Protestant Business Ethics

On August 24, 2010August 24, 2010 By southwerkIn business ethics, Capitalism, Economic measurement, ethics

Like the Catholic Church, the Protestant denominations were torn by controversies over the economic and social changes brought on by industrialization during the latter part of the 19th century. There were two approaches to this. One was the Social Gospel. The other was a focus on religious matters and neutrality toward economic issues.

Mainline Protestant churches like the Methodists, Lutherans, and to a lesser extent the Episcopalians chose the Social Gospel. The Southern Baptists chose neutrality.

The Social Gospel is based on the belief that for Christ to arrive on earth, humans must prepare the planet by moving the world toward righteousness.

The movement begins slowly in the 1870’s and builds up influence until by the 1910’s, it is a major force on the American political scene.

Today, the mainline Protestant Churches meet regularly and reaffirm their belief in the importance of economic justice.

The Principles of the United Methodist Church

Methodists have a long history of social activism being one of the first churches to advocate women’s rights, oppose the slave trade and advocate for humane conditions in American jails prisons.

The Church adopted its first social creed in 1908. I quote in full

We deem it the duty of all Christian people to concern themselves directly with certain practical industrial problems. To us it seems that the churches must stand ¡ª

For equal rights and complete justice for all men in all stations of life.

For the right of all men to the opportunity for self-maintenance, a right ever to be wisely and strongly safeguarded against encroachments of every kind.

For the right of workers to some protection against the hardships often resulting from the swift crises of industrial change.

For the principle of conciliation and arbitration in industrial dissensions.

For the protection of the worker from dangerous machinery, occupational disease, injuries and mortality.

For the abolition of child labor.

For such regulation of the conditions of toil for women as shall safeguard the physical and moral health of the community.

For the suppression of the “sweating system.”

For the gradual and reasonable reduction of the hours of labor to the lowest practicable point, and for that degree of leisure for all which is a condition of the highest human life.

For a release from employment one day in seven.

For a living wage as a minimum in every industry, and for the highest wage that each industry can afford.

For the most equitable division of the products of industry that can ultimately be devised.

For suitable provision for the old age of the workers and for those incapacitated by injury.

For the abatement of poverty.

To the toilers of America and to those who by organized effort are seeking to lift the crushing burdens of the poor, and to reduce the hardships and uphold the dignity of labor, this Council sends the greeting of human brotherhood and the pledge of sympathy and of help in a cause which belongs to all who follow Christ.
The current Methodist approach to Business Ethics is encapsulated in their “Social Principles of the United Methodist Church 2009 – 2012.” These principles are revised every four years. This document is divided into seven sections. Although Section IV entitled “The Economic Community” deals directly with business ethics, many other sections are directly relevant.

Section IV is in 10 sections:
1. Property
2. Collective Bargaining
3. Work and Leisure
4. Consumption
5. Poverty
6. Foreign Workers
7. Gambling
8. Family Farms
9. Corporate Responsibility
10. Trade and Investment

The Property section advocates ownership of property although with limitations for the public good. In essence, all ownership of property is a responsibility to God.

The Collective Bargaining section supports the right of workers to organize unions and for bargaining between management and unions to take place in an atmosphere of fair dealing devoid of violence or worker replacement. It also calls for innovative changes such as representatives of the public interest.

The Work and Leisure Section calls for a “living wage.” There are a number of definitions of the phrase, living wage. A simple one would be “a salary large enough so that a worker could afford the basic amenities of life: food, housing, etc, while also providing enough resources for meaningful leisure time. This is of course a gross simplification of a difficult concept. There is also a call for government intervention for full employment. However, the most important words from this section are the following:

“We believe that persons come before profit. We deplore the selfish spirit that often pervades our economic life.”

This quote is indicative of a mind set that disputes the idea that money is the measure of all things, a rejection of the moral minimum and a call to act without always being focused on self interest.

The section on consumption advocates the manufacture of useful goods without damaging the environment or using slave labor in its production.

The section on poverty calls for a fairer distribution of the world’s resources. To quote:

“As a church, we are called to support the poor and challenge the rich.”

The section on Foreign Workers calls for limitations on the exploitation of these workers and advocates that they receive the same benefits and privileges of citizen workers.

The seventh section concerns Gambling. The Methodist Church is against it.

The eighth section is about Family Farms. This actually covers a much wider area. The Church opposes the concentration of farming resources into the hands of transnational corporations. They believe that the family farm has an enduring value and deserves state action in its support.

The ninth section concerns itself with Corporate Responsibility. This is the first paragraph.

