Mercy to the Guilty, Cruelty to the Innocent
Adam Smith had suspicions about the conduct of ‘merchants and manufacturers’, finding them inclined to invoke the spirit of monopoly and any contrivance they could think of to raise prices against consumers. These deeply held, and often expressed views of Smith cut right across the careless attribution to Smith of notions about laissez faire and benign invisible hands, as repeated endlessly by modern commentators and commented upon critically here almost daily.
In a recent illustration of Smith’s justified suspicions, Martin Vander Weyer, author of 'Falling Eagle: The Decline of Barclays Bank' (Phoenix), writes a review in the Daily Telgraph, 24 August 2005, of “Lords and Liars” by Christopher Mason, under the heading of “The fine art of bad behaviour” (the intended pun justifies itself in the review):
“The facts of what Christopher Mason calls "the Christie's-Sotheby's conspiracy", the
commission-fixing deal struck between the chief executives of the world's two leading
fine art auction houses in the back of a parked Lexus at New York's JFK airport in
February 1995, are not in doubt and have been published numerous times, though never
before with such a rich underpinning of bitchy detail. The morality of the case, however,
is more obscure.”
How what happened could be thought to have been morally ‘obscure’ is beyond me.
The CEOs were found out for colluding against their customers interests. In Adam Smith’s
mind that was morally wrong and, I would suppose (we are all customers for much of our
daily lives) most of us would consider what they were doing was morally wrong, unless you
share a strange view that ripping of rich customers is acceptable along the lines of so-called
‘victimless’ crimes. Poor people selling heirlooms of windfall finds are cheated by these
Behaviours as much as rich people collecting them.
Martin Vander Weyer asks:
“Was what took place between the two firms really a major crime? Or was the case that eventually brought Sotheby's chairman Alfred Taubman to jail and its chief executive Dede Brooks to a six-month sentence of home-confinement an example of overzealousness in the American courts? Were the breakfast meetings between Taubman and his Christie's opposite number, Sir Anthony Tennant, at Taubman's Mayfair flat, anything more than a matter of civilised relations between the heads of two firms with adjacent interests? Or was it all a confirmation of Adam Smith's dictum, in The Wealth of Nations, that "people in the same trade seldom meet together even for merriment and diversion, but the conversation ends in a conspiracy against the public or in some contrivance to raise prices"?
There is little doubt that the meetings, social or otherwise, were aptly described by the quotation from Adam Smith’s “Wealth of Nations” (WN I.x.c.27). Nor is there any doubt that this was a conspiracy for substantial gain:
“The conclusion to be drawn from Mason's account is that the misbehaviour involved was certainly on a large scale: the criminal prosecutor's estimate of the amount that Sotheby's sellers were overcharged in commissions as a result of collusion between 1995 and 1999 was $44 million, and the two firms each coughed up damages of $256 million in a civil settlement.”
“Misbehaviour”? At $44 million! What in the reviewer’s scale of robbery constitutes a crime? One of the guilty, Al Taubman, owner of Sotheby’s, receives very sympathetic treatment from Martin Vander Weyer:
“Whatever else those hands could do, there is no doubt that Al Taubman loved his wife, loved the passport to high society that ownership of Sotheby's brought him, took little interest in the details of its business, and gave very generously to charity. To be guilty of naivety and social ambition hardly deserves a custodial sentence, and our final glimpse of him as an ailing 77-year-old, queuing in the cafeteria of a correctional facility in Rochester, Minnesota, is really rather tragic.”
All persons serving their sentences in jail are ‘tragic’, including all the other persons in their 70s, few of whom stole $40 million from their customers, or a fraction of that sum. Here too, we can see where Smith understood the feelings of sympathy of those contemplating the judicial outcome after the events leading to it, based on their humanity. These people should, says Smith:
“reflect that mercy to the guilty is cruelty to the innocent, and oppose to the emotions of compassion which they feel for a particular person, a more enlarged compassion which they feel for mankind” (“Moral Sentiments”, II.ii.3.7: 88-89).
In a recent illustration of Smith’s justified suspicions, Martin Vander Weyer, author of 'Falling Eagle: The Decline of Barclays Bank' (Phoenix), writes a review in the Daily Telgraph, 24 August 2005, of “Lords and Liars” by Christopher Mason, under the heading of “The fine art of bad behaviour” (the intended pun justifies itself in the review):
“The facts of what Christopher Mason calls "the Christie's-Sotheby's conspiracy", the
commission-fixing deal struck between the chief executives of the world's two leading
fine art auction houses in the back of a parked Lexus at New York's JFK airport in
February 1995, are not in doubt and have been published numerous times, though never
before with such a rich underpinning of bitchy detail. The morality of the case, however,
is more obscure.”
How what happened could be thought to have been morally ‘obscure’ is beyond me.
The CEOs were found out for colluding against their customers interests. In Adam Smith’s
mind that was morally wrong and, I would suppose (we are all customers for much of our
daily lives) most of us would consider what they were doing was morally wrong, unless you
share a strange view that ripping of rich customers is acceptable along the lines of so-called
‘victimless’ crimes. Poor people selling heirlooms of windfall finds are cheated by these
Behaviours as much as rich people collecting them.
Martin Vander Weyer asks:
“Was what took place between the two firms really a major crime? Or was the case that eventually brought Sotheby's chairman Alfred Taubman to jail and its chief executive Dede Brooks to a six-month sentence of home-confinement an example of overzealousness in the American courts? Were the breakfast meetings between Taubman and his Christie's opposite number, Sir Anthony Tennant, at Taubman's Mayfair flat, anything more than a matter of civilised relations between the heads of two firms with adjacent interests? Or was it all a confirmation of Adam Smith's dictum, in The Wealth of Nations, that "people in the same trade seldom meet together even for merriment and diversion, but the conversation ends in a conspiracy against the public or in some contrivance to raise prices"?
There is little doubt that the meetings, social or otherwise, were aptly described by the quotation from Adam Smith’s “Wealth of Nations” (WN I.x.c.27). Nor is there any doubt that this was a conspiracy for substantial gain:
“The conclusion to be drawn from Mason's account is that the misbehaviour involved was certainly on a large scale: the criminal prosecutor's estimate of the amount that Sotheby's sellers were overcharged in commissions as a result of collusion between 1995 and 1999 was $44 million, and the two firms each coughed up damages of $256 million in a civil settlement.”
“Misbehaviour”? At $44 million! What in the reviewer’s scale of robbery constitutes a crime? One of the guilty, Al Taubman, owner of Sotheby’s, receives very sympathetic treatment from Martin Vander Weyer:
“Whatever else those hands could do, there is no doubt that Al Taubman loved his wife, loved the passport to high society that ownership of Sotheby's brought him, took little interest in the details of its business, and gave very generously to charity. To be guilty of naivety and social ambition hardly deserves a custodial sentence, and our final glimpse of him as an ailing 77-year-old, queuing in the cafeteria of a correctional facility in Rochester, Minnesota, is really rather tragic.”
All persons serving their sentences in jail are ‘tragic’, including all the other persons in their 70s, few of whom stole $40 million from their customers, or a fraction of that sum. Here too, we can see where Smith understood the feelings of sympathy of those contemplating the judicial outcome after the events leading to it, based on their humanity. These people should, says Smith:
“reflect that mercy to the guilty is cruelty to the innocent, and oppose to the emotions of compassion which they feel for a particular person, a more enlarged compassion which they feel for mankind” (“Moral Sentiments”, II.ii.3.7: 88-89).
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