A Philosopher's Blog

Wells Fargo & Financial Crimes

Posted in Business, Ethics, Law, Philosophy by Michael LaBossiere on September 30, 2016

The venerable Wells Fargo bank made the news in 2016 for financial misdeeds on a massive scale. Employees of the company, in an effort to meet the quotas set by management, had created numerous 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, backlash from the public and the shareholders has resulted in Stumpf and Carrie losing some of their financial compensation.

As would be expected, there are currently no plans for criminal charges of the sort that could result in jail time. This is consistent with how financial misdeeds by the elites are typically handled: some fines and, at worst, some forfeiture of ill-gotten gains. While I do not generally agree with Trump, he is not wrong when he points out that the system is rigged in favor of the elites and against the common people. The fact that Trump is one of the elite and has used the system quite effectively does not prove him wrong (that would be fallacious reasoning); rather he himself serves as more evidence for the rigging. Those who loath Hillary Clinton can also add their own favorite examples.

It is instructive to compare the punishment for other misdeeds to those imposed on Wells Fargo. Shoplifting is usually seem as a fairly 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. While Wells Fargo did not seem to directly steal money (that is, it did not simply empty accounts into its own coffers), it did rob people through the use of fees and other charges that arose from the creation of these unauthorized accounts.

While there are clearly differences between the direct theft of shoplifting and the indirect robbery of imposing charges on unauthorized accounts, there seems to be 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 financial 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 the punishments for the financial elites. This would change the fine for shoplifting from likely being in excess of the value of what was stolen to a fraction of what was stolen (if that). The obvious objection to this proposal is that if shoplifters knew that their punishment would be to pay a fraction of the value they had stolen, then this punishment would have no deterrent value. Shoplifting would be, in effect, shopping at a significant discount. It is thus hardly shocking that the financial elite are generally not deterred by the present system of punishment—they come out way ahead if they do not get caught and can still do very well even if they are caught.

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 the 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.

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 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 them the same sorts of harms inflicted by individuals engaging in 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—the misdeeds of the elite and corporations are so often punished lightly or not at all. This is nothing new—the history of law is also the history of its unfair application. The injustice of justice, one might say.  However, this approach is problematic.

Looked at 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 are able to 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 run. 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 common students would be failed and sent before the academic misconduct board for such a misdeed. The common 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 is yet another shining 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, morally, a shoplifter accept a fine that vastly exceeds what they stole when a financial elite can pay but a fraction of their theft and profit well from their misdeeds?


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Crimes in Future Times…with Drones

Posted in Ethics, Law, Technology by Michael LaBossiere on April 20, 2015

According to my always ignored iron rule of technology, any technology that can be misused will be misused. Drones are, obviously enough, no exception. While law-abiding citizens and law writing corporations have been finding various legal uses for drones, other enterprising folks have been finding other uses. These include such things as deploying drones to peep on people and using them to transport drugs. The future will, of course, see the employment of drones and other robots by criminals (and not just governments engaging in immoral deeds).

The two mains factors that makes drones appealing for criminal activity is that they allow a criminal to engage in crime at distance and with a high degree of anonymity. This, obviously enough, is exactly what the internet has also done for crime: criminals can operate from far away and do so behind a digital mask. Drones will allow criminals to do in the actual world what they have been doing in cyberspace for quite some time now. Naturally, the sort of crimes that drones will permit will often be rather different from the “old” cybercrimes.

Just as there is now a large market for black market guns, it is easy to imagine a black market for drones. After all, it would be stupid to commit crimes with a legally purchased and traceable drone. A black market drone that was stolen or custom built would be rather difficult to trace to the operator (unless they were incautious enough to leave prints on it). Naturally, there would also be a market for untraceable drone controllers—either hardware or software. As with all tech, the imagination is the limit as to what crimes can be committed with drones.

In a previous essay, “Little Assassins”, I discussed the likely use of drones as assassination and spying devices. While large drones are already deployed in this manner by states, advancements in drone technology and ever-decreasing prices will mean that little assassins will be within the skill and price range of many people. This will mean, obviously enough, that they will be deployed in various criminal enterprises involving murder and spying. For example, a killer drone would be an ideal way for a spouse to knock off a husband or wife so as to collect the insurance money.

It is also easy to imagine drones being used for petty crimes, such as shop lifting (there has apparently already been a robot shoplifter) and vandalism. A drone could zip into a store, grab items and zip away to its owner. A drone could also be equipped with cans of spray paint and thus allow a graffiti artist to create his masterpieces from a distance—or in places that would be rather difficult or impossible for a human being to reach (such as the face of large statue or the upper floors of a skyscraper).

Speaking of theft, drones could also be used for more serious robberies than shop lifting. For example, an armed drone could be used to boldly commit armed robbery (“put your money in the bag the drone is holding or it will shoot you in the face!”) and zip away with the loot. They could, presumably, even be used to rob banks.

