Pilant's Business Ethics

Business Ethics Blog

Category: Corporate Social Responsibility (Page 1 of 3)

The Ethics Sage Talks About Price Gouging


The Ethics Sage latest post deals with price gouging in prescription medicine. He discusses the social responsibility of business and goes into some detail about his preference for a free market solution.

i_454I am more and more convinced as time has gone by that the pharmaceutical companies have failed in serving the public and that some kind of government intervention to prevent price gouging and selling prescription medicines for other than their FDA approved uses is going to necessary.

However, the Ethics Sage is worthy of reading. You should put him in your favorites, visit often and perhaps, even sign up as a follower.

Below is a selection from his latest essay. I recommend you visit his web site and read it in full.

James Pilant


Recently a group of 118 oncologists came out in an editorial in the Mayo Clinic medical journal to support a grassroots patient effort to push for fairer prices from drug companies. According to the editorial, many cancer patients are bankrupted by the high cost of care even for insured patients for treatment that costs $120,000 a year. The proposal is to get it down to $30,000 in out-of-pocket expenses – more than half the average U.S. household income. According to the editorial, the drugs are so high that as many as 20% ofoncology patients don’t take their medication as prescribed. I believe it may be better to mandate catastrophic insurance coverage. Under Obamacare, if you are under 30 or obtained a “hardship exemption” you qualify for a high deductible, low premium, catastrophic plan. What about those over 30 who are more in need?

Greed is good. Greed is right. Greed works. These are the words spoken by Gordon Gekko in Wall Street. We could say this is the mantra of greedy CEOs of pharmaceutical companies. In a 2014 survey by Fierce Pharma, a news outlet for the industry, the average pay of the 10 top CEOs of big Pharma was about $30 million. None of the companies were in the Fortune top 100. Celgene was number 369, the highest in the industry. The CEO of Celgene earned $36.61 million. This seems out of line given the relatively small size of most pharmaceutical manufacturing companies.

Are Corporations an Achilles Heel?

Are Corporations an Achilles Heel for the United States?

Achilles was a Greek warrior at the siege of Troy. He was immune to all harm except on one heel. He was shot and killed by a poison arrow in his one vulnerable spot.

The United States has an Achilles heel. There is an American vulnerability that other nations even those with little credible military power can exploit.

!!!Molesw-hellsangelsTo disrupt the German economy during the Second World War, the Americans used strategic bombing. They targeted key industries like ball bearing plants and oil production. There were attacks on infrastructure like bridges, governments offices and railroads. The effort required great sacrifice on the part of the Army Air Force. The 8th Air Force alone suffered 47,000 casualties with 26,000 dead.

One of the greatest missed opportunities of the campaign was the German electrical system. American intelligence did not realize how stretched German resources were and appear to have never considered the German grid a worthwhile target. But in this internet age, such vulnerabilities will be much more apparent and they are vulnerable to other to more than aerial assault.

Bombing the United States presents serious problems to any potential aggressor. The distance is prohibitive for almost all the other nations on earth. Flight time would be measured in hours.

But strategic attacks can be made at the speed of an electronic transmission.

You can attack infrastructure through corporations, both domestic and multi-national. They possess critical targets held as data and in other systems like control of the electrical grid. Instead of physical attacks on infrastructure, hacking attacks with the same purpose would take place instantaneously and in multiple locations.

Of course, this could be considered wild speculation of the worse kind, a “chicken little” diatribe aimed at the weak minded. Unless you note that such attacks have already happened and are happening now. Unless you reflect that such cyber attacks are based overseas and have every appearance of state sponsorship, apparent trial runs for the “real thing.”

Currently Burger King is moving its headquarters outside the United States to evade taxes. It’s hard to think of fast food place as a matter of strategic interest to the United States but the fact is this company holds several million credit card records including pin numbers as well as a considerable amount of employment information as well as corporate gateways to large financial institutions, lobbying organizations and other companies like suppliers. Throwing all this on the internet for the free market of theft would be a form of sabotage but a foreign hacker would probably gather many company’s data before launching a concerted attack to disrupt the economy by making credit card use difficult or impossible while crippling commerce and banking, a strategic attack without the loss of a single man.