Corporations are responsible not only to their stockholders, but also to other stakeholders: their workers, suppliers, vendors, customers, the communities in which they do business, and for the earth, which supports them. We support the public’s right to know what impact corporations have in these various arenas, so that people can make informed choices about which corporations to support.

The last section deals with International Trade. It affirms a belief in the importance of such trade but calls for safeguards for human dignity and the environment.

James Pilant

Newspaper Columnists – Business Ethics Roundup 8/24/2010

On August 24, 2010 By southwerkIn business ethics, Capitalism, Economic measurement, ethics, Government Failure, Privatization3 Comments

David Moon at Knoxvillebiz decries reliance on the federal government. He is particularly incensed by the money provided to Fannie Mae and Freddie Mac, (Mortgage giants). I disagree with his position but I agree this whole bailout business has been a boon to the banks and little has been asked in return. I worry about the mortgage holders, not the villains who preyed on them like deranged vultures.

Edward Lotterman at TwinCities.com explains the difference between cyclical and structural problems in the economy. He explains that the problems besetting us are structural and take a long time to sort out. Lotterman is excellent teacher of economics. If you follow his columns you will pick up the jargon and understand the key terms.

Tell me I’m awesome every day — I’ll pay you. is the intriguing name of Jay Hancock’s current column. It seems there is a company that will call you up once a day for a month for $10 and tell you how awesome you are. I will now quote the quote Mr. Hancock uses from the company’s advertisement (Do you suppose I will ever get the opportunity to quote the quote from another quote?) –

With AwesomenessReminders, a real person will call you every day to tell you how much you rock. If you’re not around, we will leave you a voicemail. Our founder, Zack Burt, has studied psychology in-depth at the university level and found that social reinforcement is critical to maintaining our “frames”, also known as our “point of view”. Getting positive social feedback, via a daily reminder call, is instrumental to progress. Experts agree. This study from Wake Forest University also shows that social feedback has clear effects on self-esteem, even if individuals claim that they are unaffected by social feedback.

Keith Chrostowski from the Kansas City Star quotes Milton Friedman, “The social responsibility of business is to increase profits.” (This, of course, is a magnificent philosophy if the destruction of your nation is your intent.) Chrostowski is urging the formation of “B” corporations. This kind of corporation is designed to make a profit and do good, socially useful good. This turns Mr. Friedman’s insane prediliction for Utopian abstractions on its head. There is a web site where the “B” corporation idea is being pushed. You might give it a look.

Jon Talton in his column, Sound Economy, writes about the demise of “Shareholder Nation.” This was the idea that the great majority of Americans would realize the sound investment qualities of the stock market and invest their money. These Americans were taken to the cleaners in the last two years and are fleeing the stock market and its pseudo security. The idea of shareholder nation has fallen victim to the cold, naked greed and incompetence of our banking class.

Loren Steffy, writing for the Houston Chronicle, explains the game that British Petroleum is playing with those injured by its gross incompetence. It seems that if you accept payment now before you have any real concept of the continuing damage you sign away your right to sue. If you refrain from accepting the settlement offer, you face years of litigation. It is difficult to find any column by Steffy to be anything but a good read, very consistent high quality.

It is difficult decision for me to make, but I have decided to talk about the government response to the spill and here is my opinion.

The federal government’s response to the catastrophe in the gulf was ill conceived, strongly favorable to BP, a failure of leadership and grossly incompetent. The government failed in its most basic responsibility to protect its citizens and threw its lot in with the perpetrators of a vast economic disaster. It is difficult to conceive of any possible decision making worse than what the government has done. It calls into question the basic competence of the current administration.

An Introduction To Business Ethics

On August 23, 2010 By southwerkIn business ethics, Capitalism, Economic measurement, ethics, Government Failure, Teaching

This is my thoroughly acerbic intro to my business ethics class.

Business Ethics is the study of what is right or wrong in the world of business. We are going to explore your views of ethics. While you will learn about many ethical systems, the emphasis of the class is upon your ethical development.
It is possible that you live in a moral vacuum. You could have no beliefs whatever as to what should or should not be done. However, this possibility is so rare as to be almost impossible.

More likely is that you have been influenced by society and have accepted the viewpoints of those around you. You float in a sea of belief systems absorbing what is “normal” and usually what is comfortable.

Some, a good number, have been educated into a moral system. The most common system would be that of a religion although other systems of ethics which can be found in organizations as diverse as political parties, charities, and organizations such as Ala-non. These other systems vary dramatically in the depth and importance of ethics in them.
The few remaining individuals will have actively considered what is right or wrong. Some have reflected on these issues a great deal; others less.