Drones could also be used for poaching activities—to locate and kill endangered animals whose parts are very valuable to the right buyer. Given the value of such parts, drone poaching could be viable—especially if drone prices keep dropping and the value of certain animal parts keep increasing. Naturally, drones will also be deployed to counter poaching activities.

While drones are already being used to smuggle drugs and other items, it is reasonable to expect enterprising criminals to follow Amazon’s lead and use drones to deliver illegal goods to customers. A clever criminal would certainly consider making her delivery drones look like Amazon’s (or even stealing some of them to use). While a drone dropping off drugs to a customer could be “busted” by the cops, the person making the deal via drone  would be rather hard to catch—especially since she might be in another country. Or an AI looking to fund the roborevolution with drug money.

No doubt there are many other criminal activities that drones will be used for that I have not written about. I have faith in the creativity of people and know that if there is a crime a drone can be used to commit, someone will figure out how to make that happen.

While drones will have many positive uses, it certainly seems to be a good idea to rationally consider how they will be misused and develop strategies to counter these likely misuses. This, as always, will require a balance between the freedom needed to utilize technology for good and the restrictions needed to limit the damage that can be done with it.

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On Returning the Lost

Posted in Ethics, Philosophy by Michael LaBossiere on February 17, 2014
A picture of a wallet.

(Photo credit: Wikipedia)

My regular running routes take me over many miles and through areas that are heavily trafficked—most often by college students. Because of this, I often find lost phones, wallets, IDs and other items. Recently I came across a wallet fat with cash and credit cards. As always, I sought out the owner and returned it. Being a philosopher, I thought I’d write a bit about the ethics of this.

While using found credit card numbers would generally be a bad idea from the practical standpoint, found cash is quite another matter. After all, cash is cash and there is typically nothing to link cash to a specific person. Since money is rather useful, a person who finds a wallet fat with cash would have a good practical reason to simply keep the money and use it herself. One possible exception would be that the reward for returning the lost wallet would exceed the value of the cash in the wallet—but the person who finds it would most likely have no idea if this would be the case or not. So, from a purely practical standpoint, keeping the cash would be a smart choice. A person could even return the credit cards and other items in the wallet, claiming quite plausibly that it was otherwise empty when found. However, what might be a smart choice need not be the right choice.

One argument in favor of returning found items (such as the wallet and all the cash) can be built on the golden rule: do unto others as you would have them do unto you. More formally, this is moral reasoning involving the method of reversing the situation. Since I would want my lost property returned, I should thus treat others in the same way. Unless, of course, I can justify treating others differently by finding relevant differences that would justify the difference. Alternatively, it could also be justified on utilitarian grounds.  For example, someone who is poor might contend that it would not be wrong to keep money she found in a rich person’s wallet on the grounds that the money would do her much more good than it would do for the rich person: such a small loss would not affect him, such a gain would benefit her significantly.

Since I am reasonably well off and find relatively modest sums of money (hundreds of dollars at most), I have the luxury of not being tempted to keep the money. However, even when I was not at all well off, I still returned whatever I found. Even when I honestly believed that I would put the money to better use than the original owner. This is not due to any fetishes about property, but a matter of ethics.

One of the reasons is my belief that I do have obligations to help others, especially when the cost to me is low relative to the aid rendered. In the case of finding someone’s wallet or phone, I know that the loss would be a significant inconvenience and worry for most people. In the case of a wallet, a person will probably need to replace a driver’s license, credit cards, insurance cards and worry about identity theft. It is easy for me to return the wallet—either by dropping it off with police or contacting the person after finding them via Facebook or some other means. That said, the obvious challenge is justifying my view that I am so obligated. However, I would contend that in such cases, the burden of proof lies on the selfish rather than the altruistic.

Another reason is that I believe that I should not steal. While keeping a lost item is not the same morally as active theft (this could be seen as being a bit analogous to the distinction between killing and letting die), it does seem to be a form of theft. After all, I would be acquiring what does not belong to me by choosing not to return it. Naturally, if I have no means of returning it to the rightful owner (such as finding a quarter in the road), then keeping it would not seem to be theft. Obviously enough, it could be contended that keeping lost property is not theft (even when it could be returned easily), perhaps on the ancient principle of finders keepers, losers weepers. It could also be contended that theft is acceptable—which would be challenging. However, the burden of proof would seem to rest on those who claim that theft is acceptable or that keeping lost property when returning it would be quite possible is not theft.

I also return found items for two selfish reasons. The first is that I want to build the sort of world I want to live in—and in that world people return lost items. While my acting the way I want the world to be is a tiny thing, it is more than nothing. Second, I feel a psychological compulsion to return things I find—so I have to do it for peace of mind.