What kind of vulnerabilities do we as a nation have to these kinds of attacks beyond financial information? Here’s some examples:

Hacker uses an Android to remotely attack and hijack an airplane

Hackers Find Open Back Door to Power Grid With Renewables

Hacking Hospitals: The Present and Future Threat to Your Data

What nations are interested in hacking American or multi-national companies? Here’s some examples:

Russian hackers attacked US financial system stealing gigabytes of data in suspected retaliation for Ukraine sanctions

Iranian Hackers, Getting More Sophisticated, Target U.S. Defense Companies

US Report: China Hacked Into Key US Defense Contractors Site

So, are corporations an Achilles heel in the defense of the United States?

It is obvious that American corporations should act to help defend the country and themselves from these kinds of attacks. According to some, however, corporations are people. Are these “people” patriots or citizens with responsibility? By the tenets of free market fundamentalism, there is no problem of patriotism or duty here. The profit motive will solve these problems simply and easily. Hacking causes problems that cost money, thus the companies will act to defend themselves. So far, so good. But a great deal of money and expertise has already been expended and American data seems to be hacked daily. It is quite likely that companies will attempt to defend themselves. On the other hand, will they defend themselves with the depth of commitment necessary for a infrastructure asset of the United States?

If a corporation has no patriotic duty. If its only duty is to its shareholders. If demands that it act in loyalty to the national interest be described as parochial then there is no need for preventive action in accordance with a nation’s needs. It is difficult and requires the outlay of money and time to defeat this kind of highly skilled and apparently state sponsored attack. Any company embarking on such a program of defense would be placed at a competitive disadvantage with its fellows. While, it would be acting in the interest of the United States and acting in accordance with the duty expected of any American citizen, this would not be in accordance with the “only” real purpose of a corporation, that is, to act only for shareholder value.

What do we do?

By the tenets of neo-liberalism, the market should solve this problem. Perhaps, Russian, Iranian and Chinese, etc. will find having access to American markets more important than exploiting our vulnerabilities? Perhaps will just be lucky – which is apparently our primary mechanism of defense so far.

Or we could demand and establish by law a responsibility to act in concert to act as patriotic citizens on all American corporations and fully prevent them from moving to other nations to escape the obligations of American citizens. After all a corporation, is created by the state and its benefits depend on state protection. While many find the idea of corporate personhood persuasive, I do not. But in any case, they don’t have human mobility and thus their geographic presence can be regulated in a way that human movement cannot.

Patriotism and responsibility for vital national assets like credit card numbers, defense secrets, etc. should not be a matter of choice for a corporate board, but expected behavior from fellow Americans.

James Pilant


Hackers’ Attack Cracked 10 Financial Firms in Major Assault – NYTimes.com

Questions over who the hackers are and the approach of their attack concern government and industry officials. Also troubling is that about nine other financial institutions — a number that has not been previously reported — were also infiltrated by the same group of overseas hackers, according to people briefed on the matter. The hackers are thought to be operating from Russia and appear to have at least loose connections with officials of the Russian government, the people briefed on the matter said.

via Hackers’ Attack Cracked 10 Financial Firms in Major Assault – NYTimes.com.

NFL Thought We Wouldn’t Find Out


NFL Thought We Wouldn’t Find Out

NFL Thought We Wouldn’t Find Out

Ray Rice elevator video was sent to the NFL three months ago, source says | World news | theguardian.com

A law enforcement official says he sent a video of Ray Rice punching his then-fiancee to an NFL executive three months ago, while league officers have insisted they didn’t see the violent images until this week.

The person played the Associated Press a 12-second voicemail from an NFL office number on April 9 confirming the video arrived. A female voice expresses thanks and says: “You’re right. It’s terrible.”

via Ray Rice elevator video was sent to the NFL three months ago, source says | World news | theguardian.com.

A Common Sin

A common sin in the world of business ethics is to make a stop gap measure and hope to avoid the full consequences of what happened. If the NFL indeed had that video for three long months, we are dealing with that scenario.

