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The Big Bang took place 13.7 billion years ago. Earth formed
about 4.54 billion years ago out of “stardust.” So our planet is not nearly as
old as our universe (which consists of clusters of galaxies). It was not until
1.8 million years ago that our species, homo
sapiens, took shape, formed by the forces of natural selection. We are relative newcomers to our planet’s
existence, yet much of what we encounter, make, or use in the modern world has
existed as only a mere flicker in our species’s 1.8 million year life as a species.
For example, it was not until about 70,000 years ago that
our ancestors’ brains developed to the extent that a fictive imagination was
possible. That is, the homo sapiens brain
was no longer dependent on the senses (e.g., touch, sight, smell) and thus
empirical observation of one’s environment (e.g., appearances). The brain could
imagine a unicorn, justice as an ideal (even as a Platonic form!), and a
utopian vision having little if anything to do with how the world is at the
It was not until 9,500 BCE that homo sapiens settled into permanent settlements to farm. Only a
relatively few types of plants were grown and animals were domesticated as a
result of the agricultural revolution. For example, wheat originally grew only
in a small area in the Middle East; by the end of the twentieth century, the
crop’s area had reached 200 million hectares.
From roughly 6,000 BCE, wheat has been a
basic staple food of Europe, West Asia, and North Africa.
It was not until the eighteenth century that the scientific
revolution found some traction. At that time, the gravitational pull of the
past, through tradition and custom, began to lose out to an orientation to the
future, and thus to discovery and innovation. This was a major shift in the
history of our species. As a result, the modern world as it exists would look
like another world to a person living in the sixteenth century, whereas the
same person would find the life of people living in the eleventh century to be
As a result of the agricultural and scientific revolutions,
we moderns have a myriad of processed foods (e.g., hormones, preservatives).
Paradoxically, even though agriculture has essentially mass-produced only a
relative few of the foods that our ancestors ate from one day to another in the
eons of time in the Stone Age, the advent of long-distance transportation has
extended the reach of otherwise geographically limited foods (e.g., pineapples)
as well as the agricultural staples (e.g., wheat). This all sounds well and
good, but a subtle problem festers that can only be discovered by taking a very
long historical perspective grounded in anthropology—the study of the homo sapiens species.
I have been applying my own study of what almost two million
years of natural selection has etched in our biology to this day to dieting.
The forces of natural selection have not had nearly enough time to tweak our
bodies (including our brains) to the modern world in which we live. For
example, we eat much more in complex carbohydrates (e.g., wheat, so breads,
pasta, etc.) than our stomachs are designed to digest. In other words, it is
difficult for our species to digest wheat because that food was not factored
into the equation by the forces of natural selection in adapting the stomach of
a homo sapiens over almost two
million years. How long out of the 1.8 million years has wheat been a staple
food for us? Almost a blink of an eye.
Additionally, sugar is difficult for our livers to process
because that organ was formed when sugar was only consumed when fruits were in
season. Accordingly, besides being overworked, the human liver produces cholesterol
particles in the process. Coca-Cola is like a frontal assault on the liver,
with the heart being hit as collateral damage through a lifetime. It is no
wonder that heart disease is the leading killer of modern man.
Combining these snippets of anthropological food science
with the fact that few of us get anywhere near the amount of exercise of the
prehistoric hunter-gatherers, we cannot count on the burning of calories nearly
as much. By the way, the hunting made our ancestors more muscular and fit (and
without the pathogens that have plagued our species ever since we created large
societies and domesticated animals).Even with regular visits to a fitness center, we moderns really must
attend to the intake side of the energy budget wherein a surplus of retained
calories is bad. To reduce current and accumulated surpluses, we can apply a
bit of anthropology with beneficial results.
Because complex carbs can turn into fat while a person
sleeps and most exercise typically occurs during the day rather than at night
(except, perhaps, in the bedroom), I have shifted my intake of “heavy foods”
like bread, pasta, meat, and potatoes to breakfast and lunch. In this mix I
have drastically reduced my intake of wheat foods (even whole wheat bread!)
because I know my stomach is not well-suited to digesting them. Because fruits
and vegetables are of relatively few calories and natural selection has taken
them into account in adapting the human stomach, I emphasize them for dinner. I
make sure the proportion of fruits and vegetables is than that of wheat foods.
In short, both timing and
proportions are in the mix along with
food servings when anthropology—taking the millions of years of natural
selection as the default—is itself added into the equation in formulating a
diet to lose weight. As Plato wrote, much of being virtuous is changing habits.
