Tuesday, February 22, 2011

Good Business, Bad Business

Denote the concept of a rule as a general term for everything from guidelines to laws, encompassing all of our sentiments regarding morality.

In a system where the rules are set by an outside (divine) authority, the rules themselves define the totality of goodness or badness. This can be proven by contradiction; suppose that someone did something bad (or good). If there was no rule to determine that it was bad, how could it be bad?

In a system where the rules are set by a human process that is internal to the society in which the rules exist, the rule set cannot be entirely stipulated or communicated throughout the society; regardless of whether it is agreed upon, individuals are only given a part of it and forced to infer the remainder. If we take this inference to be the basis of individual differences in ethics, we are, in a sense, arguing against the individual proclivity to have ethical originality. Nevertheless, this seems to manifestly be the case. Those who have more dissident ethical views are typically those who for some reason formed strong completions based on small subsets and then came to conclude that the remainder of society's opinion of the rules were invalid due to the resultant discrepancies. Typically this happens early in life.

The above description posits that rules begin at the level of the whole society and are disseminated to individuals through acculturation. Then it cannot be that the rules are merely the confluence or agreements, mediated by political processes, of individual ethical positions; rather they are the expression, by the politically dominant, of a mixture between their own vision of the complete rule set and modifications, including intentional omission of those rules which are in some way disadvantageous to them. For example, money talks in politics.

The concerned intellectual responds by pointing out these flaws and omissions, ideally by demonstrating clear and simple contradictions or recalcitrant data. The politically dominant, often having hired unscrupulous intellectuals of their own, seek to undermine, in whatever way is most effective, the potency of the concerned intellectual's message.

There is also an important function served by rules, namely that of the just social order. Under a rule set that is ideal, the basic physiological, social and emotional needs of the people are best fulfilled. Many arguments support this idea but it would be onerous to argue for it here; a detailed argument is given by Rawls in A Theory of Justice. There may be no single ideal, but within a single ideal the utility of stability typically makes movement to a different ideal undesirable.

Define a business as a collection of individuals that is marked by internal political relations that lead it to have coherent profit-seeking behavior and a hierarchical command structure. Typically the business has political interests insofar as proposed and existing rules have a significant effect on either the business itself or some political faction within the business. Since it has a hierarchical command structure, only certain factions within the business are able to express their political views through the business. Thus, the business organizes the labor of many political factions toward the ends of its leadership.

This political participation has its ethical expression in ubiquitous and blatant manipulations of the rules. Having not experienced more than a tiny portion of the unfairness within a given rule set firsthand, the typical member of the society will object to only a tiny portion of the behavior of businesses and a tiny portion of the rules. However, the many tacitly accepted modifications of the rules will, over time, create a divergence from the just social order. The individual whose interests are not coincident with those of business will not necessarily realize that the rules have become increasingly unfair to him. Instead he may perceive an arbitrary aspect of the rule set as vulgar or oppressive due to the interaction of his many rule completions, some of which involve the acceptance of manipulations or omissions.

Within a typical society, the lions' share of profit and corresponding sinister political manipulation come not from each business in an equal share, but from a small portion of businesses. These businesses are not necessarily the largest (so long as profit is not used as the yardstick). What makes these businesses different is the modus operandi of subversion through rule manipulation. Not always is the conduct of such businesses illegal, but typically there are many illegal activities taking place within these businesses, hidden behind a veil of secrecy and plausible deniability. Typically these businesses are monopolies or parts of cartels; or they control majority market shares within consumer and/or supply chain markets. In part, it is the freedom from the persistent pressure of competition that allows the accumulation of profits in sufficient quantity to corrupt the political process. However, perfect competition is an unbearable state for the typical business, and so it is no wonder that it is so rare.

Because of the power of business that result from their profits, and the myriad incentives to manipulate rules to jeopardize society in general, the political goals of businesses should be viewed with extreme skepticism. Within the political structure, the vast majority must be united against the small factions who control businesses. Great care must be taken, in particular, to ensure the fairness of competition between businesses, because it is often arguments related to this unfairness that become the basis for profound regulatory blunders.

If, on the other hand, the political effort to maintain skepticism toward the political goals of businesses fails, the political environment rapidly deteriorates. Instead of having a system in which the rules are more or less fair and a small amount of effort is needed to maintain that fairness, the system becomes one in which the rules are more or less unfair and those seeking to restore fairness must resort to extreme philosophic extrapolation in order to even visualize what a fair rule set might be. In such a situation, social reformers become pitted against each other because the proper ideal is unclear.

In order to resolve this conflict among social reformers, a robust traditional character must be cultivated within societies. This character must combine expressions that appeal to each relevant political faction. Within the traditional character, artistic and philosophic expressions, particularly hero stories read to children, must be developed that serve as a common language of ethical discussion. Small ethical fragments, enforced by celebrated art, become the basis for effective political discourse by the masses.

Businesses will seek to disrupt this character. However, it is not difficult at all to engender a persistent cultural belief that businesses are not cool.

I think that this musing has some relevance to present day America.