“Well written and an interesting perspective.” Clan Rossi --- “Your article is too good about Japanese business pushing nuclear power.” Consulting Group --- “Thank you for the article. It was quite useful for me to wrap up things quickly and effectively.” Taylor Johnson, Credit Union Lobby Management --- “Great information! I love your blog! You always post interesting things!” Jonathan N.

Saturday, April 2, 2011

Transocean Executive Compensation Bonuses for "Best Safety Year in 2010" in spite of the Deep Water Horizon Explosion

Transocean, the world’s largest off-shore oil rig company, owned the Deep Water Horizon rig that exploded in the Gulf of Mexico in April of 2010. Astonishingly, the company awarded its managers healthy bonuses. Even more astonishing, safety was a major component. Even without intending to, the compensation sets up managers in a conflict of interest—their compensation motivating them to keep up the good work rather than to correct for what went wrong in the management of the Horizon rig. In other words, the bonuses give all the wrong incentives, and there has been no principled leadership to point in the other direction.

The full essay is in Cases of Unethical Business, which is available at Amazon.

Friday, April 1, 2011

On the Ethics of Arizona Medicaid Charging Smokers and the Obese an Extra Fee

MSNBC reports that “Arizona's cash-strapped Medicaid program is considering adding a $50 tax on single patients who smoke, have diabetes or are overweight. Arizona Health Care Cost  Containment program spokeswoman Monica Coury says the tax is intended to push patients to take better care of themselves. Coury says the issue is getting at the cost of health care while trying to stretch dollars and get people to take better care. ‘If you're not going to manage those things and take some personal responsibility, and in turn that costs the state more money, then you need to have some skin in the game,’ Coury said. . . . ‘You need to be responsible for the fact that your smoking costs us more.’ . . . State Sen. Kyrsten Sinema of Phoenix says it isn't fair to charge diabetics $50. Sinema says the fee fines people who may have medical conditions beyond their control. . . . The changes are part of a major revamp of Arizona's Medicaid program to find funds to restore transplant coverage — eliminated amid much controversy [in the fall of 2010].”

Ethical Analysis:

Focusing here on the ethical dimension of the proposed changes, I lay aside here the worthy question of whether the proposed changes are the optimal way to restore transplant coverage, or, more generally, to make up the funding shortfall facing Arizona’s Medicaid program. Ethically speaking, Coury’s reference to personal responsibility clashes head-on with Sinema’s claim of the conditions being beyond the patients’ control. Responsibility presumes that the agent has control over that which he or she is to be responsible. It makes no sense, for example, to hold President Obama responsible for the weather (unless the federal government has a top-secret way of controlling and changing the weather over U.S. territory).

In terms of smoking, the question is perhaps whether a drug addict has control of his or her addiction. To be addicted, according to the World English Dictionary, is to be dependent on something. Meriam-Webster’s Medical Dictionary asserts that dependence in turn involves being “unduly subject to the influence of another.” The question is thus whether being “unduly subject to” implies or involves the loss of control as opposed to merely control being more difficult. The qualifier of “unduly” suggests being subject to something excessively, according to the World English Dictionary. This does not signify the loss of control. Therefore, ethically speaking, smokers can be held responsible for their addiction to nicotine even though it is very difficult for them to quit. That smokers have quit demonstrates that those who do not quit cannot fall back on the fallacy that they have no control over their addiction. So to the extent that the smokers cost others, it is ethical to charge smokers more.

With regard to diabetes and obesity, a distinction can be made in terms of control. Losing weight, if only from restricting the quantity (and types) of food ingested, is within a person’s interval of control unless the excess weight if due to a disease and cannot be lost without risking the loss of minimal nourishment and health. I suspect that this qualification is misapplied by overweight people who presume that their “condition” is a result of an illness when over-eating (as well as a refusal to exercise) is the actual cause. Such persons, doubtless the overwhelming majority of obese people, can be distinguished ethically from those whose excessive weight is caused by a disease and cannot be lost without risk to one’s health and perhaps even life.

Apart from the illness caveat, the argument that overweight people have no control over their excess weight is effectively countered by the success that people have had in losing weight. Prima facie, one can reduce one’s consumption even in the midst of a presumed overwhelming urge to eat more. Therefore, it is ethical to hold overweight people responsible for their weight, and thus to charge them more if they cost others more. Diabetics are a more complex case.

Regarding obesity and (the ensuing?) diabetes, it may be that once a patient has the disease, nothing she could do would cure her of the disease. Otherwise, the person’s failure to reduce his weight while diabetic would be a basis for holding the person responsible not only for remaining overweight, but also for suffering from worsening diabetes. Furthermore, if being overweight is necessary for the onset of the disease, the diabetic could be presumed to be responsible for having developed the disease, and thus properly charged more for having it treated. However, to the extent that overweight people do not necessarily become diabetic, it may not be reasonable to assume that an overweight person should have acted to avert what is a mere possibility. In terms of a diabetic’s choices, if losing weight lessens or eliminates the (chances of, or continuance of) the sickness and the diabetic does not lose weight, a diabetic could rightly be held responsible and thus properly charged for the extra cost borne by others.

A few nuances should be made transparent. First, if the charges are not merely to reimburse others for the increased cost, but also to manipulate the “offender” to change his or her ways, it can be asked whether such manipulation is itself ethical and effective. If a person believes that his addiction, eating habits, or disease is a “condition” rather than a result of his choice, then it is unlikely that he would suppose that having to pay more would have anything to do with even a potential change in his “condition.” In other words, a link in the chain of reasoning presumed in the manipulation would not exist for the person to be manipulated.  Moreover, manipulation itself may be unethical unless, as in Kant’s categorical imperative, the rational being to be manipulated is treated not merely as a means, but also as an end in herself. If the end includes the patient recovering, this criterion may well be satisfied in Arizona’s proposal. In such a case, the noxious smell of manipulation may still pass the smell test.