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Taxes & Profits

Posted in Business, Ethics, Philosophy by Michael LaBossiere on September 30, 2013
Thief (soundtrack)

Thief (soundtrack) (Photo credit: Wikipedia)

One of the rather useful aspects of philosophy is that it trains a person to examine underlying principles rather than merely going with what appears on the surface. Such examinations often show that superficially consistent views turn out to actually be inconsistent once the underlying principle is considered. One example of this is the matter of taxes and profits.

One of the stock talking points in regards to taxes is that taxes are a form of theft. The rhetoric usually goes something like this: taxes on the successful/rich/job creators is taking the money they have earned and giving it to people who have not earned it so they can get things for free, like food stamps, student financial aid and unemployment benefits.

Under the rhetoric seems to be the principle that taking the money a person has earned and giving it to those who have not earned it is theft and thus wrong. This principle does have considerable appeal.

This principle, obviously enough, rests on the notion that earning money entitles the person to that money and that not earning the money means that a person is not entitled to it. Simple enough.

A second stock talking point in regards to wages for workers, especially the minimum wage, is that the employers are morally entitled to (attempt to) make a profit and this justifies them in paying workers less than the value of their work.

Not surprisingly, those accept the first talking point also accept the second. On the face of it, they do seem consistent: the first says that taxes are theft and the second says that employers have a right to make a profit. However, these two views are actually inconsistent.

To see this, consider the principle that justifies the claim that taxing people to give stuff to others is theft:   taking the money a person has earned and giving it to those who have not earned it is theft and thus wrong.

In the case of the employer, to pay the worker less than the value of his work is to take money the worker has earned and to give it to those who have not earned it. As such, it would also be theft and thus wrong.

At this point, it might be objected that I am claiming that an employer making a living is theft, but this is not the case. The employer is, like the worker, entitled to the value of the value she contributes. If she, for example, provides equipment, leadership, organization, advertising, and so on, then she is entitled to the value of these contributions.

Profit, then, is essentially the same thing as taxing a person to take their money and give it to those who have not earned it. As such, it should be no surprise that I favor justice in regards to both taxes and wages.

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Minimum Wage V: Taxes & Wages

Posted in Business, Ethics, Law, Philosophy, Politics by Michael LaBossiere on September 9, 2013
Money cash

Money cash (Photo credit: @Doug88888)

In the United States, there is considerable intersection between the class of people who oppose minimum wage and the class that opposes taxes. In some cases, both of these views can be grounded on a consistently applied principle. For example, those who favor a minimal (or non-existent) state will note that both views are well grounded on the idea that the state should not impose on the citizens. In other cases, though, the reasons presented for these views seem to be at odds. In this short essay I will consider this matter. For simplicity’s sake, I will just stick to discussing earned wages and stay away from such things as inheritances, lottery winnings, and such.

I have conservative friends on Facebook and, when the issues of taxes heats up, I get to see various postings that claim taxes as a form of theft. When the issue is more specifically about taxes being used (or increased) to pay for government services such as welfare, the stock line is that such taxes are wrongfully taking money from the rightful owner and giving it to people who do not deserve the money because they have not earned it. Interestingly, many of the quoted sources are wealthy people who are dismayed at being compelled to pay taxes. This view seems to rest on two important assumptions. The first is that the people who are being taxed have earned (in the moral sense) their money and thus are entitled to keep it. The second is that the people who are imposing the taxes and the people who get the money have not earned it and thus are not entitled to it.

The basic principle at work here does, on the face of it, seems reasonable enough: people are justly entitled to what they have earned and not entitled to what they have not earned. This, in turn, seems to rest on what appears to be a principle that people are entitled to the value they create. After all, there has to be some foundation for the claim that an income is earned and thus justly belongs to a person. The mere fact that a person gets the money is, obviously, not automatic justification that it is earned in the moral sense and that they are thus morally entitled to the income.

In the case of taxes, the folks in question obviously get that principle: they believe it is their right to keep their money and it is not right for other people to get, via taxes, what they have earned. This is, as noted above, apparently based on a principle that people are entitled to the value they create. This is certainly appealing—if I have created the value, then that value is justly owed to me. However, it would also seem to follow that I owe payment for value received. Such, when I receive the goods and services of the state, then I am obligated to pay for their value—otherwise I am stealing from others and violating my own principle. But if my taxes are simply being taken from me and given to others, then it would seem that I am being robbed—the value I have earned is being taken from me, not to pay for the goods and services I use, but to simply give handouts to those who have not earned it. This seems to be clearly wrong.

At this point, it might be wondered what this has to do with wages. Fortunately, the answer is straightforward. If the principle is accepted that a person is entitled to the value s/he has created (and thus earned) and that for someone to take from that person is theft, it would follow that an employee is entitled to the value s/he has created. For the employer to take that value for himself/herself would be the same as if the employer was receiving money taxed from a worker and just given, unearned, to him or her.

