One result of this is the common corporate practice of balancing the cost of compliance with regulations against the cost of deliberately breaking the law and paying the fine. This is a direct outgrowth of the limited-liability corporate status that Adam Smith argued against: that corporations would have the rights and freedoms of an individual, but no shareholder would be personally liable for its malfeasance. The corporation might be an individual in law, but as Baron Thurlow, an eighteenth-century politician, reportedly said, “It has no soul to save and body to incarcerate.” For example, between 1990 and 2001, General Motors, one of the world’s largest manufacturers, was caught breaking the law, prosecuted, and convicted on over forty occasions. One of the most revealing cases involved the 1979 Chevy Nova, whose gas tank had been dangerously repositioned to cut costs, making it susceptible to fuel-fed fires. Court documents from a lawsuit filed in 1993 revealed that even after GM realized the car was vulnerable to gas-fueled fires, it chose not to fix the car’s design. Initially, upon realizing there was a gas-tank issue, GM management asked the Advance Design Department to provide a comparative cost analysis. They calculated that the cost of paying out anticipated damages came to $2.40 per automobile, whereas the cost of repositioning the fuel tank more safely came to $8.59 per automobile. GM decided its primary responsibility was to shareholder profits and declined to reposition the fuel tanks.45 Would GM management have decided differently if the executives knew they themselves would have been held personally liable for any deaths or injuries that resulted?
As Joel Bakan, a professor of corporate law, points out, if the corporation were an actual person (as its legal status contends), then the standard practices of many of the largest corporations fit the Personality Diagnostic Checklist of a psychopath: “callous unconcern for the feelings of others; incapacity to maintain enduring relationships; reckless disregard for the safety of others; deceitfulness: repeated lying and conning others for profit; an incapacity to experience guilt and failure to conform to social norms with respect to lawful behavior.”46 No doubt GM’s executives didn’t regard themselves as psychopaths, yet they justified abdicating responsibility for the harm they knew their choices would cause because Liberal culture and their corporate charter required them to put profits first.
One of the most damaging large-scale expressions of this “ethic of no ethics” is in the work of full-time corporate lawyers and lobbyists who attempt to shape government regulations in the interests of their clients’ profit. This is reinforced by corporate-financed media campaigns that, in the name of freedom, whip up an ideological rage against the tyranny of “big government.” Self-regulation in the name of private profit regularly leads to environmental damage and public costs that can occasionally be catastrophic. One of the most dramatic examples in recent years was the 2010 blowout of the British Petroleum Macondo Deepwater Horizon drilling rig, which dumped five million barrels of crude oil into the Gulf of Mexico. Over the course of several years leading up to this, BP had cut costs by releasing thousands of older, more experienced, and thus expensive specialists, while at the same time it lobbied to weaken regulation and enforcement.47 These were all considered reasonable cost-cutting ways to improve the bottom line of boosting profits. The resulting disaster was less an accident than the likely outcome of a system that allowed short-term private gains to be reaped by transferring long-term risks and costs to some third party — the public.
Friedman’s simple-minded elimination of ethical thinking in business has helped create a political climate where many leaders in finance and politics no longer seem capable of distinguishing between greed, reasonable self-interest, and the common good. While examples of this are many, some of the most shocking recent events involve the US finance industry and the global financial collapse of 2008, which destroyed the assets of millions of American families and sparked the Great Recession. This occurred after years of corporate-sponsored deregulation of the financial markets made it possible for banks and financial institutions to make enormous profits through a variety of predatory credit and investment schemes. When the whole unsustainable system collapsed, most of the participating firms could reasonably claim they hadn’t done anything wrong.
This wasn’t, strictly speaking, true, but the pervasive culture of valuing private profit over public good made it difficult for executives to feel responsible. In an interview after the collapse, Lloyd Blankfein, then the chief executive officer of Goldman Sachs — one of the firms implicated in the mortgage crisis, and one of the world’s largest, most profitable, and most politically influential investment banking firms — defended the $54 million bonus he received in 2007 by explaining that he was simply “doing God’s work.”48
Such hubris can be seen as a predictable psychological inflation resulting from the politics of self-interest. In 1886, Black Elk, the great Sioux visionary, left his reservation to join Buffalo Bill’s Wild West Show in the desperate hope of traveling the country and finding a way of helping his defeated, starving people. After a few enervating months in New York City, he saw the noble pretensions of American democracy degenerating into a morally impoverished plutocracy:
After a while I got used to being there, but I was like a man who had never had a vision. I felt dead and my people seemed lost and I thought I might never find them again. I did not see anything to help my people. I could see that the Wasichus [whites] did not care for each other the way our people did before the nation’s hoop was broken. They would take everything from each other if they could, and so there were some who had more of everything than they could use, while crowds of people had nothing at all and maybe were starving. They had forgotten that the earth was their mother. This could not be better than the old ways of my people.49
From such a perspective, the notion that the invisible hand of the market entitles us to whatever we can get away with is a kind of mental and spiritual illness. In practice it means that the rich inevitably grow richer and feel self-righteous doing so. In the United States, in 1965 the average CEO earned 24 times what the average worker earned; by 2007, this had risen to 275 times the average worker’s wages,50 creating what the economists Paul Krugman and Robin Wells dubbed the “creed of greedism.”51 Small-government conservatives, blinded by the dogma of free-market ideology, have great difficulty recognizing that in the absence of wise regulation (imposed from both within and without), such a culture inevitably leads to the “tyranny of the biggest,” as the larger, more powerful entities use the competitive advantage of size to further undermine free competition in the service of their own wealth. Unlimited freedom without the guidance of wisdom leads to new forms of tyranny.
The Eclipse of Wisdom
Classical Liberalism as it has come to be embodied in the United States relies on three impersonal mechanistic understandings that converge in at least one major way: eliminating the need for the individual to consider the good of others and of the whole. The first is the mechanical materialism of Cartesian-based science, which values only the measurable certain knowledge of the tangible world and dismisses as unknowable and unimportant most of the things of the mind. The second is a minimal form of collective decision making and conflict resolution based on a mechanical system of elected representatives, separation of powers, and checks and balances. The third is the law of supply and demand embodied in the invisible hand of the market that supposedly converts self-interest into the collective good. Combined, these ideas and mechanisms release the citizen in principle from the struggle of soul searching and considering the big picture. They make selfishness and a lack of introspection into virtues. The casualty is not only the good but the truth of the whole. Greed eclipses a humble opening to the mystery of the human condition. Without openness and humility, deep learning and moral growth are impossible. Truth becomes whatever makes you rich and powerful. Ipso facto, the rich have the truth and should rule.
In the wake of the corrupt and decrepit feudal institutions of the medieval era, the American Constitution was a revolutionary and liberating advance. It was as close as one could imagine to a mechanical form of government congruent with the clockwork universe of Descartes and Newton, in which the various branches of government would act like the cogs and levers