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Friday, August 5, 2011

Is Corporate Social Responsibility Ethical?

Corporate Social Responsibility (CSR) is typically thought to be a topic in the field of business ethics. If a company is socially responsible, it is typically presumed to be ethical in being socially responsible. Solidifying this attribution, some scholars of CSR have even sought to explicitly base it on specific ethical principles. However, contrasting a corporate policy with societal norms or specifying how corporations can get in line with them is not to provide an ethical justification.  Even if a societal norm is consistent with an ethical principle, the norm itself is something that is, rather than a justification for what ought to be. To attempt to derive ought from is is known as the naturalistic fallacy. It is like getting what ought to be from a melon ripening in a field. Is does not imply or justify ought.

By distinguishing between rules based on societal institutions (e.g., a rule for making a promise) and moral obligations (e.g., fiduciary obligation), John Rawls provides a good explanation for why business & society (e.g., CSR) is qualitatively different than business ethics. According to Rawls, a social contract philosopher for whom justice is based on the ethical principle of fairness, the rule or procedure to be followed in promise-making does not by itself give rise to a moral obligation. “To account for fiduciary obligations we must take the principle of fairness as a premise. Thus along with most other ethical theories, justice as fairness holds that natural duties and obligations arise only in virtue of ethical principles. These principles are those that would be chosen in the original position.” Rawls’ original position refers some explanation.

The original position is a level floor of sorts by which principles of a social contract can justly be adopted. It is not an actual meeting; rather, its key aspect is a veil of ignorance, whereby one does not know what office or position he or she will occupy. Rather than sitting down with other people and making a contract, one simply assumes the veil and asks oneself, “To which principles would I freely give my consent if I didn’t know my situation in the institution or system?” Those principles arrived at thusly are to be taken as the operative ethical principles on which moral reasons are based.

Essentially, Rawls is saying that the core of an ethical analysis is applying ethical principles through moral reasons to justify or castigate a given practice. These principles, together with the relevant facts of the circumstances, are what “determine our obligations and duties, and single out what count as moral reasons. A (sound) moral reason is a fact which one or more of these principles identifies as supporting a judgment.” (Rawls, p. 348) In other words, to justify something by an ethical principle is to give moral reasons based on that principle. Such reasons resonate with should be rather than necessarily what is. Such is the name of the game in business ethics: the project is to evaluate an actual or hypothetical practice or rule according to principles and reasons grounded in ought.

“By contrast, institutional requirements, and those deriving from social practices generally, can be ascertained from the existing rules and how they are to be interpreted.” (Rawls, pp. 348-49) That is, rules or norms, such as corporate policies or decisions, are based on existing practices, rather than on what ought to be the case. “The norms applying to persons who are players in a game depend upon the rules of the game. Whether these requirements are connected with moral duties and obligations is a separate question. This is so even if the standards used by judges and others to interpret and to apply the law resemble the principles of right and justice, or are identical with them.” (Rawls, p. 349)  So even if a social norm bearing on a corporate policy or decision dovetails with an ethical principle, the norm itself cannot justify ethically, as in providing moral reasons, because a norm is based on existing practices rather than an ethical principle agreed to under some ideal condition.

Therefore, Corporate Social Responsibility, which relates societal norms to corporations in order to identify and explain divergences as well as to suggest ways in which corporate policies and decisions can move closer to the norms so as to achieve greater legitimacy for the corporation in society, may seem to provide ethical justification; indeed, the convergence itself may even seem ethical in nature. However, a relationship between two extant rules or practices does not get us to an ethical principle decided in the original condition scenario. How a rule relates to a practice is not an ethical principle.