It might be countered that the employer earns what s/he receives by the value the employer contributes. The obvious reply is that this claim is true—but this would entail that the employer is not entitled to profits acquired by underpaying employees or overcharging customers. Either approach is like the employer being taxed so that the money can be given to people who have not earned it.

It could be countered that the employer-employee relation is different because of things like market forces, abundance of laborers and so on. As such, an employer can justly pay an employee less than the value the employee creates by his/her labor because of these factors. The obvious counter is that an analogous argument could be made regarding taxation—that the various complex economic factors warrant taking money by taxes to give the money to those who have not earned it.

Thus, those that argue against taxes by contending that they have a right to what they have earned must extend the same principle to the wages of workers. They, too, would be just as entitled to what they have earned. So, if taxation is theft, so is underpaying workers. As such, the minimum wage should be the value of what the worker creates. Anything less that allows the employer to steal from the worker would be theft.

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Minimum Wage IV: The Value of Work

Posted in Business, Ethics, Law, Philosophy by Michael LaBossiere on August 21, 2013
Forex Money for Exchange in Currency Bank

Forex Money for Exchange in Currency Bank (Photo credit: epSos.de)

Some folks labor for minimum wage (or less) while a very few receive millions per year in compensation for their work. Many people are somewhere in between. However much a person makes, there is still the question of whether she is earning what she deserves or not.

This question falls, obviously enough, within the realm of moral philosophy and, more specifically, the subset of moral philosophy that is economics. After all, this is a matter of value and a matter of what a person should be paid.

On the face of it, the easiest and seemingly most sensible approach would be to answer the question by determining what value the person contributes and set that as the compensation the person deserves. To use a simple example, to determine the value added by a Big Burger employee to a Big Burger would involve subtracting out all the other contributions to the value of the burger, ranging from advertising costs to raw material costs. Naturally, the cost of managing the person would also be subtracted out. Since Big Burger employees are paid hourly wages and work with more than just burgers, the deserved wage would involve some estimations and calculations involving the average productivity of the worker. Other situations (such as those of salaried workers or self-employed people) would require appropriate modifications, but the basic idea would remain the same in that a person would presumably deserve to earn compensation based on the value she adds.

This would certainly seem to be a fair approach. If a person is paid more than the value of his work, then he would seem to be engaged in theft. If a person is paid less than the value of his work, then he would seem to be the victim of theft. Naturally, there can be obvious exceptions. For example, a person might help out a friend or charity by doing work at a rate far lower than she actually deserves without it being theft. As another example, a person might decide to help someone out by paying him more than his work is actually worth. This would be charity rather than theft.

On the idea that a person should earn what she deserves, then the idea of minimum wage would seem to not apply in a meaningful way. After all, the minimum wage and the maximum wage would be the same in this case, namely the value of the person’s contribution. Thus, perhaps the law should be that people must be paid what their work is worth. In some cases, a fair wage would be less than the current minimum wage. But, in most cases it would certainly be higher.

An obvious problem with this is the difficulty of determining the value of a person’s work. One aspect of the problem is practical, namely sorting out all the costs involved and determining what the person in fact contributes in regards to value. This is mainly an accounting problem, presumably solvable with a spread sheet. The second aspect of the problem is were value theory really enters the picture, namely sorting out the matter of assessing worth. That is, determining what should go into those cells on the spreadsheet. For example, what value does a CEO or university president actually contribute via their leadership? As another example, what is the real value an artist adds to the paint and canvas she is selling for $45,000? This area is, to say the least, a bit fuzzy. There is also the fact that people would tend to overvalue the value of their own work and generally undervalue the work being done for them.

The minimum wage could, then, be seen as a rather weak guard against work being grotesquely undervalued. By setting a minimum, this means that people will (in general) at least get some of the value of their work. However, it certainly leaves considerable room for greatly underpaying workers relative to what their work is actually worth.

The stock counter is that such matters get sorted out by “market forces.” That is, people whose work is more valuable can command better wages while people whose work is less valuable will command lower wages.

The obvious reply to this counter is that the alleged market forces tend to result in most people being underpaid and some people being compensated far beyond their actual contributions, even accepting the fuzziness of value. In fact, the underpaying of most is what is needed for the few to have such generous compensation. After all, if people were paid based on the value of their work, then there would be no fair way to profit off this work. For example, if Bob contributes $50 of value per hour to my widgets, I would need to steal from Bob to make a profit off his labor.  As another example, if a CEO contributes $100,000 in value to the company, but is compensated with $10 million, then he is stealing the value generated by others.

It might be said that this is all fair because people agree to this system of value. However, this does not seem to be the case: people seem to agree to it in the same way that people agree to a dictatorship: they just go along because the people on the top and those who support them have the power to hurt them.

