In Voltaire’s Candide, the protagonist and his traveling companion, Martin, arrive in England to see an admiral being shot for losing a battle. Martin explains to Candide that Britain finds it necessary “to shoot an admiral from time to time to encourage the others.”¹ We can see how this could work. Indeed it is what countless hollered should be the fate of bankers following the GFC after thousands had experienced great distress, lost homes, jobs, and pensions.² Although banks were fined an unprecedented $100 billion in the five years postcrisis, these punitive fines still left many victims and observers of the crisis dissatisfied. This discontent was exacerbated by the added insult that shareholders paid these fines rather the individual bankers. Moreover, a handful of the heavily fined banks, such as the Royal Bank of Scotland in the UK, were government owned at the time so ultimately the taxpayer paid the tab for the misdeeds of the loathed bankers. Hatred and anger towards bankers was immense—overflowing into the Occupy movement in New York, London and beyond.

If bankers had tried to temper this anger with a show of remorse and suitable apologies, things might have been different. Instead, Bob Diamond, then CEO of Barclays, briskly pronounced that “there was a period of remorse and apology for banks and I think that period needs to be over.”³ Diamond’s call for a halt to any contrition was somewhat premature, coming in 2011 just prior to the unveiling of apparent rigging of interest-rate and foreign-exchange markets. Lloyd Blankfein, Goldman Sachs’ CEO, actually thought the period of penitence had ended much earlier when he joked in November 2009 that he was merely doing “god’s work.”⁴ Inflamatory statements like this make the idea of court martialing bankers highly attractive. Sadly, doing so is unlikely to save us from future financial crashes. Arguably, increasing the scope of financial offences punishable by jail terms potentially makes it easier for bankers to get away scot-free.⁵ Furthermore, greater criminal responsibility for aspects of the bad behavior during the boom and subsequent crash is unlikely to impact the probability of future crises. That does not mean, however, that we should tamper with exisiting criminal offences such as insider trading, market manipulation and money laundering. The aim of this chapter is to explore the option of greater use of criminal law. My unpopular conclusion is that we should not expand the scope of existing legal remedies but rather we should pursue these remedies with greater alacrity and resources and reinvent financial regulation in the way described in Chapters 5 and 6.

I argued in Chapter 4 that the period immediately after any major financial crisis is ripe for root and branch financial reform. Cries of “This time is different” heard during the boom are always replaced with shouts of “Never again” as the bust unfolds. I noted that crises are often the handmaiden of fundamental financial reform. Many useful reforms have followed crises, such as the requirement that the audited accounts of banks should be published. Crises also produced deposit insurance, the US Federal Reserve and a raft of other central banks, the Glass-Steagall Act, and the Basel Committee of Bank Supervisors.⁶

I have also suggested in earlier chapters that there is a policy dynamic at work in this specific postcrisis period. While the moment for proper reforms emerges in the wake of a crisis, if it is not grasped, it soon disappears and poor reforms surge in. Bank regulators, caught up in controlling the raging fires of a financial crash, often see the point of origin and rush to suggest remedies. The Basel Committee of Bank Supervisors actually delivered a blueprint for meaningful reform (Basel III) as early as April 2009—a mere seven months after the Lehman Brothers’ demise. Yet, over time, as taxpayers’ money is used to bail out wealthy, undertaxed bankers and the ensuing government deficits led to scrapping investment in society’s less fortunate, moral indignation morphs into anger. This justifiable anger shifts the focus from appropriate reforms to salacious details of individual villainy. Inevitably, the initial consensus among regulators of what went wrong and how it should be fixed is lost.

It is then the turn of politicians to bombard us with their favorite explanation: the “bad apple” doctrine of financial crises which we introduced in Chapter 3. This doctrine states that bad people doing bad things cause crises and they often do so out of bad, (invariably) foreign jurisdictions. This kind of Manichaeistic struggle between good and evil men makes an excellent story.⁷ It is a convenient creed that absolves those in positions of authority from the responsibility of having been poor overseers. All they need to do is vehemently lash out and squash those identified as bad apples. Both the political Left and the political Right have queued up to express their rage at the bankers in the eye of the storm. Even other, untarred bankers have joined the baying mob as a means of declaring their own innocence.

