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 normal: 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. Supermarkets and the rest of the food industry, pharmaceutical firms, hospitals and care homes, housing and construction, great swaths of the financial sector - tales from all of these show that fraud and trickery are in the mainstream, the New Black of commercial life. In particular, there appears to be an expansion of organized fraud in the economies and markets for legal, everyday goods and services; the recent horsemeat scandal in Europe is one example of this. And it is not just companies. There's corruption and crime in governments here and around the world: crony capitalism, powerful oligarchies, 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?
It seems as though Margaret Thatcher and Ronald Reagan and their powerful backers have a lot to answer for. I say that because my research into fraud points to the importance of the neoliberal talk, policies, programmes and transformations that became important starting in the 1980s. This neoliberal economic and political transformation brought with it a moral transformation. High levels of fraud and trickery, it appears, are the result of the extensive changes in political and moral economies that occurred across economic sectors, the state and communities in those countries that experienced neoliberal transformation.
If the conclusions I have drawn from my own research are generally correct, then dealing with that fraud and trickery is 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-economic 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.
For scholars interested in economic fraud in the West, the past few years have provided a vast number of cases and huge amounts of information. And yet, few academics are prepared to collect and analyze the data on this historical shift to "fake capitalism" in the West. We have scholars discussing the current economic crisis in conventional terms, but we have few who are concerned with that fraud and what it tells us about social change, power, accumulation and democracy. For most, it seems to be scholarly business as usual post-2008, and that is not good enough. We need a strong scholarly engagement with the realities of fraud and the related bundle of norms, values, practices and systems of power. With that, we can begin to challenge conventional narratives and models of the capitalist market, the sources of wealth, poverty and power, and the bases of people's culture and practices.
If we are going to try to fix things, we need to recognize that fraud is not simply a manifestation of culture. That is because that culture is shaped by the political economy that gives it force. 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. It is far from clear that our rulers are up for that.
However, if we are going to try to fix things, we also need to remember that fighting fraud does not mean giving morality to the amoral fraudsters and deceivers. Since Mandeville and The Fable of the Bees, we have been told that greed is good, that each of us serving our own interests serves the common weal. The current economic crisis shows how empty that fable is. But it should not blind us to the fact that all 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 though - I can't afford to be nice," "I wouldn't be paid this much if I didn't make good decisions," "Looking after my family is more important than looking after strangers," or "If we all look out for ourselves, everyone will be better off." Economic fraud, then, signifies not the absence of moral norms, views and codes, but their presence. In other words, a moral norm does not automatically prescribe a pro-social practice such as solidarity, cooperation, honesty or justice. In a particular case, the actually existing moral norm - i.e. notions of standards of interaction regarding others' welfare and of what constitutes acceptable/unacceptable practice - among the actors involved can also be that it is OK, proper, or necessary to defraud (and therefore harm) another human being or social group (say, the poor, elderly, vulnerable, workers, customers and so on), for example to meet the corporation's target, to keep one's job, to survive, to defend or advance one's own power and wealth position or that of one's own family, social group, corporation, or country and so on.
That said, to combat fraud we need to understand it. We need to understand the systems of economic and political power that facilitate it and of the values and norms that justify it. Ignorance will not help us to see where the fraud comes from, and if we can not see where it comes from we can not even begin to see how to restrain it.