What if paying the fine is just cheaper than doing the right thing

Something I keep thinking about: we set up fines to stop people from doing bad stuff, but what happens when that fine is just a line item in a spreadsheet? Like say you run a company and acting ethically costs you 5 billion, but pulling some shady move and eating the fine afterward only runs you 500 million. The choice is obvious. At that point the fine isn't a punishment at all, it's just overhead. A fee you pay to break the rules guilt-free. And this isn't some edge case, it's everywhere: Banks caught laundering money pay fines that are a tiny slice of what they actually made doing it. Tech companies violate privacy laws because the penalty is a rounding error compared to what the data is worth. Corporations dump pollutants and literally budget for EPA fines ahead of time like it's a known expense. The wild part? Everyone in the room knows exactly what's going on. Regulators know. The lawyers know. The companies definitely know. But the whole machine just keeps running anyway. Why? Probably because making the penalties actually painful would mean someone has to stand up and risk being called the guy who "killed jobs" or "crushed innovation" or whatever the PR spin is that week. If a fine doesn't actually hurt, it's not a deterrent, it's just a toll booth. Pay up and carry on. Which basically means the rules only really apply to people who can't afford to ignore them.

Ofcourse, things like that are the norms in the system. You'll be hated if you try to change it with something more stringent. And they will wonder how you got to the top in the first place to be able to make the changes since the top is meant for very corrupt fellows. . So, if you manage to get to the top as the reformist, it's likely was by "accident" or miracle, and they would work hard to get rid of you if you do not be like them. You just have to play by the rules and don't bite more than you can chew. Besides, outsiders or bottom dwellers won't be smart enough to notice the loopholes or corruptions.  They will think you are are "law-abiding" or that the system is actually moral, and they wouldn't dare to break the law until someone deep in the system shows them how things really work. No country is an exception in this case... it's just more difficult to detect in the more clever ones. The whole thing operates like the prison system. With enough money you can live like a free person in the prison even though you are not supposed to. Usually the poor or ignorant live like real prisoners. But the higher or deeper you go, while following their way, the "freeer" you become. However it's better to remain at the bottom, suffer it and stand the chance of being saved by our CREATOR. Besides, reaching the top means you become soulless or like a zombies with little to zero empathy. I think that's what they call psychopath. It's all about money or reward, which.is what is used to bait and promote people.

Are you from Africa? Because this is a typical example of what's happening in Africa. Anything man-made is meant to favor one party and harmful to other but natural law is fair for all parties, unfortunately, the evil minds develop the so called law that make way for them as long as they have money. Imagine someone stole billions of money but was fined to pay a unit or few tents of million. Tell me how corruption can be eliminate this way. Yes, law is meant for the poors that don't have money to pay the fine. Reason why people don't hesitate to make money by all means possible, it gives you freedom that not even law can give you.

this is gradually becoming a norm whereby, people count the cost involved in committing a particular crime and go on to do it knowing fully well that it is easy to go through the punishment and enjoy the benefit of their atrocity. it is just like someone that was convicted of embezzlement and knows fully well that the maximum punishment he can pay for such crime is that he gets to be locked three years behind bars afterwards he can get his freedom and enjoy his money. he will comfortably pay that sacrifice and spend the years in prison for the sake of the benefit he stands to enjoy afterwards. that is why some countries intentionally set strict laws that discourages criminals from thinking of certain crimes.

Companies that poluttes the environment is a good example, the right thing for them to do is move away to a far location where people won't complain about noise or carbons, but doing that would hurt the nature of the business, so the right angle to place themselves is by paying whatever the law charges them to deposit every interval. Why are they not penalized? first of all they employ labor, second of all they give revenue to the government. The strict penalties goes to companies whose admins don't admit to pay fines.

Why will it hurt the nature of a business? We are only talking about factories here and once the product is finished, they still can do deliveries to their small stores. The real thing or nature that it will hurt, is our mother nature if not the people nearby but once the nature is damaged, it still can affect the people in different places. Them paying the government, to stay still doesn't solve the issue on the environment but this is the sad part, as some governments only care about the money and not the safety of the individuals. If we are only talking about the economy, then I would say that is a good thing, add in the line that you said that these companies are providing a career to the people.

The reality is that there are two types of law, one for rich people, where you can pay for any crime you've committed if you are rich and wealthy and then there is a type of law that's enforced for regular people, those who don't have much money and fame. Everyone who is in the government and has some sort of power, is extremely wealthy and they are wealthy because they don't pay taxes. There are loopholes in the law exclusively for rich people, so rich people use that opportunity and abuse the system that's designed in a way to keep them wealthy. Everything's artificially created for their betterment.

even if there is at least one person who wants to put a stop to this kind of system, he can't do anything about it because he will just be gotten rid of and at the end the system like this continues so he is forced to comply anyway it takes an entire group to stop this kind of system otherwise there is no stopping this kind of system

You are right, and this situation is sadly too common in many African countries today. The justice system often ends up favoring the wealthy or those with connections, while the poor face the full weight of the law for even minor offenses. It’s frustrating because laws are supposed to protect everyone equally, but when money and power come into play, fairness disappears.Corruption keeps thriving because people see that wealth can buy freedom and influence, so many are tempted to chase money by any means just to escape that unfair system.

When you're rich, you are automatically a friend to the government because whatever law you break, you will given a fine to pay since the government is after more money coming in. Those companies pay tax and borrow loans from the bank to run theor business so the law wouldn't be harsh on them. Imagine in the south south region of my country, Oil companies do pollute the villagers farm and river that they drink from, killing the aquatic animals as per oil spillage. What happens next, they pay fine to the government. A poor man is an enemy to the government because they are the ones that the law is made for.

