I’ve been aware of this for years. I would read through the whole newspaper article reporting the FBI operation and regularly discovered the “terrorists” had no money, no guns, no explosives, and no coherent plan.
I don’t see how these kinds of operations make us safer. In fact, the only thing I can see is the public relations machine of the FBI burnishing its image after its spectaculor failures in the 9/11 attacks. (That’s not just my opinion – read the 9/11 report – http://www.9-11commission.gov/report/911Report.pdf
James Pilant
English: The Seal of the United States Federal Bureau of Investigation. For more information, see here. Español: El escudo del Buró Federal de Investigaciones (FBI). Para obtener más información, véase aquí (Inglés). (Photo credit: Wikipedia)
I’d say that the majority of the foiled attacks that they cite are really only foiled attacks because the FBI made the attack possible, and most of the people who are caught in these so-called foiled attacks are caught through sting operations that use either an undercover FBI agent or informant posing as some sort of Al-Qaeda operative.
In all of these cases, the defendants, or the would-be terrorists, are people who at best have a vague idea that they want to commit some sort of violent act or some sort of act of terrorism but have no means on their own. They don’t have weapons. They don’t have connections with any international terrorist groups.
In many cases they’re mentally ill or they’re economically desperate. An undercover informant or agent posing as an Al-Qaeda operative gives them everything they need… gives them the transportation, gives them the money if they need it, and then gives them the bomb and even the idea for the terrorist attack. And then when that person pushes a button to detonate the bomb that they believe will explode—a bomb that was provided to them in whole by the FBI—agents rush in, arrest them and charge them with conspiracy to use a weapon of mass destruction and then parade that person out to the public saying, “Look at us. We caught a terrorist. This is us keeping you safe.”
If you look at the record of prosecutions in the decade after 911, there has yet to be a case of some Al-Qaeda operative providing the means for a wannabe terrorist to do an act of terrorism. It’s only the FBI that’s providing the means through these sting operations. What this has done is really inflate the threat of terrorism within the United States—particularly from Muslim terrorists—because in almost all of these cases sting operations target men on the fringes of Muslim communities who might be mentally ill, economically desperate or otherwise very easily manipulated by an informant who can make a lot of money in these sting operations.
Milton Friedman’s Dumbest Idea (The article actually says “the world’s dumbest idea,” but it is longer than the recommended length for titles if you are doing “search engine optimization and I had to cut it. jp)
English: Portrait of Milton Friedman (Photo credit: Wikipedia)
I wish I had written the article below. I love every word of it, and the most astonishing thing about this writing is where it appears, in Forbes. That takes by breath away. How did he get past the editor?
Well, enough of that –
The article is very much what I have been saying in previous articles on this web site and in public, that is, the idea that a corporation’s sole purpose is to make money for the shareholder is ridiculous. I’d start my analysis with “non-profits,” and get more legally critical as I went through the various kinds of corporations and what they were used for.
Generally speaking, articles dealing with the crisis focus on derivatives, Sallie Mae, the business press, rating agencies, etc. They all share blame and a lot of it. I have always been convinced that the underlying problem was greed, self interest, the corrosive effects of Milton Friedman’s bizarre doctrine of economic utopia, and the replacement of critical scrutiny by frantic cheerleading in the financial press, and I have some more villains to name.
Bogle doesn’t dodge the ethical question. He wonders how we got here and how we can get out. He longs for the day when businessmen understood the value of trust and fair dealing. I’m not surprised to find that Mr. Bogle has no simple solution. It took four decades of worship of the financial means of production of little more than electronic impulses to triumph over the creation of actual goods. This isn’t going to be easy, and it it likely to fail subjecting this country to a chain of financial meltdowns each one of which will severely damage the lives of millions of Americans who will bear the chief cost not only of their way of life but paying for the meltdown themselves out of their “widow’s mite.”
This is capitalism run off the tracks. Greed out weighed simple good judgment. Obvious signs of trouble, not just obvious but certain evidence of approaching disaster, were ignored as money piled up.
The market was supposed to be self regulating. Read a little Milton Friedman. This economic freedom to innovate was supposed to lead to better lives for all Americans, perhaps the whole world. This utopia, this nirvana, has thus far failed to appear. But incomes in a handful of the well placed are measured in the billions.
