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Friday, November 4, 2011

GlaxoSmithKline: Born Again Ethically?

GlaxoSmithKline, a drug company based in the E.U., agreed in 2011 to pay $3 billion to settle the U.S. Government’s civil and criminal investigations into the company’s Medicaid pricing practices and sales practices, including illegal marketing of Avandia, the diabetes drug linked to coronary problems. The settlement amount surpassed the previous record of $2.3 billion paid by Pfizer in 2009. Even so, it is doubtful that $3 billion proffered enough of a punch to motivate either Glaxo’s board or CEO to do what would be necessary to extirpate a corporate culture perhaps too comfortable with cutting corners.

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

Thursday, November 3, 2011

Just the Facts: Empirical Social Science Overplayed

Tilburg University in the E.U. is known to have an emphasis on empirical studies in the social sciences (including business). With this bent, the university is typically considered to be closer to the American academic tradition than that of Europa. So when Dr. Diederik Stapel, a psychology professor at Tilburg, acknowledged to having committed academic fraud in several dozen published articles in academic journals, the academic status of empirical research itself was thrown into question. Experts point out that Stapel “took advantage of a system that allows researchers to operate in near secrecy and massage data to find what they want to find, without much fear of being challenged.” Indeed, it is rare even for peer-reviewers of potential articles to demand to see the raw empirical data supporting a given study’s conclusions. According to Dr. Jelte Wicherts, a psychology professor at the University of Amsterdam, the problem of data being misused by the scholars who collect and analyze it is widespread in the discipline of psychology.

In a survey of more than 2,000 American psychology professors, Leslie John of Harvard Business School found that 70 percent had acknowledged (anonymously) to cutting some corners in reporting data. Add to this the problem of unintended statistical errors and the problem of being able to rely on scientific results becomes acute. Dr. Joseph Simmons, a professor of psychology at the University of Pennsylvania’s Wharton School of Business says, “We know the general tendency of humans to draw the conclusions they want to draw.”

Indeed, the “academic” field of corporate social responsibility has been rife with “scholars” writing to impose or justify their critical ideology of the modern corporation. For example, at Amiti Etzioni’s conference at Harvard Business School on his theory (or movement?) on socio-economics, one professor demanded that the participants form a labor party. The Harvard professors in attendance pointed out that Etzioni was simply trashing the neo-classical economic paradigm (economic liberalism, or free-market competition) without proffering an alternative theory. This did not stop Dr. Etzioni from continuing to advance his agenda, which I submit was precisely to condemn the neo-classical economic theory. Similarly, “scholars” of CSR tend to presume that corporations have an obligation to share corporate governance with stakeholder groups and give more philanthropically. Never mind that the purported obligation is typically not justified beyond the “scholar’s” own ideology. I would be surprised if the empirical research was not highly skewed in the direction of that ideology.

Of course, the problem of empirical science is not limited to disciplines such as psychology and business & society, which are particularly subject to ideology. Once I sat in on a doctoral seminar on strategy. The professor, who would go on to get tenure at a major business school, advised the doctoral students to check with the managements of the companies they are surveying before publishing the results in case any of the managements do not like the conclusions. Otherwise, the “professor” observed, consulting opportunities might be diminished. That several of the students had been bankers and would be conducting empirical studies of the financial sector ought to concern anyone who has heard of “too big to fail” and the related over-reliance on models designed to manage risk.

So whether in dealing with human psychology or huge financial firms, skewed empirical research can be dangerous. Politically, the CSR agenda could result in too much power being amassed by stakeholder groups at the expense of property rights. Moreover, the discipline of psychology (and that of business ethics) suggests that the emphasis on empirical studies, particularly at American universities, is ahistoric. Before the twentieth century, psychology was part of philosophy. Perhaps the problems with empirical science might lead to a re-consideration of the value of philosophical psychology in terms of knowledge as well as practice. Similarly, the interlarding of business ethics (a subfield of ethics, which in turn is a field of philosophy) with empirical surveys—as if what is counts for what ought to be—can be questioned. Rarely does a business ethicist stop to wonder why philosophers do not send out surveys as part of doing philosophy. David Hume’s naturalistic fallacy provides a good explanation for why they do not.

