What is the Basis of Business and Society?

Scholars and practitioners alike in the field of business & society tend view it as being synonymous with corporate social responsibility. It is easy to do. Another error concerns the conflation of CSR and business ethics. In fact, the very name of the topic, corporate social responsibility, is problematic. Straightening all this out could result in more topics in business & society even as the field ceases to overstep into business ethics and the nature of CSR becomes more transparent in business as well as society. 

The full essay is at "Basis of Business & Society."

Increasing Rates of Acceleration of Ice-Melt: Difficult for Humans to Grasp

The findings of two studies published in January, 2019 indicate that Antarctic’s ice had been melting “at an alarming rate” since 1979.[1]  The rate of melting looked at precisely tells part of the story of why people in general were even in the year before 2020 still catching up in realizing the full extent to which climate change was going on. The key here is the concept of acceleration. The rate of ice loss has not been consistent in that ice disappeared faster in each successive decade.

The full essay is at "Increasing Rates of Acceleration of Ice-Melt."

---

1. Brandon Miller, “Antarctica Ice Melt Has Accelerated by 280% in the Last Four Decades,” cnn.com, January 14, 2109

Egyptian Court Overreached in Declaring a Legislature to be Unconstitutional

In 1803, the U.S. Supreme Court decided Madison v. Marbury, which established the authority of the court to declare a law to be unconstitutional, and thus invalid. A basic principle underlying this authority is that a constitution is on a level superior to a statute. An entity established in a constitution to interpret it can thus invalidate a law passed by another body established in the constitution. Invalidating that other body itself would be an entirely different matter, as it would involve one constitutional body dissolving another of equivalent grounding. Accordingly, the constitutional court in Egypt overreached on June 14, 2012 in declaring the parliament dissolved.

The full essay is at "Egyptian Court Overreached."

Addressing Systemic Risk: Beyond the Dodd-Frank Act of 2010

After the financial crisis in September 2008 in the U.S., the former chairman of the Federal Reserve, Alan Greenspan, admitted to a Congressional committee that his free-market notion that a market will automatically self-correct itself had a major flaw. He had come to this realization because the financial market for mortgage-backed bonds had failed to correct in terms of price for the dramatic increase in risk. Instead, that market, and that of overnight commercial paper, had seized up rather than simply adjust price to the decreased demand. Fear had paralyzed what had hitherto been thought to be a self-correcting market. The failures of Bear Stearns and Lehman Brothers introduced us to the concept of systemic risk, wherein the failure of a bank (or company) causes a market to collapse. Such a bank is thus too big to fail. If actualized, such risk interferes with even the basic operation of a market, not to mention its self-correcting feature. One question is whether banks that are too big to fail should merely be more adequately regulated or broken up, as the U.S. Supreme Court broke up Standard Oil in 1911.

Alan Greenspan, former chairman of the U.S. Federal Reserve Bank

   The full essay is at "Addressing Systemic Risk: Alan Greenspan."

Affluence and Democracy in China: A Complicated Relationship

The Financial Times reported in 2013 that there was “no great clamour in China for western democracy.”[1] The assumption in the West that prosperity in China will someday inevitably usher in democracy may unduly privilege Western political values in an exogenous context. The newspaper suggested that prosperity can be the source of rising pressure for political change rather than an antidote to it. In other words, the power shift between the state and individual that is unleashed by rising incomes does not necessary privilege the individual. Time and again, China’s leaders have refused to shift power to the individual at the expense of the state; social harmony, and power, are just too important. To be sure, cronyism and corruption, while endemic in China, are not esteemed cultural values, and the rising middle-class may demand that the state clamp down on the unfairness of government officials “wetting their beaks.” This would be particularly problematic if the growing upper-middle-class demand more transparency in government and more rule-of-law to instill fairness over the personal aggrandizement of government officials. However, President Xi, at least publically, would hardly object, as he set out to come down hard on corruption even in the state. At the very least, the matter of increasing wealth and democracy in China can only be complex, yet we can come to some conclusions based on Chinese history and the Chinese view of democracy being Western.

 

The full essay is at "New Wealth and Democracy: A Chinese Puzzle."

