Paper on moral foundation of collective action against economic crime (final)

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MORAL FOUNDATION OF COLLECTIVE ACTION AGAINST ECONOMIC CRIME BY DAUD VICARY ABDULLAH President & Chief Executive Officer and Professor Dr. Abbas Mirakhor First Holder INCEIF Chair of Islamic Finance International Centre for Education in Islamic Finance (INCEIF) Lorong Universiti A 59100 Kuala Lumpur MALAYSIA Daud Vicary Abdullah Tel: +603 7651 4141 Fax: +603 7651 4143 E-mail: [email protected] Professor Dr. Abbas Mirakhor Tel: + 603 7651 4010 Fax: +603 7651 4143 E-mail: [email protected]

description

A Paper delivered at Jesus College Cambridge in September 2012 at the 30th International Symposium on Economic Crime

Transcript of Paper on moral foundation of collective action against economic crime (final)

Page 1: Paper on moral foundation of collective action against economic crime (final)

MORAL FOUNDATION OF COLLECTIVE ACTION

AGAINST ECONOMIC CRIME BY

DAUD VICARY ABDULLAH

President & Chief Executive Officer

and

Professor Dr. Abbas Mirakhor

First Holder

INCEIF Chair of Islamic Finance

International Centre for Education in Islamic Finance (INCEIF)

Lorong Universiti A

59100 Kuala Lumpur

MALAYSIA

Daud Vicary Abdullah

Tel: +603 7651 4141

Fax: +603 7651 4143

E-mail: [email protected]

Professor Dr. Abbas Mirakhor

Tel: + 603 7651 4010

Fax: +603 7651 4143

E-mail: [email protected]

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MORAL FOUNDATION OF COLLECTIVE ACTION AGAINST ECONOMIC CRIME

I. INTRODUCTION

By whatever definition or measure, economic and financial crimes are on the rise at

such a rapid pace to resemble an epidemic 1. No country, society, culture or community

seems immune to their devastating impact on victims, economies, governments and

societies2. Not long ago, these activities were known as “victimless crimes”3.

Consideration of these crimes has evolved over the last four decades. General concern

about them however intensified post-9/11 and accelerated post-2007/08 financial

crisis4. Activities that used to be thought of as developing country crimes, such as

bribery, corruption and fraud, are now major concerns of rich countries as well. While

the financial crisis focused attention on crimes of the white collar elite, empirical

research was pointing to an alarming phenomenon: “the everyday crimes of the middle

class,” crimes being committed by those “at the very core of contemporary society.”6

Much analysis of the growth in economic and financial crimes have focused on rapid

economic changes resulting from globalization and the accelerated pace of global

expansion of information technology.7 Very little attention has been paid to what a

number of observers consider as the most fundamental of all changes: the erosion of

morality.8 To be sure, there are classes of sociological, political, and psychological

studies, theoretical and empirical, that have dealt with what is referred to as a “market

anomie”, meaning the weakening “market morality” or “normlessness.”9 To our

knowledge, however, there have been very few studies that relate directly the growth

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of economic and financial crimes to the erosion of morality worldwide, even in societies

where the “market” does not have a dominant role in the economy.10 Some have

focused their sight on the rapidly weakening general moral standards and admit that the

humanity is facing a “particularly acute” moral confusion. The cause, however, is said to

be the rapid changes that have undermined “many of the institutions or traditions that

previously formed and policed our values.” Further, says Richard Holloway, the Bishop

of Edinburgh, “there can be little argument about the agent that has caused this change;

it is the dominance of the global market economy and the social and cultural

movements that have accompanied its ascendance.”11 Accordingly, globalization led to

the emergence of conservative administrations, in the 1980’s and 1990’s, that radically

restructured and removed traditional restraints on markets and on capital leading to

unleashing of greed, self-centered and self-interested behavior. Importantly, this

“unfettering of the market” has been accompanied by a number of cultural and social

movements that questioned traditional approaches to human relations. The result has

been described as the “political triumph of the Right and the cultural triumph of the

Left.”12

According to the above argument, causes of the “particularly acute moral confusion”

are to be sought in the “political triumph of the Right and the cultural triumph of the

Left.” There is no erosion, in other words, in the moral standard of humans. Holloway

argues that “there can be little doubt that our confusions are particularly acute…not

because we are less interested in or committed to the moral life than we used to be…”

but, presumably because of “unfettered market” and cultural changes. For long,

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however, causal direction has been assumed from erosion of mortality to crime. Those

“with weak ethics are naturally more likely to commit crime in all circumstances”13, and

that it is taken as “axiomatic that weakening ethics is one cause of crime.”14Moreover,

concern with “white collar” crimes preceded by decades the strengthening of

globalization, deregulation of the markets and cultural changes.

Whatever the cause(s) of erosion of morality across cultures, recovering a universal

moral principle, acceptable to all members of the human community, will have to form

the foundation of effective mobilization of international cooperation in collective action

against economic and financial crimes. For reasons that this paper hopes to argue, the

“demand” for international co-operation in combating these crimes has not succeeded

to elicit the desired results because of lack of a well-articulated, globally-shared moral

basis for collective action against economic crime. The basic thrust of this paper is that

such a moral foundation is urgently needed. Given the deep pluralism that characterizes

contemporary humanity, this is a daunting challenge. Holloway provides two helpful

suggestions by defining two characteristics for any “emerging morality.” First, “the

principle of harm…is a useful guide in steering our way through the currents of debate

about what is or is not allowable or moral behavior and, second, the “emerging morality

must be characterized by the principle of consent.”15

This paper argues that unlike other complex moral issues facing human society, no

one would deny the enormous, clear and unambiguous “harm” caused by economic and

financial crimes. The outrage against these crimes are so strong that at least one

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observer refers to them as “crimes against humanity.”16 The extent, intensity and depth

of the ”harm” these crimes cause are well-described by their victims, according to which

this paper classifies them as assault upon human dignity, trust, contract and property,

all of which constitute fundamental elements of the institutional infrastructure of

societies. Without these, no social cohesion or continuity would be possible leading to

what Hobbes envisioned as a “war of all against all.” The paper argues that the first

requirement suggested by Holloway is already met. The paper further argues that

Holloway’s second requirement, integrally related to the first, can also be met. The

paper suggests that a moral principle that can meet the requirement is the golden rule

with its long history, in one form or another, in all known systems of thought, in all

societies, cultures and religions.

Accordingly, the next section deals with the first principle. It discusses the clear and

unambiguous principle of “harm” as it pertains to the devastating damage caused by

economic and financial crimes to human dignity, trust, contract and property. The third

section argues that the changes brought about by globalization and technical progress in

our time are not too dissimilar to those in the seventeenth and eighteenth centuries

which also changed moral perception. The Scottish Enlightenment thinkers responded

by envisioning a new “moral sense.” The section argues that, given the will, humanity

can respond to the present state of moral confusion by redefining the prevailing moral

sense in terms of the golden rule. The fourth section discusses the golden rule as a

universal moral principle that could be adopted as a result of consent of a broad

representation of all segments of humanity who would not want each other “harmed”

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by economic crime. Section four also discusses the golden rule, its history, its presence

in all cultures and religions, its attribute of “universalizability” and potential for

attracting global “consent”. Section five concludes the paper.

