The America I Grew Up In

This is a quote from Rogue Columnist –

I grew up in an America that had created the greatest middle class in the history of the world, a great civilization not just a great market. Where people were citizens, not consumers. Where we landed men on the moon and would always be on the forefront. Where Martin Luther King Jr. said, “Let justice roll down like waters and righteousness like a mighty stream…” And we worked for that. But we’ve become a different America and different Americans. For King warned, “A nation or civilization that continues to produce soft-minded men purchases its own spiritual death on the installment plan.”

I fully agree. I believe in the unity of citizenship and a cooperative ethic recognizing that we are all in this together particularly in these very bad times.

James Pilant

Suggested Rules For Corporate “Moral” Decision Making

Badaracco is presenting a theory of ethics that I have seen in textbooks before. I’m not impressed. The first has got to be the shallowest possible interpretation of Utilitarianism as well as an equally inadequate exposition of the principle of rights. Then there is “what will people think.” My reputation is all. And we can’t live in a fantasyland. Wow, I betcha that Bible and the Western Civilization stuff got nailed there.

Of course, I guess you have to make it simple for the masses of the corporate relativists in the crowd.

Oh, well, read it for what’s it is worth -

The conference’s concluding keynote speaker, Joseph Badaracco, Professor of Business Ethics at Harvard Business School, presented the assembled CIOs a practical guide to making ethical decisions—not in case of right versus wrong, because that’s easy—but in right versus right, because that’s hard.

Badaracco suggested four ways to think about each decision:

1. Will it produce the greatest good for the greatest number of people? That’s a good place to start, Badaracco said, but it’s not sufficient.
2. What are the rights of the people involved? For example, if a Nobel Prize winner, on the verge of discovering a cure for cancer, needs your heart, having it cut out of your chest against your will would, ultimately, produce a great deal of good for a great number of people, but it would certainly violate your rights. Not to mention establishing a grisly precedent.
3. What will the decision say about your values, your character, and the values and character of your organization? Leaders need to represent the values they hold dear. However, simply focusing on how the decision reflects upon you can be short-sighted at best, priggish at worst. Finally,
4. What will work in the real world? Leaders cannot afford to live in fantasyland.

All these questions eventually need to be answered, and one can spend a long time thinking about them. But say you don’t have a lot of time? Badaracco offered a quick three-step process:

1. The newspaper test. How will you feel if your decision hit the front page of tomorrow’s newspaper?
2. The Golden Rule. How would you feel if someone else made the decision about you?
3. The obituary test. How would you like the people you respect to look back at your decision?

Shareholder Power?

One again, I’m going to lament that the people who own the corporations don’t seem to have any actual control over them. Let me quote Nouriel Roubini from his excellent essay, Gordon Gecko Reborn.

There are also massive agency problems in the financial system, because principals (such as shareholders) cannot properly monitor the actions of agents (CEOs, managers, traders, bankers) that pursue their own interest. Moreover, the problem is not just that long-term shareholders are shafted by greedy short-term agents; even the shareholders have agency problems. If financial institutions do not have enough capital, and shareholders don’t have enough of their own skin in the game, they will push CEOs and bankers to take on too much leverage and risks, because their own net worth is not at stake.

At the same time, there is a double agency problem, as the ultimate shareholders – individual shareholders – don’t directly control boards and CEOs. These shareholders are represented by institutional investors (pension funds, etc.) whose interests, agendas, and cozy relationships often align them more closely with firms’ CEOs and managers. Thus, repeated financial crises are also the result of a failed system of corporate governance.

That’s what I think too.

Simple statement – We hear over and over again about property rights but start talking about actual shareholder control, power held by the actual property owners, howls of outrage cloud the horizon.

The people that own the corporations should have say about what they do.

James Pilant

Listening!?

I went to a wedding on Saturday. My sister, Linda, married John Fricke. My sister is very pretty. Somehow my genetics failed in this particular area but if looks and genetics can be compared to gambling, Linda broke the house. John is tall and handsome. Since, his genetics are his own, I don’t feel quite so bad about that.

I’m not good at weddings. I am self conscious and worry a lot because my 17 year old son keeps saying, “Dad, you can’t say that.” He’s probably right.

So, what is the subject of which I write? Well, probably getting out of our (my) head once and a while would be a good thing. I deserve a little credit since I am a very fine listener. But there is one problem, I forget to turn it on.

Listening is a skill and a difficult one. I had the opportunity to practice almost every day as an adviser for a couple of years. But it’s still hard and I forget to turn it on. We would much rather coast through life than live it and I am not much of an exception. I have a serious problem with not living all the time. The ridiculous thing is that I tell my class that if they are awake and alive five percent of the time and they live to be a hundred years old, they’ve only actually lived five years. Than I call upon them to have some more life. As their teacher, I should not play such a hypocrite.

Is there a moral responsibility to pay attention to the group and try to take its tone? Well, Lord Chesterfield thought so. He used an example of a funeral as a place where high spirits would be out of place and made it a rule to take the same attitude of the group.

I only did that sota on Saturday. I suppose I could promise to do better but this would impose an intolerable burden on my sister. After all, I can’t ask my relatives to keep getting married until I get enough practice in.

What moral responsibility do we have to support and participate? I frankly am unaware of any rules. So, I am issuing a call. Are there any rules? And if so what are they?

All may participate!

James Pilant

Corporate Crime – Travesties Of Justice

Watch this video where Mokhiber explains how corporates avoid penalties for their crimes.