Here is an American Experience

February 1999
Now with Afterword from October 2012

One day I received from my health-insurance company a letter urging me to cooperate with it and the state in a campaign to eradicate health-care fraud. “Call 1-800-IC-FRAUD,” the back of the envelope read. “We’ll pay for information that leads to the arrest, prosecution and conviction of anyone committing health-care fraud.” The same day I read in the newspaper that this company’s former chief financial officer, along with another employee, had been convicted of keeping a phony set of books so that the company could claim that its high-risk clients were costing it more money than they actually were.

Like as not it was this little malfeasance that led the company to undertake its anti-fraud campaign, but I couldn’t help feeling the effort was misdirected. If the source of the problem is chief financial officers trying to help their companies bilk the public and take advantage of people with AIDS, breast cancer, diabetes and so forth—I’m afraid I can’t be of much help. These are not the kind of people “IC” much of. They tend to live in fancier neighborhoods, associate themselves with more powerful people.

The founder of a large supermarket chain, by then enjoying a comfortable, expansive retirement, told someone I know the story of how he had built his business. In the beginning, back in the days when bread was a nickel, he had just one grocery store, and the competition in the retail business was so intense that in order to ensure an adequate profit margin he asked his clerks to surreptitiously add a little bit to every customer’s bill. (The current tactic—apparently used by both Mom-and-Pop stores and large chains—is to miscalculate the sales tax or charge tax on untaxable items.) So that no one would detect a pattern, every day the sum was changed: a penny, five cents, three cents. He may have put some of this spare change aside for his wife’s fur coat, his children’s orthodontia, but at least some of it was invested in new and bigger stores, in driving his competition out of business. Eventually enough wealth was produced to allow this man to give large sums to his alma mater. You may have been taught—what?—in a building named after this man. Perhaps, if you went to business school, you were taught what this man described as the most intractable problem in retail management: how to keep the employees from stealing from their employers. (I have since run into an expert on shoplifting who claims that in both the United States and Europe—for all that employees steal and for all that may offend a boss’ idea of loyalty—customers steal more.)

Fraud and thievery always pay better than honorable work, Rousseau noted, and taking advantage of other people is always more profitable than helping them. “How not to get caught is thus the only question—to which the strong devote all their force, and the weak all their tricks.”



Many, many moons later I found myself writing scathingly about the thievery of my landlords (Dear Ms. Shednails). And then, just a few days after completing that piece, I learned that approximately 1 percent of my neighbors in the apartment complex—roughly 100 leaseholders—were renting out their apartments by the day or week, effectively operating mini-hotel businesses on the side. This was not only reducing the “quality of life” of their fellow tenants and neighbors, but was in violation of the very rent laws that provide we tenants a veneer of legal protection against the more substantial rapaciousness of landlords. And it may be assumed that these tenants, while benefiting from the stabilization of their rents under New York State’s rent stabilization laws, were charging their hotel customers rather higher fees. What was that again Jean-Jacques—how not to get caught is the only question? Might we call this an ethical question, that is, a question about how best to live—i.e., without getting caught?



Rousseau, Discours sur l’origine et les fondements de l’inégalité parmi les hommes, endnote:

Il n’y a point de profit si légitime qui ne soit surpass‚ par celui qu’on peut faire illégitimement, et le tort fait au prochain est toujours plus lucratif que les services. Il ne s’agit donc plus que de trouver les moyens de s’assurer l’impunité, et c’est à quoi les puissants emploient toutes leurs forces, et les faibles toutes leurs ruses.

Any amount of legitimately earned profit can be exceeded by illegitimate means, and one always makes more doing one’s neighbors wrong than by helping them. How not to get caught is thus the only question—to which the strong devote all their force, and the weak all their tricks.”

(It is hard to find on-line English translations of Rousseau’s text that include this note; however, an English text of the body of the discourse can be found, for example, via Fordham’s Internet Modern History Sourcebook:

Portrait of Rousseau is by Maurice Quentin de La Tour, 1753.

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