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Ethics, Money & Corporate Power. Can they co-exist?

 
  

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ONLY NICE THINGS
16:05 / 30.03.08
There's rather a difference between it being possible to live ethically under capitalism, and capitalism being itself an ethical system, isn't there?
 
 
ONLY NICE THINGS
17:00 / 30.03.08
Expanding on that slightly- yes, it's possible to buy local and organic, for example, to donate to good causes, to build a zero-emissions home, to walk to work - but all of these things are expensive, and require significant resources. One of the things that irritates me about exponents of the free choice model is that they tend to ignore that if one is living with few resources one has little real choice - one may be able to select from a dozen different _brands_ of cheap, heavily processed food, but what choice, exactly, does that represent?

Also, all of these things are being done in an environment where the way to acquire the resources to do all of these ethical-living free-choice activities involves plugging into a system which, as you have acknowledged, has essentially no concern for ethical process at all; it will seek to do everything it can to avoid or minimise the impact of law on its ability to maximise profit - including, which is another thing which has been mentioned and which you have not included in your model, using its considerable political power. Waaaaay back on page one, I said:

Your model seems to be a bit like a traditional marriage, where business brings a load of money home, gives some of it to his wife, society, as housekeeping and goes back to wealth generation, leaving her to allocate her stipend to good works, cleaning and culturally improving activities. However, that neglects to take into account that business, in order to maximise profit, has both the ability and the compulsion to exert pressure on society and government. This is quite apparent in the US, where often large companies which provide many constituents with jobs can induce congressmen and senators to serve their mutual interest by securing federal funding - handouts, in effect, from the housekeeping kitty - for their own ends.

This ties in to a couple of other issues, for example the power business has in poor countries, and its relatively limited accountability - Shell in Nigeria was the cited example, Union Carbide in Bhopal is another quite famous one. Also, of course, that by participating in this system in order to get the cash for one's organic veg or one's sustainable farm in the Cotswolds, one is participating in the continuing degradation of the world's ability to sustain its population. Also from back on page one:

But that doesn't end all global poverty, does it? As a case in point: by creating a set of consumers in India and China who want, for example, to consume beef sandwiches, wealth generation leads to massive pressure being put on farming resources. Beef is a process product - it can be sold for more than the potential value of the resources put into raising the cow that generates it. However, a cow also produces less actual usable food than the same amount of grain. This is not the concern of the companies producing, buying or processing and exporting beef, and the governments in the countries where the beef is being grown can be induced to cooperate with the companies through differences in the exchange value of their currency and reserves and the cash realisable by the companies. However, this leads to shortages in food, damage to the soil, disruption of the farming culture and so on in that country. What's the solution to that? Logically, generate wealth so that everyone in that country can be rich, and then buy their own beef sandwiches. But from where do they do that? Where is the wealth built, and where is it allocated? As ES says, some very rich people in, say, Nigeria may increase the average wealth of a statistical Nigerian, but it need not do much for an actual Nigerian, especially if the government that should be representing him or her is compelled by their own circumstances to conspire with rather than to put a brake on the practices of their corporate patrons.

So, there's a problem there. More broadly, although sticking with the US, UK and Western European countries is a pretty good idea, tactically, because they have generally high standards of living (although in particular the US has considerable urban and rural poverty also, of course, of a kind which I believe you think no longer really exists in realised capitalist economies - I don't think poverty in Western Europe really exists anymore). However, they are manifestly not the only capitalist economies, not least because, due to the importance of open markets to exploit, capitalist economies aggressively seek the breakdown of any system that seeks to close markets to them. So, Chad, Malawi (where the aggressive advancement of free market strategies as a condition of IMF assistance led to repeated famines until the government forcibly subsidised fertiliser) and Burkina Faso, for example, are all operating in open markets, or more precisely in markets which are canted in the favour of the interests of the largest operators. Also, of course, China was pushed hard as an example of the success of capitalism:

I think it is clear and obvious that capitalism in China and India has generated wealth and improved the lives of billions.

