Ratings and white-collar crime

Main article: Economic losses and counterfactuals

Main article: Justice and defense in communities

White-collar crime in our society is pernicious and, in monetary terms, accounts for the vast majority of crime. Let's talk about a few articles in the news recently. The first is about a botnet with malware that infected people’s computers and enabled it to claim Covid benefits to the tune of $5.9 billion. The second is an attempt at bribing a juror to acquit defendants accused of stealing money from a charity devoted to providing food-aid for low-income children. The third involves a US Navy Admiral accused of approving contracts for a company the Navy had rejected in exchange for future employment.

The first case, the botnet that stole Covid funds, is a great example of a precious economic resource that the government distributes, apparently in this case without a lot of oversight. With fraud on this scale (originating with a single person), a community might decide to be a little stronger on identifying citizens who claim benefits. The balance between severity of the crime and privacy intrusion is, again, the community’s to decide. We know at this point that Covid relief programs were hastily put together and poorly managed, thus providing an opening for the enormous fraud that was perpetrated under them. A community, with a ratings system, responding to a pandemic will have the advantage of a built-in watchdog system for preventing fraud in newly erected government programs. And surely all the members, now quarantined at home, would have extra time on their hands to help design and oversee these programs. Quicker votes to, say, impose temporarily more severe ID requirements could take place. An established ratings system will provide an inherent advantage in responding more nimbly to emergency situations.

There is a general concern that foreign actors are behind concerted attempts to attack our infrastructure in this way. This could easily happen in ratings-based communities as well and it will be incumbent upon them to secure their systems and prevent identity fraud originating from outside. Needless to say, communities networked together by the ratings system are more equipped to gather the intelligence needed and deploy the expertise required to foil attempts from outside actors.