God's Gold through the Centuries

In the wake of the financial crisis that came to a head in September of 2008, people might have been wondering if sufficient moral constraints on the greed on Wall Street are available, even possible. The ability of traders to create complex derivative securities that are difficult for regulators to regulate, much less understand, may have people looking for ethical or even religious constraints. It would be only natural to ask if such “soft” restraint mechanisms really do have the puissance to do the trick. Here’s the rub: the tricksters are typically the last to avail themselves of ethical or religious systems, and they the wrongdoers are the ones in need of the restraint. Blankfein said of his bank, Goldman Sachs, that it had been doing God’s work. About a week after saying that, he had to walk his statement back and admit that the bankers had does some things that were morally wrong. Although divine omnipotence is by definition not limited by human ethical systems, it is hard to imagine a divine decree telling bankers to tell their clients one thing (buy subprime mortgage derivatives) while taking the opposite position on the bank’s proprietary position (shorting the derivatives, beyond being a counterparty to clients). Divine duplicity seems to represent an oxymoron on a megascale rather than a justification for greed. As the crisis erupted and was subsequently managed by public officials in government and new managers brought in to salvage AIG, I was researching the history of Christian thought on profit-seeking and wealth. I have since published an academic text and a nonfiction book, which develops further on the treatise on the topic. As the book is too recondite for sane people (i.e., outside of academia), I am writing a non-fiction book on the topic for a broader readership. To whet the appetites of those of you who are waiting for something more readable than a recondite thesis, I present a brief account of my original research on the topic here. 

For the full essay, see "God's Gold through the Centuries."

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See related essay: "Religious Sources of Business Ethics"

The academic treatise: Godliness and Greed: Shifting Christian Thought on Profit and Wealth 

The non-fiction book: God's Gold: Beneath the Shifting Sands of Christian Thought on Profit-Seeking and Wealth.

Saving the Fisheries: Greenpeace Praised Safeway for its Ethical and Stately Leadership

In April 2011, Greenpeace gave fifteen supermarket chains a passing grade; five others failed. Surprisingly, Safeway came out on top, above even Whole Foods. Safeway pledged to stop selling Chilean sea bass (Patagonian toothfish) because current fishing levels are unsustainable. Furthermore, the grocer called on governing bodies to declare the area in the southern Antarctic where the bass is fished a marine reserve. According to Casson Trenor of Greenpeace, such an act of “corporate marine activism” had “never been done before.” Safeway also discontinued the sale of orange mughy, which is unsustainably being fished in the deep sea off New Zealand.  In fact, the company stopped adding red-list species to its inventory.


The full essay is at "GreenpeacePraised Safeway."

Servant Leadership Christianized: Self-Effacing Love in Business

Although servanthood is a very important biblical concept for leadership, according to Richard Higginson, the role of servant “is not reserved only for those who are leaders. Christians in general are “servants of God” and are expected to serve other people.”[1] Moreover, to be ethical in a servant style is not distinctly Christian; leaders who are not Christian can nonetheless operate as servants. The term servant does not in itself have a religious connotation. Yet under theological auspices, a distinctly theological sense of servant leadership can be understood and practiced. I contend that such servant leadership is something more than the notion that has been popularized.

The complete essay is at “Christianized Ethical Leadership.”

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[1] Richard Higginson, Transforming Leadership: A Christian Approach to Management (SPEK: London, 1996), p. 48.

Ethical Leadership: Pruning Off the Debris

As business practitioners grapple with the intangible yet potentially valuable notion of ethical leadership, it is left to scholars to assess whether those practitioners are “coloring within the lines.” It is admittedly all too easy to draw in exogenous material that is pleasing to the eye; it is all too easy to deem such material required for ethical leadership rather than ballast weighing it down, unnecessarily. One business practitioner characterizes ethical leadership as that which “inspires the behaviors in people necessary to create competitive advantage.” As achieving a sustainable competitive advantage is the task of strategy, inspiration alone can be extracted as that which is particular to leadership. Strategy is what is left once one has extracted inspiration from the characterization.