The intent of this course is that you actively consider your ethics as they relate to issues in business.
You move from moral vacuum, society’s choices, religious systems, organizational beliefs and your own reflections to a highly active consideration of ethical choices.

There is no rejection here of any system of ethics. It is quite likely that individuals will find in our attempt at developing a moral framework a ratification of their previous beliefs. It is likely that the strongest choice for many will be a religious system and those that have worked to develop their own judgment will usually find their search to have been significant.

Hopefully, all students in the class will develop their system of ethics in some sense. However, if a student begins the class with a system of ethics or an absence of such a system and finishes with no change, which will have no effect on the grade received.

What we will study

We will begin by exploring religious codes of ethics. Many religions, in particular Protestant and Catholic Christianity, Judaism and Islam have created sets of rules that apply directly to morality in the business context.

From there we will journey through the often confusing field of philosophy. We will discuss the impact of the major schools of thought on business ethics.

We will look at legal obligations of duty, fair dealing and care.

After this comes current thought, in particular American philosophies of business ethics.

We then investigate the issues of crime and ethical issues concerning business. A focus on particular moral issues concerning individual business fields like accounting.

Ethics programs and their implementation are next followed by human rights concerns and the last chapter concerns social responsibility.

Business ethics is a relevant and vital subject, but this field of ethics had been full of difficulty.

Business involves large sums of money, interactions between humans at different levels of power, interactions between one business and others, and interactions between business and government.

Some businesses have stolen incredible amounts of money, caused or contributed to the death of millions of people, damaged the fabric of the world economy, colluded with other businesses to set prices or drive other businesses out of existence, bribed government officials, evaded taxes and by giving an impression of constant criminality and dishonesty damaged the social fabric of many nations and poisoned their relationships with other countries.
Business ethics has been taught in the United States for about forty years. It has been a disaster. Corporate scandals so huge as to threaten the world’s financial systems have occurred several times. The more mundane corporate crimes ranging from tax evasion to the participation in causing injury and death are so commonplace they require little discussion.

Most of the individuals in these crimes were educated in business schools with business degrees probably the most common, the MBA. They had business ethics as a course. The fruit of that teaching is evident. There is no fruit. There is no positive result.

It can be claimed that business ethics has had some immeasurable effect that cannot be calculated. If that is a justification for having this course why don’t we teach a wide variety of other classes that might be effective. Is that how a business school is to be run: in the hope of a course being useful? Perhaps we should seek business success with Ouija boards, séances, and voodoo curses?

If we admit that current business ethical teaching is a failure. What can be done?

First, let’s have a look at our current textbooks. They contain many fascinating elements. First there are thought problems at regular intervals. A student is told in this thought problem that he is in position of having dire financial problems and at the same time he is confronted with an ethical problem involving a superior. If he does the morally correct thing, it could result in dismissal and the end of a career. If he does the wrong thing, he will keep his job and the risks are quite low that he will be caught. The student will of course give the proper response to the teacher. But he has already digested the principal lesson of the example. Don’t make waves. Don’t risk your career. When you get out into the real world you are going to have real financial pressure and if you lose your job, there will be consequences for the rest of your life.

How about that section on ethical systems, a vital part of the text? After all most of us attempt to work out our problems through with ethics code we already have and this is usually one common in our society. In most textbooks, there will be several pages perhaps even a large part of a chapter explaining the base elements of philosophy. This is so the eager business student has a good grasp on normative as opposed to descriptive ethics. You see that normative ethics is a system in which you try to figure out what is right or wrong. Descriptive ethics involves studying the current systems of belief or lack thereof. You see if we taught what was right or wrong we might offer students moral choices. But we give it a quick pass and offer students the choice of doing whatever is being done now, a convenient way of avoiding any moral choices at all. You see telling students what is right or wrong means forcing our ideas on them rather than allowing them the total freedom to act without any direction at all.

Then there comes the heart of the matter, a discussion of ethical systems that can range over as much as two to three pages. In one textbook which will remain nameless, Christianity is give two entire paragraphs, although there are reliable reports that a considerable number of Americans claim to live by its tenets. We then discuss utilitarianism and Kantian ethics. Occasionally to amuse myself at the beginning of the semester, I ask the class how many of them live by utilitarian ethics. After a long period of silence, I try out Kant and the categorical imperative. Would you believe that our students don’t seem to make any of their moral decisions based on this thought? They don’t even seem to know what these things are! But if you ask about that Christianity thing, the one with two paragraphs, many of them react. Then you will find several students who are trying to figure out what is right or wrong in their own minds developing their own philosophy. And last you will always find two or three students who believe that money is the only measure of morality in this world, a descriptive ethic.