No wonder then, that many turn to using criminal law, and locking up the bankers seemingly responsible for the crisis and all its misery. The idea of using criminal law against bankers is today most advanced in the UK. To illustrate the major issues at work I shall focus in the following section on the development of UK law with regards to the wrong doing of bankers. In 2010, the UK established the Independent Commission on Banking and, partly in response, in 2012, the Parliamentary Commission on Banking Standards (PCBS). The PCSB’s report, entitled Changing Banks for Good, sought to rectify what it deemed “profound lapses of banking standards.” It repeatedly criticized the lack of attribution of individual guilt in the banking crisis and determined that it was time to “make individual responsibility in banking a reality.” The PCBS stated that there was a “strong case in principle for a new criminal offence of reckless misconduct in the management of a bank.” This would provide regulators with another weapon when dealing with egregious situations, such as “where a bank failed with substantial costs to the taxpayer, lasting consequences for the financial system, or serious harm to customers.” While this reflects a general trend in regulation around the world, it is noteworthy that more litigious societies, such as the United States, have not followed the example of creating such an offence.

The UK’s tough stance is now embodied in the Financial Services (Banking Reform) Act 2013. Section 36 makes the reckless management of a bank a criminal “offence relating to a decision causing a financial institution to fail.” It carries a maximum seven-years imprisonment sentence and/or fines of an unlimited amount. This is in line with other criminal offences within the context of financial services and a significant increase in the scope and symbolism of how banks are to be regulated. To be convicted of reckless management the act requires that a senior manager had been aware of a risk that implementing a decision⁸ would have caused the failure of the bank and that the manager’s conduct fell far below the reasonable standard to be expected of someone in that position. The UK’s financial-services regulator defines a senior manager for this purpose as both executive and non-executive board members. The provision seeks to emcompass anyone who is de facto running a bank. In October 2014, when two HSBC directors resigned in protest at the new rules, Andrew Tyrie MP, Chair of Treasury Committee, responded that the “crisis showed that there must be much greater individual responsibility in banking. A buck that does not stop with an individual often stops nowhere.”⁹

Order 2014 of the UK Financial Services (Banking Reform) Act 2013 (Commencement No. 5) was issued on July 9, 2014. It enables the Prudential Regulation Authority and the Financial Conduct Authority (which can both institute proceedings) to begin consulting on this new criminal offence—a process unfinished at the time of writing. However, it is reasonable to expect that the offence will come into force soon.

This new criminal offence is well intentioned. It rightly seeks to reduce the asymmetry between privatized gains and socialized losses. But it will not protect society from financial crises and could actually create perversions of natural justice. It exposes senior individuals to greater risk of prosecution by the regulators. Exactly who is deemed a “senior person” in the eyes of the Financial Conduct Authority is ambiguous. Does it broadly cover anyone managing aspects of the bank’s business that carry the risk of serious consequences? Is it more circumscribed to a range of management functions? The Prudential Regulation Authority has suggested a narrower scope that extends only to people whose roles directly affect the firm’s safety and soundness. Whichever it is, the burden of proof is now squarely on the senior manager’s shoulders. He must show that he was not at fault for a failure within his sphere of influence. The manager must have taken reasonable steps to avoid contravention of the law occurring or continuing to occur. These steps include adequate and appropriate systems, controls, reporting lines and information management.

Any investigation to uncover a potential offence is likely to require a high level of access to corporate records and the institution itself. It will be inevitably complex and difficult to separate the merely suspicious behavior from behavior intent on engaging in a criminal activity. And how does the investigation dissect what are usually collaborative decision-making processes to single out the individuals liable for having caused a bank’s failure? The only certainty is that this regime will promote incoherency in the management of firms that are already dangerously incoherent. Senior management will now have,

• less authority over decisions, by giving greater autonomy to risk managers and compliance officers, and
• less certain compensation, but
• will carry more open-ended liability for the outcome of collective failures.

In most walks of life, more responsibility coupled with less authority does not work.