Second, throughout this analysis, I have been assuming that the additional charges can be afforded by the patients and/or their insurance companies. If a patient cannot afford the extra fee and still provide for necessities such as food, shelter and obviously health care, as well as incidentals, then a basic human rights factor intercedes and it could be quite unethical to impose the fine/fee. Relatedly, to the extent that Arizona’s proposal involves reducing the number of enrollees in Medicaid, the goal itself may be unethical from the standpoint of the human right to survival, or life.

Third, if smokers and obese people are to be held responsible for their choices in health-care policy, it would be unethical to be selective in leaving out other choices that have negative consequences in terms of health (and cost). Even so, consistency zealously pursued can put the government into all of our lives with the result being that we have lost our liberty. That is, we might ask ourselves whether there is not a slippery slope involved in opening up our various decisions to governmental overview and charges. The imposition itself could be regarded as unethical, especially in a free society. Yet being forced to pay for the egregious choices made by others, such as by smokers and obese people, can also be regarded as involving an unethical transfer of responsibility. Accordingly, it is well and good, ethically speaking, that a society makes judgment calls respecting how far “egregious” extends. Being a matter of judgment and balance, there is no pre-established line in the sand to be sought in making this determination.

In conclusion, my ethical analysis supports the proposition that smokers and overweight people can be held accountable for their smoking and obesity, respectively, and perhaps even for being diabetic to the extent that mitigating the illness is within the patient’s previous or, more strongly, current control. This conclusion is of course beset by conditions. However, they do not deprive my conclusion of its main thrust—namely, that society has an ethical basis, and thus a right, to hold smokers and overweight people responsible for their inherently unhealthy choices by imposing an extra fee for government-supported health-care. To treat either smokers or the obese as somehow simply affected by, rather than as the agents of, their smoking or obesity is to engage in the subterfuge of an ideological agenda in the guise of science. Such a cloak is of course highly unethical.







Government Employees and Manufacturing Jobs: Takers and Makers?

In 2011, according to Stephen Moore, “there are nearly twice as many people working for the government (22.5 million) than in all of manufacturing (11.5 million). This is an almost exact reversal of the situation in 1960, when there were 15 million workers in manufacturing and 8.7 million collecting a paycheck from the government. . . . More Americans work for the government than work in construction, farming, fishing, forestry, manufacturing, mining and utilities combined. We have moved decisively from a nation of makers to a nation of takers.”

“Collecting a paycheck from the government” implies that people who work in government are somehow receiving an entitlement rather than compensation for their labor. Treating government employees, and, moreover, the receivers of government services, as “takers” reduces all the functions of government to welfare programs. Are the corporations in the private sector that receive defense contracts “takers” akin to the lazy “takers” that Stephen Moore has in mind in his opinion piece?  Is G.E. a “taker” in not having any tax due on 2010 earnings in the billions?  Presumably, the defense contractors and tax-minimizing companies benefitted from government-sponsored infrastructure, such as police protection and roads?  Furthermore, are citizens who benefit from security and transportation to be regarded as “takers”?  Are flyers “takers” when they rely on the FAA to keep flight control agents in control towers on the up and up?

Furthermore, Moore is ignoring non-governmental reasons for the reduction in factory jobs in the U.S. “Every state in America today except for two—Indiana and Wisconsin—has more government workers on the payroll than people manufacturing industrial goods. . . . Even Michigan, at one time the auto capital of the world, and Pennsylvania, once the steel capital, have more government bureaucrats than people making things.” However, even though government payrolls have expanded as we have asked for more from our governments, such as in regulating banks too big to fail, the proliferation of capitalism in the world, such as via more foreign direct investment in developing countries (with the notable exception of Africa), has brought with it a spreading-out of manufacturing around the world.

Even so, the U.S. still has the most manufacturing jobs of any economy, but this does not mean we need not expand our skilled labor force in new fields such as computer technology. In focusing on manufacturing, Moore seems to reduce “making” to manufacturing.  Does not a CPA “make” something of value when investors and creditors rely on the certified financial statements of a company?  Without doubt, we need to expand our notion of “making” in the twenty-first century global economy. We also need to reduce our conception of “taking” when it comes to what government employees do and even in what the government does. Otherwise, even Moore might be left with the unavoidable conclusion that the American corporations, even more so than the “welfare mothers,” are the “takers.”

Click to add a question or comment (and view them) on government and manufacturing jobs in the U.S.

Source:


Wednesday, March 30, 2011

Ethics in Blogging: A Normative Constraint on Excessive Economizing and Power-Aggrandizement

Blogs are interesting creatures. Like humans, they seek not merely self-preservation, but also the expansion of their domain on the internet. The empire-building does not have power-aggrandizement as its goal; rather, they use what power they have to maximize the reach of their words. To be heard by as many blogs as possible—as if quantity were more important than quality—is a still more intermediate means, with the end being to bring one's words to the world. At the extreme, a blog wants to see a world that has become a projection of its own words. Less extreme, a blog wants to be a significant player in societal discussions even beyond the internet. Toward such ends, blogs economize in the sense of seeking to minimize what they incorporate of other blogs beyond what they view as being useful to themselves, while attempting to maximize that of themselves that is incorporated on other blogs by power and moral suasion. Of the latter device, for example, a blog might say to another blog, “I’ll blogroll you if you blogroll me.” This is a variant of the manipulatory ploy of “I’ll follow you if you follow me” on Twitter.

As Susan Gunelius, an expert on blog marketing, observes in Blogging for Dummies, such reciprocity is no longer a normative practice in blogging. Indeed, the “I’ll follow you if you follow me” mentality is questionable at best. It implies that one person follows another not because of any value perceived on the followed’s account, but, rather, solely so he or she can be followed by yet another person.