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Voting & Taxes

Posted in Ethics, Law, Philosophy, Politics by Michael LaBossiere on March 23, 2011
1967 U.S. postage stamp honoring Henry David T...

Image via Wikipedia

In an earlier post I addressed the matter of whether taxes are theft or not. In the course of the discussion, I considered that if the citizens consented to the taxes, then they would not be theft. After all, part of what makes theft wrong is that it involves a lack of free consent on the part of the victims. As such, if those taxed voted for the taxes (or voted for representatives who voted for the taxes) then they would have given their consent and such taxes would not, on the face of it, be theft.

This, of course, could be seen as trying to settle one issue by making use of one that is at least as subject to debate. After all, to say that taxes are not theft when they have been properly voted into effect requires assuming that voting provides this consent in a meaningful way.

Obviously enough, if the voting is directly for a tax and everyone votes in favor, then this would be a clear case of consent. Likewise if everyone votes for someone who is clear that they will support a tax, then that would also seem to provide indisputable consent. As everyone knows, such unanimous voting is all but unheard of. This raises the matter of whether those who voted against the tax (or the tax supporter) have given their consent or not.

Intuitively, it would seem that by participating in the voting process, they have thus agreed to abide by the outcome-whether they win or lose. As such, those who vote against a tax (or tax supporter) would have given their consent to the outcome. Those who chose not to vote would also seem to consent as well-by electing not to vote, they have simply set aside their role in the process and not their consent to the process.

This does assume that there are not factors in play that would make the voting questionable, such as the use of fraud and force. It is easy enough to imagine circumstances in which a vote would clearly not count as a matter of consent. However, the discussion is focused on legitimate voting scenarios.

At this point, it might be objected that if voting is based on consent, whenever people vote against something they are showing their lack of consent. Hence, those who voted for a tax or anything (directly or indirectly) have given their consent while those who voted against it have not. As such, if I vote against a tax, when I am forced to pay I am being robbed. If I had voted for it, then I would not be a victim of theft. To use an analogy, suppose I am in a group and people start to decide what they want for dinner. After a vote, most people decide they want to go to Chez Expensive and have the Costly Quiche. I, however, decided I would rather just go home and make some spaghetti and salad. If these other folks decide to take my money to fund their Quiche, then it would certainly seem that they would be endeavoring to rob me.

Since this is an obvious problem, it is hardly surprising that past thinkers addressed this matter. Locke’s approach is to contend that the consent given when forming a community extends to voting. He argues for this by noting that the political body must move one way (we either have a tax or we do not) and it must move  “the way the greater force carries it, which is the consent of the majority.” If it did not, then the body would be split and the original agreement would be broken.

Naturally, some might contend that the body should split when people disagree. Going back to the quiche example, if some folks want the quiche and I do not, we can simply go our separate ways.

The obvious reply is that while this is sensible in matters involving such minor things as dinner, it would be destructive to society to have the political body break apart over matters of law and policy. This, Locke claims, would be irrational. So, as Locke sees it, the original consent extends to voting and there is also the practical matter of going along with the majority so as to avoid shattering society.

This does lead to a rather serious concern that was perhaps most ably discussed by Mill, namely the tyranny of the majority. The majority (or those who try to pass as the majority) might decide to oppress some of their fellows or do other wicked things. As such, there is clearly a need to place limits on the power of the majority. Mill, being a utilitarian, advocates a utilitarian approach to this matter. As he sees it, the greater good is served by limiting the extent to which the majority can impose on the minority. While Mill does not focus on taxes, he does accept that citizens can be held obligated for “bearing a fair share of common defense or work necessary to the interest of society.”

In regards to the specific matter of taxes, it would seem that if the tax is within the limits of a “fair share”, then it would not be theft to tax someone even if they voted against the tax. However, a tax that went beyond this or had some sort of moral defect could be regarded as theft.

The above discussion does, obviously enough, assume that voting is legitimate. However, this is an assumption that is easy enough to question.  Thoreau, for example, claimed that (in his essay on civil disobedience) “voting for the right does nothing for it-it is a feeble expression of the desire that it should prevail.  The wise will not leave right to chance, nor wish it to prevail through the power of the majority.”

Thoreau also addresses the matter of taxes and argues that people should be allowed to decide to not pay their taxes if they decide to withdraw from the political system. He does, however, make a point of saying that people should pay for what they use, such as paying the highway tax if one uses the highway.

This does seem to be consistent approach in the context of the consent theory. After all, if someone completely removes themselves from the political system, they remove their consent. To claim that they consent to the results of the votes made by others would thus seem to be an error. To use an analogy, if I do not join a club, they have no right to expect me to pay their membership fees-no matter how they vote on the matter. Likewise, if I am not part of a state, then the state would have no right to assume my consent merely because other people voted on something they want to impose on me.

