Although Delaware is a place where all of this happens, it could easily move, and I think it is. I don`t want to end up with such a pessimistic view, but I mean, maybe I`m Hal, you should end up with something more optimistic, but I think I just don`t have much confidence in that kind of rhetoric because we see it in diversity initiatives as well, equity and inclusion. It`s like, OK, everyone says they value diversity, they care about diversity and what they do? They hire a diversity consultant, run a few workshops, read a few books, and then move on, but they don`t really change the inside of the company or the company. If they can`t even do it in terms of diversity, how are they going to do it on issues that really impact profit margins? While I make an excellent point, I think the other side of the coin is more important these days, not everything that is illegal is unethical. There are so many laws governing our behavior that one author notes that we commit an average of 3 crimes per day in the United States (online.wsj.com/article/SB10001424052748704471504574438900830760842.html). We certainly don`t commit the 3 unethical acts a day that reach the level of crime. There is something wrong here. 04. It may be illegal not to perform a contract, but it can be ethical for a number of logical reasons.
When I discovered Hal`s book, I thought, that`s the way it is. I mean, he says, it`s all there, there`s the data. And that`s the kind of sister book that I think my book finished and couldn`t pick up. And in a way, part of the argument in favor of spider web capitalism is that it`s illegal, legal, first world, third world, they`re all connected in these webs now, and eventually they lead to Delaware. And that`s what I find really interesting: How can we think of the United States as a transparent Western democratic society when all roads lead to Delaware in one direction? And so the story I have in the book is that in the 80s, when Manuel Noriega was still president of Panama, an American investigative journalist went there to follow how offshore was used in Panama. It was introduced to a young lawyer named Ramón Fonseca – about whom, by the way, there is a film called The Laundromat that I enjoyed, with Antonio Banderas playing Ramón Fonseca. He said he had interviewed Ramón Fonseca about offshore finance and, at the end of the interview, he had told him: “So you are helping rich people hide their money all over the world. Where do you keep your money? And in a flash, Ramón Fonseca said: “In Delaware. You will never find it there. You know what I mean? It`s as if the system is designed to hide things.
I don`t really think it`s companies doing terrible things, or even wealthy individuals doing terrible things. I mean, my kids were very disappointed – now I`ve forgotten the name of the actress, Hermione Granger from Harry Potter, Emma, I can`t remember her last name. Non-malevolence means doing no harm. Providers should consider whether their actions could harm the patient through omission or commission. The guiding principle primum non nocere, “above all do no harm,” is based on the Hippocratic Oath. A health care provider`s actions or practices are “right” as long as they are in the patient`s best interest and avoid negative consequences. It would be interesting to hear Professor Finance`s views on the various issues arising from the SEC`s relationship with investment banks since the 2008-2009 debacle. At this point, it seems that the law itself is quite “fickle” when it comes to determining when an act is illegal. The Abacus case illustrates that what is considered legal is “transactional” while showing that what is ethical is not even worth considering by the perpetrators of multifaceted misconduct. Bethany McLean: What I found scary about your book is both the lack of transparency and the lack of transparency of what politics is, because politics is not determined by daytime policy-making, but by more obscure means. Did you find that too, Kimberly, in your research? Have you found that people not only benefit from this grey area between what is legal and illegal, but also help themselves understand what this grey area is? Bethany McLean: Hal, it sounds like what you`re describing is a system that uses the legal system as both a weapon and a shield. Is that fair? To what extent is what you write actually illegal, and to what extent is this kind of thing, which is in fact completely legal, but not in the best interests of all of us? Well, the Delaware Bar lawyers who write these rules give no justification as to why the rules are necessary.
They certainly do not appear before the committee. And they just give the rule, the changes they want, the rule is basically approved, because there`s not even the way to ask the questions that would help us understand what`s going on. Then they go to the governor, and after talking to one of the previous governors, I can tell you that the governors are not very interested either, because we have experts who write the rules. Why do we have to challenge the experts? She stopped the woman and said, “Wait a minute. We are here to make money; We are a company. That is perfectly legitimate. Of course, we want businesses to be profitable. I mean, I think it goes back to what we said earlier. They must set the criteria by which we must judge them. But so far, it`s all been smoke and mirrors, hasn`t it? We believe in stakeholder capitalism, but they haven`t helped define what it is. But I mean, I think I hope that, at least in the environmental field, ESG is the most quantifiable area.
What was interesting about the kind of limited partners and general partners who were outside investors was that they kind of understood that there was this core business that was being set aside in another vehicle that was dealing with these bribes or whatever. But as long as they generated returns, they didn`t care. So it was the kind of place they were all looking for. I think that`s the most interesting part. So there is a form of supervision, but it is completely insignificant, and that was quite worrying for me. If I mentioned to the legal experts, does it not sound like the fox guarding the chicken coop because these lawyers appear in court according to the rules that they have written themselves? I mean, talk about Stigler. This is the perfection of regulatory capture. It institutionalizes regulatory ownership.
You control the whole process. You don`t even need to lobby anymore. They simply write the rules themselves, and then they argue under the rules they wrote themselves. It was quite shocking to me. When I asked people, I got answers like, “Well, that`s very technical.” “Transparency helps with capital formation, transparency helps with pricing and helps with good market surveillance, which is good for financial markets,” Weitzman said.
