Trust in Business and the Law

Every day, in almost every transaction, we rely on trust in business. We believe that a customer will pay us according to the terms of a sale. Our employees have access to money, goods and confidential information because we trust them.

We order goods from far away, perhaps in another country, and trust that when we open the boxes what is inside is what we ordered. We present credit cards to retail clerks or waiters and trust that they aren’t selling our information to thieves.

In the last thirty years we’ve had a flood of new laws. According to some reports, almost 80% of them are now enacted by bureaucratic fiat. A government agency issues a rule, including the penalties for non-compliance. Regardless of where it comes from, a rule that carries punishment is a law.

The US Chamber of Commerce estimates the cost of business complying with new regulations. It is over $10 billion in added expense every year. In 2015, we added over 3,000 new laws to the book, although Congress only passed about 200 of those.

But has this made us more honest? Why are we even more suspicious and protective than ever before? I think we’ve come to depend on laws over trust, and that is a mistake.

We have a candidate for President who admits that she endangered national secrets in an attempt to keep her emails from the eyes of the very government she worked for, but points out that she broke no laws.

She met with representatives of foreign governments who simultaneously petitioned her office for benefits while they paid her husband millions of dollars for an hour’s work, but they broke no laws.

The other candidate admits that he siphoned large sums from companies that he then put into bankruptcy, ruining hundreds of vendors and contractors, but he broke no laws. He calls it “smart business.”

This man acknowledges serial philandering on his serial wives, but wears it as a badge of pride. He makes outrageous claims that he could easily substantiate, but refuses to do so because the law doesn’t require it.

broken-trustWhatever the outcome of this election, it’s plain that we will have a President whom the majority of the country doesn’t trust. If they’ve shown us anything, it is that laws alone can’t coerce honest behavior.

Yet we are expected to rely on trust in business every day while complying with regulations designed with the worst players in mind. How many business owners pay employees less than the law allows? Whom do you deal with that you know defrauds their customers?

None the less, the government cranks out 15 new laws every working day, and even the most honest and upright among us have to share the burden of compliance.

No volume of laws can replace trust in business. It’s sad that we are about to elect a President who makes that plain.

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4 Responses to Trust in Business and the Law

  1. Don’t forget the cost of hiring CPAs and attorneys to help comply with the law.

  2. John Hyman says:

    Almost everyone knows the axiom “For every action, there is an equal and opposite reaction” but have you considered this when writing a politically biased and provocative article?

    Point #1- when in our lives have we ever had a body of Congressman that we actually trusted? And recent changes to the campaign laws they enacted only serve to promote their ability to retain office and the agendas of a select few with deep pockets to donate.

    Point #2- Why are laws enacted in the first place? Are you so naive as to believe there is an anti-small business cabal operating within the government? All you have to do is look at the recent Wells Fargo fiasco to see why government regulations are necessary. Greed and ego are almost usually at the heart of a scandal and when left unbridled there is an ugly side to capitalism.

    Government exists to protect its citizenry. Yes, it is easy to cite examples of overreach, and yes, it is often burdensome to small business owners. But imagine what our society would resemble with little to no oversight?

    Yes, I have become more reliant on laws, because trust is hard to find in corporate and political culture today.

    • John F. Dini says:

      Well John, I don’t see how you could say I’m biased unless you believe everything about one candidate and nothing about the other. And sorry, but I don’t agree that “They are all like that” is an acceptable justification. My “majority don’t trust” comment is the result of dozens of reputable polls. It is a fact, not an opinion. I have little respect for either “right wing attack journalism” or “the liberal media.”

      As to part 2- you are treading close to trolling territory. Who said anything remotely about a conspiracy, and why would I be naïve? Of course the government has a role in protecting it’s citizens. Another fact. Since the 1970s we’ve seen an explosion of new laws. My point is that they take the least common denominator and apply it to everyone. (How many of us really need a warning that hot coffee is hot?)

      I don’t often take on political issues in my column, but I also find it tough to ignore a topic that is brought up daily in my conversations with owners, which is a broad lack of enthusiasm for either one of the people who will be the next President. Last fact: a total of 9% of eligible voters cast their ballot for either Clinton or Trump in the primaries. A democracy gets the government it deserves.

  3. Mike Wright says:

    The stated purpose of Government is “to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence (sic), promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity,…” I don’t see that the points made are politically biased. I believe we should ask of all politicians, whether their actions are honestly motivated by this purpose or for their own personal interests. It is strongly held that the foundation of our uniquely American form of capitalistic system was made possible by trust that sprung from religious beliefs of our founders. We have moved away from spirituality, but it cannot move away from morality and its stated purpose. How can politician revise morality and redefine life, liberty and the pursuit of happiness every two, four or six years based upon the convenience of a simple majority of less that 70% of the people.

    As a business person with some financial understanding, it seems that every new citizen of the US (born or immigrating) is now assuming a debt of $ 60,000. This is to pay what our government has spent and continues to spend to insure they are reelected. My limited understanding is that this can only be paid back through business activity or spoils of war. The later is not currently palatable.
    Under the current political leadership our Gross National Product is not sufficient to sustain this in the future. I haven’t heard anything during this campaign that causes me to trust that the candidates can understand let alone solve the problems. How can we trust that the laws and regulations that they create will correct them. I want to trust! I want something better for my grandchildren and yours! We seem to be going further in the wrong direction!

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