However, beyond all these shortcomings, my fundamental objection remains with the idea that financial crises are caused by bad individuals. To believe so condemns us to repeat boom and bust cycles. Individual failures may be caused by individual actions but the authorities are already well equipped to deal with the financial and potentially criminal aspects of individual bank failures. Jail time for offences such as individual fraud and insider dealing is de rigour. Ivan Boesky and his colleague Mike Milken were both jailed for defrauding junk bond investors in the 1980s. Nick Leeson served four years of his sentence for fraudulent reporting of trading losses that grew so huge that they brought down the 233-year-old Barings Bank in 1995. “Bernie” Ebbers was jailed for 25 years in the United States for his part as CEO of WorldCom in a fraud and conspiracy related to false financial reporting. It resulted in a $100 billion loss to investors as his telecom empire disappeared down the dot-com debacle. Around the same time, John Rigas, founder of Adelphia Communications, was sentenced to 15 years imprisonment for a fraud that led to the collapse of the firm he led. A year later, Enron Corp Chief Executive Jeffrey Skilling was jailed for 24 years—subsequently reduced to 14 years for cooperation—for his role in the collapse of Enron, an energy-trading behemoth. Enron’s Chief Financial Officer, Andrew Fastow, received a six-year prison sentence and Chairman and former CEO, Kenneth Lay, was facing a 20-year sentence before he died of a heart attack.

Prior to the GFC, a case could be made that while jail time for white-collar crime was not unusual, not many bankers were residing at Her Majesty’s pleasure in the UK, languishing in US federal prisons, or elsewhere. The cases above represent a handful of individuals over a few decades. But postcrisis this changed—starting with the “Bernie” Madoff affair. Mr. Madoff was convicted of fraud and sentenced to 150 years in June 2009 for perfecting the Ponzi scheme.¹⁰ The investigation into Mr. Madoff’s dealings led to greater scrutiny of other seemingly infallible investors. In March 2012, Allen Stanford, operating out of Florida and Antigua, was convicted for frauds that US prosecutors said amounted to a massive Ponzi scheme deserving of the 110-year prison sentence he received. Let me jog your memory with just a few other cases. In October 2010, Jerome Kerviel, trying to prove he was a worthy trader, ended up being jailed in France for 5 years. He had created fraudulent documents, used forged documents, and made attacks on an automated trading system while attempting to hide a $6.7 billion loss. Raj Rajaratnam, CEO of the US-based Galleon Group of hedge funds, was jailed for 11 years in October 2011 for insider trading. Garth Peterson, a former Morgan Stanley real estate banker in Shanghai, was sentenced to nine months in prison for bribing a Chinese government official. In the UK, Thomas Ammann, an FSA “approved person,” got 2 years inside for insider dealing in December 2012. Rajat Gupta, a Goldman Sachs non-executive director, began a two-year prison term in the United States for insider trading, conspiracy, and securities fraud on June 17, 2014. These are simply a few of the more high-profile cases. The caricature of all financial market participants as bandits getting bailed out, and getting away with illegal activity makes for good movies, but is inaccurate, never mind the enormous losses experienced by bank shareholders.

Let us be clear. Market manipulation is and has been a criminal offence. The scandals surrounding the alleged rigging of the LIBOR reference interest rate and foreign exchange markets that have resulted in large fines could lead to a further round of convictions and imprisonment.¹¹ We need more resources allocated to those who police and enforce the existing laws. Many argue that this is not enough. They want society to send a stronger message. Nothing less than a widening of the scope of the criminal law in the way the UK is proceeding, to include the wrongdoing at the heart of the financial crisis, will surfice. However I think they will be disappointed because the actual quantity of convictions is unlikely to rise under the new criminal regime that has been introduced. The high threshold of certainty that must be met to secure a criminal conviction is particularly difficult to achieve in a financial crash. It is a major undertaking to prove that a single senior person’s conduct fell far below the expected standard at a time when competing factors may be contributing to the demise of a bank.

Sadly, even if all those who would be convicted after a financial crisis were somehow removed before hand, the crisis would still arrive. I know it is vexing to the public that something so bad that hurts so many people and causes so much damage could happen without some illegality. But crashes do not originate from accumulated, random acts of malfeasance. Busts generally follow booms. The longer and wider the boom, the deeper and more all-­encompassing the crash. Long, widespread booms do not happen because a few people do things they know are risky. It happens because hordes of people do things they believe are safe—so safe that it justifies them taking on even more extensive risks. They are reinforced in their thinking that what they are doing is safe by the dominant philosophy of the day as proclaimed by newspapers, academic research, and even regulatory bodies. The reader may recall our earlier allegation that some of the most sanctimonious people today are often those who presided over the publication of reviews, reports and studies boasting that this time was different. Financial innovation was supposed to keep us safe as houses.

