Sunday, December 6, 2009
The Hostage "Business"
His submission is:
The Hostage Business
http://www.nytimes.com/2009/12/06/magazine/06kidnapping-t.html?_r=2&scp=1&sq=adiele+nwaeze&st=nyt
And I thought no one was listening :)
Thursday, December 3, 2009
Self-Interest
We began with self-interest and what it can do right.
Therefore, these last readings should not be seen as damnations of self-interest. Rather, they are sign posts of the boarders between self-interest and morality. The two overlap to a large extent, but not completely. Much ink has been spent trying to show how, indeed, rational long-term self-interest is perfectly compatible with respecting property rights. The fact is, not one has succeeded. A great article on this that I could not get for the class this time is Gregory Kavka's "The Reconciliation Project".
I want you to look at these limits so that you ask yourself the very real question - What do I want out of (business)ethics? If it is to persuade others to do the right thing, then you will have some success, but it will be limited. If, on the other hand, it is to guide your own life and actions you will probably have more success. But hubris is the Achilles'heel of us all and temptation takes many forms.
On this point I think Tolkein was wiser than many ethical theorists - No one can use the ring.
Bill
Monday, November 30, 2009
Business and Non-Business
"Find a written piece that equates unethical activity with business as usual. It is quite common for commentators of various stripes to confuse activity that is not business with activity that is, I want examples of this confusion. The general writing of such pieces is like this: “In a case of business as usual, the XYZ corporation knowingly sold exploding mayonnaise to unsuspecting elderly gnomes. In this classic case of greed/profits before humanity 47 people were hurt, and countless cans of tuna destroyed, in what can only be described as a case of the market run amok.” In this imaginary case XYZ has engaged in fraud, which is stealing, which is not trading, which is thus not business – but the article calls it business. You need not include any explanation with your submission, unless you think it needs explaining. Try not to worry, if a submission is not “what I am looking for” you can try again until you do. I would prefer a newspaper or magazine article, but an example from a book works as well. Blogs are tricky, but regular, well established blogs, stand a good chance of counting. It does not need to be a current event. Any time period is fine. I will post these submissions for all to see on the blog."
I cannot say that I agree with all of the submissions, but that was never the point. The point is to show that there is room for debate on the concept of business and to show this possibility by pointing out instances where, in your informed opinion, you think the source has mistaken business and some other form of activity.
Here are the first examples: (Comments in square brackets are an extremely brief summary of the "beef" the submitter had with the article.)
Loudon man sentenced in bond fraud case
TULSA, Okla. - A Tennessee man has been sentenced to federal prison for his role in an international conspiracy involving 19th-century railroad bonds and 100-year-old Chinese bonds.
Robert William Searles of Loudon was handed a four-year, nine-month prison term and ordered to pay more than $3.6 million in restitution.
The 71-year-old Searles is the third person sentenced in the scheme that federal prosecutors say defrauded hundreds of investors around the world of millions of dollars.
[This is not business…it is stealing]
http://www.nytimes.com/2009/11/02/business/media/02carr.html
The Media Equation
Business Is a Beat Deflated
By DAVID CARR
Published: November 1, 2009
….There are exceptions. Google. Apple. Twitter (assuming it ever makes money). But the editorial tropes of financial might don’t easily describe the nature of their accomplishment. How hot and bothered is a reader supposed to get about an algorithm? And no one wants to read a magazine about the sovereign funds, foreign investors and bargain hunters from afar who seem to be the real power in buying in at the bottom.
[Business is more than just making money…Twitter is a business.]
http://www.timesonline.co.uk/tol/news/uk/crime/article6922184.ece
November 19, 2009
Rabbi Baruch Chalomish accused of swapping cocaine for sexual favours
A rabbi set up in business as a drug dealer and lavished his supplies of cocaine on young prostitutes at parties, a jury was told yesterday.