However, China does not have a free press, and its businesses are broadly state-owned. It happens to be a big enough economy to set terms to keep wealth in its borders, in a way that many countries are not, for example by making it far easier to function as a part-Chinese joint venture operating through a shell company than as a wholly foreign-owned business. If you are a small coffee grower in Africa, you do not tend to get the same protections from your government, not least because your government cannot fight your corner with the same resources behind you - which, incidentally, is one reason why I think the question of whether coffee shops should be privately or publicly run is a limitingly insular inquiry; it focuses only on one tiny point at the end of what is currently a long chain of potentially exploitative practice. China's approach - it's heavily controlled interaction with open markets - is sensible given that the institution of capitalist economics led to the collapse of the Russian economy in the 90s (and the Japanese economy, incidentally, and the Albanian economy, and the Argentinian economy, in different ways). However, it's not capitalism in the UK/EU/US sense at all, and in fact those systems are different enough to raise questions about whether it even makes a lot of sense to say "the countries where people enjoy high standards of living, which happen also to be highly-developed, early-industrialised, to have either huge mineral wealth or to have had access to the mineral wealths of other countries through Empire - that's capitalism, and nothing else counts".
 
 
Fist Fun
07:59 / 31.03.08
There's rather a difference between it being possible to live ethically under capitalism, and capitalism being itself an ethical system, isn't there?

I was thinking about this. Ethics are defined at two levels. So don't kill people, don't use child labour are the ethics of general society. Some societies say never kill anyone ever, some say it is ok to kill someone if they have done something very bad. Again there is differences in how child labour is defined. That is for each society to decide.

There is also personal ethics. Whether to buy organic food, is it important to be nice, giving to charity. All personal decisions.

So it isn't the system that is ethical. It is the choices that are available under that system. Those choices are made by individuals and society. So if the system removes the ability to be ethical. That is the problem.
 
 
ONLY NICE THINGS
09:52 / 31.03.08
I think that's broadly correct, yes. There are some systems which I think cannot be ethical, IMhighly partialO - systems that depend on coercion or slavery to function, for example.

However, I don't think your division into general ethics and personal ethics is entirely coherent. One doesn't buy organic food to satisfy the abstract demands of an arbitrary behavioural system - or at least, probably not. One does so for reasons of self-preservation, possibly (one wishes to get health benefits from non-processed food) - which is not an ethical choice. However, one also (hopefully) takes this ethical action because one sees oneself as part of an interconnected system where your actions and the actions of people like you have consequences. So, you pay more than you have to for coffee, the company that you buy the coffee from passes that extra on to the growers, the growers are able to maintain a better standard of living. You buy organic vegetables, you do not add to the amount of pesticide and nitrides entering the water table as agricultural pollution, in order to reduce the damage to the environment done by your consumption of food. You don't buy clothes made by child labour or de facto slave labour, you work out your own standards for what those terms constitute and apply them - so, a country may decide that children can legally leave school and work in full-time employment at 11, but you do not have to accept that decision.

What you are calling the "ethics of general society" are laws, which are a bit different. You may think that a law is ethical or unethical, but abiding by it, although not necessarily agreeing with it, is generally a condition of living free in a particular society.

An action may be ethical - in tune with one's own ethics - but not legal. It may be legal but not ethical in the opinion of a greater or lesser number of people or the leaders of a society (in which case there may be moves to make the action illegal as well as unethical). For example, a leading supermarket chain was recently revealed as having been supplied by gangmasters using unregistered foreign labour paid below the minimum wage. The gangmasters were behaving in a fashion that was illegal and, in my opinion and the opinion of the leaders of my society, unethical. The major supermarket, by forcing down prices to the point where its price demands required the use of illegal labour, and not inquiring into whether it was possible to meet those pricing demands while operating within the law, might be said to be behaving legally but by no means ethically - in fact, it was doing what it is meant to do - operate at the bleeding edge of legality in order to maximise profits. We've already been over why the struggle to keep legality pegged to ethics can be an unequal one a few times, most recently directly above.

