Business Ethics: Further Problems Between Society and Business

Abstract: I write about hubris and ethical problems in business, and I attempt to figure out why CEOs escaped unharmed as the companies they led sunk into ruin. I map roughly what causes most institutional problems, and I attempt to dissect the ethics of major corporations and lower management. I also attempt to explain how my generation may avoid making such mistakes.

Wal*Mart is being sued by 1.6 million current and former employees for sex discrimination; Apple is storing unencrypted long-term exact location data on iOS 4; BP is applying for a license to resume drilling in the Gulf of Mexico; Food giant Monsanto is going to be allowed to police itself1; the Consumer Financial Protection Agency is about to lose a massive fight because the debate over consumer financial regulation has left the mainstream2; and Sony has failed to inform that their customers' financial data is in the hands of cyber thieves3 & 4.

Combined with what I have said previously about corporate America--especially with the financial collapse and tobacco companies--it would appear that the jobs we all have are, while providing us with a decent living--are contributing to harsher costs elsewhere.

I've begun reading one of my father's old university economics textbooks (from 1979), and the author (APA citation at the end of the essay5), George C Sawyer wrote the textbook as a project in part because there is--as he said--very little literature providing a framework in which businesses can act ethically. Thirty-two years later, it seems, this same thing could be written again.

After 9/11, George W Bush diverted FBI personnel from white-collar crime investigations to counter-terrorism, at a time when white-collar crime was rampant6.

As the recession devoured people's lives and livelihoods, the entire business structure underwent immense changes: take-overs, shut-downs, and massive layoffs. While this is normal in business and is not generally frowned-upon, the constant adrenaline rush at the workplace and the subsequent focus on simply the bottom line eradicated any kind of ethical framework in the workplace. If you were a part of an organization that valued a relationship with its clients or the society in which it operated, and were taken over by someone else and everyone who enforced and adhered to that ethical standard were upended, ethics are not going to appear to be immediately important.

What I am trying to get across is that in business, long-term ethical ideals are not immediately valued unless they are proven to be profitable. However, there is a problem with this idea, because as history as far back as we can tell, has proven to us consistently that to cover up a destructive act and to ignore it creates a much bigger problem than to admit it and do something about it when it happens. The lie is usually worse than the crime. People will find out, and will no longer trust you. This is the ultimate answer Socrates gave to Thrasymachus in The Republic when he supposed that to be unjust is more profitable than to be just.

What is amazing about businesspeople then, is that for the sheer number of occurrences of this same thing happening over and over again, they keep making the same mistakes. But I also don't want to categorically say that there aren't businesspeople who do see the errors of their neighbors, but these are usually smaller business people, if only because they think that they cannot afford it.

On Easter, I was talking with my aunt's boyfriend and his brother about business ethics, and we were trying to figure out why these CEOs are making an exorbitant amount of money when their companies were in ruins. "Aren't they beholden to an executive board of directors who ultimately have to decide how much the CEOs are paid, and whose primary interest is the existence of the company?" There is a very interesting dynamic between them, and while we do not immediately know why this would happen, my own hypotheses would be this: (1) The Board of Directors could be operating under groupthink, in that the CEO wants to tell them that the company is doing just fine and therefore he should get a raise. The reality may be that corporate offices or outlets may be closing across the country, but the CEO and the Board of Directors are willfully complicit in supplanting factual reality with delusions of prosperity; any admission of possible failure is deemed heresy. This is what happened to the Bush Administration. (2) The CEO takes full command of the company and buys off the Board of Directors (this is an example my dad suggested). Any kind of collective entity could break down because of threats or coercion. Bush's cabinet denied problems in Iraq or Afghanistan out of nothing more than blind faith and ambition. The Catholic Church vociferously denied allegations of sexual misconduct with children, even after the presentation of overwhelming evidence. This same instance can appear anywhere and has nothing to do with economics; it has to do with psychology and the dynamics of hierarchical power and the blind belief in the invulnerability of the existence of the institution. Remember "Too Big to Fail"?

Most institutions--especially corporate institutions--are not democratic. Whatever equality we enjoy as citizens is lost for the bulk of our lives. This means that we are beholden to people who may not understand ethics generally, or not really have an interest in the success of an organization or its employees beyond his or her own petty satisfaction. S/He may even decide he hates you. You certainly say "Cest la vie", but I think that would be a mistake. There are hundreds of books on how to deal with a [an ethically] corrupt manager or supervisor, but I see very few books about how to be an effective and ethical manager. This, too, is not economics, but psychology and philosophy. Because of the power dynamic reminiscent of the Master/Slave dichotomy humanity has always been cursed with by its own avarice, most business leaders with whom one deals with in everyday life--the supervisor at a grocery store, the owner of a restaurant--do not have the kind of ethical or educational upbringing that would lift them out of it. Even a little power corrupts absolutely. Good managers are very difficult to come by, but most of them are so hard-hearted because the system itself demands a certain output. This output, however, under a corrupt manager, is often thrust upon a few individuals, a fraction of the total workforce. This is called favoritism, or bullying.