In Rawls’ example, establishing a rule for how promises are to be made does not in itself create an obligation (i.e., justify why people should keep promises). Hence, Rawls (p. 349) warns, “The tendency to conflate the rule of promising and the principle of fidelity (as a special case arising from the principle of fairness) is particularly strong.” The former “is defined by the existing constitutive conventions, while the latter is explained by the principles that would be chosen in the original position.” Corporate Social Responsibility, or, more generally, the field of business & society as a field, is based on existing constitutive conventions (e.g., norms, policies/rules, decisions, outcomes). A corporation is criticized for not being socially responsible because it deviates from an extant societal norm.  Whether the norm ought to be is another question. Regarding that norm, or the corporate policy or decision at issue, business ethics is in the business of providing and applying moral reasons by appealing to ethical principles that ought to be even if they are not extant in existing conventions. So to say that a corporation is socially responsible is not to say that it is ethical. The corporation may very well be highly ethical, but one cannot reach that determination on the basis of CSR; a norm cannot justify ethically, as if what people are accustomed to doing were reason enough for what they should be doing. Ought cannot be derived from is.

Click to read the existing comments on whether CSR is sufficiently justified ethically, and/or to add a question or comment the existing comments or more generally on Rawls’s theory of justice as fairness, corporate social responsibility and business ethics.


Rawls, John. A Theory of Justice (Cambridge, Mass: Belknap, 1971)

What Is a Member-State?

It is easy to get locked into a certain way of viewing something, even if the perspective, it turns out, has more to do with one’s epoch than the thing itself, including how it came about and was designed. I contend that one of the main category mistakes left covered into the second decade of the twenty-first century is that wherein one Union is treated as equivalent to a state in another Union. It is astounding when citizens of the former acquiesce in the likening of “apples and oranges” at their own expense—in this case, citizens of the United States unwittingly treating their Union as though it were simply France with a very big backyard rather than a Union commensurate with the European Union (in which France is a state). The affable “going along” is caused in part by a willful indifference that relegates any study of the origins and history of the United States. I submit that a proper comparison between the U.S. and E.U. takes both after their respective first fifty years—hence most Americans are ill-equipped to refute the asseverations of European friends that the U.S. itself is somehow equivalent to a state in their own Union.

The full essay is in "Is the E.U. a Federal System?"

Tuesday, August 2, 2011

The Debt-Ceiling Disaster Flick, Hollywood-Style

During the last two weeks of July 2011, the American media was focused on the debt-ceiling negotiations. In the midst of a summer with plenty of natural distractions, an increasing number of Americans were cluing in to find their federal government at a stalemate as the clock ticked to a possible economic catastrophe said to begin on 12:01am on August 3, 2011. The U.S. Treasury department had estimated that it would run out of ways to make up for the lack of additional borrowing authority on August 2nd.  To the media, that meant a clock ticking down to 12 midnight. In actuality, tax revenues were up so the actual date was said to be around August 10th. In any case, the U.S. would not implode at precisely 12:01am on August 3rd by any account, yet that made better drama, which in turn increased viewership.

I contend that the American people were, by in large, taken for a ride by the media and members of Congress who tacitly worked to build suspense toward a precise crisis-point in order to gain the attention of the people. Never mind that the possible crisis was self-inflicted; the media companies would have higher viewership numbers and the elected representatives would be at the center of attention. To deflect blame, the politicians used their press conferences to take partisan shots at the other party. The idea was basically this: I get the attention and you get the blame. Meanwhile, msnbc.com assures its viewers that it would be covering the crisis all weekend.

I suspect that the suspense was faked. The Congressional leaders quietly admitted that they would not allow the U.S. Government to default. Few viewers apparently picked up on that; nor did it stop the news networks from continuing with their ticking clocks and instilling still more fear of a financial collapse. Put another way, were the politicians really as worried as they said they were, they would not have been spending their press conferences to bash the other guy. Were an asteroid rapidly hurling toward Earth, members of Congress would really be too scared to be concerned that the other party had gotten a good shot in and therefore should be countered. The officials would not even think of partisanship if there were a real danger of collapse. Nor would they allow themselves to get distracted by bringing in other obfuscating priorities. Instead, they would be concentrating on coming up with a plan to blow up the rock.

