The normalisation of western fraud

Dr Jörg Wiegratz
Friday, 7 June 2013

Are you tired of yet another revelation of fraud in the food industry or the banks? Are you paying less attention to those stories? Are you getting numb, thinking more and more 'that's just how the system works'?

If so, congratulations! You're learning to lower your expectations to meet the new norm: pervasive, institutional economic fraud. This used to be the sort of thing you read about in income-poor countries in Africa and South America. Nowadays, though, it turns out (yet again) that We Do It Too, and not just the usual suspects in the shadowy corners of the arms trade, but supermarkets and the rest of the food industry, pharmaceutical firms, hospitals and care homes, housing and construction, great swaths of the financial sector. And it is not just companies. There's corruption and crime in governments here and around the world: crony capitalism, powerful oligarchies and elite criminality.

All of this raises crucial questions about contemporary capitalist societies. What norms, values, beliefs and attitudes, what ways of thinking and reasoning, shape these practices? What brought these about and encouraged so many people to take so much from the rest of us?

Current high levels of fraud and trickery are the result of the extensive changes in political and moral economies that occurred across economic sectors, the state and communities in the countries that experienced neoliberal transformation in the last few decades. Dealing with fraud and trickery is therefore more complicated than many people seem to think. Talk of social enterprise, responsible capitalism, corporate responsibility and the rest might sound nice (to some). But unless we investigate and think carefully about the moral and interrelated political-economic aspects of neoliberalism, that talk is likely to be little more than campaign promises from a tainted political class and hot air from a tainted corporate class.

If we are going to try to fix things, we need to remember that fighting fraud does not mean giving morality to the amoral fraudsters and deceivers. This is because all political and economic actors have a moral compass, even the fraudsters. They are guided by moral norms and codes of one sort or another. Those are the codes that lead people to say, perhaps, 'Everybody tricks these days', 'If I don't do it somebody else will', 'Who cares?', 'In business you have to be tough - I can't afford to be nice', or 'I wouldn't be paid this much if I didn't make good decisions'. Economic fraud, then, signifies not the absence of moral norms, views and codes, but their presence.

Finally, we also need to recognize that fraud is not simply a manifestation of culture. Those who tell us that they want to change the culture in, say, the banking sector are fooling us, and maybe themselves, if they ignore the ways that cultural change works via political-economic change. That is because of a simple truth: if you want to change existing practice, you have to change existing structures of power. Hence, whoever wants to combat commercial fraud has to address commercial power, and whoever wants to combat police falsification of statements has to find ways of limiting the power of the state that is entrusted to the police. It is far from clear that our rulers are up for that.

In short then, to combat the fraud we need to understand it. We need to understand the systems of economic and political power that facilitate it and of the social values and moral norms that justify it. Ignorance will not help us to see where the fraud comes from, and if we cannot see where it comes from we cannot even begin to see how to contain it.

A longer version of this opinion piece is available here