Can Big Business Save the Earth?

Jared Diamond (author of Collapse) seems to think so! NYT Week in Review piece from last Friday.

Where Business Meets Philosophy

Here is an article of mine from this week's Chronicle of Higher Education special review on business education. It discusses the challenge business ethics faces as an academic discipline (subscription required).

Here's an excerpt:

Students who succeed in my classes learn to apply canonical ethical theory to contemporary business dilemmas, wrestling with their values and reconsidering the proper role of business in society. That is not easily done. It can be daunting for business students to re-evaluate their own views about, and relationship to, the corporate world they are about to enter as potential leaders. But once they get a taste for it, their intellectual curiosity blossoms. A few years ago, I added to my syllabus a section on consumer ethics, forcing students to confront issues of personal choice and responsibility. If consumers spent more responsibly, there would be fewer market failures; the same goes for investors. So how self-interested should we be? To grapple with such questions is to do applied ethics.

It remains to be seen if many business professors will achieve tenure by doing ethics properly speaking. Most of what now gets published in top business journals under the rubric of "ethics" is limited to empirical studies of the success of various policies presumed as ethical ("the effects of management consistency on employee loyalty and efficiency," perhaps). Although valuable, such research does precious little to hone the mission of business itself.

While the public clamors for the return of managerial leadership in ethics and social responsibility, surprisingly little research on the subject exists, and what does get published doesn't appear in the top journals. The reasons are varied, but perhaps more than anything it's that those journals are exclusively empirical: Take The Academy of Management Review, the only top journal devoted to management theory. Its mission statement says it publishes only "testable knowledge-based claims." Unfortunately, that excludes most of what counts as ethics, which is primarily a conceptual, a priori discipline akin to law and philosophy. We wouldn't require, for example, that theses on the nature of justice or logic be empirically testable, although we still consider them "knowledge based."

The major business journals have a responsibility to open the ivory-tower gates to a priori arguments on the ethical nature and mission of business. After all, the top business schools, which are a model for the rest, are naturally interested in hiring academics who publish in the top journals. One solution is for at least one or two of the top journals to rewrite their mission statements to expressly include articles applying ethical theory to business. They could start by creating special ethics sections in the same way that some have already created critical-essay sections. Another solution is for academics to do more reading and referencing of existing business-ethics journals. Through more references in the wider literature, those journals can rise to the top. Until such changes occur, business ethics will largely remain a second-class area of research, primarily concerned with teaching.

Deep Thought

If, as Aristotle says, it's impossible to do injustice to oneself (since no one suffers injustice willingly) then is it also impossible for a corporation to do injustice to itself?

If so, then the only ethical obligation any person (or corporation) has is toward others.

Volcker seeks return of Glass-Steagall

And it's about time! Here's an excerpt from the full NYT article:

"Glass-Steagall was watered down over the years and finally revoked in 1999. In the Volcker resurrection, commercial banks would take deposits, manage the nation’s payments system, make standard loans and even trade securities for their customers — just not for themselves. The government, in return, would rescue banks that fail.

On the other side of the wall, investment houses would be free to buy and sell securities for their own accounts, borrowing to leverage these trades and thus multiplying the profits, and the risks.

Being separated from banks, the investment houses would no longer have access to federally insured deposits to finance this trading. If one failed, the government would supervise an orderly liquidation. None would be too big to fail — a designation that could arise for a handful of institutions under the administration’s proposal.

“People say I’m old-fashioned and banks can no longer be separated from nonbank activity,” Mr. Volcker said, acknowledging criticism that he is nostalgic for an earlier era. “That argument,” he added ruefully, “brought us to where we are today.”"

Amazing Moyers!

This latest interview (and essay) on regulating corporate freedom of speech is outstanding. Moyers gets cornered on why the business of journalism should get special freedom. I've never seen him get so flustered.

To me, this debate underscores something never mentioned here, i.e., that if business were more ethical we wouldn't have this regulatory dilemma. It's not really corporations who act. It's the individuals leading them. And there is no reason those individuals should act less ethically professionally than they do (or should) personally.

The assumption made is that corporate free speech is biased by definition since it is completely interested with increasing short-term profit. But I don't see why this must be the case. In fact, there are a growing number of counterexamples to that thesis. Indeed, they would seem to represent the very essence of corporate social responsibility.

The promissory agreement to further the interest of shareholders first is the corporate motivator. But there is also no reason why shareholders should consider merely short-term financial gain to the exclusion of all else. Socially-responsible corporations for example would not automatically lobby to sacrifice consumer safety requirements in the interest of higher profits.

Thus, if corporations behaved more civically, there would be little reason to gag their speech. It's the arguable abuse of their great influence today that threatens to drown out citizens' voices which is the problem. As with monopolies, it's the abuse of power that is dangerous. Not necessarily the power itself.

Medical Research Masking

The NYT has just exposed a disturbing trend: Medical research funded and ghostwritten for pharmaceutical companies to promote their drugs. For example, a for-profit company such a Wyeth offers to write an article, often requiring extensive review of existing literature in a particular area, say, hormone therapy, by sending a query to a professor at a prestigious medical school, such as, say, Columbia. The company also offers to pay the professor for the privilege of having her name on it, say, $25,000. The author merely has to review the article then submit it to a top medical journal without any indication of its true provenance. 