It is interesting, by the way, that in spite of such sustained and constant news coverage of the "crisis" over weeks, an intensely concentrated or focused public analysis did not ensue. Rather, there was merely more time for "talking heads" to pontificate and argue over the partisan shots and distracting other priorities that kept attention from being focused on the debt-ceiling question itself. In other words, even saturated coverage by the news media did not proffer a better public discourse on the topic. Is there perhaps a limit to how well public discourse can function in a union of republics or countries (i.e., on the scale of empire)? Even if so, the conduct of the representatives in the representative democracy does not give one more confidence.

For example, neither the media nor the public had an accurate understanding of default. Rather than happening at 12:01am on August 3rd without a raise in the debt-ceiling, it would not have happened until or unless the Treasury department missed interest and principal payments on Treasury bonds. Going on a cash basis and even closing some government agencies do not signify default, which pertains only to servicing existing debt. To the extent that the final agreement was accepted under the assumption that default would ensue in a day or two, the various errors concerning the nature of the doomsday contributed to the problem.

What most concerns me, however, is that the actual behavior of the members of Congress may have belied their attention-grabbing scare tactics. Sadly, I think the American people were taken in by the disaster-film narrative; we gave the news media and the politicians the attention they craved and we let them convince us that it was do or die on August 2, 2011. We bought into the notion that the world as we know it would end abruptly at 12:01am on August 3rd.  Consistent with the Congressional leaders’ quiet admission that not raising the debt-ceiling was “off the table,” a compromise arrived just in time, like a vintage ending of a Hollywood script--arriving just in the nick of time. The suspense was pushed just to the brink (defined as 12:01am on August 3rd), then the quick climax, just as in a standard screenplay. No more than ten or fifteen pages are allowed after the critical event when everything comes to a head.

I contend that the powers in Congress and the White House were quietly managing this drama, and that it ended just as they sought (i.e., maximizing the dramatic element, and thus the attention). Compromise did not have to come at the eleventh hour; the agreement was reached because it had been agreed that it would be. In other words, the politicians were not primarily oriented to averting "crisis"; they allowed their other agendas to intercede and we enabled this by giving the attention they craved. In other words, we rewarded the very behavior that belied the representatives' own claims, and we did so by tacitly agreeing to sit through the self-inflicted (by us and them) drama.

If I am correct, the problem involves a conflict of interest wherein the news media and politicians had as much or more of an interest in the attention that goes with even a self-inflicted crisis than in solving the immediate problem itself (i.e., deciding whether to raise the debt-ceiling). To the Americans who thought the Russian roulette was for real—that the politicians would actually permit default—the attention-grubbing plot was undoubtedly not appreciated.  Nor was it in the interest of the United States. It is as though the politicians in front of the microphones were indifferent to the stress being put on people already stressed out over a languid jobless “recovery.” But the politicians came out as screwed up, you retort. Yes, and Congress itself has an even worse reputation than it had before the "crisis."

It should be remembered, however, that politicians (and journalists) yearn for attention for its own sake, and they will do their utmost to shovel the blame on the other politician's sidewalk so to get both the attention and the credit for averting the crisis the very possibility of which they themselves created. If this doesn't sound rational, it is because it isn't. The politician's desire for attention can be intoxicating and even self-destructive. In the case of the debt "crisis" orchestrated drama, simply for us all to go through it was destructive. We were so oriented to the clocks ticking down to doomsday that we missed the real destructiveness going on in our being taken in by the ruse itself. Put still another way, if the members of Congress really thought the U.S. could be facing economic catastrophe, engaging partisan shots would be beyond reckless, given the pivotal role of the members in "saving" the country. Their own partisanship and other intervening priorities belied their claims of the magnitude of the risk of default. At the very least, something was amiss in how the politicians were presenting the drama itself, given their conduct. Sadly, we, the American people, were taken in by the torrid narrative itself, and therein resides the true destructiveness of the drama.