Rabbi Baruch Chalomish, 54, bearded and wearing a trilby hat, shared the dock at Manchester Crown Court with an interpreter who occasionally translated the barristers’ words into Hebrew.
He was said by the prosecution to be a wealthy man who took up with Nasir Abbas, also 54, a convicted dealer, who had the “knowhow” and the contacts in the drug trade. The rabbi was the financier in the operation. They set up their “commercial cocaine-supply operation” in an hotel service flat in Shudehill, Manchester, where, it is alleged, Chalomish liked to dispense the drug in return for “sexual favours…
[Business is partly defined by trade but not illegal trading especially with the most likely unwillingly.]
Tobacco and Business
http://www.philipmorrisinternational.com/PMINTL/pages/eng/busenv/Bus_environment.asp
[What to do when your business is unhealthy and unpopular? Do fatty meat producers need to do these same contortions?]
Tuesday, October 27, 2009
Labor and Management
I can only begin to trace out the connections between these four, their relation to our previous readings, and their importance for the future.
Between Carnegie and Gompers exists the standard negotiations for higher wages and shorter hours. Standard claims of labor and standard costs of business. In doing business one cannot ignore labor. As we see with Carnegie one can take either a more cooperative, or more confrontational, approach. It seems both are ways of doing business.
The Homestead Strike highlights some of the importance of our past readings. The steel mill was Carnegie’s property, by contract, and he hired detectives to take it back. On the other side, laborers felt they had mixed their labor sufficiently with the plant to give them some claim of ownership. The violence exhibited by both sides failed to address this fundamental question about the nature of property. In every job I have ever had, workers have started to feel this sense of ownership. I offer for consideration that it is this sense of property that must be directly engaged in more cooperative negotiations.
I also offer that Frick’s attempt to bust the union was not business. Having achieved all the concessions he could have wanted for the purpose of running the business he went after their organization. There is a difference between reducing costs and eliminating every possible source of opposition. I wonder if an analogy holds between attempting to destroy a functioning collective bargaining unit and a functioning individual bargaining unit. Attempts to keep workers attached to their jobs are numerous. Listen to the song “Sixteen Tons”. I’ll go into this more in audio I think.
Some further quick points I offer for now: (1) Laughlin picks up the economists argument and is basically arguing about the relationship between the division of labor, productivity, and wages. By attacking Laughlin, Gompers is really attacking Smith. (2) Taylor is the logical conclusion of Smith’s division of labor. After all, if we are going to divide it, let’s divide it right. The whole purpose of this division is to increase productivity and Taylor notes, with some justification, that this increase in productivity depends on a correct division. (3) Finally, it is the unsatisfactory nature of Taylor’s system that now serves as the touchstone for a huge amount of management literature to come.
Friday, October 9, 2009
Gospel of Wealth
Walking through boarded up Main Streets, my first thought is never – “Oh, there should be more non profits here.” My first thoughts are how neat it would have been to be here when that Art Deco mercantile was open, or to see first run movies in the type of theatre that only existed in the downtown of yester-year.
Sure, things change. The point, though, is the sadness in closed downtowns is primarily that there is no business. Doing business was/is helping the community. This does not mean that charity is not laudable; it is just to say that doing business is serving the community. Carnegie is just wrong on this point.
Thursday, October 1, 2009
Marx
Points of Agreement: (Quotes are from the Manifesto, Chapter 1).
1) "The bourgeoisie, wherever it has got the upper hand, has put an end to all feudal, patriarchal, idyllic relations."
2) "The bourgeoisie has stripped of its halo every occupation hitherto honoured and looked up to with reverent awe."
3) "The bourgeoisie cannot exist without constantly revolutionising the instruments of production "
4) "The need of a constantly expanding market for its products chases the bourgeoisie over the entire surface of the globe."
Points of Disagreement:
1) "in place of the numberless indefeasible chartered freedoms, has set up that single, unconscionable freedom — Free Trade. In one word, for exploitation, veiled by religious and political illusions, it has substituted naked, shameless, direct, brutal exploitation."
