Frank Easterbrook and Daniel Fischel are University of Chicago law
professors who believe that, when it comes to making profits, nothing --
not even the law -- should stand in the way. (For almost two decades,
Easterbrook has also been a federal appeals court judge.)
Twenty years ago, writing about antitrust crimes in the Michigan Law
Review, Easterbrook and Fischel, then both professors at the University
of Chicago, wrote that managers not only may, but should, violate the
rules when it is profitable to do so. And it is clear that they believed
that this rule should apply beyond just antitrust.
In a nutshell, this is the Chicago School view of corporate law that has
taken hold over the past 20 years.
Under this view, if a Fed Ex truck needs to double park to make a
delivery -- double park. No problem. Pay the $20 fine. Just as long as
you are still making money, violate the law.
Or course, when it comes to corporate crime and violence, we aren't
talking about just double parking.
We're talking about fraud, corruption, pollution, price-fixing,
occupational disease, and bribery.
The Chicago School says these are "externalities" and related fines and
penalties should simply be viewed as the "costs of doing business."
We call these activities crimes, and we believe society imposes
penalties for committing these crimes to deter and socially sanction
those who would violate society's proscription.
Lawmakers of both parties are shamelessly portraying Enron and Arthur
Andersen as rotten apples, even though those same lawmakers were just
until recently on the take from both corporations, and doing the dirty
work of defeating laws that would have governed both.
But of course we are not talking about a couple of rotten apples here.
As Easterbrook and Fischel so clearly show, the corporate world is now
governed by an ideology that is rotten to the core. After all, as the
great Chicago professors teach us, it is the duty of managers to violate
the law when it is profitable to do so.
Note how most if not all who would agree with Easterbrook and Fischel are also undoubtedly "law 'n' order" types who disdain and would maximally punish
individuals engaging in the same activities.
A small fine if that for the corporations and their
wealthy managers, but jail terms for all
the other suckers.