Let's say you have 100 people working for you, and you need something done over the weekend every weekend. Out of your 100 employees, there are 10 people who are capable of doing this project. The ideal would be to fairly rotate the weekly workload. So far so good. But what would you do? Let's say that there is one person out of that 10 you really hate, and one you simply don't know that well--maybe because you never see them at your religious service--and 2 people you really like. So what do you do? You organize the workload so that the people on the bottom do a disproportionately higher percentage of the work than the people at the top. In fact, you game the system so that the top two people--maybe they're really sexy brunettes who wear low-cut jackets, push-up bras, and high skirts--never do any extra work (you'd also be committing sex discrimination, but you wouldn't care about that, and quite frankly neither would they).

Let's say you REALLY hate one person. He just annoys the crap out of you; he's constantly contradicting every idea you have, and his arguments are generally very compelling, but you can't get rid of him because your supervisors value his input. So to show your dissatisfaction, you make him come in over the weekend every two weeks, and you insult him at every turn.

The work still gets done, but at what cost? You have paid a price you didn't really need to pay: The work was done, but you've alienated many of your employees. You have also made yourself vulnerable if they know that the two sexy ladies who should be in the pool are not, and decide to report the problem to your boss. If these 10 people communicate, and one of them records the frequency and distribution of the work in a given time frame, it would be incontestable evidence that you are corrupt. I think most people are in this category of managers who succumb to these base notions and take unnecessary personal and social risk.

It is this same risk that is committed on a much grander scale. Sony perhaps believed that it could get away with not sharing critical information with its customers; maybe Apple never thought two tech geeks would find their long-term location data on an iPhone and be able to map it; Nobody thought the housing market bubble would burst; and few people understand that gold is historically a volatile commodity. Tobacco companies probably never figured people would be able to trace their products to a smorgasbord of medical complications. Wal*Mart never figured that 1.6 million employees would be suing them for sex discrimination; BP never thought that the consequences of being cheap on critical parts for their Deepwater Horizon rig would manifest themselves in a massive fireball killing 11 workers and dumping millions of barrels of oil into the ocean. And yet we see this all the time.

This is a complicated problem, and it has to do with more than simply ethics. It is easy to charge that these executives were complacent and morally dubious, but the truth might be something less overtly malevolent. It might be that instead of (or, in Wal*Mart's case, aside from) being callous bastards, they might not have correctly calculated the probabilities of failure. The person or team in charge of calculating disaster risk at BP may have--either of his own volition or coercion by management--artificially reduced the calculated risk they were taking by using faulty equipment in order to save money in the short term. But I see now that this is a solipsism in that in the example I entertained the possibility that upper management may have pressured our person in charge of risk management at BP into presenting fabricated data in order to at least present the illusion of security. But it would be equally wrong to pin everything upon an ethical bankruptcy. It may also be a hubris in that an institution may falsely believe that it is above the law, its customers, its clients, or its employees.

Most corporations, when faced with an accusation of wrongdoing, or evidence of negative social impact, immediately deny or cover up said allegations. This is the start of collapse, and embodies Jean-Paul Sartre's Bad Faith: What happened to the Catholic Church in the child molestation crisis is that they categorically denied everything beyond the point at which the evidence against them was irrefutable: A letter signed by Cardinal Ratzinger--now Pope Benedict XVI--urged the institution to protect those priests who have been accused from the law. It became a game: The only people they were even trying to convince were themselves. They blamed everyone else for their problems, but no one believed them.

How do we fix these problems? They seem insurmountable because changing the nature of institutions and how they work as a class from the outside is impossible. If we truly want our institutions to change, we must educate people in such a way that they both understand and internalize the values they would need to succeed: Social good and responsibility, respect for those around them, etc, and give them the freedom within the institutions they join to do what is right. This last condition may be the most difficult to meet because of the attitudes ingrained within CEOs and Boards of Directors may be contrary to factual reality, especially if they operate like the Bush Administration. But an even greater problem exists: How do we guarantee that those who manage to do all of this do not fall into the same traps as their predecessors? This is the most incredible and seeming insurmountable problem in human history generally. The generation that protested Vietnam brought us into Iraq and Afghanistan. It is up to my generation to solve it.