Now, you could make a good argument that this kind of business thought (Milton Friedman, etc) actually falls into the second level where self interest and avoidance of punishment become primary concerns. However, making moral decisions at the second level of Kohlberg’s six stages is just about as insulting as reasoning at the first.
My second point is when business is considered only as a money making endeavor, all the other levels of moral development don’t just become irrelevant, they become a block and a hazard to making maximum profit.
If you are short on time, please read the brief excerpt below, but if you have time click on the link and read the whole article. It merits it.
No popular idea ever has a single origin. But the idea that the sole purpose of a firm is to make money for its shareholders got going in a major way with an article by Milton Friedman in the New York Times on September 13, 1970.
As the leader of the Chicago school of economics, and the winner of Nobel Prize in Economics in 1976, Friedman has been described by The Economist as “the most influential economist of the second half of the 20th century…possibly of all of it”. The impact of the NYT article contributed to George Will calling him “the most consequential public intellectual of the 20th century.”
Friedman’s article was ferocious. Any business executives who pursued a goal other than making money were, he said, “unwitting puppets of the intellectual forces that have been undermining the basis of a free society these past decades.” They were guilty of “analytical looseness and lack of rigor.” They had even turned themselves into “unelected government officials” who were illegally taxing employers and customers.
How did the Nobel-prize winner arrive at these conclusions? It’s curious that a paper which accuses others of “analytical looseness and lack of rigor” assumes its conclusion before it begins. “In a free-enterprise, private-property system,” the article states flatly at the outset as an obvious truth requiring no justification or proof, “a corporate executive is an employee of the owners of the business,” namely the shareholders.
Come again?
If anyone familiar with even the rudiments of the law were to be asked whether a corporate executive is an employee of the shareholders, the answer would be: clearly not. The executive is an employee of the corporation.
But Friedman also produced a less felicitous legacy. In his zeal to promote the power of markets, he drew too sharp a distinction between the market and the state. In effect, he presented government as the enemy of the market. He therefore blinded us to the evident reality that all successful economies are, in fact, mixed. Unfortunately, the world economy is still contending with that blindness in the aftermath of a financial crisis that resulted, in no small part, from letting financial markets run too free.
The Friedmanite perspective greatly underestimates the institutional prerequisites of markets. Let the government simply enforce property rights and contracts, and – presto! – markets can work their magic. In fact, the kind of markets that modern economies need are not self-creating, self-regulating, self-stabilizing, or self-legitimizing. Governments must invest in transport and communication networks; counteract asymmetric information, externalities, and unequal bargaining power; moderate financial panics and recessions; and respond to popular demands for safety nets and social insurance.
The birth of the shareholder value movement is commonly traced to a speech Jack Welch gave at New York’s Pierre hotel in 1981, shortly after taking the helm at GE. In that famous speech, entitled “Growing Fast in a Slow-Growth Economy,” Jack Welch outlined his beliefs in selling underperforming businesses and aggressively cutting costs in order to deliver consistent profit rises that would outstrip global economic growth. He told analysts then, “GE will be the locomotive pulling the GNP, not the caboose following it…,” according to reports of the speech.
Jack Welch said in the interview given on 11-March-2009 that he never meant to suggest that setting, and meeting, profit expectations quarter after quarter in an effort to boost a company’s share price should be the main goal of corporate executives.
“It is a dumb idea,” he said. “The idea that shareholder value is a strategy is insane. It is the product of your combined efforts – from the management to the employees”.
What he was talking about is the commonly held belief that the purpose of business is to increase shareholder value. That belief is variously attributed to Milton Friedman, Adam Smith, and perhaps common sense. BUT, it was the operating principle that resulted in two market busts and innumerous scandals in the past decade. The fact that Welch was one of the main proponents certainly adds a fair amount of gravitas to his comments.
Profitability, shareholder value, and measures like economic value added (EVA) completely miss a point that Welch articulated so well. Namely, increased “shareholder value” is a result, not a strategy.
Across America, temporary work has become a mainstay of the economy, leading to the proliferation of what researchers have begun to call “temp towns.” They are often dense Latino neighborhoods teeming with temp agencies. Or they are cities where it has become nearly impossible even for whites and African-Americans with vocational training to find factory and warehouse work without first being directed to a temp firm.