2) "The bourgeoisie has torn away from the family its sentimental veil, and has reduced the family relation to a mere money relation."
3) "The modern bourgeois society that has sprouted from the ruins of feudal society has not done away with class antagonisms. It has but established new classes, new conditions of oppression, new forms of struggle in place of the old ones."
Something to think about. I have more I want to say ... but it can wait.
BK
Wednesday, September 30, 2009
Division of Labor and Market Size
Yet, every time I revisit that section, it becomes more interesting. For instance, Jared Diamond in his book "Guns, Germs, and Steel" attributes a great importance to the size of a population. If you look at it, though, he never really defines what a relevant population is, except to say that populations are historically defined by serious natural borders like mountains, deserts, and oceans. That is, the boundaries of a population are where transportation costs become too high. Diamond's account of population fundamentally depends upon the Smithian analysis of the size of the market.
I have also recently wondered why businesses do not attain some size, or market share, that is in reasonable equilibrium and stop there. Why always talk of growth? Then it hit me. The greater the extent of the market - the greater the extent of the division of labor. Smith's argument applies to individual businesses as well. A small hospital serving a small town will have a few generalist physicians. A large hospital serving a large population will have those plus many specialists the small town/market could not support. Grow the market and you can increase the division of labor within the firm to, hopefully, yield even greater returns.
Just a thought.
BK
Tuesday, September 29, 2009
Smith and Markets
From these readings we can plausibly construe a market as a place where:
1) There are enforced property rights. This enforcement comes from both other individuals and the state.
2) Enforced contracts. This enforcement comes from both other individuals and the state.
3) Trading, where what is traded is not simply a good or service, but the rights to these goods and services. These rights are protected in 1 and 2 above.
4) Some claim to the protection of life and limb. We find this mainly in Locke and Hobbes. It would do us little good to have a market where people could not steal from us, but could kill us then take the "ownerless" goods.
At the very minimum, then, a business must work within the framework of 1-4. This does not tell us everything a business is, but it does establish a fundamental framework. Anything that violates any one or more of 1-4 above is not business.
BK
Saturday, September 26, 2009
Thursday, September 24, 2009
Smith, Malthus, Marx
While these three individuals come to some very different conclusions, it is worth noticing the similarities in their arguments. The common thread that can fray shows us how close these arguments really are and perhaps why debate around them becomes so heated.
The first chapter of your reading on Smith concerns the division of labor and the “opulence” that results from the division of labor. The second chapter concerns the principle behind the division of labor. The third on the relationship between the division of labor and size of the market. Chapter IV is about money which sets the stage for Chapter 5 where Smith argues that real value resides in labor.
Malthus agrees with the notion that value resides in labor, but vehemently disagrees with Smith on the notion that the division of labor makes everyone better off. In fact, Malthus does not believe it ever could make everyone better off. Remember Smith argues in Chapter 1 section 4 that agriculture does not benefit as much from the division of labor as manufacturing. Malthus completes the argument. If manufacturing is more productive it will initially provide returns that support an ever increasing population. It will do, and must do, this more quickly than agriculture can keep up. That is, manufacturing will continue to give more workers the opportunity to procreate. Given their natural desire to procreate, or perform actions that result in procreation, the number of workers will eventually outstrip the ability of agriculture to feed them. When this happens either famine, disease, or both will wipe out a number of workers. This kills so many that the surviving workers are now easily supported by existing agriculture leading to the exact same cycle again.
Malthus agrees with Smith on the productivity of land, the short term results of the division of labor, and the ultimate value of any commodity.
Marx, likewise, utilizes Smith’s labor theory of value. The first page of our reading on the manifesto exactly acknowledges Smith’s point about the division of labor and markets. In these opening pages Marx is arguing that because of the explosive growth in markets, especially with the discovery of America, there was a corresponding explosion in the division of labor. Unlike Smith who see this as a good thing, though, Marx sees it as perhaps better than feudalism, but worse than what the proletariat deserve.