For example, one way my essays are sent out is via @wordenreport on twitter. This is the entire purpose of that account. The reason why someone would follow the account is therefore presumably because he or she wants to read my essays (I don’t send out other tweets on that account). To hold that the value to the follower in receiving my essays is somehow dependent on me following him or her rather than on the quality of the my essays simply does not make sense from a logical standpoint. Moreover, the mentality that seeks to impose such a conditionality is inherently manipulatory. For my part, I would rather not have people follow @wordenreport if they do not want to read my essays, as receiving them is the sole purpose of that account. Furthermore, because I use @wordenreport simply to send out links to the essays, I do not look at incoming tweets; I have another twitter account to accommodate that. So it does not make sense for someone to want me to follow unless he or she is simply interested in having a higher number—as if that were an end in itself apart from signifying a greater reach attained for his or her mind. It is the combination of the element of manipulation and valuing a higher number as an end in itself that characterizes the mentality that I am identifying here. It evinces the sort of excesses that can manifest from the economizing and power-aggrandizing forces that are operative in blogging.

Fortunately, “semi-permeable” normative constraints can be applied to the two forces that seek to maximize the variable of self-interest. One might call such constraints ecologizing, for like an ecosystem they can be breached by a maximizing species or variable within. Susan Gunelius points to a few of the ethical “rules” that can act as constraints via pressure from other bloggers.

Spam can be interpreted as economizing or power-aggrandizing forces that fail to respect the normative "rules" of the internet society. Comment spam, for example, utilizes a useless or irrelevant comment-posting simply to self-promote (i.e., to economize) through links. Post-spam reduces a blog’s own post to an otherwise content-empty medium advertising the blog itself or someone else’s product in exchange for samples or money. Both of these kinds of spam are unethical because they operate under a subterfuge (i.e., promising to be something other than what they are). The underlying selfishness fuses with theft (i.e., stealing other bloggers’ time and effort in reading), and thus manifests passive aggression. In other words, it is a “taking” beyond that which the spammer is entitled to take.

As another example of the mentality that has a difficult time with limitation, some bloggers steal the bandwidth of other bloggers. According to Gunelius (2010, p. 69), bloggers and website owners can be charged more if the amount of time that their content is accessed increases dramatically, “such as when other bloggers use images without saving them to their own hosting accounts first.” Gunelius claims that a blogger should copy and save the picture (assuming fair use) before inserting the image in the post. Otherwise, the excess power-aggrandizing steals more than time and effort.

In describing excessive economizing and power-aggrandizing in blogging beyond ethical, or “ecologizing,” constraints, I have sought to bring out the element of aggression. The anger that bloggers feel toward the “cheaters” is not only due to the unfairness in the manipulation; the response is also to the passive aggression. If the responses go beyond what is proportionate, however, excessive power-aggrandizement is involved in the victims as well. That is, the victims can become victimizers! Such anger “over the top” is also evinced in comments that are hateful or otherwise attacking. It is the sheer excess in the anger that can strike one as amazing in the sense that it even happens at all.  For such intense anger to be directed to a total stranger, especially if he or she had posted on his opinion without ad hominem criticism, points to psychological problems in the person making the comment.

The spiked anger is actually a projection of the person’s failure to deal with his or her own problem, rather than having much at all to do with the “offending” post. Trolls, for example, are actually playing out their pathology on the internet because they believe they can take their anger out on strangers without any downside. Blackballing such people is not only smart; it is an ethical obligation if it is in line with preventing or minimizing future attacks against innocent victims. However, lest such hate be conflated with spam as if the two were equally egregious, it is important that efforts to keep hate at bay do not overflow as excessive power-aggrandizing! While spam is annoying and involves passive aggression, the anger in hateful writing directed to an innocent person is far worse.

Generally speaking, the bloggers who subscribe to normative constraints in the blogosphere recognize the existence of excessive power-aggrandizement and economizing forces in blogging. The theft and anger elements in the excess are particularly onerous. While the law cannot effectively sanction such elements, “societal” pressure can. However, lest the latter become self-righteous, it is important not to label as spam anything that is inconvenient.

For example, commenting (or tweeting) to someone on topic and including a link to one’s own post can be a legitimate part of an effort to start a conversation on a mutual topic—as long as there is content on that topic in addition to the link. You might tweet on Obama and Libya. I might send the following reply: “yeah, but Obama waited too long. So his motive is suspect. See link.” My reply was on the other’s topic and added content as well as a link to my posting on that content. To treat my tweet as cold-calling would be to overreact simply out of the mistaken belief sending out a tweet should not occasion tweets. In such overreaction is an element of presumptuousness in addition to the excessive power-aggrandizement. In other words, excess can manifest where it is least expected.  

Of course, I’m reading Blogging for Dummies, which fits my pace on blog technology and using social media on the internet. So my thoughts should be taken with a grain of salt. Perhaps if we could bring more humility and less hate to our expansive electronic world, we might find that it would blast off to the stratosphere. We would be able to say, “you ain’t seen nothin’ yet.” The new world is not merely technological; fundamentally, it is composed of fallible human beings—you and me. Lest we treat the self-seeking proclivity as anything less than ubiquitous, we could do worse than recognize it in ourselves.

Source: Susan Gunelius, Blogging for Dummies (Indianapolis: Wiley, 2010).

On ecologizing, economizing and power-aggrandizing forces applied to business and society, see: William C. Frederick, Values, Nature and Culture in the American Corporation (New York: Oxford University Press, 1995).

