Shaming the Greedy and Fraudulent: Promise and Perils
In today’s New York Times, Clyde Haberman discusses the greedy and destructive behavior of prominent Wall Street types and ponders whether they should be made to feel a sense of shame for their actions. For instance, John Thain, the recently fired CEO of Merrill Lynch (now part of Bank of America), paid huge bonuses to executives, even though Merrill had just lost $15.3 billion during the last quarter of 2008. Mr. Thain asked for a $30 million bonus, even while the company was crumbling and seeking billions in taxpayer bailout money. He spent $1.2 million to redecorate his office, which included the purchase of a $87,874 area rug, a $68,179 credenza, and a $18,468 George IV chair. Bernard Madoff erected a Ponzi scheme worth $50 billion, largely on the backs of members of the Jewish commuity who entrusted their millions to him because he hailed from their larger community. (Lisa Fairfax at the Conglomerate has a terrific post on the significance and perils of affinity fraud in light of the Madoff scandal).
Haberman asks: “Is there a way for the Thains [and Madoffs] of the world to be held up to shame, if only as a caution to others? How about something like billboards bearing their pcitures and brief descriptions of their actions?” Criminal law theorist and Prawfs blogger Dan Markel explained to Haberman that it is certainly permissible for private entities to say: “Look, this person has wronged us greviously” as it is part of the marketplace of free speech, as long as the statements are not defamatory or otherwise tortious. But Markel cautioned that such nontraditional shaming punishments tend to “humiliate more than rehabiliate, encouraging a kind of hot, emotional vigilante culture.” On the other hand, law professor Steven Calandrillo emphasized the practical value of such shaming: those in business will think twice about their own actions after seeing public shaming strip colleagues like John Thain of their good name.
Markel may have the stronger argument. The threat of a vigilante mob is particularly potent in our networked age: online and offline shaming can ruin reputations, produce privacy invasions, and lead to offline stalking and physical violence. And as Martha Nussbaum argues in Hiding From Humanity: Disgust, Shame, and the Law, a judge ordering a defendant to wear a sign to work that says “I am a thief” would unfairly demean the defendant. This, of course, is a hotly debated issue in the literature and would be worth further discussion.