In June, the Labor Department reported that the nation had more temp workers than ever before: 2.7 million. Overall, almost one-fifth of the total job growth since the recession ended in mid-2009 has been in the temp sector, federal data shows. But according to the American Staffing Association, the temp industry’s trade group, the pool is even larger: Every year, a tenth of all U.S. workers finds a job at a staffing agency.
I strongly believe that we should hold companies responsible for the acts of their subcontractors. These workers are essential to the American economy but are treated little better than lab rats. This kind of indentured servitude while useful for settling agricultural colonies has fewer uses in the modern world except rank exploitation.
It’s hard to be middle class on these kinds of salary. I read a report the other day that this new generation now coming of age is much less likely to buy cars than the previous ones. What a surprise? There are fewer jobs and the jobs pay less. Of course, they won’t be buying as many cars, or anything else. We pay a lot for our low prices at these huge chain stores, perhaps too much.
James Pilant
From around the web.
From the web site, National Staffing Workers Alliance.
The problems of temp/part-time/precarious work isn’t just a problem in the U.S. our Canadian sisters and brothers are fighting the same fight. The article below highlights how Government run Liquor Control Board of Ontario (LCBO) used temp and part time workers and while the workers struggle with low wages, the LCBO rakes in huge profits (sound familiar?)
Most of these workers are no longer on the margins of the economy, but are central to the functioning of the economy. In most where house work, day-labor in the agricultural sector, food processing, and in the healthcare sector, agency workers are becoming the Norm. In fact, these agencies are part of one of the fast growing industries in Québec; according to Statistics Canada, in 2008 there were approximately 1200 placement agencies across the province, and the industry had an estimated value of $1 billion.
I suspect that similar forces are at work in the market for part-time professionals. A small number of highly marketable people are able to negotiate part-time contracts on very good rates. Some may have more than one part-time job, others may be working as non-exec directors. A few may be wealthy enough not to need to work full-time. Employers tend to be reluctant to employ part-timers in professional jobs so the very fact that people are in such positions may be an indication of their bargaining power.
As ever, skill levels and social factors, rather than types of employment contract, are the key determinants of pay. If you have highly marketable skills, good social support networks and/or affordable child-care and, crucially, powerful and well-placed contacts, you can make the flexible labour market work for you. If you haven’t, you can’t.
The higher up the social hierarchy you are, the more likely you are to be working on part-time or temporary contracts from choice and the more likely those contracts are to be highly lucrative. At the other extreme, part-time and temporary work is poorly paid, precarious and often all you can get. What is a lifestyle choice for some is Hobson’s choice for the rest.
This officer’s work apparently involved railroading the innocent with the full cooperation of a number of prosecutors in more than fifty cases.
I hope you have the opportunity to work in a prosecutor’s office. I believe in justice but prosecutorial discretion is too broad and the desire not for justice but for a good “kill” ratio often outranks justice as a priority in some of these offices.
Here is an important quote from the article:
“The prosecutor’s duty to the truth arises from several sources,” Gershman wrote. “The most important source is the prosecutor’s role as a minister of justice. In this role, the prosecutor has the overriding responsibility not simply to convict the guilty but to protect the innocent. The duty to truth also derives from the prosecutor’s constitutional obligation not to use false evidence or to suppress material evidence favorable to the defendant. The duty to truth also arises from various ethical strictures that require prosecutors to have confidence in the truth of the evidence before bringing or maintaining criminal charges. The duty is found as well in the prosecutor’s domination of the criminal justice system and his virtual monopoly of the fact-finding process.”
This quote parallels my views on the subject. Justice is not equal to God but stands high in its importance to morality and a life worth living.
The NYPD detective whose corner-cutting investigative work, combined with a community’s blood lust for quick justice, put an apparently innocent man in prison for 23 years insists he’s being scapegoated by the very district attorney who pushed for the conviction.
“They threw me under the bus,” Louis Scarcella told The Post yesterday after DA Charles Hynes indicated he’d asked a judge to vacate David Ranta’s conviction, more than two decades after Ranta was found guilty of murdering a prominent rabbi in Williamsburg.
“I was appalled when I got the news,” the retired cop said outside his Staten Island home. “I stand by the confession 100 percent. I never framed anyone in my life. You have to be a low devil to frame someone. I sleep well at night.”