1) http://www.organicconsumers.org/articles/article_23097.cfm

2) http://www.thedailyshow.com/watch/tue-april-26-2011/elizabeth-warren

3) http://gamrfeed.vgchartz.com/story/85812/sony-your-psn-personal-info-was-stolen-nine-days-ago/

4) http://www.techi.com/2011/04/playstation-hacked-credit-card-data/

5) Sawyer, George C. Business and Society Houghton Miffin Company. (C) 1979. New York, NY

6) Moore, Michael, Capitalism: A Love Story Documentary. 2009. Overture Films. United States.

The Point of Jesus From a Philosophical Perspective

I don't write a lot about Jesus. He has never really fascinated me as a philosopher or as a person. But his death--and Socrates' death--says volumes not necessarily about him, but our collective reaction to him.

The deaths of Socrates and Jesus are tragic in such a profound way that few would ever dare consider, because the manner in which they were killed speaks to the very worst in all of us.

I don't consider Jesus to be even a very important philosopher on paper (fitting, because he didn't write anything down; for that matter, neither did Socrates), but I still consider him a nice guy who really should not have been murdered. The reason I don't view Jesus as incredibly important philosophically is because he offered a utopian system of ethics that is truly impossible, and banked everything on divine judgment, despite the fact that there are very good immediate "worldly" reasons to be a good person. Many of these were laid out in Aristotle's Nicomachean Ethics. I don't think waiting a lifetime for the consequences of your actions is an effective motivation for doing anything. People are generally bad at considering anything more than the immediate consequences of any decision, and in my view, therefore, need very good "worldly" justifications for being good, such as having people like you and listening to what you have to say; having true friends as opposed as those you need to pay in order to keep their company, or the fact that helping others triggers a positive emotional response in all parties. Doing good feels good. This says nothing more or less about the integrity of their character than trying to score Brownie Points with God.

But all of this is really beside the point. Remember who Jesus was interacting with, because this will be extremely important later: Jesus was helping the disenfranchised, and eviscerating the wealthy, probably because he saw that the existing system as oppressive. Do not forget that a recurring theme in the Old Testament was also the care for the poor and disenfranchised, and in this way Jesus is still not a complete reversal.

And then there was the Pharisees, who were principally the ones who whipped up the crowd to call for his death because he had gained the support of the lower classes and were thus a danger to their power. Pontius Pilate didn't really want to kill him, but the people, who were manipulated against Jesus by the Pharisees, demanded he be crucified. And so he was.

Socrates was forced to drink Hemlock because of trumped up charges resulting from his cross-examinations of government leaders, often resulting in the exposure of their ignorance. He, too, was a threat to the powers that be.

Jesus was killed because he was a threat to the ruling class; his system of ethics and lifestyle resembled what we would think of as a commune. The problem with Jesus' death, ultimately, is that it was supported by the very people who stood to benefit from and originally supported what he had to say. The ultimate tragedy is that the people themselves wanted him to die.

Let us imagine that Jesus did come back. To be kind, let us even give him the scars he presented to his followers that, according to the story, proved that he was who he said he was when he returned. Let us also allow that he said pretty much the exact same things he said when he was originally alive.

How would people react to him? The reality of this question in its possibility--not of Jesus' factual return, but the reaction he would receive from his audience--should frighten you. In other words, if Jesus ever returned, we as a society would kill him again. It is Dostoevsky's "The Grand Inquisitor"; the irony is that Jesus would probably be murdered for his own sake--in the name of the very institutions that are supposedly attached to his legacy. One could very well argue that these institutions are not really doing what Jesus intended--which would be a fair point--but this line of reasoning would eventually call into question the very nature and authenticity of Christianity itself when matched against the figure it revolves around.

The crux of Christianity, of what follows from the tragedy of his death, the possibility of resurrection and further prophecy, stems from the profound guilt at having killed him. The people who originally believed in him probably saw the profound, cosmic injustice of his death, and devised a story with a "happy ending," in which his spirit endures and his martyrdom guarantees salvation for them. This guilt is further assuaged by a kind of determinism of the whole thing: "It was supposed to happen." But did Jesus himself see it that way? Did he want to become a martyr? Did he think he was intended to construct Heaven and Hell, or participate in a cosmic chess game against Satan? When Jesus says that he was betrayed at the Last Supper, it might not have been any kind of divine knowledge; he might have had someone tell him about the plot to have him arrested. Also, much like Socrates in "The Crito," he might have simply accepted his fate, and dined knowing that he was going to be captured, much like Socrates telling Crito that while the punishment is unjust, because I live here, I must obey them (and form the basis of Social Contract Theory). To shed light on this problem, Jesus remarked, "Forgive them, Father, for they know not what they are doing" [Luke 23:34 NSRV]. This single quote clarifies for us that Jesus did not see himself as a martyr, or, even if he did, he did not want to be one. He did not say, "Hey guys, I'll be right back. Everything will be fine." The supernatural elements surrounding his death were artificially imposed precisely because the people who loved him needed something more to hold on to; they could not live with an injustice as the end result. Even in the failure of the Garden of Eden, God did not abandon his creations, and here, too, the people who believed in Jesus would not allow their relationship with God to end in such tragedy.