My overall point is that the value of empirical studies in the social sciences (and applied philosophy) have been overstated, particularly at American universities, while theory development and the historic housing in philosophy have been relegated or dismissed outright. Along with the hypertrophy in empiricism has come a “cubby-hole” mentality wherein Frederick Taylor’s specialization of labor has somehow been applied to scholarship. One could excuse business schools for conflating what they are studying with what they are. The problem is when the academic enterprise itself comes to resemble enterprises that make widgets. It is no accident, I submit, that the twentieth century will not be known for many bright spots in the social sciences or philosophy. One could say that Plato and Nietzsche make good book-ends, with engineers and natural scientists taking over to produce a technological and information revolution. Yet who asks what the opportunity costs have been in reducing progress to the technological variety? What cost was there in the twentieth century in having technicians and ideologues for philosophers, rather than thinkers capable of seeing the big picture and proffering unique vistas? If the case of Dr. Stapel comes as a surprise, it might be because we have become too ensconced with “facts” at the expense of meaning.

Click to add a question or comment on Diederik Stapel’s fraud and on the excesses in empirical social science more generally.

Benedict Carey, “Fraud Case Seen as a Red Flag for Psychology Research,” The New York Times, November 3, 2011. http://www.nytimes.com/2011/11/03/health/research/noted-dutch-psychologist-stapel-accused-of-research-fraud.html

Tuesday, November 1, 2011

Europe's Political Elite Takes on Popular Sovereignty in Greece

As October 2011 was coming to an end, George Papandreou, prime minister of Greece, “stunned Europe by announcing a referendum” on the latest bailout from the E.U. and set the vote for January 2012. Shocked E.U. leaders were doubtless shaking their heads with a mix of incredulity and frustration, as they had not even been consulted on the prime minister’s proposal. Meanwhile, the yields on Italy’s bonds continued to increase, as did the spread between German and Greek 10-year bonds. The world was left to whether the Greek voters would reject their government’s austerity plans and, relatedly, whether the E.U. would augment its bailout of the state as per the agreement reached only days before the prime minister’s announcement.

                                     Greek Prime Minister George Papandreou announcing the referendum    AP

The full essay is at "Essays on the E.U. Political Economy," available at Amazon.

Monday, October 31, 2011

7 Billion People: Humanae Vitae Compromising the Transmission of Human Life

According to the Huffington Post, “Amid the millions of births and deaths around the world each day, it is impossible to pinpoint the arrival of the globe's 7 billionth occupant. But the U.N. chose [October 31, 2011] to mark the day with a string of festivities worldwide, and a series of symbolic 7 billionth babies being born.” I contend that the milestone is nothing to celebrate; rather, it should serve as a wake-up call for us all, lest the species continue to maximize itself right out of existence. Both the slope and its relative abruptness in a historical perspective ought to give us all pause in our assumption that our species will go on without either self-regulation from us or a drastic correction from nature. 

                                            Source: UN Population Division

It may simply be human nature to focus on putting out individual brush fires without pausing to ask whether one person set them all and to look at the fires in a larger, historical perspective. It could be that the fires are fueled in large part by decades of built-up deadwood from "no fire" policies. In other words, it could be that we are more complicit than we know. Our presumption that absolves us of any role and our assumption that we can't be wrong may be the death of our species. Before getting to the role of religion as illustrative of this presumption and assumption as applied to over-population, I want to briefly discuss the relevance of global population to several problems facing the world so the gravity of the problem can be better grasped.

Other things equal, more people on Earth means more consumption and thus more pollution. In other words, a species that does not self-regulate its size may alter the ecosystem (i.e., climate) beyond the range of that specie’s own habitat. In academic terms, a schizogenic (maximizing) variable can breach the “ecologizing” constraint that is an ecosystem. Still less understandable, a schizogenic variable within a system can destroy that system’s homeostatic nature. In short, the 7 billion milestone (and still counting) portends baleful consequences for our species.

In addition to climate change, one could point to commodity supply, such as foodstuff and energy. The increase in the price of corn, for example, could be attributed to the increasing use of ethanol (made out of corn). Going further, an increasing population means increasing demand of both, so the explanation should not rest with “alternative energy sources” as an issue. Both food and energy can be expected to be stretched as the global population increases. Oil companies going to more high-risk extractions of oil (e.g., deep-water wells in the Gulf of Mexico) can be viewed as still another manifestation of what happens when energy supplies are relatively fixed. Fundamentally, increasing global population magnifies the disconnect between the maximizing variable and finite resource supplies. If we as a species refuse to regulate ourselves as a species, we do so at the peril of our progeny. Indeed, the transmission of human life may hang in the balance ironically as people and certain organizations enable the maximizing tendency in order to transmit human life.