Our intent here is to explore the world of business in view of the many ethical systems that deal directly with business moral issues and there are more than a few. We also intend to look at your own moral development over the course of your life span.

Most importantly we will learn to consider morality and ethics as an active endeavor. You don’t put judgment in the back of your head as to what is right or wrong, you think about it actively. You have to think about what is right before the issue comes up or many times you will simply not realize the moral implications of your actions. You have a world to win, fight for it.

James Alan Pilant

What Do I Stand For?

On August 21, 2010 By southwerkIn business ethics, Capitalism, Economic measurement, ethics, Government Failure1 Comment

First and foremost, I believe that a human being can be a businessman and still maintain that precious humanity. That would be my first principle.

I hope it is obvious that flowing from this basic belief is the second, that is, there are many, many reasons to do things and money is not the only one or the most important one.

Third, I am a firm advocate of leadership. Change does not happen naturally or inevitably, and many, many times in history, we have gone backwards. A successful effort toward human values is often destroyed or turned back by the forces of greed and evil. When someone plays that song from Les Misérable, “Do you hear the people sing?,” I always disgusted. No, they’re not. They aren’t reaching for anything. It’s like one of those empty disney films where one more time they tell us to be all we can be but not really. The people like everybody throughout history get tied up and focused on the mundane, the useless, the copying and pretending that passes for life. If people change, for there to be social change, someone has to lead; someone has to point out that change is possible.

We do not live in an era of leadership.

Fourth, I believe in capitalism. I like the idea of people developing and selling goods. I like the idea of competition. But history is clear, it is a lot easier, extremely easier to make money by theft, by lies, by monopoly, by adulterating goods and by bribing or gaining favors from the government. This is so obvious to me, so clear a lesson of history repeated over and over again ad nauseum, that when someone says all we have to do is unleash the power of the market place by getting rid of law and regulation I still find myself shocked.

I have lived during the age of Milton Friedman. I believe that the free market and capitalism are tools to be used in building a healthy society not ends in themselves and certainly not a principle to held with religious fervor. I do not believe in the utopia of communism. I do not believe in a utopia based on race, or education, or religion. And I absolutely reject the idea that all decisions will be made in the best way possible economically if we only let it function without interference. The idea that you can build an ideal society on the basis of greed because it will channel decision making into the best choices to make the most capital or money or value which will produce the best outcomes is no more practical than pure libertarianism where if we have no laws everyone will behave.

I am told that what I believe is called limited capitalism. That’s probably about right. I want to buy eggs at a reasonable or good price but I don’t want to risk death for the low price. I am willing to suffer an additional cost for the government to regulate eggs. (I know I went a little long on number four but it’s important to explain that particular issue.)

Fifth, I believe in personal freedom and privacy. I think those two items are linked. I am very opposed to the surveillance society, and the lack of secrecy and security for our internet communications. I believe an e-mail should be just as legally protected as a letter sent in the mail.

Sixth, I am a patriot. I believe America is a special place because of its people and its history. Because of that, I believe this vibrant, energetic and amazing people deserve government policies to protect jobs and insure economic security. I reject, fundamentally and utterly, the charge that Americans are lazy, over paid and unwilling to accept responsibility. There is constant refrain in the media about lazy, overweight, non-saving, etc. etc, Americans. Any examination of these issues will lead to the discovery that they are far more complex than any simple moral failing.

Those are the ideas I want to put in my columns. If you think I do please tell me and if you think I don’t I need to know that even more.

James Pilant

Chinese Slaves, Robot Shareholders And Bankers Who Gamble With Taxpayer Money

On August 21, 2010 By southwerkIn business ethics, Capitalism, Economic measurement, ethics, Government Failure

A quote from Dylan Ratigan –

“For me, there was a radical break in September 2008. You couldn’t look at the system,–both its collapse and why it was collapsing– as anything that lived up to what I thought it should. It’s all predators. The economy is built around Chinese slaves, robot shareholders and bankers who gamble with taxpayer money. That doesn’t work.”

This quote is from an article on Alternet.

And this is the concluding quote from the article concerning his opinion on the continuing New Depression.

“There are no jobs, my man! Where are the jobs? People won’t stand for this forever.”

Internet Nirvana! Wow, Let’s All Go There!

On August 20, 2010 By southwerkIn business ethics, Capitalism, Economic measurement, Government Failure, Privatization1 Comment

Former Federal Communications Commission Chairman Michael Powell let loose his thoughts on net neutrality.

