The third part in a series. I recommend you read all three. This is a different way to handle the issue, one that is sustainable and provides an actual human touch to capitalism.
The World Fair Trade Organization defines “Fair Trade” as –
“a trading partnership, based on dialogue, transparency and respect, that seeks greater equity in international trade. It contributes to sustainable development by offering better trading conditions to, and securing the rights of marginalized producers and workers…”
James Pilant
[This is the final post in a 3 part series by guest contributor Natalie Armstrong, from Bachhara. Click here for Part 1 and Part 2] Fair trade organizations are not perfect, nor do they claim to be. There is still much work to be done and there always will be. It requires continual development and ongoing reassessment. The key however is that fair trade organizations show commitment to the preservation of these principles. Without a doubt, there … Read More
Is this the future? – Businesses not just devoted (or not devoted) to profit but to social change or just fairness? My good friend at Get Aktiv has a long, well written article going into considerable depth about a particular business. I would like you to read it. I am trying to work out in my mind how businesses are likely to change over the next twenty years. I think he is discussing a movement with great potential for changing the way we think about business and, in particular, corporations.
James Pilant
With ever-increasing awareness of global poverty and the appalling conditions many billions of people struggle through their entire lives, ethical and Fairtrade retailers seem to be burgeoning all over the place. We're usually happy to select a Fairtrade product over a non-Fairtrade alternative because we know it's going to guarantee fair r … Read More
Wells Fargo is one of the four largest banks in the United States. The bank received 25 billion dollars in TARP money (the bailout). But the bank charged 203 million dollars in overdraft fees since 2001 in violation of the law. They made their money by paying out checks and card fees largest to smallest instead of in the order they were received. This enabled the bank to stack overdraft fees.
He ordered the bank to pay back the 203 million dollars they made using the practice of largest to the smallest.
Here’s a news story reporting the decision –
I love irony, the irrational collision of one situation with another – and for that irony lets look at
Wells Fargo’s Vision Statement –
“We want to satisfy all of our customers’ financial needs, help them succeed financially, be the premier provider of financial services in every one of our markets, and be known as one of America’s great companies.”
Apparently manipulating the order of payout to artificially increase the number of overdraft fees “helps consumers succeed financially.”
Here’s a very different take on overdraft fees –
Are all overdraft fees always unfair? Of course not. If there was no penalty the banks would be faced with an avalanche of bouncing checks. There are many defenders of banks who say they are justified. Wrong! That’s not the question. If you only ask it one way, that is, should banks be able to charge overdraft fees, the argument always goes to the bank. But the question here is “are the fees reasonable.”
What does it cost a bank to process an overdraft?
Why doesn’t the bank charge based on the size of the overdraft rather than charging the same for $1.25 overdraft as for a much larger amount?
How much money does the bank make on overdrafts?
When you start looking at the facts, it becomes a messy problem. There are a lot things to figure in to the situation. Nevertheless, Wells Fargo’s practice is simply unfair.
There are other banks that use the practice. Will they be forced by the courts to payback the fees as well? Wells Fargo is appealing the decision. Stay tuned. I’ll tell you how it comes out.
In an item from Yahoo News, Buffet is bullish on the economy. Normally I would place a lot of importance on what he has to say. However, as you see in the article, he company just made a 27 billion dollar deal that stands to lose considerable sums in a pessimistic environment. He may be more stoking the stock price than giving a reasoned opinion.
Warren Buffett ruled out a second recession in the U.S. and said businesses owned by his Berkshire Hathaway Inc. are growing.
“I am a huge bull on this country,” Buffett, Berkshire’s chief executive officer, said today in remarks to the Montana Economic Development Summit. “We will not have a double-dip recession at all. I see our businesses coming back almost across the board.”
Berkshire bought railroad Burlington Northern Santa Fe Corp. for $27 billion in February in a deal that Buffett, 80, called a bet on the U.S. economy. The billionaire’s outlook contrasts with the views of economists such as New York University Professor Nouriel Roubini and Harvard University Professor Martin Feldstein, who have said the odds of another recession may be one in three or higher.