---

1. Philip Stephens, “Political Cracks Imperil China’s Power,” The Financial Times, January 24, 2013.

Hidden Warnings of Climate Change: A Paralyzed Species Looks On

Global warming has been so difficult to slow down through political means at least in part due to the fact that most of the action has been going on in the Arctic Ocean and the surrounding permafrost land (which, it turns out, is not so permanently frozen after all), far from almost all of the world’s population. In short, what is occurring in that region is both dwarfing the impact of human-released carbon and serving as the canary in the coal mine. The implications are truly astonishing.

The full essay is at "Hidden Warnings."

Protecting Minority Stockholder Rights: On a Conflict of Interest at Revlon

The principle of majority rule is a staple of democratic theory. Typically the victor of a close election is quick to proclaim that “the people” have spoken. That “the people” corresponds to 51% of those who voted is beside the point. What about the 49% who voted against the victor? What about the minority’s rights? In the U.S. Senate, the fact that it takes 60 out of 100 votes to end a filibuster means that a large minority can halt a majority’s bill. In the European Council, the qualified majority rule means that for a bill to pass, the states in the majority must be at least 55% of the total number of states and must have at least 55% of the E.U.’s population between them.  A large minority can therefore stop a small majority. In both of these “intergovernmental” bodies, the implication is that 51% of a vote is not as significant as the principle of majority rule suggests. What about the rights of a minority of shares of stock in corporate governance? When a majority stockholder has control of management, the interests of the minority stockholders can be shirked. This is particularly true when a majority stockholder proposes a going-private transaction with the aid of management.

The full essay is at "Protecting Minority Stockholders."

---

1. Peter Lattman, “To Perelman’s Failed Revlon Deal, Add Rebuke From S.E.C.,” The New York Times, June 14, 2013.

2. Ibid.

3. Ibid.

4. Ibid.

5. Ibid.

6. Ibid.

On the Particular Kind of Love Evinced by Jesus: A Better Criterion for Christianity?

The film, Paul: The Apostle of Christ (2018), carries great weight theologically in that Paul describes a very particular kind of love that Jesus preaches and lives out in the Gospels. In so doing, the film shows an overlooked criterion by which people who claim to be Christian can be ascertained as such or not. One implication from the film is that Christianity has contained (and still contains) a number of nominal Christians who are not in fact Christian. A related implication is that the historically (and modern) criteria by which people are considered (and consider themselves) Christian is not as useful (and valid) as the overlooked criterion that is so salient in the film.

The full essay is at "Paul: The Apostle of Christ"

Corporate Social Responsibility: Too Often a Weapon

Typically, responsibility is something that people working in a business typically presume applies not to their business, but instead to stakeholders, whether a customer, supplier or distributor. It is not uncommon for retail stores to hang signs indicating that the store is not liable for this and that. What if such a store is nonetheless at fault? To be so and even just claim not being liable for it reeks of selfish disregard for others. The idea, or mentlity, is that the other guy should pay for even problems for with someone working for the store caused.  Responsibility in this twisted sense means “I won’t pay; you must pay even though I'm at fault”  The underlying mentality can be said to come from a point of weakness rather than strength, for healthy companies can afford to shrug off any temptation to be small-minded and inconsiderate. In writing in this way, I am drawing on Friedrich Nietzsche, from whose theory it can be claimed that the store signs are actually weapons used by the weak out of resentment for the strong (i.e., customers). In comparing stores on Nietzsche's strong/weak spectrum, companies that are strong are naturally generous whereas the weak ones relish even being rude or even cruel to the stronger out of resentment. 

For more, see Skip Worden, On the Arrogance of False Entitlement: A Nietzschean Critique of Business Ethics and Management, available at Amazon.

A Critique of the Corporate Legal Persons Doctrine: The Case of Corporate Taxation

In his commentary in The Wall Street Journal in 2010, Michael Boskin went over the disadvantages in levying an income tax on corporations. Within his argument, he observes, “Of course, the corporation is a legal entity; only people pay taxes.”[1]  In so doing, he transcended, if only for a moment, his own approach that was oriented simply to giving the pros and cons of corporate taxation.  His observation is significant, and it gives us a launching pad of sorts by which we can approach the corporate income tax as a itself as a concept, rather than simply assessing its utility. In short, corporate taxation is an oxymoron if only humans pay tax. In fact, we can conclude from Boskin's remark that the doctrine that corporations are legal persons has been incorrectly construed.