So, that's one issue. Another is the possibility that, if people and societies, and in particular businesses, have the choice to operate ethically, they may decide for many reasons not to do so. If this is a choice of whether or not to be "nice", in the tipping-hats sense, this is not much of an issue. However, the stakes at the top end are quite high - to whit, the future sustainability of life on Earth. This touches on the tragedy of the commons, but also on a fundamental problem with consumer-based economics - they require consumption to continue and to increase to be identified as successful. As such, the range of choice available are pyramidal, with non-consumption frequently made difficult or unavailable. Possibly national and transnational law should prevent this, but as you legislate further, you have to start wondering at what point one still really has a free market...
 
 
Fist Fun
10:15 / 31.03.08
However, one also (hopefully) takes this ethical action because one sees oneself as part of an interconnected system where your actions and the actions of people like you have consequences. So, you pay more than you have to for coffee, the company that you buy the coffee from passes that extra on to the growers, the growers are able to maintain a better standard of living. You buy organic vegetables, you do not add to the amount of pesticide and nitrides entering the water table as agricultural pollution, in order to reduce the damage to the environment done by your consumption of food.

That's another problem posed by ethics. How can we judge what is ethical?

I've got a mate who has a 1st class degree in Biochemistry, a MSc in Bioinformatics, a Phd in Plant Science and is involved in leading research on plants at the some of the most prestigious institutions in the world.

She thinks organic food is a load of fashionable nonsense that does more harm than good.

So how do we fit those kind of ethical choices, to which there isn't a clear right answer, in?
 
 
ONLY NICE THINGS
11:34 / 31.03.08
Well, a command economy would get the best available information, make a choice and enforce that - whether it was locally-grown organic food, or huge shipments of intensively-farmed food, which I have also heard advanced as a better way to feed industrialised nations.

A capitalist economy seeks probably to maximise uncertainty, thus allowing a broad range of options to be _offered_, some of which are obviously deleterious. The producers of each option would lobby to keep regulations on their particular offering to a minimum, and might commission scientists to produce reports arguing that this or that approach is fashionable nonsense, or the one true approach. Which brings us back to:

So, that's one issue. Another is the possibility that, if people and societies, and in particular businesses, have the choice to operate ethically, they may decide for many reasons not to do so. If this is a choice of whether or not to be "nice", in the tipping-hats sense, this is not much of an issue. However, the stakes at the top end are quite high - to whit, the future sustainability of life on Earth. This touches on the tragedy of the commons, but also on a fundamental problem with consumer-based economics - they require consumption to continue and to increase to be identified as successful. As such, the range of choice available are pyramidal, with non-consumption frequently made difficult or unavailable. Possibly national and transnational law should prevent this, but as you legislate further, you have to start wondering at what point one still really has a free market...
 
 
Digital Hermes
20:18 / 31.03.08
Your point brings to mind something I mentioned, further upthread. If the companies can be convinced that producing ethical goods and services is a 'stronger investment' then getting it as cheaply and quickly as possible, then wouldn't the system sort of self-regulate?

There's a whole lot of idealism in that concept, demanding that these companies take a longer view than quarterly earnings, but even this seems more plausible than simply hoping and waiting for these choices to be made out of pure saintlyhood. If we give the market a carrot chase, the market doesn't care if it's ethical or not. Sort of tricking the economy into doing the right thing.

Another way to consider it is that if corporations are technically entities, they could be considered infants, very focused on themselves and their immediate surroundings. If these megalithic infants can start to see that they co-habitate with other megalithic entities (other corporations and organizations) then would they see that long-term survival depends on new modes of consumption and production?

Rather than trying to demand the current market system change either into a better capitalism or socialism, or any other 'ism,' I'd like to focus on how to develop the system we're currently mired in.
 
 
ONLY NICE THINGS
09:19 / 01.04.08
Another way to consider it is that if corporations are technically entities, they could be considered infants, very focused on themselves and their immediate surroundings.