II. EXTENT AND INTENSITY OF HARM CAUSED BY ECONOMIC

CRIME: MANY BROKEN WINDOWS

Analytic thinking about economic and financial crimes has evolved over the last

four decades. The most important dimension of this evolution has been the change in

focus on economic crime as “victimless” to the recognition of its far reaching, adverse

impact on a broad spectrum of victims. In 1982, a leading American political scientist,

James Q. Wilson, advanced an idea that became known as the “broken windows

theory.” The metaphor argued that if a broken window in a vacant building in a given

neighborhood is left unrepaired, soon most of the windows of that building would be

broken. The first unrepaired broken window signals that no one really cared about the

building itself and its integrity.17 Generalized, the idea suggests that tolerating crimes

leads to epidemics and, eventually, to social disintegration. Recently, William Black, the

author of The Best Way to Rob a Bank is to Own One, has contextualized “the broken

windows theory” to “elite white collar crime.” He suggests that Wilson’s idea that

“tolerating widespread smaller crimes would lead to epidemic levels of larger crimes

because it undermined community and social restraint” has been proven by the

“epidemics of elite white collar crime that have driven our recurrent, intensifying

financial crises.” He predicts “corruption that is excused and tolerated by elites is…likely

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to spread in incidents and severity because it undermines community and the rule of

law. It is likely to grow more pervasive and harmful the more we tolerate it.” Low

tolerance for activities that would not appear very serious, such as consumer fraud,

would soon create a Gresham’s effect “in which businesses or CEO’s that cheat gain a

competitive advantage and bad ethics drives good ethics out of the market. These

offenses degrade ethics and erode peer restraints on misconduct.”18

In the same year that Wilson advanced his theory of broken windows, Tomlin

suggested five basic typologies of victims of white collar crime: the individual, corporate

or business enterprise, governments, society, and the “international order.” The

consequences of inability to deal with white collar crimes, Tomlin suggested, were

“distrust of government and other institutions, a damaging effect on the moral fabric of

society, and in the propensity of the populace to rationalize the existence of other types

of traditional crimes.”19 More than two decades later, these words were echoed by the

Governor of the Bank of Thailand when he asserted that the consequence of economic

crime “go well beyond the financial loss and the economic well-being of society and the

country.” The Governor argued that “what is more important than the economic well-

being is the feeling of living in a fair and just society. If drug lords continue to live well

on their ill-gotten wealth, corrupt politicians continue to exert influence in the political

arena, fraudulent bank executives continue to go unpunished with no loss of status, and

stock price manipulators continue to get wealthier at the expense of other

shareholders, people would ultimately feel that the society in which they live is unfair

and unjust.” And, it was not only the domestic economic crime that needed prevention

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and prosecution, there “were more subtle forms of economic crime…where bigger

nations exploit the natural resources of smaller nations… where businessmen from large

countries move into smaller countries…to exploit the latter’s natural resources” and

exploit the consumers in these countries “when products which are hazardous to health

in bigger nations, have been relocated for production and sale in less developed

nations.”20

Despite the plea over decades by many developing countries that they were

victimized by economic and financial crimes perpetrated by politics and businesses of

richer, bigger nations, no serious attempts were made by the “international community”

to address these concerns. For decades, for example, the smaller countries pleaded, to

no avail, for an international convention against illegal “capital flight” from their

countries into rich, powerful states. This is in sharp contrast to the post-9/11 intense

efforts by the United Nations and the multilateral financial institutions to address crimes

such as money laundering and the financing of terrorism. In short order, these

institutions, with their typical asymmetric representation and power structure,

promulgated strong standards, codes and conventions, designed in rich, advanced

countries and imposed them, often without much debate, on their entire membership.

The language of these standards and that of their administrators, such as the Financial

Action Task Force (FATF), were that of power and displaying the one-sided concern with

the crime of their choice. The language of threats and demand for “international

cooperation” characterized much of the post-9/11 efforts to solicit international

cooperation. Any failure, for whatever reason, to respond quickly to these demands to

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“cooperate” meant, at minimum, the “naming and shaming” and eventually the threat

of sanction including loss of membership rights in multilateral institutions. Here is a

typical language:

Governments also have to address the problem of countries and

jurisdictions that are not cooperating in the combat against

financial crime and abuses. Jurisdictions that are unwilling or

unable to adhere to international standards for supervision and

regulation, for transparency, and for international cooperation and

information sharing constitute risk to other countries and a

potential threat to global financial stability. These serious concerns

have led governments to undertake a number of actions to

encourage/pressure these jurisdictions. Recent experience has

shown that public statements of concern listing of non-cooperating

jurisdictions can bring strong pressure to bear.

This language says, in effect, that if you do not, or are even “unable” to

cooperate with me to implement the standards, codes and conventions that I have

designed to prevent harm to me you become subject to “encouragement/pressure” and

punished. Concurrently, with this thinly veiled language of threat “to cooperate”, the

same statement calls for development of a new “value-based system”, a new morality:

“The challenges presented by the global economy are great and will require our being

strongly-committed to maintaining and further developing a rules-and-values based

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system.”21 The earlier part of the statement leaves little doubt whose rules, whose

values and whose morality are to be developed as fundamental base of the new

morality needed for international collective action against economic crime. Recall the

statement of the Governor of the Bank of Thailand complaining that the “international

community” has for decades turned a deaf ear to the plea of the poorer, less powerful

nations for international standards, codes and conventions that mobilize global

collective action against economic and financial crimes that harm their people, their

economy and their society.22 The concerns of the Governor of Thailand resonates in the

statements of other countries to various international fora.23

There is very little doubt regarding the devastating consequences of money

laundering and terrorism financing. But, could not the international community develop

a new value system, a new morality along the line suggested by Holloway and others?

Could not a global-wide view based on the “prerogative of global citizenship” develop a

moral principle based on “consent” rather than based on the language of power

imperatives? Would not the call for international cooperation be more effective based

on a globally agreed moral principle that harm in any form resulting from economic and

financial crimes that assault human dignity, trust, contract and property against any

member of the international community would be morally unacceptable and must be

prevented? There is ample evidence that the present approach to forging international

cooperation for global collective action against economic and financial crimes is neither

as effective nor as successful as the potentials would indicate. It is not too unreasonable

to assume that a vast majority of global citizens would agree that combating these

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crimes is a moral necessity. Could not a global moral convention of equals, develop a

universal moral principle in the design of which “consent” was forged using Gadamer’s

conception of “fusion of horizons” to ensure effective presentation of all points of view?

There is no denying that developing a universal moral principle to underlie global

collective action against these crimes is an imperative.24 Such a principle would allow

development of uniform legislation, law, standards and codes within nation states

across the globe.

II.A. THE VICTIMS

Eight years after Tomlin had focused on the victims of white collar crime, Moore

and Mills25 complained that there had been little research on the social impact of these

crimes. Throughout the decade of the 1990’s, much of the focus of analysis was on

criminology, prosecution, and retributive justice for the offenders. Concern for the

victims of economic and financial crimes did not manifest itself either in research or in

judicial proceedings until the last decade when the victim rights protection advocacy

movement became active.26 Even then, while progress was made on the rights of

victims of violent crimes, the rights of victims of economic crimes did not fare as well. In

the U.S., the victims’ rights movement turned attention to this problem only in

1999.27Even so; it is yet uncertain whether the victims of economic and financial crimes

have a clear and unambiguous right to be heard in court proceedings against

offenders.28

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In the U.S. where there have been efforts to document the arm that economic

criminals perpetrate on their victims, it is reported that many of the victims “lose their

entire savings and are devastated by the psychological and social impact. They feel

robbed of not only their money, but also of their security, their self-esteem, and their

dignity.”29 Additionally, victims of economic and financial crimes suffer, inter alia,

shame, guilt, sense of betrayal, sense of violation, social stigma, loss of trust in “the

system that was supposed to protect them” and from health problems.30

These are the harms done to individual victims. Other crimes such as corruption

victimize whole societies. They harm the legitimacy of and trust in government and

public service. The World Bank has, over decades, conducted extensive research on the

extent of harm and damages that corruption and other economic crimes cause,31 and

has concluded, in part, that these crimes “have devastating impact on the capacity of

government to function properly; on the private sector to grow and create employment;

on the talents and energies of people to add value in productive ways and ultimately on

societies to lift themselves out of poverty.”32 Recently, Krishan asserted that “corruption

and poor governance undermine both democracy and development. The poor are

disproportionally hurt- the mother who cannot afford to pay a huge bribe to get medical

attention for her dying child; the family who will be able to have safe drinking water if it

pays a bribe; and the unemployed who remain jobless because public work projects are

not implemented since corrupt officials have pocketed the funds that were allocated for

them.”33 Similar sentiments were expressed by Akinbo who argued that economic and

financial crimes “are among major challenges facing all countries of the world.” They

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“have damaging effect on the economic and political system of a country.” These crimes

“undermine development by distorting the rule of law and weakening the institutional

foundation on which economic growth depends… In a nutshell, they are the primary

threat to good governance, sustainable economic development, domestic proble and

fair business practices in the country.”34

Not long ago, it was assumed by social scientists and politicians that some

economic and financial crimes, such as corruption, were “developing country”

phenomena.35 Researchers often considered corruption as a deterrent to economic

development of poor and middle income countries in that it was thought that

corruption conditioned development and good governance. As a result, indices of

corruption were designed within this axiomatic framework.36 But, as Ades and DiTella

note, no society is immune to corruption. “Governments of all political colors in

countries of all levels of wealth are affected by corruption scandals with a frequency and

intensity that seems to be always on the increase.”37 Specifically, they argue, Western

democracies can no longer have pretentions of immunity to corruption they viewed as

“aberrant” deviation from Western norms.38 Corruption, in its broadest sense of abuse

of public office, is an economic crime and as such afflicts all societies.

