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I'm looking at the concept of how bad money (blood diamonds for example) relates to good money, and how a transfer from one to the other would occur.

Premise & Example

I don't want to purchase a stolen TV from the Bronx, and I also don't want people to give me money for my goods & services that come from stolen TVs. This question is based on the idea that if enough people think this way, then stolen money (or blood diamonds) is "tainted" and limited in use.

My question

I'm interested in how "bad money" (like money from a stolen TV) can ethically be used for good purposes. Namely:

  • If a blood diamond were to be given to charity, and the charity pays a vendor (e.g. 10,000 shoes for the poor) should that shoemaker accept that diamond as if it were never tainted?

  • If a charity indiscriminately accepts blood diamonds for its purpose, does that negatively affect the morality that charity? (especially in comparison to other ones that refuse blood diamonds)?

I'm trying to not define what is moral or good here, but am really focused on the process of "redemption" from one to the other: if it's possible, and how would it occur?

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I'm still trying to phrase this thought, so constructive advice is welcome –  makerofthings7 Dec 20 '12 at 19:22
    
i'd actually say it depends on how strong you want to enforce your premise as you could always argue that the benefit could outweigh the background. But if you consider your premise unmovable than there is no chance that a tainted object can ever be untainted, Maybe you could describe your "feelings" towards your premise more as else this could end in a discussion –  Sim Dec 20 '12 at 21:26
    
@Sim I'm open to being flexible in the premise, and I suppose the only way I can be flexible is to add "conditions". I guess the question is, should the conditions for redemption be based on my tolerance of the origin of the diamond and how it was obtained, vs the relative moral goodness that comes from such a transaction. (similar to "eye for an eye" but more like "an eye healed for an eye poked out") –  makerofthings7 Dec 20 '12 at 22:11
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I take issue with this question because it is one of the "Can XYZ ever be justified?" questions, as the answer is always "yes". Anything can be justified one way or another, rendering these questions pointless. The process of "redemption" you ask for in your closing statement is something that will vary per person and/or ideological view. You will get hundreds of different answers to this question, none more or less "correct" than the other... –  stoicfury Dec 21 '12 at 10:22
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I downvoted for unclear terms. If we approach this as a question of virtue, then we must come to the conclusion that it is wrong to use "blood money." Otherwise, we have no defined deontological rule, or any consequential outcome from which to judge the ethics of the action. –  SAHornickel Dec 21 '12 at 15:45

6 Answers 6

The money from "blood diamonds" isn't bad because of some abstract moral principles but because of practical implications: it is used to finance brutal rebel groups. The "bad money" is used for them for purchases of weapons etc. From the moral point of view the whole chain is the same evil because it is used to finance warlords and provide them with means for waging war. The money stays in the chain and only removing it from there (confiscating etc.) will break this chain.

However, the money or diamonds itself aren't anyway haunted, so once they are confiscated from criminals, there's no reason for restraining from using it.

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Confiscation without compensation to the thief / offender is valid way to remove support from the "bad chain" and move it into the "good chain" –  makerofthings7 Dec 26 '12 at 13:19
    
Does your suggested course of action decrease the demand for blood diamonds? –  labreuer Oct 3 at 22:24

I'm trying to not define what is moral or good here, but am really focused on the process of "redemption" from one to the other: if it's possible, and how would it occur?

Yes, it is possible, it can occur, for example through the State: Prostitutes, pimps, blackmailers, thieves, gangsters, must pay taxes. For the State, "Pecunia non olet", "money does not stink".

The crack tax which was passed by the Tennessee General Assembly in January 2005, levies on illegal drugs like moonshine, cocaine, and marijuana. It is up to drug dealers to pay at the state revenue office, and then they receive as stamp to provide evidence that they have paid.

The "claim of right doctrine" in the United States, which is to hold that illegal proceeds could not constitute income because the taxpayer has no claim of right to the income and is under an obligation to return the proceeds. This doctrine was rejected by the United States Supreme Court in 1961 in favor of an "economic benefits approach", which asks the question whether the taxpayer "'has such control over an ill-gotten gain that, as a practical matter, he derives readily realizable economic value from it'". The rejection of the "claim of right doctrine" was based on a clearly-delineated policy decision by the Supreme Court:

"We should not continue to confound confusion, particularly when the result would be to perpetuate the injustice of relieving embezzlers of the duty of paying income taxes on the money they enrich themselves with through theft while honest people pay their taxes on every conceivable type of income."

In addition, "the purpose of Congress was to use the full measure of its taxing power".

The courts in the United Kingdom have reached a level of clarity: proceeds will be taxed as long as they arise or accrue from a trade, whether legal or illegal. This standpoint appears to be underscored by a move away from the idea that the State, by taxing illegal proceeds, condones the activity from which these proceeds spring, to the idea that the State should not allow the wrongdoer to benefit from advantages which are denied to the honest taxpayer.

