I received an e-mail in the form of a letter from Senator Blanche Lincoln. Now this was a surprise because generally I don’t get replies from her office. The letter explains her stance on net neutrality, an issue of some importance to me.
Now, I’d love to tell you what it is, but I am prohibited. You see this letter is a privileged communication which cannot be reproduced. I would give you the legal language her office uses but that’s part of the letter and I can’t reproduce it.
So, I have a letter presumably informing me of her public position (or, WOW, maybe I’m the only one she sent it to, what do you think of the odds on that?) but it is just for the so many hundreds or thousands of us who received it to consider it in private as a treasured and protected document.
Maybe I should just put a statement like that on my blog. Then if I wrote something you disagreed with you couldn’t show anybody. If you did tell somebody, I’d claim I didn’t say that and you couldn’t show them any different. I can see the advantages already. Now, you might say anybody could see it on the net, but she sent me a fowardable e-mail message. Isn’t she as vulnerable as I am?
Now, usually I have a picture on each blog entry. The clearly appropriate picture would be one of Blanche Lincoln but it might be a privileged communication and I in good conscience can’t take that risk.
This is a re-publish of an earlier essay. I think it is on point for our current situation.
There are several factors. The first was the advent of the baby boomers to power and authority replacing the Depression and the World War Two Generations. Probably the best date for this transfer would be 1976 when Jimmy Carter became President. He was the first President to not have served in the Second World War since Truman. The significance of this was huge. The previous generation had solid memories of the failures of financial sector and the long hard times that resulted. The difference between study and experience are dramatic. It’s even worse when it’s collective experience. The new generation had stories, movies and television to remind them of the pain of those years, but it didn’t carry the power of the emotions involved, the collective helplessness of more than fifteen years when everything that generation knew was in peril.
The second factor I point to is the advent of the Chicago School of Economics and the doctrines of Milton Friedman. I point in particular to Friedman’s 1970 article in the New York Times Magazine, The Social Responsibility of Business is to Increase its Profits. This is my favorite quote.
But the doctrine of “social responsibility” taken seriously would extend the scope of the political mechanism to every human activity. It does not differ in philosophy from the most explicitly collectivist doctrine. It differs only by professing to believe that collectivist ends can be attained without collectivist means. That is why, in my book Capitalism and Freedom, I have called it a “fundamentally subversive doctrine” in a free society, and have said that in such a society, “there is one and only one social responsibility of business–to use it resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.”
I want you to understand that it appears to me that included in “the doctrine of social responsibility” is duty, honor, religion and patriotism, to name a few. (I like to tell my ethics class that the no religion agrees with this doctrine that doesn’t practice human sacrifice.) Here we have a rejection of those values that constitute Western Civilization. From Wikipedia:
The concept of western culture is generally linked to the classical definition of the Western world. In this definition, Western culture is the set of literary, scientific, political, artistic and philosophical principles which set it apart from other civilizations. Much of this set of traditions and knowledge is collected in the Western canon.
These things that make us human, these things that convey the values – the principles, that are the result of thousands of years of human experience are swept away in a simple doctrine that justifies any action within “the rules of the game.”
I want to point out one more thing: notice that the principles of “within the rules of the game” and “open and free competition without deception or fraud” are in many ways contradictory. If you can make or influence the rules why should you compete? Now get a load of this: Friedman tells businessmen that they are free of any restraint, every limitation of conduct, but they are supposed to hold to the duty of engaging in open and free competition without deception or fraud: Do whatever is necessary to make a profit but be good boys and compete.
The third element is the gradually increasing wave of deregulation which begins in a small way in 1971 when the Nixon Administration recommends the rail and trucking industries be deregulated. By the time, Jimmy Carter is elected the doctrine has gained enormous strength and much wider application. The basic implication that government regulation damages business success hampered any attempt at new regulation no matter what happened. This attitude is critical to what happens next.