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II.B. BANALITY OF ECONOMIC CRIME: “AT THE VERY CORE OF

CONTEMPORARY SOCIETY .”

As mentioned in the introduction, even before the global financial crisis,

evidence had emerged pointing to “crime and unfair practices committed at the kitchen

table, on the settee and from home computers, from desks and call centers, at cash

points, in supermarkets and restaurants, and in interaction with builders and trades

people…by people who think of themselves as respectable citizens.” Karstedt and Farrall

refer to these as “every day crimes taking place in the centre of society, not at its

margins.”39 Their research in England and Wales and in Eastern Germany showed that in

that “respectable” core of society, there is widespread offending and victimization. This

is demonstrated by survey data showing that in these regions, “a total of 75 percent of

respondents reported at least one victimization (during their lifetime) while 64 percent

had engaged in illegal or ‘shady’ practices. More than half of the total sample (54

percent) reported experiences as both victims of small and large businesses and private

transactions, and as offenders in such exchanges.” They attributed these phenomena of

“crimes of everyday” to rapid economic changes that have resulted in appearance of “a

syndrome of market anomie comprising distrust, fear and cynical attitude toward law.”

In turn, such attitude “increases the willingness of respectable citizens to engage in

illegal and unfair practices in the marketplace.” These crimes, according to Karstedt and

Farrall, “are indicative of the moral state of society, much more so than violent and

street crimes.” Not atypical of this type of sociological analysis of crime, these authors

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argue that massive economic changes are the cause of “market anomie.” They identify

“four economic cycles” all of which “push up levels of offending and unfair and unethical

practices by business and consumers alike and thus link mass victimization and

offending in markets.”40

II.C. BANALITY OF ECONOMIC CRIMES “AGAINST HUMANITY”: MORAL

PANIC

Reading both religious and non-religious analysis of economic crime imparts a

sense of panic that human societies are becoming morally unhinged. Karstedt and

Farrall observed that the “everyday” economic crimes committed by ordinary citizens

are so widespread to give an indication of massive moral failure. They located their

research and analysis within the framework of “moral economy”, a term first used in the

early 1960’s by E.P. Thompson which has come to be understood as the collection of

moral norms, and justice perceptions that characterize an economy. However, the sense

imparted by studies that transcend sociological viewpoint is that the moral failure is

deep and so widespread that it affects all parts of the society and is both prior to and

post-market transactions. Nearly a decade before the massive moral failure that led to

the global financial crisis, Holloway argued that “it is probably true that our time is

characterized by an almost uniquely turbulent assault upon tradition,” and that it is

“difficult to exaggerate the moral confusion of our day” characterized by “bouts with

moral panic that frequently afflicts us” and that such moral confusions “are particularly

acute.”41

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In addition to the harm consequent of economic and financial crimes committed

by official margins and the “very core” of society, devastating also is the impact of

crimes perpetrated by financial institutions, corporations and business enterprises.42

The aftermath of the global financial crisis revealed the extent of fraud and other

economic and financial crimes committed by financial institutions. For many, the

knowledge led to manifestation of “bouts with moral panic.” Still reverberating in the

“occupy” protest movement, the revelation of these crimes created intense moral

outrage. Zuboff, for example, was so affected that in a piece she wrote for Business

Week in 2009 she called them “crimes against humanity”43 She argued that the reasons

usually given for the crisis, such as deregulation, lack of oversight, and flawed incentive

structure, that established a link between executive compensation, share prices and

shareholder value, have merit. However, what is ignored in these analyses is “the

terrifying human breakdown at the heart of the crisis.”44

In an expression of her moral outrage, Zuboff likened the participants – bankers,

brokers, and financial specialists – in the dominant business model to the Nazi war

criminal Adolf Eichman. She argued that the business model operative in the run up to

the crisis was characterized by self-centeredness “that celebrates what is good for

organization insiders while dehumanizing and distancing everyone else”45 She explains

that at its “heart”, what drove the crisis was a sense of “remoteness and

thoughtlessness, compounded by a widespread abrogation of individual moral

judgment.” This is the reason she finds appropriate the philosopher Hanna Arendt’s

formulation of “the banality of evil” in her observation of Eichman in his trial in

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Jerusalem.46 Arendt observed that Eichman was not “perverted and sadistic”, but

“terribly and terrifyingly normal.”47 He was motivated by nothing except “an

extraordinary diligence in looking out for his personal advancement… he never realized

what he was doing…such remoteness from reality and such thoughtlessness can wreak

more havoc than all the evil instincts taken together.”48 This is indeed a sobering

thought given the evidence of how widespread is the growth of economic and financial

crimes in their broadest sense. Are these crimes becoming banal in human societies?

Zuboff’s response is in the affirmative and is an echo of Wilson’s broken windows theory

as rendered by Black. Zuboff argues that those perpetrating these crimes operate at an

“emotional distance” from their victims and from the “poisonous consequences” of

their actions, “similar to war situations.” In the context of the crisis, Zuboff argues, the

self-centered business model “made it easier to operate in one’s own narrow interests,

without the usual feelings of empathy that alerts us to the pain of others and define us

as humans.” Thus, “the narcissistic business model…paved the way for a full-scale

administrative economic massacre…to the world’s dismay, thousands of men and

women entrusted with our economic well-being systematically failed to meet…

minimum standard of civil behavior” that “says: you can’t just blame the system for the

bad things you’ve done.”49

Zuboff refers to the present “public outrage” as “a rebellion against this banal

evil” that “reflects a sense of morality that points deeper and truer than 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 wrong because they

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recognize themselves in one another”50 In the moral failure of the “narcissistic business

model,” Zuboff sees a serious violation of human rights that are now understood “to

include economic, social, and cultural rights” as envisioned in the Universal Declaration

of Human Rights of the United Nations. She argues that the “crisis has demonstrated

that the banality of evil concealed within a widely accepted business model can put the

entire world and its people at risk.” She then concludes that “in the crisis of 2009 the

mounting evidence of fraud, conflict of interest, indifference to suffering, repudiation of

responsibility and systemic absence of individual moral judgment produced an

administrative massacre of such proportion that it constitutes economic crime against

humanity.”51

III. RECOVERING A MORAL SENSE: “THE RETURN TO WHERE

WE CAN TELL RIGHT FROM WRONG”

As mentioned earlier, scholars attribute the observed, widespread “moral anomie”,

“moral confusion”, and “moral failure” to massive changes resulting from globalization

and rapid progress in information technology over the last few decades. For some, these

changes are not dissimilar to those that occurred in Europe in late seventeenth and in

eighteenth centuries. An important consequence of these changes was the decoupling

of morality from its theological moorings. Subsequently, a new morality, a new “moral

sense” emerged anchored on the authority of society, self-love, moral sentiments and

natural sympathy as its sources.52 There is a growing general perception of a nexus

between the accelerating pace, and widening spectrum, of economic and financial

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crimes—as well as Zuboff’s moral panic regarding the growing banality of these

crimes—and moral failure. This perception point to a need for emergence of new global

moral sense that would motivate strong international cooperation and coordination to

lead to collective action that would motivate development of unified legislative, judicial,

legal, and other ways and means of preventing economic and financial crimes. The new

moral sense would have to satisfy, at least, the two requirements posed by Holloway: it

would have to be based on “consent” of all parts of humanity and it would have to be

based on the principle of “harm” prevention. This paper’s objective, spirit and hope are

directed to addressing these issues in what follows. First, however, a brief review of

major elements that motivated the emergence of the moral sense in the eighteenth

century is in order.