This is not to say that the state would have no legitimate power over me. After all, if I tried to commit murder or theft within its borders, then the police would seem to be quite right to stop me.

Thoreau’s approach would require actually leaving the political body and not merely bailing after a particular vote. To use an analogy, if I agree to go out to dinner and pay my share, I have no right to bail out when they check arrives. However, if I have left a group or never joined, they would have no right to expect me to pay if they decide to go out to dinner.

As such, if a person did withdraw from society and agreed not to avail themselves of any of its goods or services without paying for them, then imposed taxes beyond this would be theft on the part of the state. After all, the state would be taking without consent and would be taking what it was, in fact, not truly owed.

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Are Taxes Theft?

Posted in Business, Ethics, Law, Philosophy, Politics by Michael LaBossiere on March 16, 2011
Photographic portrait of Emma Goldman, facing ...

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One underlying theme I have noticed in America’s Tea Party movement (and among other folks as well) is the idea that taxes are a form of theft. Interestingly enough, this idea was also put forth by the anarchists. As the (in)famous anarchist Emma Goldman said “…the State is itself the greatest criminal, breaking every written and natural law, stealing in the form of taxes, killing in the form of war and capital punishment…” However, a negative view of taxes no doubt dates back to the first tax.

The first step of the discussion involves laying out an intuitive and adequate account of theft. Obviously, a merely legal account of theft will not do here. After all, if theft is defined as taking property via illegal means, then taxes would almost never be theft-after all, they tend to be instituted by law. As such, what is needed is a moral definition of theft.

Without getting into torturous semantical details, it seems safe to regard theft (at least in this context) as the the unjustified taking of legitimate property, typically via means such as deceit or force. This definition is, of course, easily subject to criticism as not being a sufficient and necessary definition. However, the discussion does not seem to require such a definition. If it does, however, I trust that someone will be forthcoming with a better one.

Obviously enough, states can engage in theft via taxes. For example, if the unelected dictator of a state sends his lads around to take money and valuables from people using the threat of violence, then that would seem to qualify as theft. My focus will not, however, be on such cases. Rather, I will focus on whether taxes in a democratic state can be justly considered theft or not.

One rather clear case in which taxes cannot be considered theft is the case when the citizens vote directly on a proposed tax. If I, for example, vote in favor of a tax, then that tax would not be theft. After all, part of what makes theft wrong is that it involves a lack of free consent on the part of the victim. If I freely agree to pay, then that is not theft. As another example, if I vote for a politician courageous or crazy enough to admit that she will create a new tax, then I have given my consent and cannot claim to have been robbed.

However, the people who voted against the tax or the politician would seem to have not given their consent. As such, the state would be taking their money without their consent and this would seem to be an act of theft.

The stock reply to this line of reasoning is that when people vote, they agree to abide by the outcome-even if it is not the outcome they want. To refuse to do so would be to break that agreement and it would essentially render voting pointless.

The stock counter to this is to point out that there are situations in which going along with a vote would be to go along with something whose evil would exceed the wrong of breaking the agreement to abide by the vote. For example, if a vote was taken to restore slavery, good people should vote against it and should refuse to accept the return of slavery even if it were voted back into legality. In the case of taxes, the question would be whether the evil of the taxes justifies breaking the agreement to abide by the results of a vote. This, of course, takes the discussion far beyond whether taxes are theft or not and into a discussion of the legitimacy of voting. However, if the evil of the taxes justified rejecting the vote, then it would seem that if the state imposed the taxes on the unwilling, then the state would be engaged in theft. The challenge is, of course, showing that the evil of the tax warrants what amounts to rebellion against the state.

Another type of case in which taxes cannot be considered theft is when the taxes are payments for goods and services. For example, if I pay a tax that pays for the roads I drive on, then I am hardly being robbed. To use an analogy, if I have a meal at a restaurant and the bill is brought, it would be absurd of me to cry out that I am a victim of theft because I am being forced to pay for my meal. If I did not pay, I would be the thief.

While this line of reasoning is appealing, people generally pay taxes that are used to pay for goods and services that they themselves do not use or oppose. As such, this justification would seem to fail in such cases. For example, a family that pays for its children to go to a private school would not be using the public schools that their tax dollars support. As such, it would seem that they are being robbed-provided that they do not want to pay these taxes. As another example, someone who is morally opposed to abortion could claim that they are being robbed if some of their taxes are used to pay for abortions. As a final example, someone who opposes war or corporate subsidies could argue that they are being robbed when their tax dollars are used in such ways.

To use an analogy, if I go to a restaurant and I am billed for food I did not order, want or eat, then I would be robbed if I were forced to pay. Likewise for  taxes.