Click to add a question or comment on whether the “crisis” drama was orchestrated by members of Congress and the news media

Monday, August 1, 2011

Self-Inflicted Compromise on the Debt-Ceiling

On August 1, 2011, the Republican and Democratic Congressional leaders and the Democratic President came to an agreement--a compromise of sorts--on raising the debt-ceiling and spending. According to the deal, cuts of roughly $920 billion over ten years would be followed either by adopting a twelve-member Congressional committee's recommendations (including possible cuts and revenue increases) or watching another round of automatic across-the-board spending cuts. Structurally, this arrangement is unbalanced with respect to the nature of compromise between the two parties. In short, it proffers a relatively easy out for the Republicans.

Specifically, the "enforcement mechanism" that would automatically activate should the "super" committee's recommendations not be voted and signed into law contains only cuts even though the Democratic position is for a mix of cuts and revenue. In other words, the mechanism itself is biased to the default of one of the parties. The only incentive the Republican party would have to accept the committee's recommendation would be to avoid the military cuts in the automatic cuts. To obviate any revenue increases, even if only for the wealthy, the Republicans in Congress need only scuttle the committee's work or vote it down. The mechanism being counted on as "teeth" for the committee's work to be adopted should have included both across the board cuts AND revenue increases (including on the very rich). The incentive would have been on BOTH parties to work something out in committee.

Therefore, if I am correct, the structure, or arrangement, of the compromise is itself unbalanced, at least from the standpoint of incentives. It would seem that even with the possible cuts to defense, the compromise itself is a win for the Republicans. Once again, Democrats can be left wondering why their representatives gave up the store, or at least kept the door unlocked. In terms of the public option in the health-insurance reform, the matter of breaking up the biggest banks (too big to fail), and finally in permitting a spending-cuts-only outcome to the debt problem, Democrats, it seems to me, have real cause in withholding their votes from "their" man in the White House in 2012. Yet they have no practical alternative absent a primary challenger. They may be in a very tight box in "staying the course," lest they want to risk seeing the keys of the White House store formally change hands to the other party.

Click to add a question or comment on whether the agreement itself is biased toward one party.

Sunday, July 31, 2011

Entitlement to Exceptionalism

John Blake of CNN asks, “Have you ‘walked the aisle’ to ‘pray the prayer?’ Did you ever ‘name and claim’ something and, after getting it, announce, ‘I’m highly blessed and favored?’ . . . If this is you, some Christian pastors and scholars have some bad news: You may not know what you’re talking about. They say that many contemporary Christians have become pious parrots. They constantly repeat Christian phrases that they don’t understand or distort.”

For example, some Christians refer to “the rapture” without realizing that it is out of sync with historical Christian theology before 1850. According to Marcus Borg, a theologian, “People who speak Christian aren’t just mangling religious terminology, he says. They’re also inventing counterfeit Christian terms such as “the rapture” as if they were a part of essential church teaching. The rapture, a phrase used to describe the sudden transport of true Christians to heaven while the rest of humanity is left behind to suffer, actually contradicts historic Christian teaching, Borg says. ‘The rapture is a recent invention. Nobody had thought of what is now known as the rapture until about 1850,’” Borg says. Representing something as “a part of essential church teaching” without knowing what one is talking about evinces the “I can’t be wrong” attitude that typically goes along with ignorance in modern society.