III.A. SCOTTISH ENLIGHTENMENT AND THE MORAL SENSE .

What made the eighteenth century similar to the present were the rapid

changes taking place then that called for a “synthesis between a number of developing

oppositions that were increasingly being felt in social life.”53 As Seligman observed, the

developing opposition in the eighteenth century that were between “the individual and

the social, the private and the public, egoism and altruism, as well as between a life

governed by reason and one governed by passion, have in fact become constitutive of

our existence in the modern world.”54 Major social change from a feudal society to a

market society and the “emergence of capitalist market relations, with its distinction

between public and private, posed a new set of problems for the conception of the

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social order” in need of articulation of new moral vision. “The freeing of labor and

capital developed together with a new awareness of individuals acting out their private

interests in the public realm.”55 Social action and motivation were being based on self-

interest. A new moral order was required that was founded on rational self-interest

rather than on “a shared vision of cosmic order.”56

Accordingly, the new “moral sense”, a term first coined by Francis Hutcheson,

“the first Scottish philosopher to approach the problem of the foundation of morals in

an original way,”57 was based on moral sentiments, self-love, and natural sympathy.

Moral sentiments were an axiomatic property of the human mind and were what united

humans “by instinct, that they act in society from affections of kindness and

friendship.”58 Self-love “is the natural inclination to pursue the pleasures provided by

external objects, or the means that is used to satisfy it.”59 Sympathy is a feeling through

which “we participate in others’ feelings.”60 Fundamental to this moral sense is the idea

of benevolence which according to Hutcheson was the object of moral sense, and is

what drives individual to “seek the natural good or happiness of others.”61 Indeed,

Hutcheson argued that human nature itself “included a moral sense which recognized

benevolence as the core of moral action; further that when the moral sense is

enlightened and not distorted by selfish passion, a person’s judgment and behavior will

tend to contribute to the overall happiness of society and humanity. In other words,

harmony between the moral life of the individual and perfection of moral community is

a possibility and, hence, a moral, ultimately a religious, duty for humanity.”62

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In the Theory of Moral Sentiments, Adam Smith argued that “recognition” and

“appreciation” by others were the primary motivator of “all toil and bustle of the world”

and that it was man’s interest in “being the object of attention and appreciation “that

motivated all economic activity. This innate need for mutuality of sympathy and

recognition constituted the foundation of morals for individuals and motivated their

economic activity.63 It bears keeping in mind that, as Seligman points out, while Scottish

Enlightenment thought decoupled morality from theology, it did not dispose of Deistic

or transcendent source of all things; “The Author of Nature” in Adam Smith’s

terminology.64 Anthony Ashley Cooper, the Third Earl of Shaftesbury, who influenced

Hutcheson and Adam Smith greatly, argued – in response to Hobbes’ theory that human

nature is fundamentally selfish—that God provided human nature with a number of

generous forms of affections that predisposed humans to live together. Humans are also

provided with natural capacity to be attracted to positive affections and repelled by

negative affections.65 In his book, Inquiry into the Original of our Ideas of Beauty and

Virtue, Hutcheson argues that God is the source of “moral sense” to direct human

action. Moral sense, he asserts, is common to mankind and is independent of

individual’s will, “it is immediate, that is to say, its deliverances are not mediated by

consideration of personal advantages or harm…As every man has a capacity to make

moral distinctions, so the weight of moral virtue is within the competence of every

man.” Hutcheson concludes that “moral excellence can be attained by any person,

independently of this learning, power or riches.”66

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III.B. CONTEMPORARY MORAL SENSE

In spite of (or perhaps because of) the evolution of thinking over the past two

centuries about morality, the views of Scottish Enlightenment scholars have found

resonance in contemporary thought. One of the most famous American contemporary

thinkers, James Q. Wilson, whose theory of broken windows was discussed briefly

earlier, makes a compelling, spirited and articulate case in his book The Moral Sense that

humans do indeed have an innate capacity to make moral judgments. This is a counter

position to that of moral relativists’ conviction that not only morality but also the human

nature itself is a product of culture. As Geertz asserted in 1973, “there is no such thing

as a human nature independent of culture.”67 Three years later, Foucault went even

further suggesting that even man himself “is an innovation of recent date and one

perhaps nearing its end.”68 Another philosopher, Richard Rorty, asserted that humans

do not even possess anything like a “core self” and that there are no such things as

“moral facts.” He posited further that there is no “neutral ground on which to stand and

argue that either torture or kindness is preferable to the other.” Rorty argued that

“human beings must stop looking for some non-human or extra-human reality, such as

God, nature, spirit, matter or even human nature; for something-in-itself that, though

entirely independent of human knowing, would nonetheless provide us with universal

laws for governing our actions and our thinking.”69

To all this, Wilson replies that “humans do have a core self, not wholly the

product of culture”70 that has “a capacity to judge disinterestedly” how its “interests

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ought to be advanced”. He further argues that even in the face of moral confusion, most

humans have no difficulty experiencing the world as an arena of moral choices in which

humans’ moral sense asserts itself in their daily life. Reflecting Adam Smith and Francis

Hutcheson, Wilson contends that “people have a natural moral sense” composed of

sympathy, fairness, self-control, and duty. These, he argues, make the moral sense

universal because they exist in various degrees in every culture. He notes however that

humanity “has a moral sense, but much of the time its reach is short and its effect

uncertain.” He warns that humans take centuries to create a new culture of

commitment to morality, but once created, such a culture can be destroyed in “a few

generations. And once destroyed, those who suddenly realize what they have lost will

also realize that political action cannot, except at a very great price, restore it.”71

George Kateb, another contemporary scholar, echoes Wilson in his book, Human

Dignity. He argues that morality needs no justification, particularly “against relativists.”

He considers relativism as meaning “that there is no such a thing as morality; there are

only different codes….There are no principles of morality that are universally accepted

or nearly so, and there is no way of proving that one set of principles is correct and

other sets are mistaken.” In a counter-position, Kateb argues that “there is sufficient

continuity throughout recorded history in what counts as fundamentally right or moral,

despite differences in interpretation and application.” Given the fact of wide acceptance

of morality, no proof is needed as “there can be no other proof of the validity of a moral

precept than the quite common and fairly steady acceptance of it by people all over the

world, for as long as there has been moral reflections…No transcendent instruction is

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needed: it is not even a question of human discovery, but a sensitive awareness of the

obvious that gradually accumulates adherence.”

What is most relevant to the present discussion is Kateb’s position that: “Pain and

suffering are the central moral concern, and that efforts to prevent or reduce it

preoccupy moral agents. Yes, the center of morality is remedy, where possible, for

humanly caused suffering that seems needless and dispossesses human beings of what

is their desire or that neglects to preserve them in it.”72 As was indicated earlier in this

paper, clearly enormous pain and suffering are perpetrated upon victims of economic

and financial crimes. The moral principle advocated by Kateb, Holloway and others is

preventing harm, pain and suffering as much as possible and remedying their effects

whenever necessary. Kateb argues that this is such a self-evident principle that needs no

justification and requires no proof. It is a moral precept which is quite common and

acceptable by people in all cultures all over the world. Kateb’s own candidate for such a

moral precept is the negative form of the golden rule. The question arises whether this

principle meets the two requirements advocated by Holloway, namely, exclusive focus

on “harm” and acceptance by consent. The paper turns to this question next.

IV. A UNIVERSAL MORAL PRINCIPLE .

While there are many issues and subjects of disagreement on moral grounds, there

should be very little doubt about the moral clarity regarding the harm, pain and

suffering caused by economic and financial crimes. Nor can there be strong pessimism

regarding the emergence of a universal consent on the need to prevent them. It cannot

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be beyond the realms of possibility to expect the emergence of a universal moral

principle which would serve as the moral foundation of global collective action against

these crimes. Simply stated, these crimes are harmful on so many levels to pose a threat

to humanity. To motivate concerted, coordinated collective action on national and

global levels aimed at their prevention and their successful prosecution when they occur

as well as taking remedial, restorative action to assist the victims, there is a need for a

universal principle that would attract the consent of moral plurality. The hope and

aspiration of this paper is that a single moral principle of action can be forged with

participation of representatives of all cultures and all moral persuasions, as members of

a single humanity facing an ever-increasing, ever-strengthening threat to its survival. Up

to now, attempts to create strong basis for international cooperation and coordination

to combat these crimes has lacked a well-articulated universal moral foundation.