In England, various courts have repeatedly rejected the argument that a trade ceases to be a trade for the purposes of the Taxes Acts because it is illegal. The reason why they have said that profits of burglary are not taxable is not because burglary is illegal but because burglary is not a trade. Conversely, if the activity is a trade, it is irrelevant for taxation purposes that it is illegal. It is not necessary to reach any conclusion as to whether profits from an illegal trade are assessable to income tax under the present law of England. There may be lawful trade, there may be unlawful trade. But it is still trade.

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If this is an answer to the question, then the question is off-topic. Describing the common approach to such questions isn't what this page is meant to do, imo. The simple fact that at this point, there are states that are more interested in making money doesn't make "bad money" become "good money". If this was meant to be an ethical question, then this is a non-satisfying answer. –  iphigenie Dec 21 '12 at 15:29
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The question was "trying to not define what is moral or good here...if it's possible, and how would it occur?" But this was meant to be an ethical answer too: The Supreme Court already made a moral justification to "bad money" become "good money": not “to perpetuate the injustice of relieving embezzlers of the duty of paying income taxes on the money they enrich themselves with through theft while honest people pay their taxes on every conceivable type of income.” –  Ricardo Dec 21 '12 at 17:15
    
Good point. I guess I am unhappy with the question then, not with the answer. –  iphigenie Dec 21 '12 at 17:27
    
German Inland Revenue will actually accept if you state in your tax revenue something like "I made one million Euros and I won't tell you how" after robbing a bank. On the other hand, if you robbed a bank and bought a new house in cash, they might figure out that your expenses and your tax return don't agree and get you for tax evasion. –  gnasher729 Oct 3 at 16:21

Possible conditions:

  1. The chosen morally good act must directly benefit or reverse the damage to the victims who had suffered the consequences of the unethical act to which the funds were initially obtained.

  2. Such benefit(s) must equal or outweigh the cost(s) to victims caused (directly) by the trade initially.

  3. If 1 or 2 is practically not possible (perhaps because lives were lost, the goods were stolen or other permanent and irreversible damage was caused) the chosen alternative morally good act must be of equal weighting to the morally impermissible consequences of the initial financial gains so as to balance overall utility. N.B. This may not apply to the stolen TV case as Mill and other utilitarians may argue that benefits > cost if you consider that insurance covers theft as this item will be redeemable (one good) PLUS the thief benefits from a sale (another good - in the "virtue-is-happiness" sense) PLUS a buyer has a new product (one good) totalling 3 positive utility points.

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@math Could you please add some formating to the answer ? Wall of text is hard to read. –  c69 Dec 21 '12 at 22:40

My two cents.

If a blood diamond were to be given to charity, and the charity pays a vendor (e.g. 10,000 shoes for the poor) should that shoemaker accept that diamond as if it were never tainted?

I'd say no. In any case people who worked on those diamonds suffered, the fact happened. It's not really the point if the money have been used for a good cause, but that with the transaction it's been promoted their exploitation, leaving aside charity. Not only probably the abuse of those people has been addressed to the production of ornaments like jewels, something not essential, but it's clear that if instead of searching diamonds they could build useful structures for their society and if someone helped them with instruction they could, maybe, get out of their horrible situation. Nevertheless, if the exploitation of the diamonds' harvesters (I don't know how they are called) brought an improvement in their situation and if there wasn't another way to obtain it, I suppose it could be acceptable. Another way obviously is that they accept their exploitation, but this could be another long discussion.

If a charity indiscriminately accepts blood diamonds for its purpose, does that negatively affect the morality that charity? (especially in comparison to other ones that refuse blood diamonds)?

Taking from the answer above, if the charity as an objective has the one of terminating the exploitation of the diamonds' harvesters and if it could really be achieved, then I think it could be considered a necessary evil.

I'm trying to not define what is moral or good here, but am really focused on the process of "redemption" from one to the other: if it's possible, and how would it occur?

Theoretically for me it could be, but realistically I doubt it may be possible and/or effective. I'm not saying that there aren't people who in spite of the "evil" they cause at the end of the day they believe they have done more good than bad, but percentually in respect to the ones who effectively take advantage (inhumanly) of others, consciously or not, for money or other similar causes, I don't know how they place.

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No. Any activity which would drive up demand for blood diamonds will increase the money/resources which goes to those who procure them. The only moral actions would be:

  1. Destruction of any and all blood diamonds.
  2. Shame for those who are found in possession of them and have not destroyed them.

At least, I see no alternative method for lowering demand. Without lowering demand, how will the pressure to produce more blood diamonds not continue to exist, replete with oppression, etc.?

P.S. For those disinclined to support any use of shame, see In Defense of Shame.

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The question is posed wrong. There is nothing wrong with the "blood diamond" per se. However, there is a lot wrong with the initial acquisition of blood diamonds, which uses awful violence against innocent people who are forced to search for these diamonds, and the payment which goes to these awful criminals. Therefore, society decided to take any steps that can help reducing the initial acquisition.

One way of doing this is making the possession of these diamonds as illegal and tabu as possible. If there is no way to own a blood diamond in a way that is legally and socially acceptable, then people will not want them, selling them is harder, and less money is paid to the criminals at the start of the chain.

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