Wednesday, 5 October 2016

Should business have ethics just like in war?

I

Hmm…this article in the New York Times says Wall Street has “strayed from any reasonable standards of moral behaviour.”

When I was at university, a goofy professor warned us about reification. Wall Street is a street. But his target is business, and therefore capitalism, neither of which should be reified.

Let's see what I'm being sold today. Start from the basics: what does the author wish to be true? And: what question does it not occur to you to ask?

In an age where “inequality” is code for “kill the 1%,” most people assume the economic system should be cleaned up. But no one ever asks whose morals should be followed. Whose standards? Who will be the arbiter? Why should I trust this arbiter to choose the right morals and ethics? And, most importantly, why am I being encouraged to surrender my freedom to such a person?

I understand the feeling of wanting to fix a predatory economy, I really do, but it’s misplaced. A “moral economy” is a religious idea. It is pure Puritanism, pure Christianity. It is a direct and suspicious form of control and power and I do not like it one bit. No, sir.

It’s not that I “hold fast to the justifications that amount to the invisible hand theory,” as the article says. It’s that I know morality in commerce is the imposition of control. The business world is no place for morals. It is an amoral environment, and that’s a good thing for everybody.

II

In the business world, if a company says it is being “moral” or “ethical” it is lying.

But it is lying for a specific reason: to get you to buy more, to pick your pocket. Yes, this goes for the “green” movement as well. Companies exist only to make a profit and when there is no market pressure to change their ways, they won’t. When there is, they will. And when they talk of regulations or agreements, that is simply a strong player artificially constraining a weaker player.

Consider climate agreements. For 200 years Europeans and Americans pumped out enormous amounts of carbon dioxide/monoxide without a care in the world. Every day they built their economies by pulling the dirty energy from far-flung locales without bothering to build up those economies in return or worrying about environmental degradation.

But the moment China and India challenge the US for dominance in their respective geopolitical “patches,” the US ramps up the climate change debate and begs every country to “think of the children” and sign a neat piece of paper in Paris, forcing those developing countries to take a more difficult and expensive route to build their economies. Here’s the crazy part: China agreed!

The US, meanwhile, and the rest of the developed world, stays dominant, thinking up new ways to maintain the lead. None of this is immoral. It is simply the form of geopolitics. And if the tables were turned and China invented the Industrial Revolution, it too would have followed the same path of constraining a rising US.

In some distant and strange universe, it may be possible for morals to govern the market, but again, who supplies those morals? No one has been able to organise an objective and universal moral structure in the history of humankind. Those who claim success are only operating from the position of hegemony anyway (their ideas are best because all others are beaten down).

There’s even a philosophical argument that objective morality is impossible because science cannot transform an ‘is’ to an ‘ought,’ which makes me even more suspicious of the Times’ story.

III

Consider another example in the strange world of climate change. Scientists refuse to use the word "proof" when talking about global warming.

They'll say evidence suggests humans are a causal factor or that the majority of scientists agree with the reality. But they're very careful not to use “fact” or “proof.” They do this because for their entire careers scientists are told proofs only come in the form of mathematics.

And they know the public knows this too, everyone went to the same schools. So, to convince everyone climate change is real, they use the term "consensus." As in, “97% of scientists think global warming is true.” They leave a margin of error because it is useful.

Also useful are the climate “deniers.” Without them, governments would be able to enact punitive and “moral” policies to clean up the environment without opposition. I shouldn’t have to point out how totalitarian this would feel to those who still think they live in a democracy.

The propaganda effect is the same. People hear “consensus” and interpret “proof” because most don't understand that an argument from majority is actually a fallacy. And thankfully, the public demands truth because it has been trained from birth to expect truth from government and scientists.

In order to change people’s minds – which is the entire goal of any government-funded project – scientists needed the meaning of proof without using the word. This is a classic bait and switch operating within the rules of the system, in the service of a message. The person who wrote the article about morality in markets knows how to play the same game.

IV

In warfare, practically, rules exist to the extent they can be enforced. If a nation state obviates the Geneva Convention and it loses the fight, the victorious nation will send the enemy command to the docks.

Both sides know this. It was the same in Roman times (the loser would be sold into slavery). The dividing line is clear – soldiers fight those who are fighting them, and not bystanders. Respectable warfare over the control of resources (a central dynamic of all high-level warfare) has imposed rules based on ethics because there are weapons involved.

Why did the gods punish Prometheus? It wasn't for stealing fire. Zeus sent the liver-eating eagle because Prometheus gave humans the illusion they weren't doomed. This is why war has morals. It is a message for soldiers who are expected to undertake the task. War is about destroying the enemy’s ability to wage it. So if soldiers aren’t prepared to fight, the enemy has already won. The goal is killing, morals and ethics enable the killing to commence.

“Moral” Western armies know full well when ethics in war are useful and when they are not. If you're tired of hearing about "hearts and minds" and want an accurate picture of how to effectively suppress terrorist gangs which don’t conduct respectable warfare, France’s Col. Trinquier is your man. Unfortunately, his point is that the more fascist a counterinsurgency effort looks, the more effective it is. See also Dr. Luttwak, who agrees. If you compare Iraq to the Philippines, you can see the results. And if your solution is to err on the side of being more moral – the rebels might just win. In which case, you'll really see some immorality.

Some say being kind to prisoners of war is an incentive for enemy soldiers to surrender rather than fight, thereby ending the war earlier and with less killing. And that’s true. But its existence only continues because the possibility of loss in combat results in real, actual, physical death for the loser. And at the outset of a war, either side could be the loser, so both better play by the rules.

V

In business, that same loss doesn’t exist. Sure, a person may lose assets and cash, but all of this can be earned back. Even if you burn money or bury it in a field, the government will simply print more.

In business, there are always ways of winning, for all sides. So many ways, in fact, that losses are felt to be temporary by everyone. How can morals and ethics enter an environment where success is guaranteed?

There are rules in business, but they facilitate the earning of money, not stifle it. What is a set of morals in business but an artificial (and unacceptable) restriction on profit making? Why else do strong companies insist a competitor “play fair” if it didn’t mean the competitor was being constrained by “playing fair?" After all, if you’re not cheating, you’re not playing hard enough.

And boo hoo for unfair taxes and lobbying! None of that is secret. The rules aren’t hiding in some grey steel safe deep in the Ministry of Finance. It’s all open online to anyone with the time and inclination to read and understand it.

If one company pushes the government to change laws in its favour, crying about it won’t help. Go read the law and see how you can benefit from it too. Think creatively. Don’t get angry, get even. The tools and machinery to make millions of dollars are sitting right there. That’s why they were built.

Forcing everyone to comport to some arbitrary morals just because you don’t want to do the work to figure out how to win is the mark of a weak and scared person – and someone who doesn’t understand business. At a country level, it is the unmistakable mark of power.

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