Military Intervention in Libya as Just War: The Catholic Position

According to the Catholic Herald, there were originally only three conditions laid down by Thomas Aquinas for a just war:

1) “The war must be started and controlled by the due authority of state or ruler – in other words, it can’t be a civil war or a rebellion. This rules out the war being waged by the Libyan rebels, but not the military intervention of the Nato [sic] forces, since that was indeed started by the due authority, not of one nation, but of the United Nations itself.” Here we see what might be called Aquinas’ implicit Burkean political conservatism with respect to established regimes over what in modern terms we call rights of the people to protest and self-governance. Even under Aquinas’ criterion of due authority of state or ruler, the Libyan rebel movement, as distinct from the preceding unarmed protesting, could be rendered as just provided that there is a rebel authority rather than fractured units fighting on their own. Even by this interpretation, the armed rebels may fall short, at least as they were in March of 2011.  Rather than proscribing civil war or rebellion, Aquinas’ criterion could simply be oriented to preventing the unintended additional harm caused by an army in disarray without a clear line of command. In terms of the Libyan rebels, the “unfairness” in a lack of clear command could be interpreted as “unfairness” to the international coalition, whose efforts could be in vain should the rebels refuse to bind themselves under one command. As for the international coalition itself, neither NATO nor the U.N. is a ruler having the due authority of state, for those international alliances or organizations do not enjoy governmental sovereignty. To the extent that the international coalition is based on partners whose militaries are not subject to a common line of authority, the mission may fall short of Aquinas’ criterion. This objection could perhaps be qualified to the extent that the partners meet regularly in common council, whose decisions are adhered to in practice. Other than the objections of the Arab League (and of Turkey in NATO to that alliance taking command), the international coalition may in its conduct have satisfied the criterion. In short, even though both the Libyan rebels and the international coalition could in practice satisfy Aquinas’ criterion here, their qualification is on shaky ground. In both cases, this shortcoming could be overcome by themselves.

2) “There must be a just cause. This wouldn’t include, say, a war for territory, but it would include the protection of a civil population, self-defence and the prevention of a worse evil. The UN resolution emphatically fulfils that condition.” Prime facie, this criterion seems pellucid. However, to the extent that cause can be interpreted in terms of motive rather than outcome, it becomes problematic to assess a given case because it is notoriously difficult, if not impossible, to get into another person’s head. For example, if the Obama administration’s motive, or cause, is to reduce the market’s fears of future disruptions in the oil supply—fears because Libya itself only produces 2% of the global supply—then in terms of motive the cause is not just. However, even here, a “worse evil” could be interpreted as some consumers becoming unable to afford even the gasoline needed to get to work (and the rising cost of food transported to their grocery stores). Perhaps preventing mass poverty (and perhaps starvation and homelessness) could count as counting in obfuscating “a worse evil.” Even so, the protection of Libyan civilians, especially if at the point when they had been unarmed protesters, would be a more immediate prevention of a worse evil because such protection follows directly from Qaddafi’s violent betrayal of his own people. Alternatively, moreover, if the decisive element is outcome or consequence, the fact that hundreds of thousands of Libyan civilians have been spared as a result of the allied bombings would satisfy the criterion. In my view, the criterion applies to both motive and consequence. In the Libyan case, the fact that it took the Obama administration a month to respond militarily—after the protesters had given way to armed rebels and the price of oil had spiked on world markets—can legitimately be used to assess motive from the standpoint of just war theory.  Were Obama’s primary motive the protection of Libyan civilians, he would have intervened when Qaddafi violently turned on the protesters. As Obama himself said, Qaddafi had lost the legitimacy to rule.

3) “The war must be for good, or against evil. Think what Gaddafi said when he thought his tanks were about to roll virtually unopposed into Benghazi: that he would go ‘from alley to alley, from house to house, from room to room’ and that he would show no mercy’. Thousands would have died. Without any doubt, the airstrikes have been against a very great evil indeed.” This criterion is closely related to the second—the criterion going from “just” to “good” (as opposed to evil). The shift here is from just war as under ethical auspices to a theological basis. The book of Job in Hebrew scripture attests to the vital difference between the two. Theoretically, God cannot be omnipotent if conditional on observing an ethical system. In other words, the “good” theologically cannot be held ransom for the “good” ethically. Divinity transcends mere human (i.e., finite) systems. Hence God is said to be wholly other even as it is immanent in the very existence of creation. In terms of the Libyan case, the question of motive and consequence is relevant here too. In terms of motive, is the protection of consumers to obviate an evil, or is it merely a matter of convenience and fairness (to the consumers being impacted by the speculators and fear in the market)? Regarding Qaddafi’s intended action, the sheer magnitude of it could point to it being evil even as a stated threat; it is certainly unethical. However, to treat such suffering itself as pointing to an evil action risks reducing theology to ethics (harm itself to the absence of God). In other words, evil cannot be merely unrequited and unjust suffering. Perhaps the question of evil goes to the intent of the agent of the deed involving treating himself as a god, with the suffering of others being an effect of the conflation of the creature with the Creator. As with the matter of motive more generally, the problem may be in judging another person to be evil. “Thou shalt not judge”. . . but the intensity of inflicting injury tends to speak for itself. Lest our finiteness as human beings render us impotent to prevent or stop evil, we adopt such surrogates as a matter of necessity. In terms of stopping Qaddafi from murdering on a large scale (though are more lives worth more than a few?), the reaction of most of the rest of the world can be read as a rejection of evil, for Qaddafi did seem to take on god-like aspirations in having such power over life and death.

According to the Catholic Herald, “The Church later added two more rules, though St Thomas usually gets the credit for them (and why not?). The first is that the conflict must be a last resort. In other words, every other option must be tried first. In this case they had been. Sanctions, diplomacy, phone calls from Tony Blair to his pal Muammar, freezing of assets, the lot. None of it had any effect. The UN military measures were not only a last resort, they were employed only at the last possible moment, just in the nick of time.” Significantly, “last resort” does not necessarily means “after due time.” The timing of the response, and thus the alternative options available, must surely be impacted by the nature of that which is to be prevented.  For example, if a ruler is violently turning on mass protests, waiting for the go-ahead from the Security Council may not be a justification for not acting immediately. The fact that the Council does not have governmental sovereignty (e.g. five permanent members have vetoes) means that the body is not equipped to act on short-notice. This fact mitigates the claim that a U.N. mandate is morally (or theologically) of value before an evil can be prevented or stopped in its tracks. If the purpose of the international coalition’s intervention in Libya was to protect civilians, a timely response was implied because of the nature of Qaddafi’s action against the protesters. Excessive delay could be interpreted as an implicit complicity in the evil if more immediate intervention was possible. In short, last resort does not necessarily imply delay.

