Many Wall Street Executives Say Wrongdoing Is Necessary

Capitalism-hating radicals claim that our financial sector is awash with unethical and illegal behavior, which is not merely tolerated, but encouraged or even required for success. Many Wall Street leaders concur completely. Via Yahoo! News:

A quarter of Wall Street executives see wrongdoing as a key to success, according to a survey by whistleblower law firm Labaton Sucharow released on Tuesday. In a survey of 500 senior executives in the United States and the UK, 26 percent of respondents said they had observed or had firsthand knowledge of wrongdoing in the workplace, while 24 percent said they believed financial services professionals may need to engage in unethical or illegal conduct to be successful.

Sixteen percent of respondents said they would commit insider trading if they could get away with it, according to Labaton Sucharow. And 30 percent said their compensation plans created pressure to compromise ethical standards or violate the law.

35 Comments on "Many Wall Street Executives Say Wrongdoing Is Necessary"

  1. emperorreagan | Jul 17, 2012 at 9:37 am |

    It’s not just now or Wall Street:

    Many, if not most, fortunes have been made through unethical, immoral, or illegal means.

    A lot of early American fortunes came out of profiteering on the American revolution and the subsequent wars.  Similar profiteering, I’m sure, went on in other nations.

    American Industrialists like Rockefeller and Carnegie made their fortunes through brutal, unethical, and illegal business practices…then later became philanthropists and bought themselves better reputations.  And of course, there are economists that make the similar argument with regards to them – that it was necessary for them to behave illegally and unethically.

    You’ve got the fortunes made in the financial market today, which are almost exclusively based in fraud, unethical behavior, the revolving door between regulators and industry where everyone has a vested financial interest in ignoring the fraud & unethical behavior, and congress people who are owned outright.  

  2. Over time, I’ve realized that the problem isn’t just Capitalism.

    No matter what sort of system we have, we’ll end up in a situation much like the one we’re in today because of underlying elements of human nature.

    Starting out, it doesn’t matter if we have a Capitalist society, or Socialist, or Communist, or even a society entirely based on prayer.

    Over time, in any type of society or system, a certain kind of people will begin to accumulate power and resources. This problematic kind of person doesn’t use that power and those resources for the general benefit of the society that sustains them, but instead begins to “game” the system for their own personal benefit and predate the society that sustains them. Their goal is simply to accumulate more power and resources for themselves.

    As a small group of “elites” take up more and more of the resources they also begin to deform the system itself in ways that benefit themselves more than others.

    Finally, the system becomes so rigged, the resource allocation so skewed, and the outcomes so obviously “unfair” that the average member of the society begins to question the legitimacy of the system.

    Then you’ve got real trouble.

    It generally doesn’t take a society long to crumble from external threats or internal stresses when a majority of its members no longer support it or are even actively hostile towards it.

    (Watching the Soviet Bloc dissolve almost overnight was amazingly instructive.)

    Finding a way to protect society at large from the gradual takeover (and ultimate destruction) by these sociopaths or psychopaths needs to be given a much higher priority than it currently rates.

    • Liam_McGonagle | Jul 17, 2012 at 12:45 pm |

      Maybe it’s a bi-product of hyper-specialization.

      Time was when almost everybody had to be his own mechanic, carpenter, tailor, etc.  The benefits of specialization are obvious enough in terms of POTENTIAL to increase quality and cost through economies of scale.

      But when you focus so exclusively on volume within a very narrow range of endeavor, your social engagement necessarily becomes shallower.  Gradually you become less aware of how your actions impact the wider society, and terms like “morality” become almost meaningless.

      These bankers really are, at their core, probably no more or less moral than any other human being on the earth–it’s just through happenstance that their particular social and mental traits predisposed them to enjoy the incredibly myopic and reductive activities required by the Banking Machine. 

      If they’d been born 100, 200 years earlier they’d have been nobody dirt farmers like anybody else.  The fantastic exponential growth of population and the finance sector in recent history makes that just about a settled fact, not a hypoethetical counter factual.

      Ideally, there’d be some sort of forum where society as a whole could come to some sort of consensus about the least offensive level of specialization and bias their institutions to meet that level.

      But ego strokes are like crack cocaine, and there will always be some minimal number of people who just can’t rein themselves in, even when they’re perfectly aware, as the banksters in this survey seem to be, that they’re going off the rails. 

      That might have been managable 200 years ago, when the population of the US was like 1% of what it is today, but nowadays, even though real trouble makers are an extremely tiny percentage of the population, they are large enough in absolute terms as to cause utter chaos unchecked.  The % of bad eggs may be the same as in 1812, but leveraging technology and the lack of clear consensus among the rest of us, there’s really nothing to stop them.

      Even if in their heart of hearts these banksters are begging for someone to stop them.