Material from this essay has been incorporated in The Essence of Leadership, which is available at Amazon.

Toward a Theory of Ethical Leadership: Beyond the Ideologies

Constructing an accurate ethical-leadership concept that is not over-extended by one’s ideological agenda ought to begin with defining leadership itself. That is to say, more attention should be paid to thinking about what leadership is. Beyond its attributes and any contextual artifacts, leadership itself must be identified as a distinct phenomenon before we can go on to highlight the ethical dimension that completes “ethical leadership.” Then what counts as the ethical dimension of leadership can be clipped back to that which is implied in the definition of leadership, which in turn is entailed in the essence of the phenomenon.

Often overlooked, what is leadership?    Image Source: Gaebler.com

Material from this essay has been incorporated in The Essence of Leadership, which is available at Amazon.

The Banks’ Consultants: Guarding the Hen House

Leaving it to consultants hired by mortgage servicers to right the wrongs that the services inflicted on foreclosed homeowners was the unhappy consequence of bank regulators giving ambiguous guidance and failing to install viable oversight mechanisms. According to the Government Accounting Office, “regulators risked not achieving the intended goals of identifying as many harmed borrowers as possible.” Even if the reviews had been completed, there was on guarantee that wronged mortgage borrowers would have received any compensation. On the other side of the ledger, the banks had received billions from the U.S. Treasury with no strings attached. Whether intentional or not, the banking regulators put too much stock in the consultants, who, after all, had been hired by the mortgage servicers."

The full essay is at "The Banks' Consultants: A Conflict of Interest." For other cases, see my book, Institutional Conflicts of Interest: Business & Public Policy, available at Amazon.

Sources:

Ben Hallman and Eleazar Melendez, “GAO Foreclosure Report Finds Bank Regulators Failed to Provide ‘Key Oversight’,” The Huffington Post, April 3, 2013.

Dan Fitzpatrick, "'A Dose of Healthy Competition' For Banking Regulators," The Wall Street Journal, April 18, 2013.

Business Ethics Through Rose-Colored Glasses

That business ethics scholars are as though children playing in the clouds in claiming that the vast majority of business practitioners are good-intentioned, or ethical, is an empirical statement that is in need of empirical verification. I suspect the scholars' typical utopian perspectives, curiously coincident with prescriptive ideological "Thou shalt nots," suffer from not touching ground from gazes atop ivory towers. That is to say, the scholars are factually incorrect. Let us, therefore, sweep away the fog so at least we have a realistic picture of what is actually going on "on the ground."

The full essay is in Cases of Unethical Business: A Malignant Mentality of Mendacity, available at Amazon.

Larry Summers Bowed Out of the Race for Fed Chair: “Advise and Consent” Triumphant

On September 15, 2013, the White House announced that Larry Summers, Barak Obama’s prior chief economic advisor and a Secretary of the U.S. Treasury during the Clinton administration, no longer wanted to be considered to fill the upcoming vacancy as chairman of the Federal Reserve. In the announcement, Obama (or an advisor) wrote, “Larry was a critical member of my team as we faced down the worst economic crisis since the Great Depression, and it was in no small part because of his expertise, wisdom and leadership that we wrestled the economy back to growth and made the kind of progress we are seeing today.”[1] Unfortunately, this statement suffers from a sin of omission, which admittedly had been minimized by the media as well. Accordingly, the Democrats in the U.S. Senate who had just come out against a Summers nomination can be regarded as done the nation a vital service. Moreover, the “check” of the “check-and-balance” feature of the U.S. Senate’s confirmation power worked.

Alan Greenspan, Larry Summers, and Robert Rubin. In the late 1990s, they pressed Congress to keep financial derivatives unregulated. A case of government doing Wall Street's bidding?   Source: pbs.org

The Full Essay is at "Why Summers Bowed Out."

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1.Annie Lowrey and Michael D. Shear, “Summers Pulls Name from Consideration for Fed Chief,” The New York Times, September 15, 2013.