One stock reply to this is that people might think that they do not benefit from what they are paying for, they actually are receiving benefits and hence are paying for goods and services rather than being robbed. For example, the family that does not want to pay for public schools does benefit from having these schools in existence. Of course, this only holds when the taxpayer is, in fact, receiving a benefit.

A second stock reply is that even if the taxpayer is not receiving a direct benefit, they are contributing to the general good or, at least, helping others who are in need. The standard reply to this is that people should be able to decide whether they want to contribute to the general good or help others. To use an analogy, if someone steals from me so as to donate the money to a charity, they are still robbing me. This, of course, takes the discussion from the specific matter of taxes to the more general question of what we owe to others. If people owe nothing to the general good or to others, then a case could be made that taxes that aim at these goals would be theft. This sort of argument would be based on the lack of consent as well as the lack of a moral obligation to provide support in such cases.

There is, of course, a great deal of appeal to the idea that people should only pay taxes that yield benefits to them or that they are morally obligated to pay. Going back to the analogy of the bill, I should pay for what I receive or use, but not beyond that-unless I wish to do so. As such, it could be inferred that taxes that go beyond this would thus be theft for they would involve taking from me without my consent and taking beyond what I owe. Avoiding this would seem to require a tax system that is modeled on a billing system and a volunteer charity system: we would pay for what we used and decide to donate (or not) to what we do not actually use. Working out what each person owes (financially and morally) would be a rather challenging matter, but does seem to be something that could be done. As far as the financial part, companies and businesses already seem to have worked out a system of billing and this could be applied to the state as well. As far as the moral aspects of what we owe, that seems to be something that must be worked out (as a practical matter) via politics. This process will likely result in people being required to pay for things they do not use or agree with, but this would seem to be part of the price of being a citizen of a democracy. This, naturally enough, leads to the questions about voting-but that is a tale for another time.

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Is Piracy Theft?

Posted in Business, Ethics, Law, Philosophy, Technology, Video Games by Michael LaBossiere on March 8, 2011
A stereotypical caricature of a pirate.

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In my ethics class, one of the  cases the students can select for their papers is about the morality of copying software, movies, music and so on. As I point out in the hints section of that case, a rather important part if the debate hinges on whether such piracy is theft or not. After all, theft is fairly well established (with some notable exceptions) as morally incorrect-or at least morally questionable.

Normally one would expect that a commercial computer game developer would be opposed to the piracy of software. However,  Minecraft creator Markus Persson’s  stated that “piracy is not theft” at the Game Developers Conference.

Persson’s argument is exactly the sort that I have seen in student papers for years: “Piracy is not theft. If you steal a car, the original is lost. If you copy a game, there are simply more of them in the world.”

This does have a certain appeal. After all, the most obvious sort of harm from theft is that the rightful owner is being denied the use of their property and thus experiences an actual loss. If someone merely copies my software, then they have not deprived me of my copy and hence I am unharmed by this.

This same sort of reasoning would, of course, apply to copying books, theories, formulas, recipes, designs and so on. After all, if I copy the formula for a drug or a philosophical theory, the creator or “owner” still has their formula or theory. On this view, only the taking of physical objects would seem to count as theft-laying aside the science fiction scenarios in which someone could remove an idea from someone’s mind or other such things.

If this is pushed, it might be taken as applying to identity piracy and pirating credit card numbers. After all, if someone pirates your identity or your credit card number, you still possess both. The pirate is merely using what they have pirated, just as the pirate merely uses the pirated software. As such, copying your identity or your credit card number would be piracy rather than theft.

On the face of it, this does seem like an absurd result. If it does really follow from Persson’s principle, then it would show that his principle is flawed. Unless, of course, this result does not follow or it does an one bites the bullet and accepts the results.

The stock reply to the claim that piracy is not theft is that the pirate is stealing a sale and thus harming the person who “owns” what was pirated.

Persson does give a reasonable counter to this objection: “There is no such thing as a ‘lost sale’… Is a bad review a lost sale? What about a missed ship date?”

As he notes, a bad review of a product can play a role in  a person not buying it. Also, a missed ship date can also play a role in diminished sales. There are many other things that could play a causal role in a person not buying product. For example, if my book is worse than another competing book, that author will almost certainly play a role in my not selling as many books. If I price my book cheaper than the competition, then that can play a role in their not selling as many books. However, it would be absurd to claim that I am engaged in theft (or being a victim of theft). In more general terms, it would be absurd to claim that I was being subject to unwarranted harm (or being subject to it). If pirating a copy is analogous to these other things, then it would seem to follow that piracy is no worse than they are.

Of course, it could be taken that Persson is arguing that since there is no such thing as a lost sale, then piracy cannot cause a lost sale. Obviously enough, if there are no lost sales, then this certainly follows.