There are plenty victims of financial crises who have suffered real losses, but there are also a large number of people who collectively share the responsibility for these losses. It is not that no one is to blame for a systemic crisis, but that almost everyone is guilty. Where does one draw the line? Should all those who benefitted from the boom owe restitution to all who suffered in the inevitable crash? Then this is not just about bankers. There are just as many people who took advantage of the massive expansion of cheap credit and affordable housing, patted themselves on the back for allowing it to happen, or enjoyed ballooning asset prices and pumped-up pension plans as there are those suffering from the aftermath of the crisis today. Adding further criminal law to this mess will not get us the desired accountability. To ascertain who deserves the most blame and were criminally reckless will be a hugely complex task fraught with likely mistakes and potential miscarriages of justice. The grim reality is that we must place our greatest hope of moderating the behavior that lies behind financial crashes in the reinvention of financial regulation.

While the outrage that underlies the passing of the UK Financial Services (Banking Reform) Act is understandable, it is difficult to compare the financial failure of an institution to other types of criminal behavior. In a murder trial, for example, the jury has a relatively clear idea of the required elements that must be proved in order to secure a conviction. Defining “recklessness endangerment” in banking, on the other hand, is far less obvious. It is likely to hinge on a subjective assessment of whether the senior person was aware (or should have been aware) that the risk existed or could exist, and, if in the circumstances known to her, it was unreasonable for her to have taken that risk. Many investors lose money without the help of illegal behavior by others. It is part of the normal course of outcomes in investment. Juries will have to differentiate between a normal loss making investment decision and a reckless one—in an uncertain commercial environment where all investment decisions involve complicated risks.

The minute you start wondering whether a “reasonable” person would consider a decision reckless or not, you are more appropriately in the realm of civil law. Furthermore, there is the dimension of time to consider. Murder today or yesterday requires the same coming together of an act and an intent to commit that act. This is one of the reasons why there is generally no statute of limitations to bringing a prosecution for murder. But decisions that may be characterized as reckless banking with the benefit of hindsight may have appeared reasonable at that time to a reasonable person. The question then becomes in whose shoes do we stand when assessing the risk. Is it at the time the decision was taken or at the time the jury is presiding? And what happens to those who made reckless investment decisions but were simply lucky or for whom no losses materialized? There is a distinct danger that we will end up criminalizing unlucky investment decisions rather than rooting out those that stem from criminally reckless management.

In Chapter 4 we suggested that when the UK Parliamentary Commission was considering the introduction of the new criminal offence of recklessmanagement of a bank, foremost in their minds was the case of hero-turned-bogeyman Mr. Fred Goodwin. Formerly known as Sir Fred Goodwin, he was the CEO who led the meteoric expansion resulting in the spectacular bust of the British bank RBS, receiving handsome personal rewards along the way. Mr. Goodwin backed huge leveraged buyouts and audacious takeovers. At one point, RBS was the world’s largest bank by assets ($3 trillion), employing some 200,000 people. He was the architect of the takeover of National Westminster Bank when by assets it was three times the size of RBS. He completed the expensive takeover of US-based Charter One Financial, and, even as the financial system was crumbling and Barclays had aborted its own efforts to do so, he made the fatal takeover attempt of ABN Amro. Overzealous expansion contributed to the timing and magnitude of a failure so enormous it necessitated massive public action. Put in these terms, the trajectory of Fred Goodwin looks and smells like reckless misconduct.¹²

Yet, for the better part of a decade, this was not obviously the case to the supervisors of RBS. In general, supervisors favored bigger banks, as they were considered safer. They had more capital and benefitted from economies of scale. During Fred Goodwin’s reign as CEO from 2001 to 2007, the cost-to-income ratio at RBS improved markedly and profits, capital, and assets grew strongly. At the time, regulators oddly thought their job included making sure the banks were doing well, and RBS seemed to be doing so well that even though it had become the largest bank, they did not feel it warranted heavy scrutiny.¹³ The bond markets were unperturbed. Equity markets rewarded him with higher share prices. And in wasn’t only fevered markets that blessed his deeds. In 2004, Mr. Goodwin was knighted for services to the banking industry.¹⁴ Even in October 2008 after presiding over the largest loss in UK corporate history, the Daily Telegraph was still able to conclude, without a hint of irony, that Sir Fred’s “grasp of finance is in the Alpha class.”

