The venerable Wells Fargo bank made the news in 2016 for financial misdeeds on a massive scale. Employees of the company, to meet the quotas set by management, created accounts without the permission of the clients. In response over 5,300 lower level employees were fired. Initially, CEO John Stumpf and former head of retail banking Carrie Tolstedt were to keep their rather sizable compensation for leading the company to a great financial “success” based on this fraud. However, the backlash from the public and the shareholders resulted in Stumpf and Carrie losing some of their financial compensation.
As would be expected, there were no plans for criminal charges of the sort that could result in jail time. This is consistent with how most financial misdeeds by the ruling elites are handled: some fines and, at worst, some forfeiture of ill-gotten gains. While I do not generally agree with Trump, he was not wrong when he pointed out that the system is rigged in favor of the elites and against the common people. The fact that Trump is one of the elites and has used the system does not prove him wrong (that would be fallacious reasoning); rather he also serves as more evidence for the rigging. Those who loath wealthy Democrats can also include them.
It is instructive to compare the punishment for other misdeeds to those imposed on Wells Fargo. Shoplifting is usually seen as a minor crime, but a person who shoplifts property with a combined value of less than $300 can pay a fine up to $1000 or be sentenced to up to a year in jail. Shoplifting property with a combined value over $300 is a felony and can result in a sentence between one and ten years in jail. Wells Fargo robbed people through the use of fees and other charges that arose from the creation of unauthorized accounts.
While there are differences between the direct theft of shoplifting and the indirect robbery of imposing charges on unauthorized accounts, there is little moral distinction: after all, both are means of robbing someone of their rightful property. Because of this, there would appear to be a need to revise the penalties so that they are properly proportional.
One option is to bring the punishment for major financial misdeeds in line with the punishment for shoplifting. This would involve changing the fine for financial misdeeds from being a fraction of the profits (or damages) of the misdeeds to a multiple of the profits (perhaps three or more times greater). It could be argued that such a harsh penalty could financially ruin an elite who lacked adequate assets to pay for their misdeed; however, the exact same argument can be advanced for poor shoplifters.
Another option is to bring the punishments for shoplifting in line with those for the financial elites. This would change the fine for shoplifting from likely being more than the value of what was stolen to a fraction of what was stolen (if that). For example, if someone stole a $1,000 video card, then their punishment might be paying a $100 fine. The obvious objection to this proposal is that if shoplifters knew that their punishment would be a fraction of the value they had stolen, then this punishment would have no deterrent value. Shoplifting would be, in effect, shopping at a discount. It is thus hardly shocking that the financial elite are not deterred by the present system of punishment since they profit greatly if they do not get caught and do very well even if they are caught and “punished.”
It could be objected that the financial elite would be deterred on the grounds that they would still be better off using legal means to profit. That way they would keep 100% of their gain rather than a fraction. The easy and obvious reply is that this deterrent value is contingent on the elite believing that the legal approach would be more profitable than the illegal approach (with due consideration to the chance of getting caught and fined). Since punishment is often a fraction of the gain and the potential gain from misdeeds can be huge, this approach to punishment has far less deterrent value than a punishment in which the punished comes out at a loss rather than a gain. If a corporation could, for example, make 200% more by doing illegal things and they risk only losing a fraction of that gain, then doing illegal things is a smart move.
It is also interesting to compare the punishment for identity theft and fraud with the punishment of Wells Fargo. Conviction of identity theft can result in a sentence of one to seven years. Fraud charges also have sentences that range from one to ten years and beyond. While some do emphasize that Wells Fargo was not engaged in traditional identity theft, what they did was morally similar. As an example of traditional identity theft, a thief steals a person’s identity and gets a credit card under that name to use for their own gain. What Wells Fargo did was open accounts in people’s names without their permission so that the company could profit from this misuse of their identity. As such, the company was stealing from these people and doing the same sorts of harm inflicted by identity theft.
From a moral standpoint, those involved in these actions should face the same criminal charges and potential punishments that individuals acting on their own would face. This is morally required for consistency. Obviously enough, the laws are not consistent. We all know that the misdeeds of the elite and corporations are usually punished lightly or not at all. Nothing new, as the history of law is also the history of its unfair application. The injustice of justice, one might say. However, this approach is problematic.
Seem from a certain moral perspective, the degree to which I am obligated to accept punishment for my misdeeds is proportional to the consistency and fairness of the system of justice. If others can walk away from the consequences of their misdeeds or enjoy light punishments for misdeeds that would result in harsh penalties for me, then I have little moral reason to willingly accept any punishments that might be inflicted on me. Naturally, the state has the power to inflict its punishments whether I accept them or not, but it seems important to a system of justice that the citizens accept the moral legitimacy of the punishment.
To use an analogy, imagine a professor who ran their class like the justice system is running. If an elite student cheated and got an initial grade of 100, they might be punished by having the grade docked to an 80 if caught. In contrast, the commoner students would fail and be sent before the academic misconduct board for such a misdeed. The commoner students who cheated would be right to rebel against this system and refuse to accept such punishments, though they did wrong, justice without consistency is but a mockery of real justice.
In light of this discussion, Wells Fargo was yet another example of the inherent injustice and inequality in the legal system. If we wish to have a just system of justice, these disparities must be addressed. These disparities also warrant moral disobedience in the face of punishment. Why should a shoplifter accept a fine that vastly exceeds what they steal when a financial elite can pay but a fraction of their theft and profit well from their misdeeds? They should not.