BK
Tuesday, September 22, 2009
Writing and Citation Reference
Sunday, September 20, 2009
Readings Posted
Liberty Studies
At this moment, only Hobbes is posted and you will note how the rough the page is. Unfortunately, I'm cooking dinner and this is the best I can do right now.
Updates forthcoming.
Also, students, please make sure you have read all posts below.
BK
Current Events
The article "Schumpeter" is a good overview of many of the objectives of this course
Schumpeter: Taking flight | The Economist
Read Malthus then read
Norman Borlaug | The Economist
BK
Monday, September 14, 2009
Malthus and Smith
Saturday, September 12, 2009
Hume and Convention
Thursday, September 10, 2009
Hume and The Problem of Cooperation
Saturday, September 5, 2009
Locke and the Environment of Business
This actually begins to lay the foundation for business. There are two important aspects of this foundation. First, that a person has property rights means that she can legitimately defend her property, even with the help of others, against those who would take it. This is an important authority to have since without it there is no justified self-defense in business transactions. This is why it is one of the obligations of a government to protect your property: For various reasons they are exercising this right for you. This is the argument people focus on when they say things like “I have a right that ought to be protected.”
There is, however, a second moral consideration often overlooked in such debates. It is only by violating these rights that others may punish me. After these rights are suitably clarified, I may do anything I see fit so long as it does not violate these rights. This is a concept of liberty and it is essential for business activity.
There are a myriad of actions that constitute business activity. Imagine having to seek permission from the ruler for each and every action one needs to do for conducting business. The more permissions required, the harder it is to conduct business. On the other hand, in a Lockean system, no permissions are necessary as long as actions do not violate the rights of others. Here it is incredibly easy to conduct business. Perhaps there are other costs, and we will come back to this point, but if I am free to act it does mean that you have no right to punish me by taking what is mine. The promise is that if I do not violate the rights of others I get to keep the produce of my efforts. It is not any disparity in wealth that these rights protect, it is only wealth gained through actions in accordance with the natural law. If this law is kept, you get to keep your profits. Violate this law and they may justifiably be confiscated.
Notice now that it is the confluence of having to ask permission and liberty that creates the milieu in which business acts. This atmosphere will determine how business is done, just as surely as supply and demand.
BK
Thursday, September 3, 2009
Locke on Legitimate Power
Attila The Hun and Business
Trump
Tuesday, September 1, 2009
Hobbes and Business
Hobbes and Contracts
Sunday, August 30, 2009
Business and War
Friday, August 28, 2009
Hobbes, Equality, and War
We are equal, because we can kill each other. This is why we ultimately cannot trust each other (our diffidence). We all know this. Each person then is a potential threat where there is no state, government, and law. To preserve our own lives we must respond to this threat. We are always ready to defend ourselves or attack as we see fit. It is this state of constantly being ready to fight that is WAR. Think of the Cold War. Fighting is war too, but it is included in that definition.
Therefore, I offer, that Hobbes’ state of war is not simply about conflicts of self-interest. It is conflicts of self-interest that may reasonably be solved by battle that includes attempting to kill your opponent.
I make this point to present the possibility that this is not what we mean by business competition.BK
Tuesday, August 25, 2009
The Purpose of Hobbes
Many may be wondering what the purpose of Hobbes is here. After all, it can be a strange reading. The purpose is to establish a baseline and encounter certain concepts that we will find again and again.
I) The baseline I want to focus is on, is what Hobbes calls “war”. What is it? Why is it? How can it be avoided?
II) The central concepts Hobbes, and business, uses are: liberty, rights, contract, and justice. These are just to name a few.
Now you perhaps can see, or already did, the juxtaposition. People use the languages of both I and II to talk about business. Are we being realistic? Are we being sloppy?
More to come ....
BK