The Catholic Herald describes the last criterion of Catholic just war theory as follows: “Lastly, the war must be fought proportionally. This means that more force than necessary must not be used, nor must the action kill more civilians than necessary. Enormous pains are being taken to fulfil this condition, too. The supposed “smart bombs” they talked about in the first Gulf war (which constantly missed their targets and killed large numbers of civilians) appear to have been in the last 20 years perfected in the most remarkable way, so that tanks can be taken out surgically even inside urban areas without damage to their surroundings (special missiles are used, with a considerably reduced explosive charge).” Here, the purpose of the international intervention is crucial. If the end is to remove Qaddafi because he has lost the right to rule by international consensus, then the no fly zone acts are not proportionate.  However, the actual agreed-upon objective of the coalition (as per the Security Council’s resolution) does not reach regime change. In terms of protecting civilians, that Qaddafi’s forces continued to beat and kill civilians after the imposition of the no fly zone strongly suggests that the coalition’s intervention was not proportional. Divisions within the coalition on this point could thus be interpreted as contrary to just war from the Catholic perspective.

In summary, even though my analysis of the Catholic Church’s just war criteria is generally consistent with the judgment expressed in The Catholic Herald article, my particular stress is on the extent of nuances and  how they qualify the judgment. Moreover, the nuances raise theoretical questions that transcend the matter of just war. Among such matters is that of the relationship between human judgment (and ethical systems) and the divine. Just war theory can be viewed as presumptuous to the extent that it presumes a judgment on matters that transcend the boundaries of human cognition and perception. Even so, as human beings living in human societies, we are as though instinctively drawn to stop what seems to us to be evil to us even if we cannot be sure of our judgments. As is the case more generally on matters where theology meets the ground, we are in the condition of “already, not yet.” Accordingly, a good supply of humility is called for even when we are convinced that we are fighting evil rather than perpetuating it.

Click to add a Comment or Question (and View Posted Comments) on Just War Theory and the No Fly Zone in Libya.

On the Exaggerated Value of Executive Compensation in American Society: The Case of Bill Gates and Paul Allen at Microsoft

Paul Allen claims in his book that Bill Gates tried on more than one occasion to reduce Allen’s relative ownership interest in Microsoft. Of course, the veracity of Allen’s explanation can be questioned even if the factual changes in percentage terms are a matter of public record. In focusing on whether Allen’s explanation is credible, The Wall Street Journal overlooks more fundamental category mistake in reckoning ownership as a species of compensation. Such an error may reflect a hypertrophy involving the value of money in American society—an exaggeration to which the journal may be susceptible as the foremost mouthpiece of American business.

The Wall Street Journal reports that Paul Allen has some critical things to say about his co-founder of Microsoft, Bill Gates. In general, Allen asserts that Gates tried more than once to reduce Allen’s relative financial ownership in the company. Whereas the journal focuses on the veracity of Allen’s claims—ultimately questioning the man’s credibility—I find in the story a case study on the difference between ownership and compensation for labor and on corporate leadership. I contend that the difference may often be minimized in business as well as by society, while particular CEOs are unduly projected onto the societal stage essentially as societal leaders.

Allen also claims in his book that in the mid-1970s, when he and Bill Gates were two college dropouts were based in New Mexico, Gates asked for 60% of their partnership because of his greater contributions to the creation of software for running the BASIC programming language on an early PC, the MITS Altair 8800. Allen says he had assumed that their partnership was evenly split, but he agreed Gates' request anyway. Several years later when Gates and Allen established Microsoft as a formal partnership, Gates asked to change their respective shares in the business to a 64-36 split, a demand to which Allen again agreed. Furthermore, in the early 1980s, Gates rebuffed Allen after the latter asked for an increase in his own Microsoft shares after his work on a successful Microsoft product called SoftCard, Allen writes that he was deeply disappointed in Gates’ response; he had known Gates since they were students at a prestigious private school in Seattle. "In that moment, something died for me," Allen writes. "I'd thought that our partnership was based on fairness, but now I saw that Bill's self-interest overrode all other considerations. My partner was out to grab as much of the pie as possible and hold on to it, and that was something I could not accept." Allen recounts that he sucked it up and thought, "OK…but one day I'm out of here." 
                                       
                                    Bill Gates and Paul Allen, co-founders of Microsoft
                                       By Doug Wilson/Corbis, printed in The Wall Street Journal 

Furthermore, Allen asserts that in 1982 he eavesdropped on a discussion in the Microsoft offices in Bellevue, Wash., between Bill Gates and Steve Ballmer, who went on to become the company's CEO. Allen claims that he heard the two men talking about his recent lack of productivity and how they might dilute his equity in the company by issuing options to themselves and other shareholders. Allen said he burst into the room and confronted the two men, both of whom later apologized to him and backed down from their plan. "I had helped start the company and was still an active member of management, though limited by my illness, and now my partner and my colleague were scheming to rip me off. . . . It was mercenary opportunism, plain and simple." If so, then the vaunted veneer of societal leadership that Bill Gates has attained by virtue of his achievements in software, sheer wealth, and philanthropy may be a projection of something more than the man, and thus a reflection of societal values.

Of course, there are two sides to squabbles, and this case is no exception. Gates's attempts to lower Mr. Allen's stake in the company reflected concerns that Allen wasn't working hard enough and wasn't commitment to the company, say people familiar with the relationship according to the journal. That was one reason, these people say, why Gates put a provision in their first partnership agreement that would allow him to buy out Allen if he thought there were "irreconcilable differences" between the two men. Allen refers to the provision but does not include a reason for it, which is telling. Furthermore, third parties with knowledge of meeting to which Allen refers claim that Allen puts himself in meetings that he did not in fact attend. If true, Allen’s claims regarding Gates could also be doubted, though there is factual support for the changes in ownership percentages even if not for the reasons.