The fourth element can be dated roughly as beginning 1981. Hostile takeovers and corporate raiding become regular parts of the business news. The basic significance of this is that it is a war. A war fought between manufacturing and finance, with manufacturing losing at every turn. The secondary effects were only a little less worse. You could make money at it. Not little money like people made from developing new products and making things, big money. T. Boone Pickens, one of the major corporate raiders of the period is worth three billion dollars and is rated currently as the 117th richest man in the world. Now let us add in a related development, the financing of these takeovers. Drexel Burnham Lambert paid Michael Milken 550 million dollars a year during its heyday. What did Michael Milken do to merit this: he created high yield bonds, junk bonds. The era of “financial innovation” begins here. Continuing to the present day, more and more bizarre mathematical creations will be used for investment, financing and speculation.
Now, let’s combine them. Those Americans familiar with the pain of the results pass on the reins of power to a new generation. The Chicago School of Economics will provide the philosophical basis for discarding societal responsibility. The government reacts with deregulation which makes it exceptionally difficult to re-regulate industries. The financial industry begins destroying manufacturing in its search for profits.
All the elements are now in place for what has happened and continues to happen. The American population without previous experience of the fruits of financial speculation have no common idea of what should be done. The ethic of the business world is converted from a complex set of factors motivated by religion, philosophy, the myriad other factors that tie us to one another as a people to one of profit as the only value. The government accepts this philosophy and applies it, making deregulation and not regulating pretty much the official doctrine of the government. The financial industry begins destroying healthy companies making hundreds of millions of dollars for what might kindly be described as little effort. The government does not intervene to stop this, which is a clear demarcation line in history that the power of that part of American that makes things is eclipsed by the power of the deal makers, the part of American society that moves money.
Out of this history we grew a generation of Americans who knew with certainty (and unfortunately with accuracy) that going into the financial industry, taking risks, and pushing the boundaries of the rules could make one a multi-millionaire in short order. The most capable of the students at the great universities many of them Ivy League schools went into finance. Those individuals were supposed to be a wide variety of things especially the keepers of the flame, the torch that is passed from one generation to another, the moral standards, the courage, the willingness to sacrifice for their country and their fellow man so that all can prosper. It is difficult to maintain a system of morals when the rewards are so extreme. My understanding is that ivy leaguers can start at a Wall Street firm for as much as $350,000 in salary. And after that if you are willing to do “what it takes,” the path to being a mere millionaire is quick and easy. These people were supposed to be crusading attorneys, publishers, politicians, administrators – all those things that make societies function. There is an ancient precept that nations succeed based on the wisdom of the learned, the courage of their soldiers and the efforts of the workers. Our best and brightest don’t go there. They go to make money in a moral vacuum.
We are going to pay for this for a long time. When the basic doctrine, the ethos of a country becomes devoted to the acquisition of wealth with not even a tiny lip service to virtue you get unethical conduct on a broad front across the business world. Everything that has happened since then, has grown out of these events that I described. The Savings and Loan Etc. (I was going to list them but you know as well as I do what they are and I find it too depressing to make such a list just at the moment) are all explainable out of these elements.
Well, I wrote this in two hours. It’s a quick and dirty summary of what I think. A lot of it is just a portion of my thought and I will probably develop the elements over time.
I wouldn’t mind hearing what you think and you can be brutal. When I was in grad school, I thought that if some teacher marked on my papers, I would be terribly offended. A professor named Don Hoover literally marked out more than a third of what I wrote in a quite lengthy article with great big red pen strokes and I discovered to my astonishment that it didn’t bother me at all. I made the corrections and turned it back in. So, if you find the time it what must be a very busy schedule to comment I will be pleased.
James Pilant
Anya Kamenetz writes in a new column available online that student loan debt could be similar to the mortgage bubble. Student loans total about 830 million dollars. That’s larger than all the credit card debt in the United States. Nontraditional student are often hardest hit. I quote Ms. Kamenetz –
From where I’m sitting, the buildup of the national student loan balance looks like a massive betrayal of trust. People have been told for decades that this is “good” debt. In fact it’s really, really bad debt. Increasingly, high unmanageable debt burdens are falling on those least prepared to deal with the stresses and costs of college: the so called “nontraditional” adult, working-class student who is more and more likely to attend for-profit colleges that cost an average of around $14,000. And 40% and higher of these students are defaulting.
