Aristotle’s study of economics as oeconomia set the moral tone to classical economic studies. In The Politics , Aristotle defines the risks of immoral trading in the form of chrematistics. The latter represents; making money for the sake of profiteering.
The one possible flaw in Aristotle’s economic analysis is his inclusion of piracy as a form of oeconomia. Aristotle does not distinguish between piracies to correct imbalances in economic distribution- a sort of Robin Hood piracy, as opposed to blatant theft.
Looting in general destroys economic value. Wikipedia estimates formal medium and large sized businesses in the Western world lose an average of $150 000 per annum to theft. When theft and embezzlement are not sustainable a business can be bankrupted. Bernard Ebbers embezzled billions from WorldCom literally driving it to the ground. Thomas Petters, through fraud, turned The Petters Group into a $3 Billion ponzi scheme. Ramon Baez Figueroa allegedly stole $2 Billion from Banco Intercontinental nearly driving the whole country, the Dominican Republic, into long term economic ruin. Many other organisations across the world have been ruined by theft, fraud and embezzlement.
National leaders who loot and plunder national resources can encourage under-development. During the reign of Mobuto Sese Seko, Zaire, now called the Democratic Republic of Congo, failed to register any economic growth. After his death Mobuto was found to have stashed away over $3.5 Billion in foreign accounts. This was nearly the total amount owed by his country, in foreign debt, during his reign. Many other countries have seen development stalled, as national resources are plundered by corrupt leaders and civil servants.
The 8th Commandment- thou shall not steal- applies to corporate and National welfare, if one looks at the above cases. Obviously depleting a company’s, or nation state’s, resources leaves it with lesser resources to work with. In the long run, if plundering continues and cannot be covered by increases in productivity, or injections of further resources, the organisation will fold. The Bible does not condone any form theft. Be it either big embezzlements or the petty sort of stealing which plagues every organisation.
Some studies seem to indicate that small thefts help to increase productivity, and should therefore be seen as a cost of production. The jury is still out. This sort of theft however might increase productivity in the workplace; however, the cost is finally covered by the consumer. This ultimately reduces overall competitiveness. However, it increases National Product if insurance covers losses.
St Thomas Aquinas, a classical economist, looked at various moral issues in his studies of the market. His thirteen century work, Summa Theologica, looked at various issues within the market including fair-play, charging interest and pricing. The number one question Aquinas asks is: am I doing unto others as I would like to be done unto me? Nobody wants to be stolen from; as such one should avoid stealing. This supports the 8th Commandment.
Fraud exists everywhere, as evidenced by all the persistent financial crises. John Kenneth Galbraith analysed the persistence of fraud in Neoliberal economies as the Bezzle- which is a multi-million dollar undiscovered inventory of doing business. Given small economies lack liquidity, the cost of the Bezzle drives out good business. Small countries and companies need more vigilance against all forms of fraud to stay in business. If all players in small countries played honestly this would result in true economic growth.
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