While Scarcella was sleeping, Ranta, 58, was languishing in a Buffalo prison, convicted of the February 1990 murder of Rabbi Chaskel Werzberger after a botched jewelry heist in the Orthodox Jewish community.
An ‘overwhelmed’ David Ranta left prison with a small bag of belongings and family members ecstatic to see him outside of his cell. His conviction began to fall apart when it was revealed that case detectives used questionable tactics in his case, including coaching witnesses.
An innocent man was sprung from prison Thursday — more than 20 years after he was wrongfully convicted of killing a beloved Brooklyn rabbi.
David Ranta, 58, could barely contain his excitement, smiling broadly at relatives who hadn’t seen him as a free man since his 1991 conviction. Ranta was found guilty of shooting Rabbi Chaskel Werzberger in a botched jewelry heist in Williamsburg.
The conviction crumbled after a year-long investigation revealed case detectives coached witnesses, did not keep notes and gave incentives to felons who provided information.
Heyward is not alone in his suspicion of foul play in Hynes executions of justice. The DA has recently come under great scrutiny for spending years refusing to review convictions that he and his predecessor obtained through working with a homicide detective of such dubious repute. Last week, the Hynes office was forced to reopen 50 cases in which NYPD Detective Louis Scarcella was involved, after the Times uncovered that he obtained false confessions, lied, and relied on testimony from a single, crack-addicted prostitute to obtain a number of convictions. While families of those convicted through Scarlla’s police plan to start bird-dogging Hynes, others, like Heyward, have vowed to win justice for those they will never see again.
“It doesn’t matter how long I have to be out here fighting and exposing the reality of what happened. I’m going to keep at it,” said Heyward who believes there is a clear conflict of interest between New York City’s DAs and the NYPD since they are both on the same side of the law. “When cops are involved, it’s like district attorneys forget how to prosecute.”
“I’m overwhelmed,” Ranta said outside a courtroom in downtown Brooklyn, carrying a purple laundry bag with all his belongings. “Right now, I feel like I’m underwater, swimming.”
No one would fault administrators or parents for wanting to ensure that children are safe at school, but barring a domestic violence survivor from her job and taking away her family’s livelihood is hardly the solution, advocates say. “Firing all these women is not the answer. You have to deal with this and it’s really up to all of us,” YWCA San Diego CEO Heather Finlay told NBC, adding the school should have pursued protective measures that targeted the abuser — not Charlesworth.
I was appalled to read this article. In fact, when I saw the title, I thought it must be some kind of mistake or a joke. Unfortunately, the facts as reported are accurate. A women victimized by a stalking husband has been fired from her job.
What’s next? Will we eject any employee under threat for any reason since this may very well inconvenience a school?
I want you to think of the incredible possibilities. A stalker can automatically get a woman fired from her job. Now, that’s power. The school system can actually force women to stay with abusive husbands because they know they will lose their jobs.
And without a job, and often having support children, the woman is at the mercy of state services and the possible handout and support of Mr. Wonderful, the man she tried to leave.
Honor, courage, tradition – all demand we stand up to those who use violence to gaining their ends. This example empowers the wicked and damages the innocent.
Is there any business, any educational institution, any government facility, where a human being placed under threat is not a liability? Does that mean we should fire them for convenience sake? or out of fear? What kind of people are we?
Oregon Prosecutors Vie For Reduced Drug Sentences | ThinkProgress
Increasingly, conservatives who have historically followed a “tough on crime” mantra are embracing a “smart on crime” approach that reallocates resources to move away from over-criminalization and towards more efficient, effective criminal laws. Earlier this month, Georgia Gov. Nathan Deal signed two laws that embrace alternatives to incarceration to nonviolent drug and property offenders, and eliminate jail time for juveniles who merely misbehave. And ten bipartisan members of Congress have formed a committee devoted to over-criminalization.
A few years ago, it was not clear whether or not America’s preoccupation with long prison sentences for even minor crimes would even be possible of change. But now, there is a definite away from such policies as “three strikes,” etc. It is one of the most historically important changes in the history of criminal justice in the United States.
Over the past forty years, we went from a nation that relied much more heavily on rehabilitation to a nation with the highest incarceration in the world. That high incarceration emasculated state budgets causing cuts in all kinds of traditional services and made it impossible for states to deal with long term problems like deteriorating infrastructure.