If, as a nation, we are going to increase our graduation rate, we will have to find different ways of financing. The current system with nontraditional students defaulting at a 40% rate is neither sustainable nor in any way effective.
In an article on the ABC World News site, they outline the grim statistics of U.S. graduate rates, 12th in the world.
Nationwide, 40.4 percent of 25- to 34-year-olds held such degrees in 2007, falling far short of Canada’s 55.8 percent, as well as South Korea and Russia, both of which had 55.5 percent rates, according to statistics from the College Board.
I firmly believe our current method of student borrowing is a drag on the graduation rate. It’s a drag on the decision to go to college. There are some people that believe owing a half million dollars for a medical degree is not a good investment.
If college graduation rates are a good measure of national success then why do we discourage people from going to college in the first place? As a policy it is a good idea for only the well-off to go to school?
Right now, someone is reading this article and saying, “They can work while going to school, I did, look at me. I did it on my own.” Or some other method of self help. The statistics are clear, self help is not effective. The more we rely on it, the fewer graduates we are going to get. As citizens in common, as members of a human community we have duties to one another and helping people get ahead by means of an education is one of those responsibilities.
Should the United States which was first in college graduation rates ten year ago decide to abandon its position as a successful nation, a good formula is to have a system where educational endeavor is tied to large debt loads.
Tell me the name of another nation any where on earth that finances college attendance by loans of the size and weight we have here. Borrowing for an education is not something I am opposed to, but education should be financed by a wide variety of methods, so that student loan debts are manageable and limited in size.
Jen Lamoureux writes with approval of Philip Brookes’ argument about having values greater than money. She also elaborates on her economic and social ideas. It is quite provocative. You should read it. jp
So true! We cannot expect eternal economic growth. At some point, an economy will either stabilize (optimistically) or will decline. A growth of 4%-5% may not sound like much, but compounded over time, it is simply unsustainable. 4% is actually a very large sum of money when one is talking about an economy. One must also consider who the consumers are. One must either export goods and/or services, which means depleting the economy of another country by monopolizing their citizens as our own consumers, or one must continually find new ways to increase the money being spent within the economy of one’s own country. That, in turn, means finding ways to increase efficiency. Typically, increasing efficiency in this country means more deeply exploiting the work of the lower classes so that the higher echelons may earn more money. This causes the disparity between the upper classes and lower classes to widen. At some point, we must see that allowing a small portion of people to control the wealth and monopolize the consumer power in this country is not a sustainable model. At some point, we must realize that this sort of disparity causes social unrest and a dehumanization of those with less earning capability. And, at some point, members of the upper classes will have reached a critical mass in the amount of goods and services they are able to consume, which will lead to a decline in consumer spending, and thus penalization of the lower classes in the forms of pay-cuts and layoffs. I am not necessarily advocating for communism or even socialism; rather, I advocate for a model in which workers are paid a living wage by their employers and people are allowed a fair chance at creating pleasant lives for themselves. While it may be true that a labor force of unskilled workers is easily trainable and thus, replaceable, it is no less true that their labor is what creates the goods and services being sold and managed by those who are “skilled.” The idea of any company, good, or service is absolutely worthless if one does not have the labor capital necessary to change those goods and services from concept to reality. If we continue without acknowledging these very basic truths of labor and commerce, the societal effects will indeed be dire.
My buddy, Philip Brookes, writes in reply to my blog post, “No Telecommunications Company Would Deny Another Telecommunications Company The Use Of Its Lines?”
(He praises me which is very kind and much appreciated but to get posted after a good comment does not require that you approve of my post. What I want is a reasoned, intelligent comment or argument and if you can provide a new source, an article or a book, that is particularly delightful. If we are going to make the world a better place, one of our tools will be thought and skilled writing is a tool of a developing civilization.)
Philip Brookes has his own web site, Get Aktiv. It’s a good read. I recommend it. Here is Mr. Brookes’ comment –
Right on, James, write on!