The NFL when confronted with a player’s misbehavior did a minor penalty and expected to ride out the controversy. But then the video came out. Now apparently having new evidence of more serious conduct the organization fired the perp. Except it wasn’t new evidence. They knew that the film was devastating but as long as no one else saw it, they would be fine.


What was the NFL doing? They apparently knew that their man had acted abominably and that the video would the put the League’s actions under a blaze of hostile media coverage. But no one knew and they were comfortable with that. And they should not have been. They were evading their responsibility to do justice for their members and to be seen doing justice by the public at large. It’s wrong to take a half measure when presented with evil. It’s wrong to judge a crime an inconvenience that can be overlooked. It’s wrong to reward reprehensible conduct with a minor penalty. And above all, it was wrong to imply that battering a wife is no big deal.

A Failure Both of Judgment and Morality

This is a business as usual problem. Undoubtedly the League got away with this kind of stalling tactic before. But the world has changed. We are moving from a society where beating women is just something people do, often a matter of some humor,  to a society that takes crimes against women seriously. The boy will be boys crap is going out of style.

And there is the added factor of technological change. Increasingly we are under surveillance at all times in all places. You’d think the League would have had enough intelligence to figure out that there was a high probability of another tape. Probably they didn’t care.

The lesson here is plain. Do justice. Be accountable. Of course, the tendency to take the apparent easy out will usually take precedence, human nature being what it is.

James Pilant

Power From Below!

Power from Below

Power from Below

Power From Below!

From the Guardian Newspaper.

Swaziland’s royal family have long kept their distance from the paparazzi in a way British royals can only dream about. Not any more, thanks to the rise of Swazi Leaks, an online group determined to expose the opulent lifestyle of Africa’s last absolute monarch.

The movement, inspired by Julian Assange’s WikiLeaks, frequently publishes pictures of King Mswati and his family living the high life. One recent post says: “Our taxes pay for the king’s children to party in Los Angeles in the USA, will we struggle to eat here in Swaziland.”


The Little People’s Power

What is meant by “power from below?” It is the ability of those with little economic or political power to actively oppose the current order. One way is by publicizing the flaws of the system. That is what is being done in the article quoted above.

As economic and political power has concentrated in the hands of the one percent, this type of activism is becoming more and more important. It may in the end become the only vestige of democracy remaining.

Net Neutrality

One of the arguments for net neutrality is that if there are fast lanes and slow lanes, the non-commercial side of the net, politics in particular, will operate at a handicap. This is a serious problem. It would take a lively, vital and continually developing medium of democracy and neuter it.

Business interests often find democracy to be an obstacle in their path. Communities seem attached to neighborhood schools. Thus school boards can be a problem when privatizing or “incentivizing” public education. Some towns prefer fracking to not take place within the city limits.  And so companies react by lawsuit, massive campaign contributions and from time to time, simply destroying the elected body, in particular school boards.

Is there a business ethics problem here? In the minds of many corporatists, democracy is the problem. Can you imagine their pleasure in a two lane internet? The first lane for the commercial interests at full speed. The interests of corporate business enshrined. The second lane for the public. The interests of the public consigned to a ratty, ill-used dirt road – the very epitome of second rate.

Often, we get the impression that multi-national corporations prefer the the sweet guarantees of totalitarian dictatorships over the democratic societies where they were born and nurtured. And this in spite of the fact, that the dangers of such deals are well documented.

Is it wrong for a corporation to hamstring the will of the people using its massive financial advantages and its many friends in politics, academia and the church? Sometimes, corporations use their power to secure tax money, evade taxes and other responsibilities. Sometimes they take the regulated and convert it to the unregulated (fracking). Sometimes they blackmail cities and states for one benefit or another.

The Jesse James Theory of Citizenship?

The Jesse James Theory of citizenship is when a corporation desires and expects the protections of a nation state while at the same time declining any responsibility toward the welfare of that same nation state.

Corporations are under the fascinating concept that they are in a real sense, independent nations. Currently under American auspices they are seeking treaty making powers. Having nation status without a geographic presence, or a military might sound ridiculous and it is. What is happening is the desire of the modern corporation to exist between nations without any responsibility save for its own interests.