Perhaps the assumption has been that one was not needed since the issues involved are

clear. However, as reflected in the statement of the Governor of the Bank of Thailand,

echoed in many other statements of representatives of governments in numerous

international fora over the last decade dealing with the necessity of international

cooperation in combating these crimes, much of the effort in soliciting international

cooperation have aimed at selected crimes of interest mainly to a part of the

international community.

These representatives never deny the need for international cooperation in

combating money laundering or the financing of terrorism. What they point to is the

selectivity and self-serving character of standards, codes and conventions pushed on the

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rest of the world community by international institutions with asymmetric

representation and lopsided power structure creating a significant democratic deficit in

these institutions. In essence, what is questioned is the moral basis of giving priority in

demands for international cooperation to the economic crime of choice of the rich,

powerful members of the international community while ignoring for the last four

decades economic and financial crimes perpetrated against poorer, weaker and under-

represented members. That there is an urgent need for a universally accepted moral

foundation to facilitate a global coordinated collective action program to combat these

crimes, in whatever form, cannot be denied.

IV.A. “THE DEEP BEAUTY OF THE GOLDEN RULE”.

In the early 1950’s, when humanity had experienced engagement in another

devastating world war and had established the United Nations, it was a time to dream

of a different world wherein the probability of another such horrendous occurrence

could be avoided. Thus human beings entertained serious thought about a world

government which had “long been an ideal.” Phillip C. Jessup, the then Professor of Law

and Diplomacy in Columbia University, declared that this long held ideal “has recently

become a program of action…Judges, lawyers, bankers, businessmen, administrators,

churchmen, scholars and plain citizens unite in asserting that world government is not

only desirable but also attainable.”73 The motive was clear. “The impulse to establish

world government is to be attributed to the insistent human yearning for peace. Fresh

experience of war is requisite to provide the drive for active campaign to check this

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greatest of all human ills. As each modern war has ended, people have insisted that

there must not be another and for a time they have struggled to solve the problem.”74

The idea behind proposals to establish a world government was that wars could

be eliminated only when sovereignty was abolished. Even though optimistic about the

emergence of a world government, Jessup nevertheless warned that as “the memory of

the horror fades with passage of time, the impulse is blunted, the activity decreases.”

And the idea of a world government recedes.75

Concurrent with the dream of one world government, another dream was

running: the dream that humans could think of themselves as members of single

community” on the basis of a single ethical system, while retaining cultural pluralism

and individuality.”76 As history witnessed, both dreams of establishing a world

government and a single ethical system failed to materialize as the memory of war

receded and urgency gave way to business and politics as usual. However, as part of the

search for a “single ethical system”, one idea that has proved its enduring historical

appeal to mankind resurfaced and has stayed on the moral radar for most of humanity.

In an essay published in 1952 and titled: “the Deep Beauty of the Golden Rule,”77 Robert

M. MacIver, the then Professor of Political Philosophy and Sociology in Columbia

University, raised the question that: given the plurality, diversity, and relativity of

ethical, moral values, is a universal moral, ethical principle based on reason alone, and

applicable to all “in this world of irreconcilable valuation”, possible? He responded that:

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There is no rule that can describe both my values

and yours or decide between them. There is one

universal rule, and only one, that can be laid down, on

ethical grounds – that is, apart from the creeds of

particular religions and apart from the ways of the tribe

that falsely and arrogantly universalize themselves.

Do to others as you would have others do to you. This is

the only rule that stands by itself in the light of its own

reason, the only rule that can stand by itself in the

naked, warring universe, in the face of the contending

values of men and groups.”78

MacIver argued that the word “universal”, as he used it, “is one of procedure. It

describes a mode of behaving, not a goal of action. On the level of goals, of final values,

there is irreconcilable conflict.” Humans hold different principles which they wish them

to become universal and try to “convert” others. “Others will certainly resist and some

will seek to persuade us in turn – why shouldn’t they? Then we go no further except by

resort to force and fraud. We can, if we are strong, dominate some and we can bribe

others. We compromise our own values in doing so and we do not in the end succeed;

even if we were masters of the whole world we could never succeed in making our

principle universal. We could only make it falsely tyrannous.”79 How prophetic indeed

when one considers the history of imposition of standards, codes and conventions

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designed unilaterally by the rich and powerful then “encouraged” on the rest of

humanity to sign on through sheer power, “bribes”, threats and intimidation. MacIver

appeals for adoption of a different strategy:

So if we look for a principle in the name of which we can appeal

to all men, one to which their reason can respond in spite of

their differences, we must follow another road. When we try to

make our values prevail over those cherished by others, we

attack their values, their dynamic of behavior, their living will. If

we go far enough we assault their very being. For the will is

simply valuation in action. Now the deep beauty of the golden

rule is that instead of attacking the will that is in other men, it

offers their will a new dimension. “Do as you would have

others…” As you would will others do. It bids you expand your

vision, see yourself in new relationships. It bids you transcend

your insulation, see yourself in the place of others, see others in

your place. It bids you test your values or at least your way of

pursuing them. If you would disapprove that another should

treat you as you treat him, the situations being reversed, is not

that a sign that, by the standard of your own values, you are

mistreating him?

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This principle makes for a vastly greater harmony in

the social scheme. At the same time it is the only universal of

ethics that does not take sides with or contend with

contending values. It contains no dogma. It bids everyone

follow his own rule, as it would apply apart from the accident

of his particular fortune… our sole concern is to show that the

golden rule is the only ethical principle, as already defined,

that can have clear right of way everywhere in the kind of

world we have inherited. It is the only principle that allows

every man to follow his own intrinsic values while

nevertheless it transforms the chaos of warring codes into a

reasonably well-ordered universe.79

MacIver ends his essay citing Jesus: “All things therefore whatsoever ye would that

men should do unto you, even so ye also unto them; for this is the law and the

prophets.”80

IV.B. THE GOLDEN RULE

Certainly much has been written on the golden rule both before and after

MacIver’s essay, but few as succinct, clear and forceful defense of the rule as a universal

moral principle. There have been a number of credible research on the history of the

golden rule dating back to the Babylonians.81 Other research has investigated

philosophical, psychological, sociological, theological, and political implications of the

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rule across cultures throughout history. Intense debates have taken place between

opponents and proponents of the rule as a moral principle applied to issues such as

abortion, euthanasia, sexual orientation and a host of other issues with moral

implications. There has also been a growing literature on the application of the rule in

legal and judicial proceedings. Nevertheless, the adequacy of the knowledge of and

understanding of the golden rule by the general public is questionable. In the preface to

his book The Golden Rule, Jeffrey Wattles asks:

How is one to move beyond shock and cynicism as one

confronts the evidence of moral decline in society? What reaction

comes more easily than to blame them? We may be driven to act

on the tendency to separate humankind into two camps – the

ones who are the problem and those of us with higher

standards—but such is not the ultimate solution. I believe that we

can learn to relate more humanely and reach out more effectively

by discovering the golden rule.

The need even for morally active people to discover the rule

is greater than I realized over a decade ago when I began my

research. I used to assume that nearly everyone was raised so

that when they heard the phrase “the golden rule” they could

supply a principle worded, approximately, “do to others as you

want others to do to you.” I also assumed that nearly everyone

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who heard that principle spelled out had a roughly accurate initial

grasp of its meaning. And I assumed that those who thought

highly of the principle would occasionally spend time thinking

about how to apply it. I have not made a scientific survey and

would not hazard an estimate in percentage term, but my

experiences talking about the rule with individuals and groups

during the past years incline me to doubt these assumptions.

