IKN

a plague o both your houses

A reminder of Galbraith’s Bezzle

It’s not the first time this quote from the great JK Galbraith has made it to the blog, but as it’s so good and as it’s been on my mind again this morning, I thought I’d share in a quick post. Here you go.


“At
any given time there exists an inventory of undiscovered embezzlement
in — or more precisely not in — the country’s businesses and banks. This
inventory — it should perhaps be called the bezzle — amounts at any
moment to many millions of dollars. It also varies in size with the
business cycle. In good times people are relaxed, trusting, and money is
plentiful. But even though money is plentiful, there are always many
people who need more. Under these circumstances the rate of embezzlement
grows, the rate of discovery falls off, and the bezzle increases
rapidly. In depression all this is reversed. Money is watched with a
narrow, suspicious eye. The man who handles it is assumed to be
dishonest until he proves himself otherwise. Audits are penetrating and
meticulous. Commercial morality is enormously improved. The bezzle
shrinks.”

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