I am delighted that these policies are changing. The freed up human potential and the enormous sums of money available because of these changes will make American a better place to live.
A Governor’s Attack on Academic Freedom – Ethics Sage
This blog first appeared as an article on February 18, 2013 in The Chronicle of Higher Education. It challenges California Governor Jerry Brown’s recent intrusion into the process of academic freedom. Gov. Jerry Brown’s 2013-14 budget for California intrudes on academic freedom in a way that could harm the 23 campuses of California State University and the 10 campuses of the University of California—but the impact of his attempt to control academic decision-making threatens every public college and university in the country.
Putting aside for the moment the fairness of Brown’s proposed $250-million increase for both the CSU and UC systems, and an additional $10-million to each one to develop online courses, the governor’s budget attempts to dictate how the increased funds should be spent. That is a violation of academic freedom, the bedrock of colleges and universities.
Universities exist to promote the public interest, not to further the interests of individual professors, the institution as a whole, or, in this case, the governor of California. The public interest is not served by Brown’s inserting himself into education decision-making.
Online education has its uses. I teach online classes myself. But to mandate that colleges and universities devote certain resources to this is silly. It appears that the “very serious” people, the “villagers,” the Washington elite, etc., have decided that online education is a wonderful way to cut costs and is roughly equal to regular classroom education. It isn’t. It’s a different kind of animal. It takes different teaching methods and different student attitudes to work. It is not applicable to every field and endeavor. It’s limitations and advantages are not yet fully understood. Using it as a broad means of cheapening education without enough experience in its use is madness.
The processes of education in Western civilization have taken many centuries to develop. However, there are more than a few people who want to throw all those centuries of educating the “whole” man away and replacing it with the fastest, cheapest vocational training possible. Didn’t Rick Scott explain the logic …
Spending money on science and math degrees can help Floridians find work and provide a return on taxpayers’ investments, Gov. Rick Scott said today in an interview on “The Marc Bernier Show” on WNDB-AM in Daytona Beach.
Scott said Florida doesn’t need “a lot more anthropologists in this state.”
“It’s a great degree if people want to get it. But we don’t need them here,” Scott said.
“I want to spend our money getting people science, technology, engineering and math degrees. That’s what our kids need to focus all of their time and attention on: Those type of degrees that when they get out of school, they can get a job.”
Actually, we need whole human beings who can appreciate civics, art, architecture, literature, history, etc., those subjects that develop judgment and intellectual power. Those people are effective citizens.
So, let’s keep academic decision making at the college and university level.
Political Animal – The suicide rate continues to soar; or, how our dysfunctional economy is literally killing us
Our pension system is a shambles and we’ve seen a wave of mortgage foreclosures. Many people in this economy have lost their jobs and everything they’ve worked hard for all their lives, and have no realistic prospects of finding a decent job ever again. They are understandably freaked out, stressed out, and depressed. Losing one’s job is one of the most traumatic things that can happen to a person, especially in this dismal economy. Moreover, when people lose their jobs, they also tend to lose their health insurance. And without access to decent mental health care, many depressions go untreated.
In the Times, one expert has this to say:
“The boomers had great expectations for what their life might look like, but I think perhaps it hasn’t panned out that way,” she said. “All these conditions the boomers are facing, future cohorts are going to be facing many of these conditions as well.”
How many people in this country will end their working lives having seen a significant decline in their living standards, relative to the standards their parents enjoyed? For the first time in America, declining economic mobility is a reality for many of us. The dashed dreams and expectations so many Americans are experiencing may explain much of the increased suicide rate. This economy is literally killing us.
I was a little boy when Walter Cronkite had a program called “The 21st Century.” It talked about the wonders we could look forward to in the new century. We had a lot of hope and belief in continuous progress. The United States had done so much and had been so successful, we knew things could only get better.
We were wrong. The 21st Century is not what we expected, not in our wildest dreams. Some of what people thought was supposed to happen was silly: personal robots, etc; but economic insecurity? in the United States? No one would have believed that.
The middle class is severely damaged, opportunity more circumscribed than the Gilded Age. The dreams of building great cities, great wonders, etc. don’t even seem to exist.
For the 1% this is a golden age beyond all imagining, and yet they do not have enough. They want more.
Yes, some people in the face of this kind of world are opting to die. I’m not surprised. We were supposed to be better off not worse.