A volunteer soliciting contributions for an environmental

group guessed that the golden rule “An eye for an eye and a tooth

for a tooth.” A reporter misquoted the rule: “Do to others as will

be done to you.” Given the correct formulation, two students

debated at length with their professor that the rule meant the

same as the motto “Get even.” A pastor’s wife doubted that the

rule was biblical. Philosophers often distort the rule and dismiss it,

while others who prefer a charitable interpretation find no

reply.82

Wattles argues that the rule is intuitively easy to grasp, it has immediate

intelligibility, is obvious and self-evident. “I know how I like to be treated; and that is

how I am to treat others. The rule asks me to be considerate of others rather than

indulging in self-centeredness.”83 Wattles reviews the historical development of the

golden rule from Confucius, ancient Greece and Rome, the Jewish Tradition, New

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Testament, European Middle Ages through to the writings of twentieth century

scholars. He concludes that:

The golden rule is, from the first, intuitively accessible, easy

to understand; its simplicity communicates confidence that the

agent can find the right way…the rule is a principle in a full sense.

Even before it is formulated, its logic operates in the human mind.

Once formulated, it shows itself to be contagious and quickly rises

to prominence. It functions as a distillation of the wisdom of

human experience and of scriptural tradition… Much of the

meaning of the rule can be put into practice without any religious

commitment, since it is a non-theological principle that neither

mentions God nor is necessarily identified with the scriptures or

doctrines of any religion. The rule is an expression of human

kinship, the most fundamental truth underlying morality…”Do to

others as you want others to do to you: is part of our planet’s

common language, shared by persons with differing but

overlapping conception of morality. Only a principle so flexible

can serve as a moral ladder for all humankind.84

Once a universal principle is agreed upon to serve as the moral foundation of

collective action against economic and financial crimes, legislative, legal, judicial

processes and procedures relating to prevention and prosecution of those crimes too

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would be based on that moral principle as well. Legislative and legal history of the rule

as related to law have been reviewed by Duxbury who suggests that the “courts have

appealed to the Golden Rule, among other things, as a benchmark of good advocacy and

legal probity, a principle of judicial (and interjurisdictional) as comity, a means of

determining whether a claimant deserves an equitable remedy, as a rational for limiting

forms of speech and expression, for the judicial review of legislative action, and as a

basis for principles of equitable fair-dealing, restitution for unjust enrichment, general

trusteeship, proprietary estoppel, specific performance (compelling the defendant to do

to the claimant as he would have had the claimant do to him had their positions been

reversed), and the duty of care in negligence.”85

In addition to analyzing some court cases in light of the use of the golden rule, a

number of issues with significant moral implications, such as abortion and euthanasia,

have been presented and analyzed by Duxbury. In each of these, Duxbury considers the

moral debates involving the use of the golden rule. He also analyzes the position of

those who consider the golden rule not only as a moral principle per se, but also as a

principle of fairness. He concludes that:

The Rule provides us with standard according to which

we might usefully test our intuitions regarding the moral

quality and implications of particular legal principles and

initiatives… there is good sense in trying to examine the

convictions motivating particular legal decisions, rules, and

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reform proposals in the light of a robust principle of

fairness such as the Golden Rule, and considering whether

the convictions and the principles lead us to similar

conclusions.86

It would be interesting to use the golden rule as a benchmark and standard of

fairness to see if the present process of designing and implementing “international”

standards, codes and conventions stand the scrutiny suggested by Duxbury.

IV.C. THE GOLDEN RULE AS THE MORAL FOUNDATION OF COLLECTIVE

ACTION

Either in its positive or negative form, the golden rule can serve the purpose of

forming the moral foundation of collective action against economic crime. Historically,

the negative form of the rule is traced to Confucius who is reported to have been asked:

“is there a single word that can serve as the guiding principle for conduct throughout

one’s life?” Confucius replied: “Perhaps it is Shu, ‘Consideration’. Do not impose on

others what you do not desire others to impose upon you.”87 The rule appears in its

negative and positive forms in all systems of thought throughout history.88

One of the most powerful appearances of the negative form is reported in the

following incident involving Rabbi Hillel, a contemporary of Jesus:

On another occasion it happened that a certain heathen

came before Shammai and said to him, “Make me a proselyte, on

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condition that you teach the whole Torah while I stand on one

foot.” Thereupon he [Shammai] repulsed him with the builder’s

square which was in his hand. When he went before Hillel, he

[Hillel] said to him, “what is hateful to you, do not do to your

neighbor: that is the whole Torah, while the rest is commentary

thereon; go and learn it.”89

Not only did the rule resonate clearly and loudly among the followers of Jesus, in

his words, especially in his sermon on the mount, it was raised to a much higher and

more substantive pitch. In the words of Jesus, the rule transcended the reciprocity of a

mutual relation with one’s neighbor to extending love to that neighbor.90 Accordingly,

Paul Ricoeur argues that the golden rule implies, or establishes, reciprocity between the

doer of an action and the person acted upon. This reciprocity “implies equality between

the parties concerned: If I treat others as I would wish them to treat me, then that

presupposes that they will treat me as I would treat them, creating a social contract

between equal parties.”91 Furthermore, in contrasting the golden rule with the principle

of “love your neighbor”: Ricoeur suggests that the former is ethical and the latter is

“hyperethcial.” The former, he argues, can be interpreted as being limited to a mutual

reciprocal arrangement: “I will only do this for you if you do something for me.” The

latter, however, has a logic of generosity, benevolence and altruism where one gives

more than another deserves.92

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In the context of economic and financial crimes, the selection of the golden rule

as the universal principle of morality would mean that since these crimes do harm to

everyone, in the global struggle against them, each member of the global community

has a reciprocal duty to ensure that no other member of the community is harmed as a

result of these crimes. Some of the important characteristics of the golden rule are its

simplicity, impartiality, consistency, reciprocity and fairness. As Wattles suggests, the

golden rule “interpreted by moral reason requires an even-handed consistency” and this

“consistency blocks hypocrisy and promotes harmony of thought, word and deed. In

modern rational ethics, the special point of consistency is to be impartial in application

of principles.” He argues that impartiality can only be important and matter if the “equal

basic” worth of each person has been a priori affirmed and that is what the golden rule

does “as it equates the value of the self and other.”93 Contrast this to the present state

of international combat against economic crime. Nearly all the standards, codes and

conventions deal with the prevention of crimes that in the perception of powerful

members of the international community harm them primarily. As evidenced by

decades of ignoring the pleas of poorer and less powerful members for international

cooperation in combating economic and financial crimes that harm them, it appears

that the rich and powerful are saying: “I demand that you cooperate with me to prevent

what harms me but I do not care about what harms you.”

Be that as it may, the characteristics of consistency, impartiality, reciprocity and

fairness become the foundation of moral reason and the justification for claims that the

golden rule is the only moral principle that can attract universal adherence as was

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argued by MacIver. The Oxford philosopher R.M. Hare is credited with being the first

contemporary scholar to interpret the golden rule as a principle of consistency. He

applied the golden rule to issues of abortion and euthanasia arguing that the golden rule

possesses two logical features of moral language: universalizability and prescriptivity.

The former implies that by making a moral judgment, one gives another person the right

to the same thing in a similar situation. The latter, the prescriptivity of moral language,

according to Hare, means that one’s action is consistent with one’s moral judgment.94

This means that by “prescribing to myself, I commit myself to doing what my judgment

requires. If no obstacle prevents me, I must act in conformity with my prescription, if I

am to be a moral participant in the language of morals.”95

In the context of economic and financial crimes, the above arguments would

suggest a moral principle upon which international cooperation for collective action

against these crimes could be based. The golden rule reasoning could be formulated as:

“a nation would not want that other nations are harmed by economic and financial

crimes.” Just as one nation would be pleased that it is not a victim of a particular

economic crime, it should want to participate in international efforts to prevent other

nations from being harmed by that same crime. Given this moral foundation, domestic

and international legislation, law, standards, codes and conventions can be created that

stipulate how specific crimes are to be treated, prevented and prosecuted.

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IV.D. THE GOLDEN RULE AND ECONOMIC CRIME .

