should still use the financial statements in valuing, but they need to look at more variables and intangibles for what they are promoting is possibly destroying.

Image Used In This Post

Not So Fast You Greedy Bastards image courtesy of Flickr user cogito ergo imago published under the CC license.