In Chapter 3 we observed that the tragicomedy of financial crashes is that today’s criminals were yesterday’s heroes. What appears in the hangover of the morning after to have been a reckless party seemed innovative and downright clever the night before. In the fatal words of Chuck Prince, former CEO of Citibank, “As long as the music is still playing you have to get up and dance.”¹⁵ My point here is that criminal convictions will be impossible unless the legal standards used to convict in the bust are completely different from those applied during the boom when the mistakes were being made. Yet where a person’s liberty is at stake, we must demand greater legal objectivity and certainty—even for bad guys, because it protects the innocent.

Bankers were allowed to place asymmetric bets in which they pocketed the gains while passing losses on to the taxpayers. The full range of fiscal and regulatory measures, coupled with civil remedies, must be used to alter these incentives. But as long as strong incentives to unsustainable behavior exist, locking up individual bandits is not going to save us from financial crashes. Continuing to believe otherwise will lead to dangerous complacency and the repitition of a costly cycle.

Financial crashes are the madness of crowds. We are not going to minimize the heavy financial, economic and social cost of crises if we do not deal with the collective delusions that underpin the booms. In Chapters 5 and 6 I suggest ways of doing this, including automatically ratcheting up higher capital adequacy requirements as lending growth rises. But there is currently an unhealthy overreliance on capital adequacy which is hard to measure. We must not forget that the failed banks appeared well capitalized just a year before their collapse. It is imperative that we refocus bank safety away from malleable measurements and accounting. Whoever the individual bankers are, they will always and forever underestimate risks in the boom and overestimate them in the bust. Future rules must be geared toward minimizing the structural mismatch between risk taking and risk capacity—and must do so across the financial sector rather than just across banks.¹⁶

What more can be done to chasten the reckless behavior of bankers? Gary Becker won the 1992 Nobel Prize in Economics for his work in applying economics to a broad set of human behaviors.¹⁷ Becker showed that the incidence of wrong doing is less about the morality of individuals than we would like to think. The best predictor of “criminal” behavior (or, in our case, behavior we don’t like and has adverse consequences) is whether it has a high return, which can be obtained with low risk.The objective of regulatory policy then is to lower the return and raise the risk of this behavior. The threat of jail would effectively raise the risk, but given the added threshold of certainty required, guilty verdicts will be few, potentially even less than under civil law.

One way of using law to raise the risk of bad behaviour that deserves closer scrutiny is directors’ liability insurance. Today this is paid by companies and so is not a check on directors. Banks should not be able to pay this insurance directly. Instead, directors should be made individually responsible for having this insurance. Average directors pay would rise to compensate for this, but directors would face higher insurance premiums the more directorships they held and the more they proved a poor insurance risk. This could potentially drive out bad directors and pull in better ones. The pool of directors is too shallow to begin with. Banning directors from working in finance for a long period if they were directors of a bank that had been bailed out by the taxpayer may also disincentivize reckless behavior. Implementation of these ideas would be tricky. How do we deal with a director who leaves just before a bailout? Furthermore, we need directors to stay on to help manage the restructuring that happens postcrisis. Sometimes they are the only ones who know “where the bodies were buried.”

We also need to pay attention to the return part of Gary Becker’s equation. Capping bonuses and taxing the churning of markets, as I discussed in Chapter 10 and 12 respectively, would disincentivize the chasing of short-term returns that often contribute to bubbles and crashes.

Conclusion

We currently have a criminal law regime for financial misconduct, covering the manipulation of markets, fraud, insider trading, as well as laundering criminal money, or money destined for criminal or terrorist activity. There is modest scope to extend this to other areas where the crime and perpetrators are narrowly focused, easy to identify and not reliant on our future judgment of what was reasonable at the time. But the reach of criminal law cannot easily cover the kind of behavior that leads to the boom that leads to the crash. I argue in Chapter 3 that it is not a few knaves who bring down the system, but the crowd of greedy fools. Indeed, financial booms make fools of most of us. Thinking it is all about locking up the knaves may bring about personal satisfaction, but it will not save the financial system. Our best defense against behavior that is collectively unsustainable is to disincentivize it. But we also need to be careful that by doing so, we do not merely shift that behavior to where it is unseen. We need to go further and bring all financial behavior into a regime that incentivizes sustainable behavior. That is at the heart of the reinvention of financial regulation that we proposed in Chapters 5 and 6.