      • I wish you were right and I’m not entirely sure that you’re not.

        However, I simply know too many people who are intelligent and anywhere from modestly to wildly successful, but have almost no sense of general empathy or even possess an innate sense of “right and wrong”.

        It’s not that they’re too focused, it’s that they lack something. The normal human empathy that most people possess and expect from others.

        On the other hand there are definitely people who “know better” or at least should, who engage in behavior which damages others because it benefits themselves.

        In combination, these two groups are enough to push a society to the brink.

        • Liam_McGonagle | Jul 18, 2012 at 11:55 am |

          I used to think that but that was before I realized that the disenfranchised are no more reliable, moral or intelligent than the elites.  Maybe we’re playing into a false dichotomy of “Successful vs. Moral”. 

          Success within any given system is a function of how closely one’s operational preferences and characteristics fit into the system (i.e., a calculating mentality driven by concerns of volume over quality vs. a deliberate, plodding mentality driven by a concern with robust diversity over sheer volume of transactions).  Bankers are successful in the current system because they’re calculating and action oriented–even if they don’t really have a clue as to the long-term implications of their frenzies.

          That would have been a recipe for disaster under feudal regimes, where laws and rights were determined by intensely localized personal relationships.  Banksters’ casual disregard for tradition and loyalty have earned them universal contempt from all hereditary aristocracies around the world.  Here is a very clear instance where the priviledged behavior of one era marks them as contemptable pariahs in another.

          But that didn’t make banksters any more inherently “moral” back in the Middle Ages than they are today, or any LESS moral than the armed warlords that ruled over them.  And I’m pretty sure you yourself wouldn’t have to think too hard to come up with some spectacular economic/political failures of the current era who are also no-account, treacherous villains.

          So what does that mean?  It offers no evidence that snob=moral, but it surely does NOT mean that slob=moral.

          Are only three possibilities remain:

          1.  ALL snobs and MOST slobs are inherently IMMORAL.
          2.  All humanity, from top to bottom, are irredeemably immoral.
          3.  All humanity are CONDITIONALLY moral, but the prerequisites of snobbery heavily bias it towards immorality.

          #3 seems the most likely to me.  Having lived on both sides of the snob/slob equation, I can’t say I’m much more impressed by one over the other, only that it’s easier to understand why an elite would act immorally. 

          I’m pretty sure that the optimal situation would be for a loosening of the hierarchy, to lessen the pressure on elites towards immorality.  Although the absolutely perfect ideal is certainly unattainable, that’s no excuse for not trying.

          • I’m still not convinced that the problem relates to hyper-specialization, or modern technology, or anything of the sort.

            Some people are just “bad”. They lack empathy and consideration for others. They have no internal sense of right or wrong (as most people understand it) to guide them. Nor are they properly able to internalize the values of the people around them.

            We can call them Sociopath or Psychopath or “Evil” or whatever. They’ve been around as long as the rest of society. They are not just a modern phenomenon.

            Some of them have low intelligence or poor impulse control or poor role models and end up in prison. I’m not too worried about those. (Do a google search for a killer named Richard Kuklinksi/Iceman for an example)

            Some are smarter, or have better impulse control, or better role models and those are the ones I’m talking about. I suspect that the PCL-R diagnostic generally fails to detect this type.
            (Our resident Mental Health Professional may want to chime in here)

            I’m going to go out on a limb and suggest that Mitt Romney may qualify as this type of character.

            I’m not sure how we can protect ourselves from these types of people and at the same time respect everyone’s rights.

            It may be that we can’t, but before we come to that conclusion we need to put more effort into it.

    • TransparentlyYours | Jul 17, 2012 at 2:47 pm |

      “Finding a way to protect society at large from the gradual takeover (and ultimate destruction) by these sociopaths or psychopaths needs to be given a much higher priority than it currently rates.” Wouldn’t it be nice if everyone could start off playing the game from the same point within the system? But the second you want to advance and “rise through the ranks”, then you must willingly submit to a lifestyle of complete transparency, thus giving up the “right” to anonymity and/or privacy as far as your financial records and accounts are concerned. You want to be an elected official or the owner of a new business? Fine. Just know that everything you do and say will be recorded and broadcast live. There will be no closed-door meetings or private files. It will all be out in the open. And the more you make, the more taxes you pay. That money then feeds directly back into maintaining the infrastructure of the overall system which allowed those individuals to rise to the top in the first place. Crazy. I know… 

    • Lifobryan | Jul 17, 2012 at 6:19 pm |

      Really well articulated. Thank you for posting those thoughts.

      Also – I think it’s important to acknowledge the inherent socio-psychopathology at the foundation of western economy. As much as we revere our founders for enlightened thinking, the system they designed was built on the backs of slaves, in a land taken through extermination of much of its native population. 