In times to come, there will be attempts to set up corporate utopias on abandoned oil rigs or perhaps even an island. The power of even the smallest criminal gang to annihilate one of these intellectual exercises is not understood by those who have lived in the protection of an organized society. They understand “the real world.” This is, in spite of its name, a bizarre fantasy where they are the tough, realists who understand how everything works. When these overpaid, over-praised denizens of the skyward reaches of organized societies are casually plundered by “unorganized” societies, the rest of us less favored ones will find it difficult to generate sympathy.

We don’t live together in societies to oppress the creative classes as in an Ayn Rand fantasy. We exist in societies, nation states, because they have demonstrated over hundreds of years the ability to protect their citizens and organize economically. The word, parochial, has been used to describe the attitude of those of us who find the willingness of corporations to abandon a nation a demonstration of a lack of patriotism. But we do consider ourselves Americans, Canadians, Frenchmen, etc. It is a rabid and selfish form of self interest that pushes for this kind of corporate abandonment of national and ethical responsibilities.

Self-interest is not the key to utopia. In morals and ethics the distance between self interest and raw evil is only a matter of scale.

James Pilant


Bankrupt in Thought ?

Bankrupt in Thought

Bankrupt in Thought

Bankrupt in Thought

San Bernardino blues: Bankrupt city flailing amid financial overhaul | Al Jazeera America

What the city will spend money on is a new redevelopment guru to attract business investment to an area that turned the former Norton Air Force Base into the San Bernardino International Airport — an airport with a spanking-new passenger terminal to handle flights but, so far, no scheduled service from any airline.

via San Bernardino blues: Bankrupt city flailing amid financial overhaul | Al Jazeera America.


I don’t understand. If the city is bankrupt, why is it spending money on business ventures?

San Bernardino is bankrupt but continues to spend money on business projects of an apparently dubious nature. The San Bernardino International Airport appears to be a major example of a very large expenditure designed to attract business without proper planning. The article below might give you an idea of the planning for this airport (there’s another airport 23 miles away).


Or this article –


But I’ve seen this before, many times. Cities will give out tax breaks to businesses, use eminent domain to seize property for private development and allocate some taxation powers to new malls, etc. Essentially they are getting rid of their own tax base. In addition, cities are building projects designed to attract business. There seems to always be politicians who are willing to invest tax money in dubious enterprises or as a reward for support. After all, it’s not their money. Furthermore, officeholders in cities may only serve for a few years. After that you need a new job. It’s good to have friends and one way to make friends is to give out lots of money.

Rahm Emanuel, the current mayor of Chicago and one of the most aggressive masters of the corporate handout, has little to fear if he loses his next election. He will no doubt find a safe harbor in a minimally six figure salaried job with any number of organizations that benefited from his “kindness.” Those benefits came straight from the taxpayers while he hammered those same taxpayers’ services.




All over the United States, city political offices have become corporate benefactors, and by the time the citizens realize their city is being looted, the elected official has moved on to greener pastures.

If public service is your reward in a society where many people believe that money is the only thing of value, that’s a pretty thin reward. If you believe that money is the only thing of importance and that those fools who elected you should have known better, then why not close the public libraries and the schools so you have money to build a new stadium or an airport? Why not sell the right to collect money from the city’s parking meters and turn highways into toll roads administered from Dubai?

Do businesses have a moral obligation not to loot the cities and states they live in? Or is that just “business.”

Or are we seeing a new wave, a new movement? A new corporate attitude? Let’s loot the cities. Let’s loot the states. And then move our headquarters to Canada (or Ireland).

Is it parochial to believe that corporations should pay taxes and avoid collecting welfare from governments?

James Pilant

When Duty Called …

377mWhen Duty Called …

We know today that during the disastrous meltdown at the Fukushima facilities, most of the nuclear plant workers, those highly trained individuals, bold and brave, willing to stay when everything is going wrong and a possible disaster threatens us all, when confronted with an actual nuclear disaster decided to take a day off and fled the scene.

Goodness! Does this call into question all those scenarios where the nuclear plant is in trouble and the steely eyed, workers (who will be played by Tom Cruise in the later film) work those controls, klaxons sounding in the background, and bring that reactor back from the brink?

