> fraudulent behavior needs to be punished systematically since the erosion of trust will eventually destroy a market
Can you expand on the quote from Gulliver's Travels? It's been decades since I read it and I can't think of where in the book it could have been from, I don't remember much economics being in the book...
They look upon fraud as a greater crime than theft, and therefore seldom fail to punish it with death; for they allege, that care and vigilance, with a very common understanding, may preserve a man’s goods from thieves, but honesty has no defence against superior cunning; and, since it is necessary that there should be a perpetual intercourse of buying and selling, and dealing upon credit, where fraud is permitted and connived at, or has no law to punish it, the honest dealer is always undone, and the knave gets the advantage. I remember, when I was once interceding with the emperor for a criminal who had wronged his master of a great sum of money, which he had received by order and ran away with; and happening to tell his majesty, by way of extenuation, that it was only a breach of trust, the emperor thought it monstrous in me to offer as a defence the greatest aggravation of the crime; and truly I had little to say in return, farther than the common answer, that different nations had different customs; for, I confess, I was heartily ashamed.[330]
[330] An act of parliament has been since passed by which some breaches of trust have been made capital.
What a gem this quote is. We index so much on punishing even fake violence in situations where there is real risk to both parties, and as a result, we incentivize fraud on a massive bubble scale level.
Can you expand on the quote from Gulliver's Travels? It's been decades since I read it and I can't think of where in the book it could have been from, I don't remember much economics being in the book...