The Massacre of the innocents
In “Fine Arts in Brussels“, an article written by Luis Ortiz, Angel Givaja and myself last year, we used Bruegel´s “Massacre of the innocents” to illustrate the idea that the progressive increase of the amount of fines could eventually undermine the financial situation of many companies, thereby damaging the innocent (workers and shareholders), while leaving those responsible for the infringement (the managers) unscathed.
I just came accross a very recent study by Oxford Economics on the “follow-on effects of cartel fines on investment and employment” which seems to confirm our fears about the inadequacy of disproprotionately high fines. The study concludes that “a large fine on a cartel member will have a knock-out effect accross the economy as a whole, impacting on firms and workers who were not involved in the original cartel“.
Thanks to J.M Panero for the pointer!
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