Crime pays: The new American way?

Updated
A man walks through struggling downtown Binghamton on January 18, 2012 in Binghamton, New York. Binghamton, in the Southern Tier of New York State, is at the...
A man walks through struggling downtown Binghamton on January 18, 2012 in Binghamton, New York. Binghamton, in the Southern Tier of New York State, is at the...
Spencer Platt/Getty Images

Facebook recently entered a $20 million legal settlement, as part of which they will pay $9 million to 614,000 users whose personal information was placed in advertisements without their permission. This may seem like a victory for privacy rights advocates, but the joke is ultimately on the legal system as Facebook earned an estimated $73 million in profit from the ads before the suit.

The social media giant has learned its lesson about this particular method of privacy violation. But has it learned greater lesson about the expediency of getting ahead of the legal curve?

Diving into profit certain but legally murky water sounds financially prudent when, at worst, you’ll be expected to pay just a portion of the ill-gotten gains to just a portion of the ill-used consumers.

And this practice is not something limited to Facebook. The American banking industry was engaged in criminal activity that put the roof over other Americans’ heads in jeopardy; was bailed out, and has returned to the same legally questionable practices. Between current legal and potentially illegal practices, the financial industry saw record profit in recent weeks.

Similarly, oil companies have begun the practice of hydraulic fracking with the only thing more worrisome than ignoring the damage the practice might do: no conclusive knowledge of the potential damage at all. In the meantime, flammable water and earthquakes that subside with drilling suggest what the damage and scope will be - and already are.

One family, eager to move from property they allege fracking made unbearable, reached a settlement with Range Resources, an oil and gas production company, to the tune of $750,000. Now this is certainly a prettier penny than what Facebook paid, but - and here is why the whole ordeal is profitable - it is many zeroes shy of a serious blow to an oil giant who continue the practice and also included the price of the plaintiffs’ 7- and 10-year-old children’s right to free speech.

In our for-profit incarceration system, judges have been bribed into extending prison sentences for the prison’s benefit as opposed to society’s. While the judges themselves may have to answer to the legal system, the business leaders who bribed them fear even less punishment than the Facebook’s and bankers of the world. In fact, they own the prisons!

What bank and prison owners have in common with Facebook is that the profits they reap from violating others’ rights and trust so dwarf the punitive fees for doing so, it makes perfect business sense to simply wait for another opportunity and slightly different legal context to do it again. “Make money first, ask questions later,” is not just a code practiced in the dark corners of our business landscape.

It is the theme among the most “lucrative” branches of America’s economy. Crime pays in America because paying for your crime doesn’t cost that much. So long as that is the case, the American economic and legal systems will be fueled by the hot air of disadvantage rather than the volleys of supply and demand, violation and restitution.

That hot air is precisely what brought about the economic crash of 2008 and that same bubble is filling up again. Unless legal action is taken to stop it, we’re in for a repeat catastrophe with no more financial security in sight.

If our legal system does not pack enough punch to make the punishments for all types of white collar crime - from online privacy violations to inflated criminal sentencing - outweigh the profits, “punishment” will become just a legal figure of speech.

Crime pays: The new American way?

Updated