I’ve just been reading an interesting article from Psychologies magazine, July 2010, which highlights that mental illness is peculiarly endemic to ‘selfish capitalist countries’ – unselfish capitalist countries (you’ll need to read the article!) suffer half as much mental illness, and developing countries such as Philippines, etc… have very little mental illness as well. Similarly, suicide rates particularly of professional men, will reveal a lot about our society!
Another debate that’s been raging here in Australia the past few days/weeks, and ties into your discussion about business ethics, is the issue of the rate of migration into our country. Whilst many people are open to multi-culturalism and humanitarian migration, it completely astonishes me how many ‘leaders’ (political and business/economic) can look you straight in the face and argue that the only way our society will survive is if we continue to achieve economic growth of 4-5% per annum, indefinitely. Obviously, this logic is fundamentally flawed on numerous fronts: there must, of course, come a time when this planet will groan under the punishment of 11+ billion people trying to co-exist here; and this argument is based purely on economic analysis to ensure we keep earning money at such a rate as to support our western lifestyles, with absolutely zero consideration of societal effects!
Oh, that us human beings would wake up and acknowledge that our life on this earth is about so much more than money in the bank account, and possessions we can purchase!!
I found this on the web last night. It’s a video of American unemployment by county. The film runs month by month and in about a minute you see how unemployment developed in the U.S. over the last two years. It starts in January 2007 and runs until May of 2010. High employment counties have light colors. High unemployment counties are darker. You can watch the whole nation darken in a two year period, it’s very striking.
Fernwood Publishing is going to bring out the book, Rumors of a Moral Economy. It is to be used as a textbook in business ethics. I attempted to apply for a review copy only to discover that since I live in Arkansas and lack a Canadian Province to report as my locale, I am out of luck. (They don’t do any business in the United States? I mean we have a common border, right?)
Nevertheless, I have the privilege of having as a friend on Facebook, the author of the aforementioned textbook. He has his very own blog (which I link to, only the seventh link I have on my blog) Christopher Lind, The Moral Economy. This is his picture and a brief description of what can only be described as a busy career. (Now, I copied this in its entirety from the web site, Fernwood Publishing. So, if they want me to stop recommending the book, the author or copying their advertisement so others can see it, I will.)
Affiliation: St. Andrew’s
Dr. Christopher Lind is a Senior Fellow of Massey College at the University of Toronto.
From 2003 to 2006 he served as Director of the Toronto School of Theology. The Toronto School of Theology is one of the largest and most diverse ecumenical theological cooperatives in North America. From 1985 until 2003 he was based in Saskatoon, first as Professor of Church & Society and then as President of St. Andrew’s Theological College. A lay Anglican, from 2000 to 2003 he also served as President of the amalgamated St. Andrew’s College and St. Stephen’s College in Saskatoon and Edmonton, sponsored by the United Church of Canada.
Dr. Lind holds a Bachelor of Arts degree from York University in Philosophy and Political Science, a Master of Divinity degree from Trinity College and a PhD in Theology from the University of St. Michael’s College specializing in Ethics and Economics. He has authored or co-edited five books in the areas of Ecumenical Social Ethics, Globalization and Agriculture, Mission and Theology. Dr. Lind has distinguished himself as an ethicist and theologian over 30 years of an academic career. His employment and career path are expressions of his vocation as a leader in personal, institutional, and social transformation.
I went on the web and read some of his stuff. He’s a fine writer. He avoids a heavy academic style for a more comfortable prose style. So, read his blog. Wait with breathless anticipation for his book and I will attempt to lay hands on actual Canadian copy (I may be indicted for espionage.) and tell you all about it.
My friend, Jen, commented on my earlier post, Personal Change Doesn’t Equal Social Change. He is kind to agree with me but I found his comments significant and I want to share them. So, I present Jen!
I agree with this post, and I think the shift has to start somewhere in education. Business ethics as a discipline needs to evolve beyond what it currently is. Currently, most of business ethics focuses on adhering to laws and other governmental regulation while maximizing profit. There is little motive for taking into account ethical concerns which do not have some sort of legal impetus. This shift will likely happen as slowly as the shift away from ethics and morality in business, but it must begin with education of those who are newly venturing into the corporate world. Business majors, MBAs, etc. need some sort of educational motivation to effect change as they move into the working world, which I believe will come in the form of making business ethics more of a normative field.