If Gates was putting more effort into the business, an argument based on that could be made that he should receive a higher percentage of the ownership so he would receive more dividends. However, it could also be argued that ownership, unlike compensation, is based on having founded a business (or having purchased the rights to such a basis by buying stock-ownership). Gates may have conflated compensation with ownership in demanding a greater percentage of stock, essentially regarding the latter as compensation in treating dividends as a form of salary. Such a conflation may distort property ownership in a way that minimizes the fundamental difference between an owner and an employee. Of course, an owner can work as an employee of his own business, but the two roles are distinct. Gates’ mistaken notion of ownership may have been formed out of a society that over-values executive compensation, and more generally money. Consider, for example, the much higher compensation packages that American managers receive relative to their European colleagues. Relatedly, the ratio of executive to “lower level” employee compensation in the U.S. is much higher than in the E.U.  Such differences point to differences in societal values, and such values can, if exaggerated, lead to category mistakes. So Allen’s complaint against his boyhood friend and business partner may actually be a critique of a much larger problem in American society.

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Tuesday, March 29, 2011

Mass Foreclosures as Fallout from Regulatory Capture: Banks in a Conflict of Interest at Treasury

During the summer of 2010, the Obama administration unveiled a $1 billion program to offer loans to help the jobless pay their mortgages until they could find work again. Even as it was to take effect before the end of that year, by April of the next year the program had yet to accept one application. The New York Times avers that this “could be an epitaph for the administration’s broader foreclosure prevention effort, as tens of billions of dollars remain unspent and hundreds of thousands of homeowners have been rejected.” By April of 2011, the existence of the main program, the Home Assistance Modification Program, had become a target of the Republican-controlled U.S. House.  On March 29th, the House voted to end the foreclosure relief program. Even though the Democratic-controlled U.S. Senate vowed to pursue a rescue, even the Democrats there considered the program to be badly flawed. To be sure, the administration had failed to stem the wave of foreclosures.
The full essay is at "Essays on the Financial Crisis," available at Amazon. 

Monday, March 28, 2011

President Obama's Justification for Limited Military Intervention in Libya: Driving a Wedge between the Bushes

In the early evening of March 28, 2011, President Barak Obama addressed the American people and the world to explain his administration’s involvement in the international coalition that had been implementing a no fly zone over Libya while protecting Libyan civilians from their own ruler. He sounded much more like the first President Bush than the second in terms of foreign policy.  Similar to how the elder Bush had restrained himself from going all the way to Baghdad after he had joined an international coalition in removing the Iraqis from Kuwait, Obama said that directing American troops to forcibly remove Colonel Qaddafi from power would be a step too far, and would “splinter” the international coalition that had imposed the no fly zone and protected civilians in rebel areas of Libya. Interestingly, in taking the elder Bush’s route, Obama came out strongly against that of Bush II. Referring to the alternative of extending the U.S. mission to include regime change, Obama stated, “To be blunt, we went down that road in Iraq . . . regime change there took eight years, thousands of American and Iraqi lives, and nearly a trillion dollars. That is not something we can afford to repeat in Libya.” In effect, Obama was exposing a fundamental difference between George H.W. Bush and his son by saying essentially the same thing as the elder Bush had done while excoriating the foreign invasion of his son. Yet Obama did not stop there. He added a theoretical framework that the elder Bush could well have used.
The New York Times puts the theory quite well. “The president said he was willing to act unilaterally to defend the nation and its core interests. But in other cases, he said, when the safety of Americans is not directly threatened but where action can be justified — in the case of genocide, humanitarian relief, regional security or economic interests — the United States should not act alone. His statements amounted both to a rationale for multilateralism and another critique of what he has all along characterized as the excessively unilateral tendencies of the George W. Bush administration.” In other words, even in providing a basic framework, Obama was able to distance Bush the father from Bush the son.  Interestingly, Obama had awarded the senior Bush with the Metal of Freedom over a month earlier. I would be very surprised if Obama would award Bush the Son such a prize. In terms of foreign policy, the philosophical line in the sand clearly distinguishes the second Bush from both his own father and Barak Obama.
Of course, the President’s speech left his audience hanging in other respects. For instance, averting a large-scale massacre in Libya is in the U.S. strategic or national interest because of our humanitarian values as well as the proximity of Libya to the nascent upheavals in Tunisia in Egypt. So would not protecting a mass protest in Yemen, which is next to Saudi Arabia, or in Syria, which has particular strategic interest to the U.S. on account of Syria’s connection with Lebanon (and thus relevant for Israel) and Iran, also be in the American national interest?  The President could argue that neither Yemen (or Bahrain) nor Syria had come to the point where the civilians in a major city were at risk—but it could still be asked, what if?  Must there be a baleful hint of genocide in a city commensurate to the Libyan city of Benghazi for protesters to warrant invoking principled leadership with or without allies when a ruler has effectively lost his right to rule by having turned on his own people?
I contend that the President treated the U.S. strategic interest quite broadly by including the protection of large numbers of civilians against their own ruler, particularly when even the portent of carnage could destabilize emergent republics next door. Such interest is broader than questions such as, “how the civilians would view the U.S. were they to gain power?” and “what effect would a new government have on Iran and Israel?” Such questions pertain to a narrower conception of national interest—one that is much less of value to a country. Viewing the good will of protesters as an opportunity—essentially taking on the wider, humanitarian-inclusive, notion of national interest—Syria, Bahrain and Yemen become like Libya as soon as their respective protests and prospect of government brutality reach a certain threshold that Libya had surpassed. What that threshold is—meaning in terms of scale as well as brutality—is something the American Congress and President need to decide. For once that is set, attention can turn to the mechanism involved in forming an international coalition should a country cross the line. Differing from Obama, I submit that the establishment of a threshold can be relied up such that principled leadership could be invoked by the U.S. even in the absence of partners at the outset. Such unilateralism would differ appreciably from that of Bush the Younger, whose invasion of Iraq was based on a criterion used for that one case alone (WMD).  In other words, unilateralism need not mean capriciousness or impulsiveness. A humanitarian threshold undergirded by a strategic interest in there being a world wherein rulers serve rather than violently turn on their own people can justify not only international coalitions, but also instances of principled leadership.
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Social Media Companies: For Liberty or Against Protesters?