I would add self-discipline in countering the lure of instant gratification as
a vital ingredient. In terms of dieting, a changed habit that a person sustains
can actually result is a smaller, shrunken stomach. This physiological change
can in turn take away some of the pain in applying the self-discipline.
Although I do not read published diets, I suspect that this anthropological
approach is quite novel.
2 millionsquare kilometers or 77,204
Corporations have undoubtedly oriented their philanthropy to
take advantage of the potential synergy with marketing their products and
services. This “revelation” should not surprise anyone in modernity. Even so,
overdoing any convergence to maximize profits is certainly open to ethical
critique, even if leaning excessively on strategic interest at the expense of
reputational capital is perfectly legal. This point ought to impress itself on
the frontal lobe of any dean who hires lawyers to teach business ethics. In
this essay, I focus on McDonald’s funding of its own charitable organization,
McDonald House Charities. Has the corporation’s financial contribution been
sufficient, ethically speaking, to justify the resulting reputational capital,
marketing synergies, and long-term profitability?
In late October 2013, Corporate Accountability International
and The Small Planet Fund came out with a 30-page report accusing McDonald’s of
using its own charity as a branding device for the food products. Specifically,
the report claims that McDonald’s reaps all of the “branded benefit” from the
charity while contributing only about 20% of the money. At the time, the
corporation was contributing only $5.3 million to $10 million to its namesake global charity. Meanwhile, the “reputational
cost” to the company does not seem to have registered with the management.
From an ethical perspective, to link charity, the root word caritas meaning higher human love, with
such an encroachment by self-interest is bound to stir a general recognition of
hypocrisy. “McDonald’s giving does not match its rhetoric,” Michele Simon, a
public health lawyer and author of the report, said. The hitherto accrued
reputational capital associated with “McDonald’s” was suddenly on the chopping
block. By linking the ubiquitous symbol of McDonald’s, the clown Ronald
McDonald, to the charity, “McDonald’s gains an emotionally loaded marketing
vehicle while shielding itself from critics,” the report concludes. Who would
criticize the company for having established an organization that provides
temporary housing for family members of hospitalized children? Yet anyone who
has seen Cameron’s film, Titanic,
grimaced as the rich son of a Steel magnate grabs a small girl (as though his
own) in order to gain access to a life boat. McDonald’s has been grabbing not
just children, but sick ones!
used by Leibniz in caritas naturalis seu
benevolentia universalis (natural love, that is, universal benevolence),
allows for some self-love as the love is natural rather than divine. Even so, an
influx of excessive self-interest premised on narcissism can easily pierce and deflate
the entire phrase as a viable theory of justice. A sordid sense of the
underlying greedy mentality naturally results.
Hence, reputational capital is “withdrawn.” Over-reaching is itself “emotionally
loaded,” such that a virtue ethics is part of the ethical judgment.
Lest it not be forgotten, however, corporations are
organizational abstractions designed like
sharks to be feeding machines. Furthermore, to ask a board of directors or
management to disregard their fiduciary duty to the property-owners, the stock
holders, in favor of giving cash away with only a hazy long-term financial
impact by means of some reputational capital accrued is unethical in deontological
terms (i.e., in terms of duty). Even so, a company’s stockholders realizing
their property rights can legitimately (and ethically) order the board to direct
management to give money to a cause even though it bears little or no relation
to the company’s strategic interest.
Even so, over-reaching in a duplicitous and mendacious way,
such as by McDonald’s board and management, is never pretty. Hence the noxious
odor of a squalid character-type is bound to rise to the discomfort of the gods
on Mount Olympus. They are not depicted as always ethical, however, so here the
indictment must surely come from ethics itself. Yet as Nietzsche points out, it
can hardly be immoral for the weak to act contrary to weakness, for that is how
they are constituted. To be other than what one is can hardly be an obligation.
Perhaps our normative expectations regarding corporations need to be scaled
back to account what they are in themselves. This is not to say that McDonald’s
has not surpassed the nature, design, and purpose of a corporation, just as a
mortal sin is not dismissed simply because human nature is what it is. The
reference point here is the abstract nature of what a corporation is, to which
corporate conduct can either surpass or fall short.
Resolving just a part of the $13 billion being demanded by
the U.S. Government in court, JPMorgan capitulated in October of 2013 to a $5.1
billion settlement to resolve claims by the U.S. Federal Housing Finance Agency
that the largest American bank had sold Fannie Mae and Freddie Mac mortgages
and mortgage-based (i.e., derivative) securities by knowingly misrepresenting
the quality of the loans and the loan-based bonds.At the time of the $5.1 billion settlement,
JPMorgan’s executives were trying to settle “state and federal probes into
whether the company misrepresented the quality of mortgage bonds packaged and
sold at the height of the U.S. housing boom.”