I'm not sure where one gets that from, though. In what sense are corporations like infants? They are made up of often hundreds of executives, feeding up to a small and concentrated group of people with at least theoretically considerable cognitive ability and experience. You can only treat things that are not people as if they are people so far...

If demand orienting totally towards products satisfying certain ethical criteria, then supply will shift with it. We've already seen this to an extent, in the use of "green" or "ethical" credentials in coffee, detergents, clothes, financial services and the like. However, that excludes several factors, most notably:

1) Demand does not command supply, supply anticipates demand. There's no use having eight million people suddenly wanting three-legged trousers one day if nobody has made them - there is no opportunity for profit. To take a more prosaic example, if you make laptops with mercury, you don't want everyone to decide to stop buying laptops with mercury at once - you want a graduated curve of users prepared to pay a premium for mercury-free laptops, and you organise your marketing and your lobbiyng to that effect. An extreme example of this is the tobacco industry, which pretty much by definition produces a main product that gives people cancer and limits food production in the developing world - it fights a rearguard action in regulated markets, seeks to expand in unregulated markets and looks for product diversity.

2) And connected to that, demand is not informed only by ethical considerations. People have many motivations for their consumption patterns, some circumstantial (I don't want to have to use a car, but public transport is inadequate), some irrational but environmental (I don't want to have to use a car, but if I don't drive the kids to school they will be hit by cars or abducted and I will be a bad parent). Business plays a role in engineering these factors and their treatment. Also, quite simply, many people lack the leisure or the spend to make the kind of informed ethical choices that free-market ethicists often propose as the solution. This also relies, of course, on a basic principle of altruism permeating all human interactions, which is tricky.

So... I have a feeling that Buk is right that educating companies in how to be nicer is not likely to return profit, because companies not being nice is not a design flaw. For a contemporary example, try this - where businesses are doing something which is clearly unethical, and wildly environmentally unfriendly, in order to pursue a legal profit. You're always trying in this system to try to find ways to prevent these exploits being found, and by definition you are always a step behind (assuming that you are an ethical national legislator, which, you know, huge question mark). It's a bit like virus protection in that sense, but much less reactive and more vulnerable. Also, in B2B cases or cases of pure exploitation, the one pressure the market theoretically feels - the pressure of the ethical consumer - is essentially non-existent. Note that, much as Shell said that it only accidentally gave bribes in Nigeria, we have Greenergy in that article saying:

We are rigorous about our supply chain and careful about where we source bioethanol and biodiesel, but it can always sneak in if we have to buy a one-off cargo in Rotterdam to fill a gap ... We try and avoid splash and dash at all costs.

That is, they do not avoid it at all costs - such an activity makes almost no sense in a capitalist economy. However, it does try to avoid it, for its own reasons. What are those reasons, and how compelling are they?
 
 
Digital Hermes
16:26 / 01.04.08
The infant analogy comes in by the fact that corporations are considered legal entities, by themselves. Employees, boards of directors, and management are all working for the benefit of this entity. In that respect, my analogy considers that most decisions made by a company, particularly a large one, are being made at an almost reptilian level of intelligence. Consume, grow, compete for resources, that kind of thing.

So as an infant at first concerns itself with adapting to it's surroundings in a way that is instantly beneficial to it, and then slowly develops the understanding that working in society requires a certain level of interaction and sharing with that society, so too might this reptilian entity evolve. This is theoretical and optimistic, but not outside possibility.

Certain brands marketing themselves as ethical or green has been mentioned. Is that a niche, or part of a trend to slowly replace their production base from something wasteful to something that shares with society(or at least avoids destroying needed elements like land/breathable air/freedom from slavery)?
 
 
Mickosthedickos
13:51 / 02.04.08
Just a few points not backed up by much evidence at the moment as i am not at home.

A higher level of GDP generally correlates with higher living standards and greater political freedoms.

The best way to achieve GDP growth is by adopting free market policies, notable examples being Taiwan, South Korea, etc.

I realise that GDP is a flawed concept but if we look at current levels of GDP rather than GDP growth we see a much more reliable indicator of personal and political freedoms.
 
  

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