As the world’s population was thought to surpass 7 billion, Eric Tayag of the Philippines’ Department of Health warned, “Seven billion is a number we should think about deeply. We should really focus on the question of whether there will be food, clean water, shelter, education and a decent life for every child," he said. "If the answer is 'no,' it would be better for people to look at easing this population explosion." I contend that Tayag was understating the problem and thus the need for corrective action at the global level. Problematically, however, some influential international organizations have priorities that exacerbate rather than solve the problem.

The Huffington Post reports that in the Philippines, “much of the population question revolves around birth control. The government backs a program that includes artificial birth control. The powerful Roman Catholic church, though, vehemently opposes contraception.” The vehemence itself may be a problem for the Vatican. The teaching itself may evince an overreach from the vantage point of a religion. As such, the foray may unnecessarily compromise the Vatican’s credibility even to the Catholic laity.

According to the Huffington Post, “The Catholic clergy opposes abortion even in cases of rape and incest, stem cell research and all artificial contraception and sterilization methods, including birth control pills and condoms. But according the 2008 National Survey of Family Growth, 98 percent of sexually active Catholic women over the age of 18 have used some form of contraception banned by the Vatican. Even among more religious Catholic women, who attend Mass on a weekly basis, 83 percent use some form of contraception. In 2009, 63 percent of Catholic voters said they support health insurance coverage for contraception, including birth control pills, according to a Belden Russonello Strategists poll.” Essentially, the laity have been saying that the hierarchy has been overstepping its proper domain, given the Catholic Church is a religious organization and morality is not theology. Ironically, the overreach has diminished rather than extended the clergy’s influence. The root of the clergy’s error may be their conflation of morality and religion.

The “transmission of human life,” and, moreover, “the happiness of human beings” referred to as the basis of the humanae vitae encyclical have at best an indirect relation to religion or theology, which, being about God’s nature, transcends the human domain. In other words, the encyclical has a rather secular basis. It is at best peripheral to worshipping God. To claim the transmission of human life is somehow like God being the Creator obfuscates the human and the divine. It is thus to make a category mistake.

Even in terms of humanae vitae as an ideal, acting only when one can act in the ideal can be criticized. Indeed, this dictum is inconsistent with the very notion of ideal. For example, to say that one should ideally eat fruits and vegetables is not to say that one must never eat a cookie. Likewise, to say that a man and woman being in love and actively involved in the transmission of human life is an ideal in married life is not to say that one should limit oneself to it. Rather, it is to say that making love with the possibility of transmitting human life is better than making love in marriage without transmitting human life. It is a fallacy to go from this to claim concerning an ideal that “therefore” one should never act other than in the ideal.

It would be unfortunate if the transmission of the human species were compromised rather than sanctified by a religious organization whose clerics mistake the very notion of ideal and apply it in a domain that is only indirectly related to religion. In other words, even well-meaning maximizing (i.e., over-reaching) can function as a catalyst in the downfall of the human species. The underlying culprit may be individual self-interest, whether by individuals or organizations, that is inherently partial and thus puts the part ahead at the possible expense of the whole. Beyond the self-interest may be the intractable assumption that one cannot be wrong, for this assumption alone can blind one to the harm of which one is unknowingly complicit. The end of the transmission of human life may come down to human stubbornness and presumptousness--that is, human pride, ironically perhaps most strident in religious garb.


Encyclical Letter Humanae Vitae, Paul IV.

Jim Gomez and Tim Sullivan, “World Population Hits 7 Billion: Babies Celebrated Worldwide,” The Huffington Post, October 31, 2011. http://www.huffingtonpost.com/2011/10/30/world-population-7-billion_n_1066475.html

Laura Bassett, “The Men Behind the War on Women,” The Huffington Post, November 1, 2011. http://www.huffingtonpost.com/2011/11/01/the-men-behind-the-war-on_n_1069406.html