The question of the role of social media internet companies as protesters use them to communicate on their protests and governments exploded on the world stage in the context of the protests going in the Middle East in early 2011. Lest it be presumed that the firms’ respective policies are relevant only in terms of what content (or users) is allowed and how that content could impact events on the ground, the policies themselves reflect on the claim made by the West that we are the land of the free. In other words, if social media companies are (allowed to be) oppressive or otherwise not respectful of their customers, the overall message to the oppressed in the Middle East cannot be that greater freedom is indeed possible because it exists here. Lest our own private sector unwittingly undercut the words and efforts of the protesters, we might want to use this case to ask if we couldn’t be freer too.
According to Ebele Okobi-Harris, the director of the business and human rights program at Yahoo, which owns Flickr, the case of el-Hamalwy, an Egyptian activist whose uploaded pictures of security agents were abruptly taken down by Flickr staff, has prompted internal discussions about whether Flickr should reconsider its approach. What if the photos had been his own and he had not yet backed them up? Flickr’s abrupt and unannounced action suddenly seems quite oppressive. Fortunately, managers at Flickr are at least thinking about the issue. “As the uses of these social networks evolve,” Harris said, “we have to start thinking about how to create rules on how to apply rules that also facilitate human rights activists using these tools.”
According to The New York Times, Harris “pointed to the challenges of balancing the existing rules and terms of service for users with the new ways that activists are using these tools. One challenge is whether a company should maintain its commitment to remain neutral about content, even when politicized content could offend users or even put people in danger. ‘Does a company take responsibility for the content?’” Okobi-Harris asked. For instance, what, el-Hamalawy asks, would Flickr do if a group that opposes abortion wanted to post photographs of doctors who perform abortions? In his own case, el-Hamalawy “said Flickr’s decision to take down the photos left him not only frustrated and angry but also terrified. ‘Everyone knew that I had released those photos,’ he said. ‘Then the photos were gone. I couldn’t sleep. I was thinking that at any minute, they were going to come for me.’” Would Flickr managers be responsible for el-Hamalawy’s death if it was occasioned by Flickr’s action?  Or was it his own act in uploading the photos in the first place that put his life at risk? To be sure, Flickr should have notified him before taking down his pictures; the company is responsible for causing him fear. However, this seems more like bad business than unethical conduct on Flickr’s part. Whether a customer is a protester oppressed by a dictatorship or simply a novice photographer who has uploaded her own pictures, there does appear to be reason to withhold one’s trust from Flickr staff.
Beyond the matter of bad customer relations—which seems to be ubiquitous in American business—the question of whether social media, which includes Facebook, Flickr, Twitter and YouTube among others—is unwittingly biased toward oppressive governments even if only from a desire to maintain control over its site must be addressed. In early 2011, it became clear that such companies were increasingly being used by activists and pro-democracy forces, especially in the Middle East and North Africa, to the notice of their governments. As Harris asked of Flickr, does a social media company have responsibility for the content?  Furthermore, it should be asked whether such a company should be susceptible to the influence of governments, whether in identifying users or barring their content?
According to The New York Times, the “new role for social media has put these companies in a difficult position: how to accommodate the growing use for political purposes while appearing neutral and maintaining the practices and policies that made these services popular in the first place.” The New York Times reports that “YouTube was one of the first social media networks to wrestle with content posted by a human rights advocate that conflicted with its terms of service. In November 2007, YouTube removed videos flagged as “inappropriate” by a community member that showed a person in Egypt being tortured by the police. They were uploaded by Wael Abbas, another Egyptian blogger involved in opposing torture in Egypt. After a public outcry, YouTube staff members reviewed the videos and restored them.” Had YouTube managers been influenced by Egypt in taking down the video, the company would have effectively taken sides in the Egyptian dispute between its government and people. Absent such pressure, the issue could simply be whether a warning notice is appropriate given the graphic nature of the violence being shown. I made the horrible mistake, for example, of watching the slow beheading of a Western hostage by a terrorist group in the Middle East. Even a year or two later, I can still hear the man’s raspy voice shouting for dear life as his throat was being deprived of air while his murderers pathologically invoked their deity’s name as if their act had been sanctioned by a power higher than, and thus somehow justifying, their own anger and resentment. Because I looked ignored the “graphic content” warning (as they are perhaps too commonly used), perhaps the issue facing YouTube does indeed go beyond whether such a warning should apply. In my case, my curiosity got the better of me. Should YouTube have been responsible for protecting me from myself? This seems like a tall order, especially as it could invite the staff to discriminate between content based on their political or ideological positions. It could be that the staff could limit their intervention only to extremely graphic content, with review taking place in the company in the particularly cases.  Still, in a free society, citizens ultimately must take responsibility for ignoring warnings; I don’t believe that a government or private company can protect citizens from themselves, even if it can protect us from others of us who would seek to harm, mislead or cheat us.
Regarding Facebook, The New York Times reported on March 26, 2011, the company “has remained mostly quiet about its increasing role among activists in the Middle East who use the site to connect dissident groups, spread information about government activities and mobilize protests. But Facebook is now finding itself drawn into the Israeli-Palestinian conflict and has been pushed to defend its neutral approach and terms of service to some supporters of Israel, including an Israeli government official. Yuli Edelstein, an Israeli minister of diplomacy and diaspora affairs, sent a letter [in March] to Facebook’s chief executive, Mark Zuckerberg, asking him to remove a Facebook page created on March 6 named the Third Palestinian Intifada. The page, which calls for an uprising in the occupied Palestinian territory in May, has more than 240,000 members. ‘As Facebook’s C.E.O. and founder, you are obviously aware of the site’s great potential to rally the masses around good causes, and we are all thankful for that,’ Mr. Edelstein wrote. ‘However, such potential comes hand in hand with the ability to cause great harm, such as in the case of the wild incitement displayed on the above-mentioned page.’ Facebook has, so far, not removed the page. The administrators are not advocating violence, and therefore, it falls within the company’s definition of acceptable speech, company officials said. ‘We want Facebook to be a place where people can openly discuss issues and express their views, while respecting the rights and feelings of others,’said Andrew Noyes, a spokesman for public policy at the company.”
“Wild incitement” can pertain to the pro-democracy rallies that had been taking place throughout the Middle East. Even if violence were being called for in the Intifada, would Facebook (or Twitter) remove such content if it had been put up by an Egyptian or Libyan protester?  More pointedly, what if a page or tweet referred to “wild incitement” in the midst of being attacked by government troops or police? How far removed is an occupied people to such intimidation on a daily basis? Should they be barred from tweeting, “Come help me at X intersection b/c police are beating my elderly parents”? The staff at Facebook are smart not to intervene in disputes between a government and its people. If anything, an America-based company has a basis in taking the side of the oppressed, for the United States came into existence from British oppression. Relatedly, the U.S. Government acts in concert with its own beginning whenever it takes the side of a people protesting against governmental oppression.
Even if Facebook does not intervene to censor content, it is possible, even likely, that particular policies are inherently in the advantage of vengeful government agencies and a threat to Facebook’s customers. For example, The New York Times reports that “Human rights advocates have also criticized Facebook for not being more flexible with some of its policies, specifically its rule requiring users to create accounts with their real names. Danny O’Brien, the Internet advocacy coordinator for the Committee to Protect Journalists, cited the case of Michael Anti, an independent journalist and blogger from China whose Facebook account was deactivated in January because he had not used his state-given name to create it. In addition to losing the ability to publish and communicate on Facebook, and not wanting to use his real name because of China’s strict rules governing freedom of speech and harsh response to those activists who violate them, he has lost the contact information for thousands of people in his Facebook community. ‘One can’t expect all of these services to provide everything to everyone,’ said Mr. O’Brien. ‘I think that part of the solution is to provide people with a dignified way of leaving the service.’”
O’Brien was giving too much to Facebook. It is insufficient to expect Facebook to merely provide its customers with a dignified way to leave (or be deprived of service). In addition, Facebook ought to respect the preference of some of its customers to anonymity. Facebook’s staff would still have those customers’ contact info (more of which could be demanded and verified in such cases), so anonymity would not be an excuse to get away with unethical or illegal conduct, such as publically defaming someone by making false claims. At the very least, a person’s anonymity being refused is a basis for that person to lie ethically about being on Facebook. Moreover, Facebook’s insistence that real names be used adds to the argument that the U.S. Constitution should be amended to include an explicit right to privacy. Much of the criticism of Roe v. Wade is actually that the justices “found” such a right being implicit in that constitution. While the problem regarding Facebook insisting that customers use their real names may have implications for U.S. constitutional law, we may simply have a matter here of bad business (i.e., bad customer service). In an economy kept competitive by anti-trust law, the emergence of a competitor with more respect for its customers could be anticipated. Ironically, having a government strong enough in resisting the lure of industry lobbyists that it enforces anti-trust law with sharp teeth can actually spread liberty by allowing for competition. Such liberty could be expected to leave its own imprint in the world in the midst of the pro-democracy protests in the Middle East. In fact, Facebook having respect for its potential and actual customers who prefer anonymity could send a message stronger than any from the protesters or human rights advocates in the Middle East—namely, “Look over here! Real freedom is possible!”
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Source:
Jennifer Preston, “Ethical Quandary for Social Sites,” The New York Times, March 27, 2011.