It would seem that the bank was in a vulnerable position in the settlement
negotiations, having “capitulated.” I’m not so sure.
Firstly, “JPMorgan preserved its right to seek reimbursement
from the Federal Deposit Insurance Corp. for FHFA claims stemming from
Washington Mutual Bank’s estate,” which at the time was managed by the FDIC.
The reimbursement would come out of the estate rather than the FDIC.
Secondly, it was not as though the claims against JPMorgan
were only for the misdeeds of people at Bear Stearns and Washington Mutual
before JPMorgan acquired them (and their problems!). Indeed, an ethical
argument based on the principles of fairness and desert (as in deserving, not
sugar) could be brought forward in defense of JPMorgan were the bank being
asked to settle claims from the misconduct of the other two banks before being bought out. To be sure, the
“fire sale” price of $2 per share (a mere 7 per cent of the market value) in
acquiring Bear Stearns could justify ethically the assertion that JPMorgan
ought to then cover the misconduct, even fraud, at Bear even before the bank
became part of JPMorgan. In other words, the very low price per share—being so
low relative to Bear’s market value—factored in the probably settlement costs.
Getting a good deal and shirking the related implicit or explicit obligations
is not fair—nor is it responsible, societally speaking.
To be sure, the “separate misconduct” represents only a part
of the governmental claims—exactly how much of the total I do not know. The FHFA “accused JPMorgan and its affiliates
of making false statements and omitting material facts in selling about $33
billion in mortgage bonds to [Fannie and Freddie] from Sept. 7, 2005, through
Sept. 19, 2007.”
JPMorgan had acquired Bear Stearns and Washington Mutual in 2008, so the fraud
at Bear Stearns and Washington Mutual must be pre-acquisition. According to the
regulator’s affidavit submitted to the federal court in Manhattan, executives
at JPMorgan, Washington Mutual, and Bear Sterns “knowingly misrepresented the
quality of the loans underlying the bonds.”
The fraud allegedly touched inside JPMorgan itself.
In 2006, for example, JPMorgan purchased 4,209 mortgages
from New Century into a mortgaged-backed (i.e., derivative) security, which the
bank then sold to investors including Freddie Mac (which bought about a third
of the $910 million bond deal). Within a year, fifteen percent of the mortgage
holders were delinquent on a payment or in bankruptcy, according to BlackBox.
By 2010, the 15% had turned into 50 percent. “The truth was that New Century
had completely abandoned its stated underwriting guidelines,” the investors
allege in a court document as support for their claim that JPMorgan bankers
made false and misleading statements in testifying to New Century’s
Given that JPMorgan had “dealt with some of the biggest subprime lenders . . .
, including Countrywide, Fremont, and WMC Mortgage,” the false and misleading
statements were likely not just about New Century.
JPMorgan was most vulnerable in this respect; the bank stood on semi-solid
ground (e.g., melting permafrost) concerning the pre-acquisition, fraudulent
managerial behavior at the Bear and Washington. Even so, as of October 2013,
neither JPMorgan nor its bankers whom investors claim made the false and
misleading statements had been charged with criminal
Thirdly, JPMorgan did not have to admit to any wrongdoing as
part of the $5.1 billion settlement. This “lack of guilt” achievement points to
a real or imagined vulnerability in the regulatory agencies bringing suits
against Wall Street powerhouses. From this standpoint, the government
capitulated. This is particularly so in this case because of the extent of
lying at several banks regarding the risk of their respective mortgages
produced and/or securitized into bonds.
Therefore, I would not exactly say that JPMorgan
capitulated. The amount of the settlement is indeed significant, though $5.1
billion is hardly catastrophic for the largest American bank. In the judgment
of William Frey, the chief executive of Greenwich Financial Services, “(w)hile
these settlements seem huge, given the nature of the offenses, they are
trivially small.” How
is it that the Wall Street giant got a mere slap on the wrist?
I propose for your consideration the hypothesis that
JPMorgan did not get hit with worse in part due to the financial muscle that
the bank, as well as Wall Street more generally, has in the corridors of power
in Washington, D.C. More particularly, the “capture” or at least bias of regulators,
who depend on the regulated for market information and regulatory feedback and
who face political pressure from elected officials and their appointees, may
explain more closely why JPMorgan’s potential legal liabilities have been less
than typically supposed.