Lately it seems like the US is sinking deeper and deeper into the dark caverns of corruption…
The article below by Taleb suggests this is happening mainly because wide differences between public and private sector incentives work at cross-purposes. Taleb rightfully points out that heavy regulatory environments (a form of Tyranny) carry the seeds of their own self-defeating “arbitrage”. While I agree this might be partially responsible for the spreading disease, I feel there are other issues at play (breathless Capitalism; widening income inequality; diminishing social cohesion; human nature; etc.)... but that's another post...
The real question is how to put an end to this behavior… Taleb offers precious little on that!
The only thing I’m fairly sure of is that if left unchecked corruption will destroy the fundamental trust binding society. There is an inverse relationship between corruption and trust... and when trust is broken what usually ensues is either civil strife or a police state... and the time gap separating the two spheres can narrow surprisingly fast… It’s happened in the most “civilized” nations before… don’t fool yourself!
The Regulator Franchise, or the Alan Blinder Problem
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