Black Friday: An American Holiday

For a long time, I didn't understand why the Friday after Thanksgiving in the U.S. would be called Black Friday. Why associate darkness with such a nice holiday whose humble purpose is to feel gratitude, even and especially if a person has little externally for which to feel grateful. Black Friday is so named because the shopping day is so bit it can bring retail businesses out of the red and into the black, as if profitability were dark rather than something worth rejoicing--in business, I might add--rather than for a whole society. For American society to so easily have come to call the day following Thanksgiving black just because that is how managements perceive it demonstrates just how commercialized, or business oriented, American society has become. What this means for that society, and even perhaps the majority of the people themselves, is very troublesome, even disturbing.

The full essay is at "Black Friday: An American Holiday."

Stakeholder Management: Profit-Seeking, Nietzsche, and Fiduciary Duty

Part I Profit-Seeking

The Johnson & Johnson Credo says in part, “We believe our first responsibility is to the doctors, nurses, and patients. . . . Our final responsibility is to our stockholders. Business must make a sound profit” (Bowie, p. 18). Final here does not mean last but not least; nor does it mean first among equals. Instead, this credo, which I contend is tailored for marketing purposes, denies the residual profits feature of commercial property rights. To place a cap on profit such that the residual can go to stakeholders without the majority and minority owners’ approval is to violate property rights in favor of redistribution.

Part II Nietzsche

Nietzsche contends that modern ethicists seek to impose their Thou Shalt Not in order to dominate the strong out of weakness. The normative subterfuge used by these new birds of prey masks their hypertropic (exaggerated) instinct to dominate. Whereas the strong naturally dominate, the weak who feel compelled to do so must resort to subterranean means in order to beguile the strong into renouncing their native strength. Imagine, for example, a wan-looking business ethicist in a small academic office trying to dominate Donald Trump, Bill Gates, or Warren Buffet, for instance. Nietzsche wonders how in the hell the strong ever got roped into being ashamed of their strength by the sordid moralists whose instinct to dominate is somehow immune from such shame.

Part III Fiduciary Duty

“A growing number of business experts advocate adjusting the conventional view of a company’s purpose—to generate wealth for its stockholders—to a more holistic view that recognizes that business doesn’t operate in a vacuum. Everything a business does affects someone somewhere—not just the stockholders—and those other someones deserve consideration from every business that affects them” (Bowie, p. 14).

The full essay is at "The Stakeholder Subterfuge." See also the book, On the Arrogance of False Entitlement: A Nietzschean Critique of Business Ethics and Management. Both are available at Amazon. 

An Ethical Meltdown in Japan: On the Toxicity of Tepco's Nuclear Power

According to The Wall Street Journal, Japan’s largest power provider, Tokyo Electric Power Co. (Tepco), faced the biggest challenge of its 50-year-history in "recovering from the damage done to its nuclear facilities and power systems by a devastating earthquake and tsunami." The New York Times reported on March 17, 2011, that "foreign nuclear experts, the Japanese press and an increasingly angry and rattled Japanese public are frustrated by government and power company officials’ failure to communicate clearly and promptly about the nuclear crisis. Pointing to conflicting reports, ambiguous language and a constant refusal to confirm the most basic facts, they suspect officials of withholding or fudging crucial information about the risks posed by the ravaged Daiichi plant."

According to The Wall Street Journal, when Tepco said early in the morning of March 16th "that a fire had broken out at the Daiichi plant’s No. 4 reactor, a reporter naturally asked how the fire had begun, given that just the day before the company had reported putting out a fire at that same reactor. The executive’s answer: ‘We’ll check. . . . We don’t have information here,’ he explained. After about two hours, the Tepco representative had the information: Turned out the smoke was coming not from reactor No. 4, but from reactor No. 3. If Tepco’s information had been delayed and vague, the reporters’ response was quick and direct. ‘You guys have been saying something different each time!’ one shouted. ‘Don’t tell us things from your impression or thoughts, just tell us what’s going on. Your unclear answers are really confusing!’"

                Tepco executives leave one of the many press conferences held during the disaster in 2011

The full analysis is in Cases of Unethical Business, a book available at Amazon.