For someone to say, “I name and claim this house as mine" is really just a desire to possess it; the expression "name and claim" is simply a subterfuge for greed (a basic desire for more).  Accordingly, the prosperity gospel facilitates, or enables, greed, rather than constraining it. According to Blake, prosperity Christians, who believe that God rewards true belief with material wealth, “don’t say ‘I want that new Mercedes.’ They say they are going to ‘believe for a new Mercedes.’ They don’t say ‘I want a promotion.’ They say I ‘name and claim’ a promotion.” However, it is impious in a religious sense to claim anything, not to mention something as profane as a job promotion. Moreover, the “claim” evinces a certain presumption to having true belief and furthermore that God the Omnipotent is constrained by the positive correlation between a certain belief and material riches. That is, besides providing a subterfuge for greed, the nonsensical phraseology represents an over-reaching by mere mortals in religious terms. Religion here functions as a lever dispensing coins.

Unfortunately, the practice of using words beyond their meaning or even incorrectly—essentially making a fool of oneself without realizing it because one thinks one can’t be wrong—pervades modern society. In business parlance, for example, some practitioners try to manipulate by urging others to “win the future.” Now, what exactly would a future lost look like? Does it even make sense? I suppose it would have to mean death, for a future lost is no future at all, and this to a human being is death. In fact, the daily grind in business is continuous rather than having a definite end-point in the future, as in a game of basketball. To refer to business managers therefore as “champions” and to urge them to “win success” mangles an already-overstretched sports analogy.

To join in and banter something about that does not make sense makes one quite the fool, even if one is doing so simply to fit in. For instance, just because other business practitioners talk of “growing” their business (or, God forbid, “growing success”) does not mean that what applies in one sense to living organisms and in another to an entire economy (e.g. "economic growth") is something one's business "does." One does not grow a business. This represents an incorrect use of the verb. Furthermore, economic growth does not mean that profits grow; rather, net income increases. Engaging in verbal slippage, wherein a word is used extrinsic to its meanings, only makes one look stupid.

Typically, an ulterior motive is the culprit behind the disregard, or lack of respect, for how a society delimits the possible meanings of words in the interest of communication. The intentional lapse is akin to historical revisionism. In both cases, selfishness is combined with disrespect for society as a whole. Too bad if you don't understand how I'm using a word; even if it's not in your dictionary, you need to adjust because I'm going to use the word as I please. To go on and broadcast one’s ignorance in a commercial goes beyond stupidity to present one's greed and desire for self-promotion without any hint of shame. Unfortunately, such promotion of even a nonsensical use of a word or phrase, such as "winning success," can result in a multiplier effect wherein pretty soon everyone is applying it to anything even in spite of the vacuous meaning. In other words, the word itself loses its definitive meaning because it is being applied as a empty form indiscriminately. However, just because people agree to treat "winning success" as substantive does not mean that the phrase has any meaning. We can all agree and behave as though the emperor is wearing clothes when he is quite naked. Similarly, treating nonsense as though it had meaning does not in itself proffer any substance.

Even in everyday sayings, insipid or banal expressions can catch on like wild fire. For example, it is common to ask someone, “How is your day going?”—as if the day was yours (i.e., as if the day belonged to the person). It simply does not make sense. “How is the day going for you?” would be better. Unfortunately, a herd, once on the march, does not verve from its well-worn path. As still another example, waiters and waitresses typically ask their customers during the meal, “Are you still working on that?” When I hear that while I am eating, I am tempted to reply, “No, but I am still eating it.” Does one “work on” food like one works on a project?  I think this particular practice is merely carelessness combined with a habit of repetition and small talk. The extent (and limitation) of jargon can itself be off-putting (as evincing a certain fakeness).

Using words or phrases that one does not understand is contemptible enough; the herd-animal mentality that accompanies speaking as though chewing cud is downright unseemly. In other words, the sheer repetition of the phrases—as if the speaker is simply lazy or unwilling even to “mix it up a bit”—is disturbing. Add to this the word-game element, such as in saying “let’s win the future” in order to manipulate others to work harder (i.e., the ulterior motive), and a hidden agenda is evident. Deliberately misusing words in order to manipulate is odious. Of course, the managerial race might reply that it is marketing: snazzy little slogans that don’t make sense. However, it could be asked whether looking stupid detracts from a marketing campaign.