But I don't see it that way. I don't think that Jesus' death could ever be whitewashed or compensated for. I may be deemed a pessimist, but I cannot deal with the fact that were we to have another chance--or even multiple chances--we would blow it. But the primary reason why I am so upset is that the people who would kill Jesus are the very same people who say they love him. I also don't condone murdering philosophers, but that's a given.

Donald Trump Should Be President, Or, We've Got Nothing to Lose

I am starting to think Donald Trump really should be President. No, he has absolutely no political wisdom, he has no understanding of government, and as Gail Collins points out in the NYTimes, "[Trump] was in the New York real estate business, a profession in which it is vital to be able to say imaginary things with total certainty"1. This fits perfectly with Jon Kyl's statement--and later, press release--on Planned Parenthood, canonized by the brilliant Stephen Colbert: "This was not intended to be a factual statement"2. Perhaps Trump does have some skill in dealing with the legislature after all.

I do not believe that America can get out of this mess without further catastrophe, which Trump could easily deliver. In fact, Trump's Presidency can also lay to rest the ideal that government should be run like a business: We could really be in a financial disaster, but Trump would tell us that it's raining unicorns and Hershey's chocolate. No one could ever tell him otherwise because it's not his money.

We have a legislature that has imploded to the point where it doesn't debate anything anymore (Jon Kyl, the perpetual backing-out of previously-agreed-upon pieces of legislation by a certain political party), so it would be fitting to have a President who also is incapable of understanding these mechanisms of government which are only valued by dead philosophers, scientists, and snooty English majors.

Trump has already had enormous success riding the Birther wave a full year too late, and there are a whole range of bizarre material open to him: Why not say Obama is a lizard? Or why doesn't he demonstrate his knowledge of Marxist theory? I hear that that nomenclature is still widely popular. He has had a bit of trouble appealing to the religious bloc, though3. I know! He can please the Religious Right by studying the Gospels and elucidate the link between Obama and the anti-Christ, though it did take about 6 months into his presidency to find the connection4.

I firmly believe that Donald Trump is the best man to demonstrate to us and the world our true nature, encompassing absolutely everything about us: Our greed, narcissism, and complete disregard for factual reality are fully ensconced within the Donald Trump persona. There is no one more capable of representing us as a people authentically than Mr Trump.

"What about the middle-class?" The middle-class!? Are you kidding me? What are you, a Communist? The middle class in America has lost its identity to the Tea Party, and can be depended upon due to insufficient general and civic education to vote for my candidate. I swear to you that Donald Trump will have the very best PR people on hand to make sure that recent history is entirely whitewashed in favor of big business, and I have full confidence that the American people will believe every word of it by the time November 3rd 2012 rolls around.

Vote Donald Trump 2012

1) http://www.nytimes.com/2011/04/09/opinion/09collins.html?_r=1&scp=6&sq=gail%20collins&st=Search

2) http://joemygod.blogspot.com/2011/04/not-intended-to-be-factual-statement.html?utm_source=twitterfeed&utm_medium=twitter

3) http://www.salon.com/news/politics/war_room/2011/04/12/donald_trump_serious

4) http://www.wnd.com/?pageId=105527

2012 Prospects

Those lucky Brits! Their executive campaign lasts a mere three weeks. Here in America, however, the opposition starts making noise right after an election. But it isn't until about a year before the next election when we turn the stove on.

It's that time again. But the strangest thing is going on. It would be fair to say that there is no one I would want to be President. Where did Obama go? Seriously! It is as if Obama has walked off the face of the Earth. He had fought so hard with the legislature to pass healthcare reform, and that's very nearly the last time we really heard from him.

Throughout his presidency, it is the legislature that took center stage, and I think this is really what has hurt him. The Democrats are fighting hard--certainly--but they are weary of taking swords to the nebulous mass that is the GOP, and Obama is nowhere to lead them. Perhaps, like us, he is weary of the idiocy and insincerity of the Tea Party.

