Thanks to several high-profile corruption scandals involving dishonest accounting practices in large corporations, Congress is holding hearings and wagging fingers at the corrupt executives involved.  "How could you?" the upstanding citizens who comprise Congress demand.  "How could you knowingly break the law?  How could you forsake your fiduciary responsibilities for personal gain?  How could you betray the trust of those who depended on you?"

I suggest anyone present for these hearings back away quietly, for the lightning bolts fired by the Gods of Irony cannot be long in coming.

Consider, if you will, the contemptible hypocrisy required for any member of Congress -- as corrupt a body as any group of power-brokers can be -- to ask another human being how that person could enrich himself while breaking the law.  Does anyone remember the House banking scandal, in which Congressmen from both sides of the aisle were writing bad checks?  The Clintons' investment controversy?  Newt Gingrich's ethics charges relative to his book deal?  The constant allegations of influence peddling among Senators and Representatives?

There is a problem with business accounting practices today.  The problem is that so far only human beings have shown themselves capable of double-entry accounting.  I suppose we could attempt to train chimps or dolphins to do it, but I suspect we'd be less than satisfied with the results.

You see, no matter what the system, no matter what the parameters, no matter what the regulations, people often break the law.  People become corrupt when they have positions of influence that enable them to enrich themselves at others' expense.  People are not always honest.

Our "leaders" are making noises about the problem, suggesting that the solution is to pass more laws.  Well, why not simply pass a single, sweeping piece of legislation that says corruption is illegal?  That won't work, you say?  Well, then, by what rationale do we think that piecemeal government intervention in private sector accounting is going to eliminate human dishonesty?

The socialist and collectivist crowd is quick to point to scandals of this type as evidence that capitalism itself has failed, that it is somehow flawed.  These same people conveniently ignore the fact that collectivist economics has proven time and time again to be even more prone to corruption and abuse of power.  Millions of people have died as a result of socialist schemes and "People's Revolutions."  Compared to the millions of dollars lost to dishonesty in the market, I'll take the lost currency instead.

Corruption -- even large-scale corruption that leads to the loss of millions or billions of dollars -- is not a failure of capitalism.  Capitalism, after all, is simply a recognition of the principle of trading value for value.  It entails having the freedom of action to trade what one wishes, when one wishes, how one wishes.  It isn't even a failure of government oversight.  Central planning, government monitoring, and burdensome legislation that ties the hands of corporate accountants will not improve the situation;  they will complicate it without significantly reducing the human tendency to be dishonest.

I touched on this idea when the Enron scandal broke, and I emphasize it here:

[Any given accounting scandal] not an indictment of Capitalism. It does not constitute a devastating critique of our culture. It does not invalidate the profit motive. It is not a skirmish in the class war for world domination on the part of corporations. It is not compelling evidence that energy company executives are leaping and cavorting naked in pools of crude oil while laughing maniacally about how the Little Guy got screwed before having a towel-snap fight in their Italian-marble-tiled Boy's Club locker room...

Resist the urge to make more out of ...any business failure ...than it really is. Free enterprise isn't utopia, but then, nothing that actually works is. Freedom of action is no guarantee of success. Businesses fail. The business cycle of expansion and retraction of the economy, of boom and bust, bull and bear, does not stop simply because we pull on Alan Greenspan's sleeve and ask him to make it happen. And no matter what we think, there's no way to stop bad management from happening. Managers, after all, are just human beings -- and human beings can be profoundly stupid.

Human beings, of course, can also be profoundly dishonest -- and disgustingly corrupt.

Until we figure out who to remove humanity from the system, capitalism -- despite its risks -- is the best system we've got.