Eddie Willers

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I have just noticed - Rand gives no description of Eddie Willers.

Platitudes

Back from break and embarking on two courses this semester: Business Ethics and Radical Capitalism. This post is about business ethics.

It seems quite common for those speaking of business ethics to talk about the necessity, or moral goodness, of compliance with the customs and expectations of the community.

I am reading this now in Robert Solomon's It's Good Business, but it can also be found in Friedman's "The Social Responsibility of Business is to Increase Its Profits."

First - this is not necessarily true. Communities can harbor racist, sexist, or any number of horrible customs and expectations. The truth of this claim would seem to rest entirely on the prior morality of the expectations. Yet, even this contingent claim should be challenged.

What if the expectations of the community are moral? If one is a moral monist then there is only one right code and both community and business ought to abide by it. Notice, though, that even here the normativity does not stem from following community expectations - business is obligated for the same reason everyone else is: This hypothetical set of moral rules is the only right code.

If one is a moral pluralist, then the community may be following a legitimate custom, but there may be other equally good moral customs as well. Some people are married, some are single - should a business not produce products for singles? Should I not write books that most of the community disagrees with? As long as the business is following a morally acceptable alternative path, then there is no reason to claim an obligation to follow community customs and expectations.

I simply find no reason to support the claim that business, or anyone else, is obligated to follow community customs and expectations.

The Hostage "Business"

This one from a colleague and friend of mine Stephen Hicks, Professor of Philosophy and Executive Director, The Center for Ethics and Entrepreneurship.

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 :)

Self-Interest

Our course concludes with readings on self-interest gone wrong - morally wrong.

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

Business and Non-Business

Recently I put forward an assignment to my students. The assignment is as follows:

"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?]

Labor and Management

Carnegie – Gompers – Laughlin – Taylor

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.

Gospel of Wealth

I always find it amazing when I read this piece the firm distinction Carnegie makes between running a business and being useful to the community. This distinction is so deep in his writing that one of the reasons he favors a high death tax is to recompense society for the unworthy lives of businessmen who have contributed nothing.

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.