“I’ve seen sentiment turn sour in the last three months or so, generally in the media,” Buffett said. “I don’t see that in our businesses. I see we’re employing more people than a month ago, two months ago.”
Roubini has been very successful at predicting economic problems. His web site is here. It would be a good decision to make it a favorite of yours. He knows his business and has no railroad purchase to influence his judgment one way or another.
I’ll let the video speak for itself. But in my mind, the answer is a solid yes. It’s the cost of the pervasive lack of business ethics, a willingness to commit crimes in the pursuit of enormous amounts of money.
The Brazilian authorities say they have rescued 95 farm workers who were being kept in slave-like conditions in two south-eastern states, the official Agencia Brasil reports.
Forty-four workers at a sugar-cane plantation in Rio de Janeiro state were not registered and had no clean drinking water or safety equipment.
But that’s more the tip of the iceberg than a major step – From the BBC in 2004 –
At least 25,000 people are working as slave labourers in Brazil, according to a new report obtained by the BBC.
The study, carried out on behalf of the International Labour Organization, says workers are living in conditions unfit for animals.
The bulk of them are working in the Amazon region, clearing forest so the land can be used for cattle and crops.
The as yet unpublished report says members of the political elite are among the landowners responsible.
As we see over and over again, political elites use their influence to flout the law. Read this –
The report does praise efforts by Brazil’s left-wing government to tackle the issue, but it says a culture of impunity persists where politicians and judges are among the landowners responsible for perpetuating slave labour.
This kind of injustice is dangerous for all free men. The profits that can be made off slave labor are enormous and the vicious mind set it produces in the privileged class bleeds over into the press, the schools and the government.
Well, these statistics are encouraging but whether CSR is a form of green washing, PR or a simple waste of time and resources on the one hand or a promising corporate move toward some limited form of responsibility, I’ll leave up to you.
This is definitely not Business Ethics. However, it is a matter of honor. Mr. Giunta displays a decision making that would seem idiotic to the beltway bloviators. He displays a patriotism that seldom figures into the business practices of “American” companies and the pseudo-citizens of our corporate board rooms.
I have been called shrill. What do you call it when one man is willing to lay down his life for his fellow man, while News Corp. (Fox News) waxes rich on software purchased from our nation’s enemy, North Korea? Are both patriots? Are both decisions reflective of honor? Are both decisions the result of a commitment to freedom and the security of the United States?
I’ll tell you the answer. Only one fits the criteria of patriot.
Let me speak with great sincerity to the guy spreading this idea around – “Are you out of your mind?” Some goober throws this idea out there and free market loons pick up on it. Is there anything, no matter how important that the current business philosophy in this country doesn’t consider a possible cost cutting item? Large airliners are designed to be flown by two people. Further, I am a big fan of “Seconds From Disaster” and a half dozen other programs which discuss why bad things happen. Several of the episodes involve overworked crews desperately trying to cope with too much information. I wonder how many times that second guy in the cockpit managed to save the plane because the two of them could cope with the flow of information.
Copilots perform just as many takeoffs as captains, and just as many landings. They are at the controls in good weather and bad. The captain has ultimate authority (and a fatter paycheck), but duties are shared more or less evenly. Due to quirks in seniority bidding, it’s not uncommon for a copilot to be more experienced than the captain sitting next to him. And if not for the number of epaulet stripes and seating protocols (captain on the left wearing four; first officer on the right wearing three), a lay observer in a cockpit jump seat would be hard pressed to figure out which of the pilots was in fact the boss.
Cost cutting is a tool, and it’s okay to cut costs if it’s a reasonable decision. But let’s work toward that standard of reason. It’s important.
The third part in a series. I recommend you read all three. This is a different way to handle the issue, one that is sustainable and provides an actual human touch to capitalism. 
Pilant's Business Ethics Blog 
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