The government and TEPCO kept this from their public and us until now. It’s embarrassing. After all, if you’ve telling a story of courage and stalwart endurance in the face of nation-wide danger, the revelation that the last ditch defenders against nuclear disaster were searching their pockets for car keys may be less than edifying.

If you think this constitutes an argument against nuclear energy, you’re right.Those systems designed to stop nuclear disaster aren’t all automatic. They need human guidance, and if the workers flee, only the thinnest of chances protects us from disaster.

James Pilant

Business Ethics Implications –

The workers violated their duty to their nation, friends and relatives by leaving their stations. It seems obvious that TEPCO, the utility company, did not properly prepare for the incident and its management handled the events poorly. The Japanese government and TEPCO have actively suppressed information regarding the incident and its aftermath.

If you are a student writing a paper about an incident in which a lack of business ethics actively contributed to the disaster, this is a good topic with abundant sources.

James Pilant

Panicked workers abandoned Fukushima as the nuclear disaster unfolded, report reveals



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Net Neutrality and Strange Bedfellows?

hmlbr52Net Neutrality and Strange Bedfellows?

It is a trite statement: “Politics makes strange bedfellows.” However overused the expression, it is quite accurate.

In the struggle over net neutrality a number of corporations have joined the side of the angels. Why?

When the subject is net neutrality we are talking about access. Without net neutrality major players, that is, those with millions or more commonly billions of dollars, will own the prime real estate, the highest internet speeds while the rest of us will live in a ghetto of diminished speed and low expectations.

Obviously, bloggers and activists need net neutrality so their sites can be effective, but so do small businesses and corporations. Some corporations have large internet operations that offer only a limited opportunity for profit. Buying internet speed is not economical for some users. Further, if you have a startup, like Facebook was at one time, you will not be able to afford the extra cost of the speed that might make your business a success.

Think of the attacks on net neutrality not as a corporate assault on equal privileges of use – think of it as specific corporations making that assault. It is not hard to figure out which ones. The other corporations will be in the same boat with the rest of us, unable to get high internet speeds without paying a premium.

Thus, we have a probably temporary but workable alliance between social activists, some businesses and corporations and independent bloggers (like me).

We’re like ill-funded insurgents often enemies with each other in a common cause against a formally trained, experienced and huge army. Let’s see what our ragged band of fighters can do?

James Pilant

Net neutrality has done the impossible: Align leftist and corporate interests


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Corporate Interests and Voting Rights


Corporate Interests and Voting Rights

Corporate Interests and Voting Rights

Generally voting rights are not considered a business ethics issue but they are the subject of business lobbying. Two of the organizations heavily committed to voting restrictions are ALEC, the American Legislative Exchange Council and Americans for Prosperity are in large part corporate financed. Would it be a logical assumption that if corporate interests are best served by less democracy, than less democracy will be lobbied for? We’re also seeing this in school privatization where local control is superseded so that school board elections don’t interrupt the process of moving the money. It may well be that corporations being oligarchal in structure themselves prefer other creatures of the same species. Red China with its capitalist heresy intact could be the natural home for the American corporation. After all, they speak the same language of power and disdain for the rabble whose desire to breath air and drink water are serious encumbrances to the pursuit of power and profit.

Of course, the problem with China is that benefits conferred may be taken away. A nation under an oligarchy may have too powerful a central government for a corporation to feel security – just as a democracy may have to much self government for a corporation to feel secure. Does that mean that corporations naturally act in conflict against nations, all nations, seeking a continuous round of benefits concessions and controls? If that were so, we individuals in the wake of Citizens United are pawns in a much larger struggle.

The corporate form is a creature of the state, at least for now. They desire the status of independent nations and the new trans-pacific trade agreement is designed to help them achieve this. But that “free  trade” agreement is in serious difficulty. So we still have time to act before the leave our jurisdiction. We Americans can change the form of their organization and we should consider this seriously. National registration of corporations is the most logical step. The corporations can play havoc with the states playing one off against another, and they’ve been doing it for years. Let’s make them play in the big leagues.