Customers as Members and Guests: Retail Fakeness Infecting Society

“Are you a member of the store?”  A salesperson at a Barnes & Nobles’ café department once asked me the question as I was preparing to pay for the coffee drink I had just ordered. Apparently, customers who had registered for a discount card were considered  “members of the store.” The same thing happened to me at a Borders store before that chain went bankrupt. There, the salesperson refused to take my “No, I am not a member” for an answer—as per company policy.

The full essay is at "Retail Members and Guests."

More on this topic is in On the Arrogance of False Entitlement: A Nietzschean Critique of Business Ethics and Management, which is available at Amazon.

Should the E.U. Represent Its States at the UN?

In 2010, it was proposed that the E.U. have an increased role at the UN in order to boost Europe’s profile as major player at the international level. One proposal would have given the E.U. the powers enjoyed by fully-fledged UN members, such as the right to make proposals and submit amendments, the right of reply, the right to raise points of order and the right to circulate documents. While there is no demand in the draft for a more prominent seating position for the EU, it was possible that the E.U. could have been moved to the center of the UN’s assembly chamber. Wherever the E.U. would have been situated, additional seats alongside a new European UN ambassador would have been made available for High Representative Catherine Ashton, the E.U. Foreign Minister, and her staff. Experts believed at the time of the proposal that such a role for the E.U. in the General Assembly would not significantly enhance the E.U.’s ability to influence policy at a UN level; instead, the proposal would have provided an opportunity for the E.U. to portray itself as a unified power on the international stage.

 

The complete essay is at Essays on Two Federal Empires, available at Amazon.

Leadership vs. Management: Change vs. Constancy?

In the "leadership vs. management" dichotomy, "management focuses on getting work done on time, on budget, and on target--in other words, steady execution and control--while leadership focuses on change and innovation." However, this contrast of implementation and innovation is a different dichotomy. Abstractly speaking, a category mistake may be involved in this false dichotomy. Change would be occurring in the execution of an innovative vision. In the realm of change alone, formulating and selling it can be distinguished from making the change. Therefore, the “leadership vs. management” distinction does not reduce to “change vs. status quo."

Material from this essay has been incorporated into The Essence of Leadership: A Cross-Cultural Foundation, which is available at Amazon. 

China: Mandating the Virtue of Filial Piety by Law

The founders of the United States, most notably Thomas Jefferson, John Adams, and Ben Franklin, held that for a republic to long endure, its citizenry must be virtuous and of a minimum education. Public education would be established, such that the common man could render a reasoned judgment at the ballot box. The dictum that the popular sovereign (i.e., the electorate) should be broadly educated resulted in law and medical schools in the U.S. requiring entering students to have a bachelor degree in another school before beginning the bachelor’s degree in the professional school. In short, public policy is an effective means of providing a people with the opportunity to gain an education, which at least in theory enhances the wisdom of a self-governing people. 

Virtue is another story. Law seems ill-equipped to form a virtuous people. It is one thing to outlaw vice in its outward conduct; how can legislation instill virtue within a soul?  Mandating virtuous conduct, such as in Massachusetts’ “Good Samaritan” law, may be possible where the conduct is in public and thus readily enforceable. Virtue within the home is far more difficult for the law to reach and thus foster. Even vice behind closed doors, such as incest as well as physical and emotional abuse more generally, is difficult for police to catch. To an extent, property rights enable such vice and allow people the option of not being virtuous in a family context.  Yet in countries in which an authoritarian state trumps even property rights, such as China, the question becomes whether legislation is the sort of thing that can foster or mandate virtuous conduct and even a virtuous character.[1] 

Filial piety, one of the fundamental Confucian virtues

 Image Source: WUJIFA

The full essay is at "Mandating a Virtue by Law."

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[1] An alternative means, which I do not discuss here, involves the future possibility of scientists being able to “tweak” the human genome to make human beings less inclined to vice and more virtuous. For example, if greed is an instinct or urge to “get still more,” perhaps through genetics that instinct can be expunged from human nature. In terms of virtue, genetics might make it more pleasurable in being generous. Where such genetic treatments are available to everyone, it seems to me that a good ethical argument could be made on their behalf.