The full essay is at "A Critique of the Corporate Legal Persons Doctrine." 

1. Michael Boskin, "Time to Junk the Corporate Tax," The Wall Street Journal, May 6, 2010.

Self-Delusion Enabled by Religion: Former U.S. House Minority Leader Tom Delay and Monopolist John D. Rockefeller

It is hardly news that religion, even one based on divine love reaching down to “love thy neighbor,” can be stretched or simply ignored as needed by the desires for power and money. When these two are both engaged, religious rationales may be attempted nonetheless. I have in mind here the cases of former U.S. House Majority Leader Tom DeLay (R-TX) and the monopolist John D. Rockefeller. Just in evoking their Christian faith to justify their sordid conduct in politics and business, respectively, these two men may be seen as astounding cases of the length to which adherents can go in using religion even in spite of obvious hypocrisy.

The full essay is at "Self-Delusion Enabled by Religion."

Climate Change: An Outsider in Democracies

The U.S. House of Representatives was created in part as an outlet for the immediacy of a people’s passions; other governmental institutions at the federal level provide a check. The term of a House representative is only 2 years, whereas that of a U.S. senator is 6 years and that of the U.S. president is four. So presumably societal  or even global  problems requiring immediate action find pressing representation in the House, whereas the perspectives of U.S. senators and presidents, being limited to six and four years respectively, are not long-term-oriented enough for problems that could blow up in decades. To register in the crowded minds of House representatives, a long-term problem yet in need of immediate attention must trigger the immediate passions of the constituents unless the representatives value principled leadership (i.e., acting in the best interests of the constituents and the country). Yet passions demanding immediate action tend, I submit, to involve anger. Climate change is thus excluded, and the long-term forecasts do little to impress upon a people how urgent rectifying action really is. Even if the scientific reports of current conditions emphasize extant dramatic changes (not to mention future forecasts with disastrous implications for humanity generally and particular regions, immediate passion is not sufficiently stirred for the U.S. House at least to prioritize addressing the problem.

The full essay is at "Climate Change: An Outsider in Democracies.

News to the Wall Street Journal: The E.U. Has a Common Market

The European Union has a common market. This would seem to be news to The Wall Street Journal, at least back in 2010. This is not to say that the E.U. is a common market, for the E.U. is much more than an economic market. For instance, the Union has governmental institutions, including a parliament, a senate (i.e., the European Council), an executive branch (i.e., the Commission), and a supreme court (i.e., the ECJ).  So it is surprising when journalists forget that the E.U. even has a common market by treating each of the States as having its own economy. To be sure, regions of the E.U. perform differently economically.  In the U.S., the States in New England, as well as New York, and California tend to have much higher GDPs than say South Carolina, Wyoming, and Iowa. Therefore, I contend that The Wall Street Journal erred in applying the concept of contagion to the E.U. financial crisis of 2010. 

The full essay is at "The E.U. Has a Common Market."

Wall Street Snuffed Out President Clinton's Goal of Homeownership for the Poor

It is one thing for the head of a government (or a government’s executive arm) to set a praiseworthy goal that is in the public interest, and quite another thing to rely on the financial sector to implement it. Finance has its own means tied to its own goals, with plenty of greed in the mix. Governmental officials may tend to minimize the potential damage from ego-laden greed to the goals of public policy. Such policy ideally strives for the good of the whole, whereas the goals of a private sector of a part. This could account, at least in part, for the financial crisis of 2008 and the continuing bear market in housing in much of the U.S.

The full essay is at "How Wall Street Snuffed Out Clinton's Goal."

Corporate Ethics Codes: A Waste of Time?

Ethics codes are not enough; that is to say, making applications of ethical principles explicit is not sufficient, even where they are grilled into employees in recurrent training sessions. Indeed, individuals or a dominant coalition can use a code’s existence as window-dressing. For example, in his letter on July 1, 2000 announcing Enron’s new and improved 65 page Code of Ethics, Ken Lay wrote, “Relations with the Company’s many publics . . . will be conducted in honesty, candor, and fairness.” If Ken Lay could get away with trumpeting a code of ethics, who’s to say who is out there now acting unethically in business under the cover of an effervescent code?

The full essay is at "Corporate Ethics Codes: Oxymorons?"