A number of scholars have developed dimensions of behavior subject to

application of the golden rule. For example, the rule could be applied to specify the

“rights of personhood.” Alan Gewirth suggests that the golden rule could be interpreted

as: “Do unto others as you have a right that they do unto you.” He defines a set of rights

he refers to as “generic rights”. They include “life and physical integrity” and prohibition

against “lying, stealing, and promise-breaking.”96 In the context of generic rights,

Gewirth’s formulation of the golden rule becomes: “Act in accord with the generic rights

of your recipient as well as of yourself.”97 John Finnis goes further in specifying rights in

terms of what he calls “basic human goods” that are “irreducible” aspects “of the

fulfillment of human person.” These are “substantive” basic goods which “correspond to

the inherent complexities of human nature, as is manifested both in individual and in

various forms of community.” The important function of moral norms is to identify

these basic goods. Moral norms being “prohibitions on killing, theft, acts of dishonesty,

and other similar negative and positive precepts the capricious contravention of which

anyone would consider immoral.”98

One category of such basic goods is human “life in itself, in its maintenance and

transmission, health and safety.” There are other basic goods Finnis calls “reflexive basic

goods.” These goods allow humans to become “active persons, acting through

deliberation and choice”. They include goods are various forms of harmony and peace.

In turn, these include “peace of conscious” which allows one to create consistency

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between “one’s self and its expression,” inner peace, peace with others and “peace with

whatever more-than-human source of reality, meaning, and values one can discover.”

These two types of basic goods constitute the “integral human fulfillment.”99 Finnis

formulates a version of the golden rule which he calls “the first and most abstract

principle of morality” as follows: “In voluntarily acting for human goods and avoiding

what is opposed to them, one ought to choose and otherwise will those and only those

possibilities whose willing is compatible with integral human fulfillment.”100 He argues

that to “do evil” is “to destroy, damage, or impede a basic human good.”101 To

intentionally harm a basic human good is “never acceptable for God or man.”102

In the present context, “generic rights” and “basic goods” defined by Gerwith

and Finnis, respectively, to specify the rights of the human person would be violated by

economic crime. These ideas can be further tailored specifically to reflect what the

victims of economic and financial crimes have described as their rights that have been

violated. As earlier mentioned, the long list of harms that victims suffer can be classified

into four categories: assault upon human dignity; assault upon trust; assault upon

contract; and assault upon property. These four categories would then define the

“generic rights” and the “basic goods” that constitute “the integral human fulfillment.”

The same degree of universality inherent in the golden rules exists for these

“basic human goods” and “generic rights.” Every system of thought ancient or

contemporary, religious or secular, contains moral norms prohibiting their violation. In

one form or another, in one degree or another, their sanctity is affirmed by all cultures

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and societies constituting humanity. Reference was made to Confucius and his advice to

avoid “harm.” Rabbi Hillel defined the essence of the teaching of Torah as avoiding

“harm” to others. A study of prophecy in ancient Israel reveals the intense concern of

the prophets with harm to human dignity, trust, contract and property.103 The teachings

of the rabbis reinforced and further explained the concerns of the prophets. The

teachings of Jesus transcended “not doing harm” to one’s neighbor to extending “love”

to that neighbor.104 Just as in other Abrahamic traditions, Islam, clearly and

unambiguously, considers violations of these four “basic goods” as transgressions

against moral norms, laws, prohibitions ordained by the Creator.105 Similar positions on

non-violability of these rights are discernible in Hinduism,106 Buddhism,107 Zoroastrian,108

ancient Greece and Rome109 , and ancient Egyptian 110 thought. Earlier, references were

made to non-religious, secular thought where “harm”, and its avoidance, were crucial

pivot of universalization of moral principles.111

Whatever the intensity of disagreements and debates regarding issues of deep

moral conflicts, such as abortion, euthanasia and the like, it is not difficult to envision a

globally unified position emerging on the acceptability of the golden rule as the

universal moral foundation of collective action against violations of human dignity, trust,

contract and property. These are, after all, how the victims of economic and financial

crimes define the “harm” done to them.

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V. SUMMARY AND CONCLUSIONS

Economic and financial crimes are growing and globalizing at an alarming rate.

The expansion of these crimes both geographically and in variety calls for urgent

global action. Yet, repeated calls over the last decade for international

cooperation to stem the tide have failed to illicit the strong and comprehensive

cooperation needed for this purpose. This lack of success to mobilize effective

collective action is not only evidenced by the rapid growth and expansion of

these crimes within and across borders, but also by the continuous expression of

disappointment at lack of effective response to pleas for broader, deeper and

stronger international cooperation displayed in international conferences,

seminars, official and unofficial fora year after year.

This paper suggests that perhaps the reasons for this failure are not far to

seek. It posits that the main reason may well be the fact that the lack of a clearly

articulated moral foundation has led to a one-sided promulgation of standards,

codes and conventions designed by and for prevention of selected economic and

financial crimes, such as money laundering and terrorism financing, that the

designers believe themselves to be the primary victims. Thus, the rich and

powerful states design and develop these instruments and then demand

“international cooperation” from the rest of the human community. This, while

the same “international community” has ignored for decades the plea of the

poorer and less powerful member states of the international community for

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cooperation in preventing economic and financial crimes, such as illegal capital

flights and criminal behavior of multinational corporations, that harm them and

their citizens but benefit the rich and powerful states. A strong, universally

agreed moral principle would avoid this manifestation of unfairness. It is also

worth noting that promulgations of laws and standards have traditionally

appealed to some moral foundation.

Given the need for a universal moral principle that would serve as the

moral foundation for cooperation and coordination of global collective action,

the paper presented views of those who argue that in the environment of moral

pluralism that characterizes today’s world, finding one unique moral principle

consented to by the plurality of moral persuasions is a challenge. The paper then

presented the view that poses two conditions for such a universal moral

principle: first, it must be primarily concerned with “harm” and its prevention,

and second, it must attract universal “consent”. The paper then presented the

views of those that argue the only moral principle that has the full potential of

“universizability” is the Golden Rule. Their justification and the history of the

golden rule were briefly reviewed. The paper concluded that the golden rule

satisfies the two requirements stated earlier. To give the rule greater specificity

in the context of economic and financial crimes, the paper followed the

guidelines suggested by two scholars who specified “generic rights” and “basic

goods’ that constituted the rights that define “integral human fulfillment.”

Accordingly, the paper suggested four categories of “generic rights” and “basic

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goods” which include the spectrum of harm and violations of “rights”, the

victims of economic and financial crimes themselves named as the impact of

these crimes. Based on these, the paper gave a formulation of the golden rule as

avoidance of harm to any and all of the four categories.

Based on the discussion of this paper, it can be concluded that to

mobilize effective international cooperation and coordination for collective

action against economic and financial crime, a global convention in which all

systems of thought are represented, where there would be a “fusion of

horizons” on various perceptions of morality, could agree on a moral foundation

for collective action. The golden rule of “no harm” buttressed by the specificity

of the four categories of “generic rights” and “basic good”, i.e. human dignity,

trust, contract, and property, could well emerge as a consensual global moral

principle. This would then allow development of legislation, law, standards,

codes and conventions that would be accepted and respected by all in the

international community.

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NOTES 1. For definition, evolution, impact and growth of economic and financial

crimes see: Southerland, 1949; Walsh and Schram, 1980; Tomlin, 1982; Wells, 1989; Moore and Mills, 1990; Wells, 1991; Welford and Ingram, 1994; Geis, et. al, 1995; McAuly, 2001; Shover and Wright, 2001; Croall, 2001; Pratt, 2001; Rebovitch, 2002; Korsell, 2002; McCarthy and Cohen, 2002; Tombs and White, 2003; Levi, 2005; Pratt, 2005; Tombs and White, 2007; Folsom, 2007; Croall, 2007; Berman, 2007; Al-Agha, 2007; Arowosaiye, et. al., 2008; Akinbo, 2009; Smith, 2010; Travers, 2010; Price Waterhous Coopers, 2011; Samavati, Koosh, 2011; Cassell and Joffee, 2011; Yasin and Hamid, 2011.