Why did Komen for the Cure give Nancy Brinker a 64 percent raise? – Salon.com
In 2012, the breast cancer organization ignited a firestorm by announcing it was pulling its funding for breast cancer screenings and services for Planned Parenthood – and then had to hastily and ineptly apologize, then backpedal. It watched as its conspicuously conservative vice president for public policy Karen Handel resigned in the wake of the scandal. It saw registrations for its events decline in Maryland, in Texas and all over the damn place. It squirmed at increasing questions over why an organization that features the words “the cure” so heavily in its promotion, that boasts how its “research investment has changed the breast cancer landscape,” devotes a minuscule and declining portion of its dollars to actually finding one.
Turns out that in 2011, it spent just 15 percent of its donations on research — nearly half of what it did just a few years prior. And, significantly, its founder, Nancy Brinker, the woman whose vow to the sister she lost to cancer has served as the organization’s poignant, relatable narrative, stepped down as its CEO. In August, Brinker announced she was taking on a new role, as chairwoman of the executive committee. (She is, however, still listed as its CEO and founder on the Komen site. Komen says it’s still looking for her replacement.) In short, the whole series of fiascoes was so appalling that Deanna Zandt, author of “Share This! How You Will Change the World With Social Networking,” called the Komen fiasco a teachable “example of what not to do.”
Yet after more than a year of bad publicity and declining participation, Brinker herself seems to be doing just fine. As Cheryl Hall pointed out this weekend in the Dallas Morning News, Brinker made “$684,717 in fiscal 2012, a 64 percent jump from her $417,000 salary from April 2010 to March 2011.” That’s a whole lot of green for all that pink. Hall notes that’s about twice what the organization’s chief financial officer, Mark Nadolny, or former president Liz Thompson were making. And as Peggy Orenstein points out on her blog Monday, it’s considerably more than the average nonprofit CEO salary of $132,739.
Giving Brinker a raise is probably not in the best interest of contributors or cancer patients. Theoretically, these are the key stakeholders for Komen for the Cure.
Really? Are they the key stakeholders? Why does the money not indicate that?
Because if there is anything we can be sure of, it is this, “How people use money tells us a lot about what they are trying to do.”
Is the organization using the bulk of its contributions to find a cure? How much of the organization is literally philanthropic?
I’ll let you work through that.
However, I will note that this an example of the free market in action – private money solving serious health problems afflicting millions. It is possible that some of you don’t see the efficiency in this model of free enterprise. I don’t either.
Why unethical conduct in business is so common at this time in our history? Why is business ethics almost irrelevant?
It is now about four years since the catastrophe on Wall Street wrought destruction on this country’s economy. In those three years, the lives of much of the population have become much more difficult while the lives of those who created the disaster seem to have changed but little.
How did we get here? How did doing financial speculation amounting to little more than gambling become respectable? How did the idea of a responsibility to the other citizens of a nation become amusing to the elites?
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.
Now we have the demonstrations on Wall Street that are rapidly forming a counterpoint to the story, I told above.
Is this the beginning of a brand new story or a small and insignificant chapter in the global rise of financialization?
I’m interested in why people don’t report to their companies if they observe unethical, illegal, or just wrong behavior. Most large companies provide training on their Code of Conduct, ethics, legal issues, and harassment. Is it that it takes effort and a bit of risk in order to report someone else’s wrongdoing? That appears to be case. In the same survey mentioned above, they found that 69 percent of respondents thought the company would not investigate the issue properly if it was reported and 23 percent feared a negative consequence, including retaliation. It appears that more training on the topic of reporting suspected wrongdoing is needed as well as efforts within companies to honor their commitments to address any report of suspected wrongdoing and keep the employee safe from harm.
Who is in a position to help companies promote more reporting of misconduct? Once again, I think the middle manager is the key to the solution. Middle managers are well positioned to see what happens with those who report to them as well as what happens with their own senior managers. Their perspective within the organization cannot be matched. Additionally, the middle manager often has sufficient information about the company and its policies to know when the issue is bad behavior or an honest mistake versus unethical or illegal actions. Encouraging employees to report directly to their manager (when the issue does not include their manager) may help to weed out the misunderstandings from the misconduct and do so at a level that feels safer to the employee.
Pilant's Business Ethics Blog 
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