However, there do seem to be some points worth considering. It could be argued that there is such a thing as a lost sale. This would seem to involve showing that but for the factor in question, a purchase would have been made. As noted above, such factors as competing product being better or cheaper could be in that “but for” category and it would be absurd to consider such scenarios theft in a moral or legal sense. As such, what would be needed is a factor that would unjustly result in the lack of a sale.

For example, suppose that you own a company that sells vegetarian food and someone maliciously spreads rumors that your food contains goat testicles. The harm that is done certainly seems to involve the reduction in your sales and this appears to be unjust because it was caused by a lie. As such, it would seem reasonable to regard this action as unethical and you would certainly appear to have reasonable grounds for legal action. Obviously enough, if your competitors lure away your customers with better products or better prices, then you would have no grounds to regard yourself as harmed unjustly. They have a right to compete. However, they have no right to lie.

Piracy certainly seems to be a situation in which revenue is lost via means that are unjust. After all, if I buy Starcraft II rather than a competitor because Strarcraft II is a better game, then that is hardly unjust. However, if I do not buy the competitor because I have pirated it, that seems to be a rather different sort of scenario. Blizzard has the right to compete, but I can hardly claim that I have a right to copy software.

That this is so can be seen in the following analogy involving a test. One way to do well on a test is to “pay” an honest price by going to class and studying. Another way is to simply copy the answers off the person who actually attended class and studies. Obviously, the person copying is not stealing answers in the sense of removing them from the original test, but they have no right to those answers and it would be quite right to prevent them from doing so and punishing them. It would also make sense to regard them as stealing-after all, they are taking what they have not earned. Likewise for pirates.

This distinction does seem to a rather important one, if only on moral grounds.

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E-Book Piracy

Posted in Business, Ethics by Michael LaBossiere on February 22, 2010
A 17th-century pirate flag.

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Music, software, and movies are readily available via various pirate sites. Now e-books are finding their way into the cargo holds of the electronic pirate ships.

While e-book pirating is still fairly limited, the rise of readers such as Amazon‘s Kindle and B&N‘s Nook will no doubt help increase the volume of piracy (much as the music players helped drive up music piracy). As such, this will be a matter of growing concern for publishers.

As is so often the case, the corporate masters are attempting to fight piracy in ways that actually tend to encourage it. To be specific, some publishers are refusing to release certain titles as e-books in the mistaken belief that this will prevent (or curb) piracy. However, pirates simply scan print copies of the book and make these available. As such, not offering e-books does not protect a book from piracy-it merely means that the pirates have to make their own pirate copy. And, of course, some people do simply make their own copies without any intent to distribute the copies works as pirates.

Lest anyone misinterpret what I have written, I am not claiming that pirates or copiers are justified in pirating or copying a book simply because the company refuses to create an e-book version. My point is that not offering an e-book version of a book does not protect it from piracy. Ironically, it actually deprives the company of revenue since some folks who get the pirated version would no doubt be willing to pay for a legitimate copy.

Companies should, of course, take steps to protect their e-books. While it is easy enough to see piracy as a shot at the “fat cats” and “corporate masters”, it also hurts authors. After all, a stolen book provides no royalties for the person who wrote the book. I assume that many people who read pirated books work jobs of their own and I infer that they would not like to spend a week at work and then have their paychecks stolen from them. This, I suspect holds even if the person in question works for a “fat cat” company or for the “corporate masters.” Stealing books is the same sort of thing.

In my case, I do not make a living from my writing (if I did, I’d be dead now) and I willingly make many of my works available for free. But, this is my choice-they are my works and hence I have the right to decide whether people should have them for free or not.  People no more have a right to steal my work than I have to force someone to work for me for free.

Yes, I do admit that there is a certain appeal in getting something for free. It is especially appealing when a person can rationalize by thinking that she is getting back at a big corporation. I’m no fan of how most big publishing firms operate and authors are often exploited, so I am well aware of the temptation. However, stealing e-books is not a blow for the author or for the common man; it is mere theft. If you want to strike a blow for the common man against the corporations, then start a publishing company that sells books at reasonable rates and pays authors fairly. That would strike a real blow. At the very least, if you must steal e-books to strike at the “fat cats”, then send the author some cash anonymously.

Of course, some people steal e-books and “justify” this by pointing out that the big authors are very wealthy. Hence, stealing a book from that author does no real harm. For example, pirating a Harry Potter novel or even all of them still leaves Rowling with her millions. It it can be argued that stealing from the rich is not as bad as stealing from those with less (after all, less relative harm is done). Of course, that is somewhat like saying that stabbing a tough person is not as bad as stabbing a weak person because the tough person can take more damage. This might be true, but it rather misses the point.

If someone wants to steal stuff because they’d rather not pay, then they are just parasites. That is all I have to say about that.

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