Gary Bender, a friend of mine, has added his thoughts to a previous blog post of mine talking about telecommunications companies, law breaking and greed. He cites books I am unaware of and an author who I shall have to pay attention to. It is pleasure to present the thoughts of Gary Bender.
Oliver James, author of Affluenza: How to Be Successful and Stay Sane (2007) and The Selfish Capitalist (2008) ‘asserts that there is a correlation between the increasing nature of affluenza and the resulting increase in material inequality: the more unequal a society, the greater the unhappiness of its citizens’ and that ‘Selfish Capitalism is a particularly aggressive form of capitalism found predominantly in English speaking nations – the US, UK, Australia, Canada and New Zealand. James argues that in these countries, around 23% of the population has suffered from some form of mental illness such as depression or anxiety in the last 12 months compared to an average of 11.5% of German, Italian, French, Belgian, Spanish and Dutch people who, James argues, live under a system of social or unselfish capitalism.’ He has been criticized for including Japan, which has a high suicide rate, as an unselfish capitalist state.
Besides the points you make, James, on ethics, there is sound scientific evidence to show that avarice is, indeed, a deadly sin.
Telstra Corporation is an Australian Telecom. It is paying a fine of 18.5 million dollars for denying interconnection between its facilities and those of other companies. Telstra admitted the breach of its legal obligations. The Telecommunications Act, an Australian law designed to prevent just such violations, was the law broken in this case.
Listen to this blogger explain how Telstra caps You Tube at a certain level of band width. He also explains how he is trapped into Telstra’s service and can’t escape.
Guess what? Companies not only want to censor what you can see or slow down things they don’t like, they also want to put the screws to their competitors.
You would think listening to the debate in the United States, that this is all about whether there is enough band width or if we are going to let the engine of “free market” capitalism make this all so cheap we can pay our internet bills with pocket change. This case might give you a different perspective. It would appear given the opportunity that companies would discriminate against each other. Do I have to tell you what that means for your internet service? Sometimes it would be fast, sometimes it would be unaccountably slow and other times, you wouldn’t see anything at all. Is the phrase, internet service provider, an oxymoron?
The way I see it you could make a lot more money denying service. You’d blame bandwidth problems, over regulation, and anybody else that the uninformed might believe responsible.
Ethical? Lord, no!
What do you think this is, some grade school playground? This is the world of American (and Australian) business.
Religious scruples? Golden rule? That shalt not steal? Thou shalt not bear false witness? etc? Not a chance. Religion does not figure into this kind of thinking.
How about philosophy? Kant and the Categorical Imperative? You know, you must do right under every circumstance? I guess we aren’t doing that. What about John Stuart Mill and utilitarianism? Are these business practices producing the best results regardless of their initial rightness? Well, if you only consider your profit, yes. But ole John Stuart probably wouldn’t agree with you.
Corporate Social Responsibility? Caste the peasants some crumbs? Well maybe, some in the company may be church goers, you know, a place to make business connections, and they might throw something extra in the offering plate.
You might say, “James, you are just too cynical and you have unrealistic expectations, after all the business world has been freed from old philosophies, over restrictive religions, and public expectations. We live in a new era of one rule, if it doesn’t make money it is wrong, if it does make money it is right. See how simple it is, James? Get on the wagon! You know if you gave up all this moral crap, and wrote the right kind of stuff there could be a future for you. No more teaching college students, no more tapping out your pitiful thoughts at night. Talk to the right people. Play the right games. There’s money to be had. There is nothing in the world that makes a businessman feel better than a little godlike praise. After all, don’t they deserve it? These individuals drive the economy. They make the world a better place. After all, wasn’t the United States created to enable business to make money more freely? Forget about all that liberty crap. You have to make the sale. You have to get some stupid schmuck to get out there with a gun and make the world safe for profit. Relax, James, you need some therapy. Anger and outrage can get you down. You could develop heart problems or at the very least hypertension. Relax, slow down. You know, there are some web sites where they show examples of business behaving well. Write about them! You’ll feel all better!”
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