By way of explanation, I suspect that the claim involved is the key. That is, the distorted or nonsensical phrases are manifestations of excess democracy whereby everyone feels entitled to use words differently and thus in a new sense. In feeling entitled to create a new definition for a favored word, we presume that the current usage does not pertain to us, and, furthermore, that others are obliged to recognize our own construction. Consider, for example, how socialism came to “grow” a new meaning in 2010 at odds with its actual meaning. The new, politically convenient meaning essentially was stolen from “government regulation,” but this didn’t matter to those who felt entitled to make the switch. Such entitlement extends even to using expressions that do not even make any sense.

It is the entitlement wherein use itself justifies, independent of whether there is any meaning. It might be a bit like playing God in the sense of being creators. Ficino, a priest who lived in the fifteenth century, argued that by virtue of having a soul, we human beings are creators, or gods, on earth because we are able to mold its resources for our use. There is a certain arrogance involved in viewing ourselves as gods on earth, even as being able to create new meanings for words at odds with their extant meanings and even with making sense! In spite of creating nonsense (creation ex nihilo in reverse?), the self-anointed creators tend to get annoyed when their "right" to create even nonsense is not recognized. Indeed, they presume that the extant meaning is obliged to defend itself—as if somehow the new meaning (or lack thereof portrayed in terms of meaning) were de facto the default simply in being created ex nihilo.

Here is a project: try correcting a nonsensical or incorrect expression and watch the resentment ensue. You are presumed at fault for pointing it out by the very person who has overstepped. Even a vacuous meaning simply continues unabated, oblivious to having been flagged and uncovered. In the United States, for example, people having earned one degree in law or medicine somehow think they have doctorates in those academic disciplines simply because they have made a lateral move after receiving a first degree in another school/discipline (the lateral move having a political rather than an academic underpinning). For the record, a doctorate must be a terminal degree (i.e., the highest degree possible for a given academic discipline—e.g., the J.S.D. in law and the D.Sci. M in medicine, for which respectively the LLB/JD and MD are prerequisite, hence they are not terminal!), contain a comprehensive exam (prior to graduation, hence by professors rather than an industry board) and a dissertation of substantial original research (i.e., not a senior thesis in medicine). Even in spite of an over-reaching, unquestioned entitlement on the basis of an undergraduate program in law or medical school (i.e., two years of survey courses followed by senior seminars—not even including a major, unlike the B.S. and B.A.), the self-vaunting professional is apt to presume that he or she cannot be wrong. Survey courses—there's a clue, Sherlock. In fact, the "professional" is even apt to resent being corrected (being so used to being looked up to) instead of being ashamed for having erroneously claimed to have earned something. This mentality, I’m afraid, may be part of modernity in general and perhaps American culture in particular.

Error itself may even be presumed to have a certain right to (an over-reaching) hegemony over truth in an epoch wherein higher education is typically reduced to vocation. Critical thinking is incorrectly thought to be superior to analytical and synthetic thinking because what matters is decision-making and problem-solving. How eclipses why. We cannot be wrong about this, or anything else, for we are all above average—all entitled to recreate society’s artifacts (and even religion) in our own personal images. Ultimately, reality itself becomes a screen filled with the projections of ourselves. At work, we are all professionals. We presume that we are in the club. Some customers are “members.” Meanwhile, as per our own presumed entitlement to presumption, no one is watching the distended, or bloated, store. To borrow from Nietzsche, no one is watching the herd but the herd itself, which is in actuality wandering as though in blindness before the dawn. Certain herd animals, wanting so to dominate the herd, have relegated the cowboys by nonsensical utterances, which to the men on horses sound like garbled cud being spewed by imbeciles not worth rounding up—not tasty enough, being so full of themselves.

John Blake, “Do You Speak Christian?” CNN, July 31, 2011. http://religion.blogs.cnn.com/2011/07/31/do-you-speak-christian/?hpt=hp_c2