Flickering Ethics at Flickr: On the Ethics of Enforcement

The New York Times has an interesting piece on the ethics involved in providing a social media service for the public.  The article describes how “(t)wo days after using Flickr to display photos of police officers from Egypt’s feared state security force, Hossam el-Hamalawy watched in disbelief as they vanished, one by one, from the popular social networking site, which he had been using since 2008. ‘I thought I was being hacked,’ said Mr. el-Hamalawy, a prominent Egyptian blogger and human rights activist who had uploaded the headshots of the police from CDs found by activists early this month at the State Security Police headquarters in Nasr City. He later learned . . .  that the photos had been removed because he did not take the images himself, a violation of the site’s . . . rules. ‘That is totally ludicrous,’ he said. ‘Flickr is full of accounts with photos that people did not take themselves.’” 

The full essay is in Cases of Unethical Business: A Malignant Mentality of Mendacity, available in print and as an ebook at Amazon.

Sunday, March 27, 2011

The Consolidation of Power in the American and Roman Empires: On the Rise and Fall of Empires

The American federal government was for at least a century, and perhaps even longer, primarily involved in defending the new empire and regulating commerce between the republics (or states more generically). By the dawning of the twenty-first century, the U.S. Government had grown both in scope and in the number of employees on its payroll while the governments of the republics had been reduced to functioning as little more than local governments. In other words, Congress had come to act like a state legislature, while the states had accepted their status as mere localities. This fundamental shift with respect to American federalism, as well as the empire-“kingdom”-city arrangement, bears a striking resemblance to the Roman empire. By implication, this similarity might lead us to some conclusions regarding the future the United States within the larger story of the rise and fall of empires.


The complete essay is at Essays on Two Federal Empires.