      Yes, yes, I know that is a broad assertion & an over-simplification. But I also think there are not-so-subtle underpinnings of psychopathic exploitation built into the system upon which Wall Street operates. Their behavior is systemic because of the foundational architecture and assumptions of the system.

    • > because of underlying elements of human nature

      the cycle from humongous group to a group of elites and non-elites
      is as you have described it
      some of this is human nature
      but most of the problems stem from the technologies we employ
      and the inherent social structures that these technologies create

      in this particular case
      because humans humans cannot/will not acknowledge
      that money has effects on consciousness and behavior
      the Alpha Chimps have been able to circumvent regulation
      and the effects of money run rampant through society

      • Monkey See Monkey Do | Jul 18, 2012 at 1:00 am |

        Exactly. I always cringe when I hear people talk about ‘the underlying elements of human nature’.
        I like Zenc – but he obviously has a fetish for violence and destruction judging by his previous posts.

        • there is no way to discretely discriminate between
          inherent human nature and the effects of technology
          but in this “scientific” age
          there is a tendency to completely ignore the effects of
          and there is no awareness of the technological environments
          that we presently live in

          which is why in ancient China
          they used to kill innovators and destroy their inventions
          all Taoist literature has some warning
          about the effects of new technologies
          as did the incomprehensible aphorisms of Marshall McLuhan

        • ” I always cringe when I hear people talk about ‘the underlying elements of human nature’.”

          You know, I understand this sentiment though perhaps in a slightly different way than you mean it.

          For most of my life, I’ve always heard “it won’t work” or “things don’t
          happen that way”, etc “because of human nature”. (Frequently in
          relation to Communism)

          Generally those statements were meant as a limitation of what is possible.

          Of course, I never cared for that.

          While I’m not sure that humans are “perfectible”, I definitely feel (and the evidence suggests) that we are “improvable”. 

          To suggest that some “better way of living” isn’t possible because
          humans aren’t good enough and never will be, is simply contrary to my
          hopes for our race and its history.

          What I meant by “underlying elements of human nature” was that despite
          whichever economic or political system we choose, we’re going to end up
          with a certain type of trouble because some people are, for a lack of a
          better term, “Assholes”.

          I later suggest that we need to find a better way to cope with these
          “Assholes” and that is so we can all live better lives on a healthier

          So, I hope that you can see how my reference to human nature was made
          in the interest of constructive criticism for the improvement of our
          condition, rather than a statement made to limit ourselves or discount
          a better future.

          “he obviously has a fetish for violence and destruction”.

          You know, I just spent quite a bit of time writing a rebuttal to this accusation. I decided to scrap it.

          Instead I’ll just say that whether or not it’s true, I personally feel that violence is generally a “last resort”.

          We are however, living in a world where the people “in charge” don’t see it that way.

          Not at all.

          Every time a law is passed, even something like a law that prohibits
          spitting on the sidewalk, it is backed up with violence or the threat
          of violence. Even if that law is passed to help people by deterring the
          spread of Tuberculosis, there’s still the barrel of a gun staring down
          that law at you.

          If I wanted to take the time, I could cite thousands of silly, stupid,
          or unfair laws that are backed up by imminent threats of violence
          should you fail to comply.

          So, let me ask you, where’s the wrong in repaying a man in his own coin?

          • Monkey See Monkey Do | Jul 19, 2012 at 12:49 am |

            The actions you choose to put out into the world co-creates that world. If you enact violence you will manifest more violence. If you enact revenge then revenge will spread. We’re much more powerful in our invidual actions then we are generally given credit for. The idea is to try and view ourselves from a more collective perspective and then to try and be the change we want manifested at the collective level.

          • I agree with you completely.

            Generally, I don’t talk about things I do to help people because it is immodest and not all that interesting. You can be sure though, that I never turn away a friend in need and I frequently come to the aid of complete strangers. As one small example, I keep a full small gas can and a small trolley jack in the back of my Diesel Dually.


            Clearly not for me. I’m driving a diesel truck that would rupture such a small trolley jack. It’s there to help people who run out out of gas or have a flat on their car.

            So I get it. We do live in a world which we help create.

            But as there are good people in the world and we need to help support them, there are also bad people in the world. We have a philosophical and moral obligation to resist them.

            You feel that violence only begets violence.

            We disagree on that point.

            I’m not going to go into a long dissertation on the provable benefits of judiciously applied violence, but I could and I will at some other time if you would like me to.

            What I will say, is that we are never going to entirely eliminate aggressive, destructive behavior from all people. It is not all learned, nor is it all environmental. There is a large part of it which is inherent.

            No matter how well you do raising good people in your family, there is always going to be another family that doesn’t do as good a job.