It would have been enough, for example, for him to say something about Wisconsin, that he stands with the public workers against Scott Walker, even if it is not in his power to do anything for them.

The crux of the problem is two-fold: Throughout the course of the remainder of his presidency and his reelection campaign, Obama will have to prove that 1) he has some fight left in him, and 2) that he is capable of championing the progressive cause. Both of these are currently absent. We know now that Obama's ideals of unity and pragmatism are worth nothing in the eyes of the opposition, and we absolutely cannot negotiate with them. Obama must therefore use the declining popularity of the Tea Party to his--and the Democrats'--advantage and pull the rug right out from beneath their feet.

It is entirely possible to do this. Anthony Wiener (D-NY) has built his career around making biting remarks about Republican policy, and I daresay that there is no one better at framing debates and making arguments in the legislature than he. I wouldn't daresay that being a great orator is the only requirement for service in government, but on an election campaign as heated and ruthless as this one will be, Wiener's skills may be invaluable. He is the only legislator who can play verbal hardball against the nebulous and poisonous mass.

"If Obama has disappeared and is no longer championing your cause, why would you want him to win?" Unfortunately, this election has degraded already into most other elections as a choice between two evils. Ideally, we would want a choice between one great politician--what Obama was when he campaigned in 2008 and what he started out as being--and one not-so-great politician, or, better, between two great politicians. But we have never had the latter, and the former occurs rarely. But if we can learn anything as a people, we can discern from Wisconsin, from Ohio, and from Michigan, that Obama--even an absent Obama--is far better than the alternative.

Granted, we would not be voting for something; rather, we would be voting against something else. There is a crucial difference. We would more be saying no to the Tea Party than yes to Obama. Unfortunately, it is my understanding that people do not like to vote against something, but in this case it is existentially necessary that we deny the Tea Party the seat of power. In order to succeed, we must participate.

Who, exactly, are we up against? First we have Donald Trump, who, aside from being bankrupt a few times himself, is also a "Birther," a conspiracy theorist who does not believe that Obama was born in the United States (and, by extension, that Hawaii is not a state). The American Family Association has already discounted him because he doesn't hate gays enough1.

Next we have Newt Gingrich, who may or may not even decide to run. He has been divorced three times, and possesses almost no respect outside of the GOP establishment. His glory days are long gone.

Sarah Palin should be next, but she hasn't decided on anything yet. Hell, she hasn't even decided who her favorite Founding Father is. I've heard no word of the corruption allegation against her in Alaska. It is worth noting that people are now realizing that celebrity does not compensate for lack of political wisdom, probably because of all her "WTF Moments"2.

And then there's Michele Bachmann. Nary a more sinister and deranged contender could be found. It is one thing to not look at the camera when attempting to address a TV audience, but it is certainly quite another to incite anti-government violence as a representative of said government.

Representative Paul Ryan was supposed to be the up-and-coming Republican darling, but just yesterday we found out that his budget proposal would expand the deficit, as well as doubling the cost of Medicare for the elderly3.

Ex-UN ambassador John Bolton, who served under George W Bush, has an itchy trigger finger on the subject of Iran. He has been obsessing over attacking Iran for two years. In his latest interview, he claimed that "if Mubarak fails, Israel should bomb Iran"4.

Mike Huckabee will probably not run because he has a sweet deal on Fox News, but he is probably the only authentic Christian conservative on the GOP ballot. His latest Dominionist gaffe? To suggest that Americans should be forced at gunpoint to listen to revisionist historian David Barton5. Mind you, Huckabee has a long history of bigoted remarks about nearly everyone, and has actually made a very revealing quip in his interview with Jon Stewart in 2008(6). Something about not being allowed to burn people at the stake...? Hmm I wonder what would happen to me if he were elected? It drives the point home that what happens in Washington affects real people, so we had better participate, lest we are set on fire.

1) http://www.afa.net/Blogs/BlogPost.aspx?id=2147505020

2) http://www.politico.com/news/stories/0111/48276.html

3) http://tpmdc.talkingpointsmemo.com/2011/04/cbo-gop-budget-would-increase-debt-then-stick-it-to-medicare-patients.php

4) http://www.rawstory.com/rs/2011/02/01/bolton-israel-bomb-iran-mubarak-falls/

5) http://www.huffingtonpost.com/chris-rodda/huckabee-david-barton-gunpoint_b_842506.html

6) http://slog.thestranger.com/slog/archives/2008/12/10/god_bless_jon_stewart