[michaelt]

I realise this might sound like a circular argument, but: Any fine imposed on a rational company for criminal conduct must be insufficient, because had the fine been sufficient, a rational company would not have engaged in the criminal conduct.

In other words, if a company gets hit with an $X fine for Foo, the options are:

1. The company determined the profit from Foo was greater than $X multiplied by the probability of getting caught.

2. The company's governance meant decision-makers on Foo received bonuses for its profits, but were insulated from the costs/fines, and acted in their personal interests but against the company's interests.

3. The company underestimated $X or the probability of getting caught.

4. The company or its employees were irrational.

And if you're the efficient-market-Homo-economicus type that believes 3 and 4 are impossible, that only leaves 1 and 2 - requiring fines larger than $X irrespective of what $X is or personal executive liability respectively.

Of course, the downside to this argument is the results if you transfer it elsewhere in the justice system; by this logic, every crime should have infinite punishment - but an automatic death penalty for speeding is an absurd result.

[zaroth]

Efficient market theory in no way claims that all companies must always act rationally.

And even more so, you can attempt to make a rational decision, and still be wrong.

It’s also often said about the market, that it can remain irrational longer than you can remain solvent.

[QuesnayJr]

The parent comment doesn't just say "efficient market". It also explicitly mentions "Homo economicus" and "rational company". A rational company makes rational decisions, pretty much by definition.

The saying that the market can remain irrational longer than you can remain solvent directly contradicts the efficient market hypothesis.

[Fjolsvith]

> Of course, the downside to this argument is the results if you transfer it elsewhere in the justice system; by this logic, every crime should have infinite punishment - but an automatic death penalty for speeding is an absurd result.

But, the penalty for a crime isn't set by logic, it's set by legislative process, which prevents the absurd result.

[vlan0]

Right, which sadly means it is not bound by any logical structure and will likely be very unbalanced.

Ex, Enron execs went to prison for years, yet no one died due to their actions. Big Pharma knowingly oversells a highly addictive substance that results in people's death....and yet the corporate veil is not pierced (where's the 10+ year prison sentences).

[Angostura]

You just need to change the probability of getting caught.