Mr. Powell’s statements quoted from the article –

“The Silicon Valley netroot community, a very powerful community, a very important constituency to this administration, is strongly, almost religiously committed to this issue in a very coordinated way and that provides a lot of power and impetus to keep this issue moving and to push the more extreme versions of net neutrality,” Powell said. He later joked the Internet was “nirvana.”

Mr. Powell is a member of the Chicago School.

When he was appointed to the FCC in the 1990’s, he is notorious for his response to a question about the “digital divide.”

“I think there is a Mercedes divide. I would like to have one, but I can’t afford one.”

In other words, internet access is a luxury that you pay for, not a right you need to function effectively as a citizen, a student or a worker.

He was for internet neutrality when it served his purposes. But now he has discovered the nearly infinite amount of money, can be made from scrapping it, he wants it gone.

Could he have some interest in the demist of the net neutrality? Well, he is on the board of Cisco. The company could make enormous sums from the end of net neutrality.

It does seem that Cisco is, well, a little ruthless in its competitive techniques.

Now, about that “nirvana” thing. The Chicago School is passionate about turning every conceivable resource into a private purchasable good. That includes water!

You see, in his mind, if you can divide it up and make money with it, that’s the logical and intelligent thing to do. If you want to maintain equal access you’re equivalent to a religious loon seeking “nirvana.”

Equal access is democratic and people centered. There is no such thing in his world. It’s like Santa Claus or the Easter Bunny as far as he is concerned.

And if you don’t see it his way, you’re just too stupid to grasp reality.

Now, the reality in his world is this, everything from politics to health care to love follows certain economic rules. These rules are dictated by nature. There is no dispute possible with their logic or power. The most effective way for a society to function is my maximizing choice, and if that choice is determined best by concentrations of economic power, than so be it.

See, the strange world we inhabit is not that world and therefore we are the mental peons he has so sadly to deal with day by day.

I feel sorry for him.

James Pilant

Hardship Withdrawals Reach Ten Year High

On August 20, 2010 By southwerkIn business ethics, Capitalism, Economic measurement, ethics, Government Failure

These kinds of withdrawals indicate sever financial distress. They are an absolute last resort in most households.

Quoting from the article – To be eligible for a 401(k) hardship withdrawal, individuals must demonstrate an immediate and heavy financial need, according to IRS regulations. Certain medical expenses; costs relating to the purchase of a primary home; tuition and education expenses; payments to prevent eviction or foreclosure on a primary home; burial or funeral expenses; and repair of damage to a primary home meet the IRS definition and are permitted by most 401(k) plans.

Forty five percent of those seeking a hardship withdrawal this year got one last year.

It’s another sign that his economy is not getting better. It’s getting worse.

During the last great depression, the government created jobs and increased spending, developing enormous projects like the Tennessee Valley Authority and the Hoover Dam.

America will not recover until there are jobs for every American who wants one.

James Pilant

Can Brad Pitt Kill Your Computer?

On August 20, 2010 By southwerkIn business ethics, Capitalism, ethics1 Comment

He might. Well, not him personally but looking for him on the web can. Mr. Pitt is what is known as a lure. You search for him on the web and you have a better chance to hit a malware site. For some celebrities the odds of hitting a malware site are as high as one in ten.

Celebrities are very popular lures but it can be any popular product or hot topic of the day. Keep you virus and malware protection software up to date and stay with reputable web sites if at all possible.

For more information and a list of the top 8 most dangerous celebrities to search for you can visit McAfee’s web site.

You Can WIN ONE Million Dollars!!

On August 19, 2010 By southwerkIn business ethics, Capitalism, Government Failure2 Comments

Generally, you could never get me to click on an entry with that title but you are reading one of my entries and I hope you know that I will do better than the sidebar glowy bouncy advertisements designed to get you to part with something if only your name and e-mail.

I don’t want you to give me anything. But if you could win this million dollars, you would make me very happy, and it would be my great pleasure to meet you, once you’ve accomplished this.

Dick Smith is an Australian. He’s also what you might call, eh, um …, eccentric. Nevertheless the offer is genuine. (He’s also a billionaire.) He will pay you one million dollars to solve the problem of global population growth.

These are the qualifications –

How you can win the award

* be under the age of 30.

* believe in maintaining stable population numbers and a sustainable consumption of energy and resources that do not reduce economic growth.

* come up with and communicate successfully about alternatives to consumption-driven economic growth.

* get noticed in the media for campaigning on such issues.

What do you think? You want the money? Can you face that kind of intellectual challenge?

James Pilant