Just such a case was recently exposed from materials in litigation over Wyeth's development and marketing of menopause drugs. Wyeth had also used such practices to promote its diet drug Fen-Phen, subsequently removed from the market after it had been correlated with serious heart-valve damage. As a result, Columbia has drafted new research ethics rules:

"A new policy at Columbia took effect in January. It prohibits medical school faculty, trainees and students from being authors or co-authors of articles written by employees of commercial entities if the author’s name or Columbia title is used without substantive contribution. The policy requires any article written with a for-profit company to include full disclosure of the role of each author, as well as any other industry contribution.

But Dr. Elliott, University of Minnesota bioethicist, said universities should go further than mere disclosure, prohibiting faculty members from working with industry-sponsored writers. Policies asking only for disclosure “allow pharmaceutical companies to launder their marketing messages,” he said."

Unfortunately, Columbia has not been joined by the majority of other medical schools in drafting such a policy, though Duke is a notable exception. I think Professor Elliott has it right here. If the research is good, it should be able to stand on its own merits without having to bear the imprimatur of a professor at a prestigious university--especially of one who did little more than review the article for a hefty sum.

The fact that companies such as Wyeth feel they must cloak their research this way reveals they have something to hide. Of course if the research is sound then perhaps (as they would surely argue) they are merely the victims of prejudice as any article explicitly authored by Wyeth would likely be subject to greater scrutiny by medical journals and practitioners themselves. But their status as for-profit companies marketing a product should indeed make us more skeptical of any research they promote. As I see it, there are two main reasons why this practice is unethical:

1. It creates a conflict of interest between the professor's civic duty and the economic interest in selling a product. As such, it blurs marketing and medicine.

2. Ghostwriting is essentially a form of plagiarism in which one passes off the work of another as one's own. While it doesn't exactly rob any single author (since they are payed for their services) it keeps us from ever tracing them--and institutions such as Wyeth--as the actual origins of the research in question. As a result, it's like robbing intellectual history itself.

It's easy to understand why so few medical schools have adopted reformist policies on this problem. They, like their professors, are in a race to maintain prestige. And having their name on more articles in more places maintains that prestige. The same goes for the journals themselves, which seek to publish work by prestigious academics. It's a bit like the classic case of hockey helmets in the NHL. Before they were required, most players didn't want to wear them since they presented a competitive disadvantage by reducing visibility and maneuverability against players not wearing them. But players were usually in favor of making helmets mandatory, which eventually occurred.

Because of this game-theoretical problem, government regulation may very well need to be applied to effect real and lasting change in the medical industry, as U.S. Senator Charles Grassley has argued.

Journalism's Long Slouch Down

Much has been said over Walter Cronkite's passing. But few have hit the nail on the head as well as Amy Goodman, Glenn Greenwald, and now Frank Rich.

It's depressing and embarrasses us all that mainstream media in mourning Cronkite could not even emulate his integrity in the slightest by mentioning that the reason he was most respected was for having the guts, every now and then, to tell the people the truth they needed to hear even against the government's wishes. In so doing, he managed to rescue the nation from collective and willful blindness. Even the Lehrer News Hour failed to say this, taking the safer path of framing its coverage around Cronkite's near-monopoly, which is only part of the story. He also had a courage no one seems to have at his level anymore. Indeed, he came to deplore what he saw as a failure of his generation, which included Edward R. Murrow, to transmit its journalistic values to the next.

Honest reporting is not primarily what the big news networks seem to do anymore--despite the fact that they hold most of the immense resources required to carry-out penetrating investigative journalism on national and international scales. Essentially, this is because they trade friendly coverage or "spin" for access.

For example, TPM's Zachary Roth shows just how low the media stooped in begging Gov. Sanford to grant them interviews. David Gregory of NBC's Meet the Press even promised that his show would allow Sanford "to frame the conversation as you really want to...and then move on." Even if this was mere posturing to get him on the show, it's unseemly behavior that creates inappropriate expectations. Roth sadly concludes:

"When you read the emails by Gregory, King, Stephanopoulos and others, you start to understand why most major network interviews with politicians tend to be a lot less hard hitting than they need to be to really hold their subjects accountable. The politicians themselves have the power to make or break the networks, by granting or withholding access. That ends up meaning that, consciously or not, the networks soften their approaches--both in their pitches, and in their actual interviews--in exchange for that access.

That's how the world works, and it's hard to know what to do about it."

The problem here may be that network news is simply run as business. And this strategy seems frankly best for business--at least for now. The question to me is whether it is possible in this highly competitive information age, for a mainstream news network to build a reputation on good old fashioned integrity and muckraking.

Judging by the slogans espousing objectivity we hear more and more (take Campbell Brown's "no bias, no bull") and consumer polls, this kind of thing would seem to be in demand--but perhaps most viewers only think they want objectivity while actually prefering subjectivity and bias that suits their preconceptions. Even so, I would hope enough reasonable and responsible viewers are out there for at least one network to truly distinguish itself in this way instead of peddling empty promises as Fox, the cable news leader does perhaps most preposterously of all, with its claim of being "fair and balanced" and so-called "no spin zone."

If enough people are not truly willing (or able) to seek hard-hitting news that reports and analyses (and at times opines) inconvenient and unwelcome truths, then the news market fails. At that point, which may already be upon us, we may need to protect and/or regulate it.

Thankfully, the national news industry still retains some of its traditional mission via the family-controlled public trusts of the New York Times and the Washington Post (though the Post's reputation was recently somewhat blemished on this score) and the non-profit and government-funded Corporation for Public Broadcasting. But these last remaining strongholds of investigative journalism may prove to be precious few in an increasingly bewidlering world of infotainment and advertorial distraction. If so, the danger is that the American people may fail to act, from sheer ignorance of--and disinterest in--all the news they'll never get.