In my academic training in economics, we looked at the theory of economics, and we also looked at the "structure" of industry, of organizations, etc. Trying to match what I expect to happen in theory with what actually happens in practice has helped me to have a fairly good understanding of both corporate business and the relief and development sector.
Here is an example ... from the sub-prime melt-down ... in theory everyone loses ... but in practice there are some that do very well. As the New York Times put it:
March 30, 2008This did not come about by accident ... I would argue that the system has been carefully put together by professionals who understand the power of the system, and have designed a process that is in the interest of the insiders and the most costly to society as a whole.
The Foreclosure Machine
By GRETCHEN MORGENSON and JONATHAN D. GLATER
NOBODY wins when a home enters foreclosure — neither the borrower, who is evicted, nor the lender, who takes a loss when the home is resold. That’s the conventional wisdom, anyway.
The reality is very different. Behind the scenes in these dramas, a small army of law firms and default servicing companies, who represent mortgage lenders, have been raking in mounting profits. These little-known firms assess legal fees and a host of other charges, calculate what the borrowers owe and draw up the documents required to remove them from their homes.
Muriel Siebert ... who became well known, I beleve, as the first lady member of the New York Stock Exchange ... and subsequently became the New York State Banking Commissioner help get State legislation passed to control the interest rate and fee abuses of credit card companies. Arguably, this was good law and served society well. It has been totally ineffective because the credit card issuers were able to move their "legal" residence to locations where there was little or no banking or credit card regulation ... and a convenient "loophole in the law" allows these organizations to go on with their business in New York State as if there were no New York banking laws.
American leadershop and the corporate world frequently talks about the importance of "Rule of Law" ... but sadly, the law has the power to protect the guilty ... and as time goes by gets more and more confusing and less and less pro-society. This is a dangerous development with consequences that are difficult to predict with certainty ... and needs attention.