___________________

¹The fictional incident in Candide is based on the actual 1756 court martial and execution by firing squad of Admiral John Byng of the British Royal Navy. His crime was not doing his utmost to prevent the island of Minorca from falling to the French fleet.

²The magnitudes are large, though it is not straightforward to try and precisely quantify these effects. Most studies show a large range of impacts across countries depending on their policy responses, fiscal space, existing social safety nets, and the degree to which citizens had resources to fall back on. The ILO estimates that unemployment increased by 34 million between 2007 and 2010 (ILO Global Employment Trends, 2012). The World Bank estimated a greater-than-100-million person increase in the working poor in 2011 as full time jobs shifted to part time or less pay (World Bank Development Indicators, World Bank). Researchers found a 5000-person rise in suicide in Europe as a result of the crisis, (Shu-Sen Chang, David Stuckler, Paul Yip and David Gunnell, The Impact of 2008 Global Economic Crisis on Suicide: Time Trend Study in 54 Countries, BMJ, 2013; 347:f5239).

³Mr. Diamond made these remarks in response to questions during his appearance at the UK Treasury Select Committee on Tuesday, January 11, 2011.

⁴Mr. Blankfein in an interview with The Times, London, November 8, 2009.

⁵Some of the arguments that I present in this chapter were first developed for an article called “Criminal Law Is Not a Tool for Improving Financial Stability,” Butterworths Journal of International Banking and Financial Law, November 2013.

⁶I provide greater detail of these developments in Chapter 4.

⁷“Hollywood . . . has always been inclined to this kind of story with heroes and villains and the nefarious banker makes for a pretty perfect villain. Michael Douglas’s iconic portrayal of Gordon Gekko in Oliver Stone’s Wall Street set the mold for this character, and a batch of post-financial crisis films have followed suit: from narratives like Wall Street 2 and Company Men, to documentaries like Inside Job and Capitalism: A Love Story.” Daniel Krauthammer, “How ‘Margin Call’ Gets It Right About the Financial Crisis,” New Republic, October 22, 2011.

⁸“Decision” has been broadly defined to include a failure to prevent a decision.

⁹See Martin Arnold, Sam Fleming, and Alistair Gray, “Two HSBC Directors Quit in Protest over New Conduct Rules,” Financial Times, October 7, 2014.

¹⁰The phrase “Ponzi scheme” is bandied around a little too liberally. A Ponzi scheme is a fraudulent investment operation where the operator pays returns to existing investors from the new capital being paid in by new investors, rather than from profits earned from real investments. It is named after Charles Ponzi, an Italian-born schemer who lived for some time in Boston, where he conducted his last scheme in 1920. It centered initially around the appearance of an international arbitrage related to postal-reply coupons but was really paying existing investors, including Ponzi, hearty returns with the capital of new investors. For an excellent modern-day study, see Ana Carajal, Hunter Monroe, Catherine Patillo and Brian Wynter, “Ponzi Schemes in the Caribbean” (IMF Working Paper 09/95, April 2009).

¹¹In addition to fines amounting to £2 billion levied on five banks in November 2014 for allegedly rigging the foreign exchange market, the UK Serious Fraud Office launched a criminal investigation. It alleged that groups of traders across the major foreign exchange trading banks, calling themselves “the A-Team,” “the Three Musketeers,” and “the Players,” colluded online by sharing sensitive information to make millions for their banks and bag enormous bonuses for themselves. Anyone found guilty of manipulating the market faces a possible seven-year jail sentence and banks could additionally face prosecution.

¹²Those looking for an entertaining if highly charged telling of this Greek tragedy should read Ian Fraser, Shredded: Inside RBS, the Bank That Broke Britain (New York: Birlinn, 2014).

¹³At the height of RBS’s takeover of ABN Amro in August 2007, RBS, one of the world’s largest banks by assets, had six supervisors. Today, the much smaller, partly government-owned institution has 23 supervisors.

¹⁴Perhaps this contributed to his worsening relationship with supervisors that occurred from around this time.

¹⁵According to Prince, “When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance. We’re still dancing.” Prince in an interview with the Financial Times in Japan, July 9, 2007.

¹⁶This is the main message of Chapters 5 and 6.

¹⁷See Gary S. Becker, The Economic Approach to Human Behavior (Chicago: University of Chicago Press, 1978).