2. United Nations, 2006; McAuley, 2010. 3. Beloof, et.al., 2010. 4. Zuboff, 2009; Cassell and Joffee, 2011. 5. Karstedt and Farrall, 2006. 6. Karstedt and Farrall, 2007. 7. Serio, 1998; United Nations, 2006. 8. Holloway, 1990; Porpora, 2001; Kateb, 2011. 9. Durkheim, 1960; Merton, 1938, 1964; Dean, 1961, 1968; Marx, 1966; Lukes,

1967; Lee and Clyde, 1974; Sirico, 2001; Calabrese, 2005; Karstedt and Farrall, 2007; Berkatzki, 2008; Adriaenssen and Maes, 2008.

10. Akinbo, 2009. 11. Holloway, 1999, p.188. 12. Ibid, p. 89. 13. Conley and Wang, 2006; Berman 2007; Shavell, 2002. 14. Conley and Wang, 2006; Sah, 1991. 15. Holloway, 1999, p.33. 16. Zuboff, 2009,

http://www.businessweek.com/print/managing/content/mar2009/ca20090319_591214.htm

17. Wilson and Kelling, 1982; Economist, 2008. 18. Black, 2012. 19. Tomlin, 1982. 20. Devakula, 2005. 21. Witherell, 2004. 22. Devakula, 2005. 23. Wang, 2002; Devakula, 2005. 24. For the concept of “fusion of horizons” see Gadamer, 1991. 25. Moore and Mills, 1990. 26. Eaton, 1990. 27. Croall, 2007. 28. Moore and Mills, 1990; Bernard, 2001; Croall, 2001; Dingan, 2005; Levi, 2005;

Kenny and O’Brian, 2007; Croall, 2007; Commonwealth’s Attorney, 2012.

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29. Commonwealth’s Attorney, 2012. 30. Ibid. 31. McCarthy, 2011; Banuri and Eckel, 2012. 32. Folsom, 2007. 33. Krishnan, 2011. 34. Akinbo, 2009. 35. Jain, 2001. 36. Doig, 1995; Gupta, 1995; Sissner, 2001; Rothstein and Uslander, 2005;

Thompson and Shah, 2005; Galtung, 2007; Azra, 2007; Andersson and Haywood, 2009; Arvate, et.al., 2010.

37. Ades and DiTella, 1997. 38. Ibid, pp.496-497. 39. Karstedt and Farrall, 2006. 40. Karstedt and Farrall, 2007. 41. Holloway, 1999. 42. Benson and Cullen, 1998; Pearce and Tombs, 1998; Gilbert and Russell, 2002;

Croall, 2005. 43. Zboff, 2009; Black , 2012. 44. Zuboff, 2009. 45. Ibid. 46. Arendt, 2006; Zuboff, 2009. 47. Zuboff, 2009. 48. Ibid. 49. Ibid. 50. Ibid. 51. Ibid. 52. Turco, 2003. 53. Seligman, 1992, p.25. 54. Ibid, p. 25. 55. Ibid, p.26. 56. Ibid, p. 25-26. 57. Turco, 2003, p.138. 58. Adam Ferguson, cited in Seligman, 1992, p.27. 59. Turco, 2003, p.138. 60. Ibid, p.145. 61. Ibid, p. 141. 62. Haakoson in Bradic, ed., 2003, p. 209. 63. Adam Smith, 1982, p.50; Seligman, 1992, pp.27-28; Hirchman, 1979;

Evankey, 2005; Weinstein, 2007; Butler (1792) in Brandt (ed); Beisner, 2012. 64. Adam Smith, 1982. 65. Robertson, 1964. Earl of Shaftesbury. Cited in Turco, 2003, p.136. 66. Hutcheson (1725), cited in Turco, 2003. 67. Geertz, 1973. 68. Foucault, 1973, p. 387. See also Robinow, 1984.

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69. Metcalf, 2007. 70. Decades earlier Noam Chomsky, 1974, had reached the same conclusion. He

argued that there must be a “mass of schematics, innate governing principles, which guide our social and intellectual behavior… there is something biologically given, unchangeable, a foundation for whatever it is that we do with our mental capacity.” Therefore, there must be a human nature (Chomsky, 1974, pp. 136-140). For Chomsky, “Unless there is some form of relatively fixed human nature, true scientific understanding is impossible.” Robinow, 1984, p.1. Some scholars go further to argue that humans have a moral conscious that “draws its existence rather from that ethical totality which derives from the inner law of our being permitting us to fulfill our entelechy, to become what we are, and what we dare not betray. The moral conscious is that ontological truth of man’s nature, the microcosmic reflection of the cosmic principle, the inner law of universe, which is the ethical demand we must have the courage to face, naked and unafraid.” Anshen, 1952, p.3.

71. Wilson, 1993; Kimbal, 1993; Raksin, 1993. 72. Kateb, 2011, p.43. 73. Jessup, 1952, p. 303; McKeon, 1952; Jackh, 1952. 74. Jessup, 1952, p. 303. 75. Ibid, p. 303. 76. Anshen, 1952, p. xi. 77. MacIver, 1952, p.. 41. 78. Ibid, pp. 41-42. 79. Ibid, p. 42. 80. Ibid, p. 42. 81. Ibid, p. 47. The quote is from Matthew 7:12. 82. Wattles, 1996, pp. v-vi. 83. Ibid, p.3. 84. Ibid, pp. 188-189. 85. Duxbury, 2009, pp. 1531-1532. 86. Ibid, pp. 1604-1605. 87. Allinson, 1985; King, 1928; Hummel, 1952; Confucius; Czikszentmihalyi, 2008. 88. Rost, 1986; Wattles, 1996; Duxbury, 2009; Wikipedia: The Golden Rule;

Dewald, 2008; Neusner, 2008; Berchman, 2008; Moazami, 2008; Chilton, 2008; Homerin, 2008; Hallisey, 2008; Sheible, 2008; Davis, 2008.

89. Wattles, 1996, p. 48; Muilenburg, 1952; Allinson, 2003; Levine, 2008; Samuels, 2011.

90. Wattles, 1996, pp. 52-66; Kirk, 2003; Chiton, 2008. 91. Ricouer, 1992, 1995; Simms, p. 117. 92. Simms, 2003, p. 117. 93. Wattles, 2003, p. 180; p. 80, pp. 122-140, p.7. 94. Hare, R.M., 1963. Freedom and Reason. Oxford: Clarendon Press, pp. 86-125.

Cited in Wattles, 1996, pp. 127-33; see also Duxbury, 2009, pp. 1569-1574.

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95. Hare, 1963, pp. 89-90; see also Wattles, 1966 and Duxbury, 2009. 96. Gerwith, Alan, 1978. The Golden Rule Rationalized. Midwest studies in

philosophy, vol. 3, pp. 133-147. See also Duxbury, 2009, pp. 1565-1568. 97. Gerwith, 1978, p. 135; Duxbury, 2009, p. 1567. 98. Finnis, 1999, p. 42. 99. Ibid, p. 45. 100. Ibid, p. 45. 101. Ibid, pp. 54-55; 71. 102. Ibid, pp. 74-75. 103. Lindblom, 1967; Unterman, 1959; Tamari, 1987; Sacks, 2012. 104. Dodd, 1952; Neibur, 1952; Ricoeur, 1990; Finnis, 1991; Ricoeur, 1995;

Ricoeur, 2000; Kirk, 2003; Donders, 2005; Chilton, 2008. 105. Khan, 1952; Hakim, 1952; Rahman, 1985; Engineer, 1990; Fakhry, 1991,

Al-Attas, 1992; Michon, 1999; Zaroug, 1999; Naqui, 2003; Oh, 2007; Abuarqub, 2009; Mirakhor and Hamid, 2009.

106. Nikhilananda, 1952. 107. Suzuki, 1952; Hummel, 1952; Hallisey, 2008; Scheible, 2008. 108. Moazami, 2008; Rost, 1986. 109. Rosemont, 1999; Dewald, 2008; Berchman, 2008. 110. Rosemont, 1999; Dewald, 2008; Berchman, 2008. 111. Northrop, 1952; Sacks, 1952; Linton, 1952; Von Fritz, 1952; Maritian,

1952; Baier, 1958; Brandt, 1961; Gellner, 1992; Gensler, 1996; Holloway, 1999; Blackburn, 2001; Epstein, 2010; Kateb, 2011.

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