            Even if your whole neighborhood does a good job raising their kids, some neighborhood is not.

            Your town may do a wonderful job bringing up its children, but the next town over may not…

            Understanding that, we each need to be at least passingly familiar with the implements of violence so that we can protect ourselves and each other.

  3. Calypso_1 | Jul 17, 2012 at 12:19 pm |

    Now let’s see a rigorous statistical cross analysis of surveys such as this and some court mandated psychometrics for sociopathy and see what turns up. 

    • Liam_McGonagle | Jul 17, 2012 at 12:54 pm |

      I’ve heard HSBC is sponsoring a panel to explore inclusion of a new DSM category for people suffering a socially disruptive obsession with institutional corruption.

      I wonder if we’ll ever see the day when they actually start diagnosing institutions and relationships, instead of human beings, as “socially disruptive”.

      • Anarchy Pony | Jul 17, 2012 at 1:00 pm |

        They’ve already got that, it’s called opposition defiant disorder. And it’s largely a crock o’ shit.

        • Liam_McGonagle | Jul 17, 2012 at 1:03 pm |

          Hopefully the diagnosis comes with a decent pharmacological indication, if you catch my drift.

        • Jin The Ninja | Jul 17, 2012 at 1:06 pm |

          i think i have that:P

        • Calypso_1 | Jul 17, 2012 at 1:53 pm |

          I am well aware of the majority of the opinions expressed regarding psychiatry on this site so I will not delve too deep regarding this diagnosis but I would like to share a particular aspect. You are absolutely correct in the sense that it is largely shit.  I personally am not aware of the current statistics on how this disorder is being thrown around in the more ‘general’ population by less than qualified social ‘gate keepers’ to brand people – I know this was a fear, and remains so when this disorder came out.
           This is not a diagnosis you should see in isolation, when used properly this is mainly a matter of paperwork, not truly a unique disorder, for managing juveniles with SERIOUS intractable behavioral issues. Issues that may stem from MR, profound psychiatric disorders or abuse, not the run-of-the-mill juvie delinquent, buck the system type.  This classification allows kids like this to be treated when otherwise they might be thrown into the criminal justice system.  I’m not talking about juvie camps either, but psychiatric facilities with full time schools and such. 
          You may have other knowledge and experience about the misuse of disorders such as this and I don’t discount such abuses at all.  However, when it comes to managing an 11 year old who has raped his 8 year old sister and then hung her by a rope in the woods when he himself has been repeatedly raped by mommies friends in exchange for meth….well these are tough issues that society usually prefers to imagine don’t exist, but they do and they require arcane paperwork systems to deal with bureaucracies.

          • Jin The Ninja | Jul 17, 2012 at 2:12 pm |

            …that…really happened?

          • Calypso_1 | Jul 17, 2012 at 2:14 pm |


          • Calypso_1 | Jul 17, 2012 at 2:22 pm |

            Perhaps you now have some insight into my sardonic personality.  Sometimes work sucks and one must be oh so professional and elevated at all times.

          • Jin The Ninja | Jul 17, 2012 at 2:26 pm |


          • Monkey See Monkey Do | Jul 18, 2012 at 1:10 am |

            Much respect for what you do Calypso. I’ve done social work for kids in similar situations, nothing that horrendous though. When i was younger I knew a kid who was in a similar family situation, I’ve always wondered how things would have went for him if he got help.

          • Calypso_1 | Jul 18, 2012 at 5:45 am |

            These types of cases rarely have any good outcomes in my experience. Further tragedies often ensue. You find yourself wondering who you think you are to try to pick up the pieces. But from my point of view, I’m glad there is a significant degree of medical perspective involved because just as the physical integrity of the body can be violated by disease and injury to the point of irreparable destruction so can the mind and we learn much from tough cases. Maybe someday we’ll learn enough even to truly help a kid like that.

        • its also known as odd…

      • Calypso_1 | Jul 17, 2012 at 1:20 pm |

        Oh forgive me for being gullible, but I hope you are not serious.  This could be pulled into 297.1 /persecutory if it was an actually pathology – but your talking about Soviet-style ‘sluggish schizophrenia’.

  4. > 25% of Wall Street executives see wrongdoing as a key to success

    ANYONE with the opportunity to game the system for their benefit
    the gamers (anyone who can) will weigh the pay off versus risk
    and then sally forth in quest of ill gotten gains

    this isn’t human nature
    this is an effect of money on human nature

  5. Wall Street executives inherently corrupt? No shit, Sherlock.

    “Behind every great fortune there is a geat crime.” Balzac (1799 – 1850)

  6. The only thing to get is money | Jul 28, 2012 at 4:47 am |

    There is no solution. There, that’s that. Whatever “solution” that is invented will result in more problems.

Comments are closed.