Too Much Money

If money is our universal solvent, allowing us to exchange anything for anything else, we seem to have reached the point where virtually all other values are dissolved as well.

The financial industry, awash with cash, is desperately looking for ways to use it to make more money, and the banks, staffed with smart, ambitious bankers, are ceaselessly searching for new ways to outdo their competitors. Fraud, insider trading, manipulating rates, cronyism, etc. etc. have become standard practices.

Reflecting on this, recently, The New York Times noted that “for the world’s biggest banks, what seemed like the perfect business turned out to be the perfect breeding ground for crime. The trading of foreign currencies promised substantial revenues and relatively low risk. It was the kind of activity that banks were supposed to expand after the 2008 financial crisis.”

“But like so many other seemingly good ideas on Wall Street, the foreign exchange business was vulnerable to manipulation, so much so that traders created online chat rooms called ‘the cartel’ and ‘the mafia’.”

Even worse, a new report suggests, corruption is increasingly accepted:
“Nearly one in five respondents feel financial service professionals must sometimes engage in unethical or illegal activity to be successful in the current financial environment. One in 10 said they had directly felt pressure ‘to compromise ethical standards or violate the law.’ And nearly half of the high-income earners say law enforcement and regulatory authorities in their country are ineffective ‘in detecting, investigating and prosecuting securities violations.’”

Add to this the fact that those who regulate the industry are largely hamstrung by a political process dominated by donors to political campaigns, not to mention the lobbyists who eviscerate efforts to impose restraints. Moreover, they know that when they leave their under-funded government jobs, lucrative opportunities await them as they work to thwart their successors.

The larger picture includes how money is overwhelming other values in our society. Scientists succumb to the temptation to falsify data to make a splash. Job seekers amplify their resumes. Cheating on campuses is on the increase.

Recent indictments of FIFA officials for bribery, point to the fact that soccer, like other sports, has become a huge and profitable industry. To be sure, the players make good money but the billions generated by TV coverage eventually filter down to the officials changed with regulating the business, selling their votes to those who stand to make yet more money from the game.

There has always been corruption, and, no doubt, there always will be. But the financialization of our world, the sheer scale and complexity of global business, along with the inexorably growing disparity between the rich and poor, has dramatically changed the problem.

Just as global warming has crept up on us to the point where now we are virtually helpless against the storms and floods that wreak havoc on our lives, corruption has become pervasive, and we are in danger of simply accepting it as a feature of normal life.

Many have been concerned about the effect of the growing wealth gap: cynicism, hopelessness, resentment, the erosion of ambition – and the potential rise of class warfare and revenge. But here is yet another effect: the normalization and increase of crime and corruption.