Treason and the U.S. Economic Crisis

In the past, I’ve formulated this argument:

In situations where your own personal good comes, not simply into contradiction with the common good, but with the possibility of other people pursuing their own personal good, a crime has been commited. For example, it’s not a crime if I catch a fish which someone else could have caught. However, if I steal the copper from all the fishing boats to sell it for cash, this is a crime. In the first case, my catching the fish means someone else can’t catch it. In the second, me catching the copper means others never get to catch fish.

Turned over towards the economic problems, this means if I make a trade which someone else could have made, this isn’t a crime. However, if I make trades which destroy the stability of the market, which make it impossible (over time) for anyone to make trades, then this is a crime.

The problem with this argument is that it is not the responsibility for people to understand how their actions impact others way down the line, but only quite immediately. In other words, if I stab someone, I’m responsible for them being hurt, but not so much for the extent of which this stabbing impacts their likelyhood to commit future crimes. (The Nuremburg trials are of course the notible exception to this rule – agression is considered the highest crime specifically because it is deemed to include all the crimes it directly and indirectly causes).

Therefore to understand responsibility in the economic crisis, we need to understand whose responsibility it is to monitor the distant, long term effects of individuals decisions. In other words, not the individuals, but the regulators. It is exactly the responsibility of regulators to set up incentive structures which prevent individuals, making selfish decisions, from destroying the possibility of anyone making any decisions at all.



  1. Treason is very much a legal matter that is up to individual states to define. An important aspect of every system of government is what kind of dissent it tolerates, and to what extent. As such, criticising the leader may be ‘treason’ in some states, while actively trying to overthrow the government through non-violent means may not be in others.

    Certainly, there are situations in which treason is justified. In such cases, it seems clearest and most sensible to say that the acts in question are treason, and that they are justified.

    As I said before:

    they knowingly put their own personal good into conflict with the common good.

    This cannot possibly be the standard for ‘treason.’ Someone walking home from a bar who decides to urinate in an alley is putting their own good over that of society. Is that a treasonous act? I don’t think treason is just selfishness writ large. It is defined as the crime of making war against the state from within. Whether that is an acceptable thing to do sometimes or not (and the founders of the US would obviously say that it can sometimes be justified), it is something quite different from simple selfishness at the expense of others, or even reckless endangerment of others.

    A closer metaphor for what the architects of this crisis did would be the directors of a car company that released large numbers of a novel type of brakes into the market that later turned out to be faulty. They may be guilty of negligence – even of criminal negligence – but they are not traitors in any meaningful sense of the word.”


  2. You are right to highlight the role of the regulators. That being said, I don’t think this is a case where a clear-cut argument can be made about exactly what any particular group should do. There are numerous balances to be struck: for instance, between permitting novel forms of financial instruments to be developed (because of the welfare increasing effects they can have) and ensuring that these new instruments are not fraudulent and do not threaten third parties.

    Procedural rules seem like an important element of striking this balance well. For instance, it is troubling that Paulson is an ex-banker and has personal ties with those leading many of the institutions being bailed out. It is also troubling that Congress latched so many unrelated things onto the bailout. Finally, it is extremely troubling that a message is being sent out that taxpayers will ultimately bear the costs associated with a big enough private failure. You can’t have capitalism on the way up and socialism on the way down; you need to be consistent one way or the other.


  3. Unless we think laws are contingent and arbitrary, “treason” has a meaning that transcends any particular definition of it.


  4. I disagree. Treason is fundamentally defined by the system of government in place where it is invoked. It has no meaning outside the laws of a particular state.


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