Yes, that's simply what it means in all societies it does function this way and it goes on and on like in circles within the wealthy class. It only affects the poor individuals who can't afford to pay for the cost of the punishment. To the wealthy class, rules are meant to be broken and it's in rules breaking they make and amass their wealth. In some cases they get away with it. The punishment attached to the law when broken does in a way encourages rule breaking. For the companies a closedown and death penalties for corrupt individuals might change the narrative.

This could be seen from many different angles. The laws are made by the legislation or through its transfer of power. Most of these rules are intentional. Rules just don't punish bad and reward good. They don't always set what's good and bad. They are either made with the interest of nation in focus or for the ones who makes them. For large and developed economies, its there to keep the progress and innovation going while not getting a tag of a nation who promotes crime or goes against the agreed frameworks or trade rules. And with increasing polarization between countries, countries not respecting the international rules and agreements, we would see more of lawlessness in individual nation and around the world.

The other biggest problem to this is. The fines, end up going to the government (themselves), and not the people harmed. Even class action lawsuits that are settled for hundreds of millions,  an average 'victim' may get a hundred dollars?  The rest is divided between the lawyers, and of course the government.  The rest is laughable. To get your share of so called settlement, they make the process so convoluted you say %$% it, I can't figure this out, and walk away, meaning more for them and their cronies. The company writes it off as a cost of business, wash, rinse, and repeat.  The only thing that has ever proven to be effective at stopping a habitual criminal, is removing the individual from being able to commit the crime anymore.  Doing so is going to bring one a lot of enemies, ie the people who were benefitting from the ill deed.  Leading to, who wants to be the patsy to 'take one for the good team' ? look at crypto scams, millions of dollars stolen, nobody ever held accountable.  Even the latest one, they are all buddies now.  When ever crypto scam organizations are busted up, who gets the money... the government. Not saying they are a scam, I don't know, but look at Trade Ogre.  millions of dollars, who took it?  The government.  gee  whuda thunkit?? Aaron

This is the problem with fixed price fines, if you want them to be effective then you need to make it hurt for whoever they are applied against. The only way to do that is make it a percentage of someones overall income or entire assets if they break the law. Sadly few governments take this approach, but there are some clever countries - like some in Scandinavia that take this approach to personal fines for things like speeding. That way it doesn't just become of cost of doing business. As you point out, unless the fine takes all the possible profit and then some extra on top, it'll never be a disincentive to not following the rules. This is also a danger of deregulation, if it goes too far then companies don't even have any proper rules that they should be following.

You get it real right. Corrupted legal regulatory bodies will always have means of syphoning public funds. So they totally negligents the value of keeping good names than riches or reputations. Laws regulating embezzlement that it defaulters penalties is not up to a 100% is according a business to the defaulter and to fight such corruption, an equivalent stolen or accounted equivalent values shall be placed upon you set the defaulter at zero profit. And to keep that effectively influential so as to keep the system clean, additional penalty can be sanctioned against the default so that such corruption will not be pampered or encouraged.

OP, perhaps there's something to learn from Bitcoin. Incentives/self-interest should be deeply and further studied by every pleb in BitcoinTalk. Incentives and self-interest are the only things that's keeping everything in the Bitcoin network stick together, especially among  miners. Plus even with self-interest, it prevents miners from becoming bad actors because the network incentivizes them to be good actors. I believe that many people take that part of Bitcoin for granted, which is actually the most interesting part to learn and study. Probably apply what can be applied in real world governance.

It is really crazy to find out how breaking rules have become part and percel of some of companies business plan and model in the sense that they calculate the cost of getting fined and realize that it is cheaper for them to get fined by the government than for they to actually do the right thing involved in their business so instead of them to invest in doing the right thing such as getting the right location of work or the right equipments, they just decide to budget for fines as a part of their normal expenses and since the government does not have issues with them when it comes to paying their tax revenues and and since they also provide jobs, government becomes even more lenient about them. But my fear with these kinds of situations is that once individuals and companies realize that they can get away from the punishment of the government and it won't hurt their profits they stop caring about the environmental hazards and the health of people. The government just need to do whatever it takes to put everyone within the law else people will keep on breaching the law at the expense of the people without fear of being punished.

problem is when the corporations own the politicians who would make the rules... and the judges who would enforce the rules. at that point, the only way to enforce is removal of the offender from the ability to offend, however you may need to do that. Aaron

I'm sorry to hear that you think that thinks work specially poorly in Africa, I assume that you are from that continent, aren't you. I do not want to downplay the seriousness of the matter about what's happening there, we all know that in most African countries living conditions are not the best and that corruption is especially visible. But it happens worldwide, and with the biggest companies in the world. Fines imposed to big techs, for example, will never cause such serious damage that they are not worth failing to comply with the rules they consider. And look what happened back in 2008: bank bailout is engraved even in the genesis block. It's sad, but things work like that when power is involved.

This touched me a lot, because when I look into the society we are leaving in today, all I see are laid corruptions allowing to operates as they want, braking the law and being covered by immunity, while some being caught will only have to pay a peanut to drag the case in the court in their own favour and continue to enjoy the rest of the money stole, what is this society turning into, we are to be very careful if we think we are not that thicker skinned in dealing with the government, because they only favour their own self, except you're part of them.