As the Manhattan Institute's Nicole Gelinas notes, despite several huge big-bank scandals -- municipal finance manipulation at JPMorgan Chase, money laundering at ING, etc. -- we haven't seen any big banks go out of business for criminal transgressions. They've paid some big fines, but those costs are passed on to consumers, taxpayers and shareholders. "The answers to our problems are straightforward," Gelinas writes. "When a bank egregiously breaks the law, it should run the risk of a criminal conviction's throwing it out of business."
Which leads me to the left's confusion. Capitalism is not inherently sinful, capitalists are -- but so are socialists, progressives, conservatives, libertarians and every other label we apply to human beings.
When I hear people complain about the evils of capitalism, it's like they think there's something especially corrupt about capitalistic institutions, as if every other institution -- including government itself -- isn't prone to the same basic shortcomings. If you don't think socialists or bureaucrats are just as likely to rig the rules to their benefit, you're quite simply ignorant of a lot of history -- and current events.
You can never eliminate the temptations of sin. But you can create accountability for sinning. That's one reason why our system of liberal democratic capitalism is superior to other systems: It creates more opportunities to hold wrongdoers -- and fools -- accountable.
Or at least it's supposed to. The market is supposed to penalize economic mistakes. The electorate is supposed to punish incompetent or venal officials. Civil society is supposed to police malice and buffoonery. And the government is supposed to punish criminals.
The key to all of this is the rule of law and the minimization of what Edmund Burke called "arbitrary power." When institutions -- any institutions -- become immunized against the legitimate forces of accountability, it should be seen as a scandal. The more inured we grow to such stories, the more we come to accept that acceptable behavior is simply whatever we can get away with.
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