James Pilant

When ‘patriots’ unite to restrict voting rights | Al Jazeera America


via When ‘patriots’ unite to restrict voting rights | Al Jazeera America.


The Ethics Sage Discusses the Sterling Scandal

The Ethics Sage Discusses the Sterling Scandal

Steven Mintz also known as The Ethics Sage has some thoughts on Sterling’s racial comments and their origin. As always, please go to his site and read the whole entry, stay for a time and enjoy some of his many other posts and then sign up as a follower to get first notice of new posts.

James Pilant

The Ethics Sage

The Ethics Sage

Does Sterling’s Punishment fit the Crime? – Ethics Sage

I grew up in the 1960s and recall many arguments with my parents over the treatment of African-Americans in the U.S. The differences were not whether schools should be segregated or blacks should sit in the back of the bus or that businesses could refuse to serve black people. It wasn’t that blatant an offense that we disagreed about. It was the more subtle issues such as whether blacks were as capable as whites to make a success out of their lives and be contributing members of society or whether they could learn as well as whites or whether they have the same work ethic as whites. …

via Does Sterling’s Punishment fit the Crime? – Ethics Sage.

From Around the Web.

From the web site, Lizzy P. Beauty.


This recent audio that has surfaced is truly saddening but there is a wider issue as a whole with the NBA owners in general. Anybody remember when Lebron James left Cleveland and his owner wrote a letter that stated he felt like he owned him personally. As if to imply he was his slave, oh yeah you all let that one pass because you were mad at Lebron. Right???

How Much Strontium-90? We dont’ know?

From the Department of Defense

From the Department of Defense

How Much Strontium-90? We dont’ know?

As I wrote with some foresight years ago, the Fukushima disaster is going to last for decades. As a business ethics disaster, Fukushima gives fracking a good run for its money, and here’s how: We keep finding out new ways that TEPCO screwed up. That’s right, after enormous failures in management, truth telling and just basic competence, all of them staggering, we keep finding new ones.

Read below about the new one and relish their utterly responsible reason – they were real busy. That is precisely one step above “the dog ate my homework.”

We’re talking Strontium 90, an isotope of the element. Our bodies mistake it for calcium and thus incorporates it into our bone structure. And that’s because we all need silvery radioactive metals deposited right next to our bone marrow so that our production of blood cells can be illuminated by the glow.

So, it seems they got real busy and lost track of how much strontium 90 was being released. No big deal. After all, what is it going to do? – Deposit itself in the bones of adults and in particular children giving  them enhanced opportunities for cancer and leukemia?

Nah. Don’t let that kind of thing worry you. After all, these are the kinds of people running nuclear power all over the world. They’re competent, cool, collected, well-educated businessmen. Not flaky environmentalists, no government officials, no liberal arts trained thinkers, just savvy businessmen who understand the real world, the world of competence, of money, the important stuff. Genetic structure? Screw it. It’s not on the balance sheet. Won’t cost the investors a dime, and that’s where the action is, after all.

Remember the free market can solve all problems. Government interference damages the free market and thus produces inefficiencies which cannot be tolerated. So, therefore, these gentlemen at TEPCO are heroes being unfairly stigmatized. We should get out of their way and let market forces naturally solve the problem.

Just look away. Everything will be fine.

James Pilant

Tepco Says Fukushima Radiation ‘Significantly’ Undercounted – Bloomberg

Tokyo Electric Power Co. (9501) is re-analyzing 164 water samples collected last year at the wrecked Fukushima atomic plant because previous readings “significantly undercounted” radiation levels.

via Tepco Says Fukushima Radiation ‘Significantly’ Undercounted – Bloomberg.

From around the web.

From the web site, Fukushima News Updates.


Mitsubishi Corp : Mitsubishi Corporation to Develop Mega Solar Projects in Iwaki, Fukushima

Mitsubishi Corporation (MC) is pleased to announce plans for the construction of a new solar power plant* in Iwaki City, Fukushima. The largest of its kind in the Tohoku region, the 12,000-kilowatt facility is expected to start operating from mid-2014. The project forms part of MC’s overall strategic focus of developing its business in the renewable energies sector.

From around the web.

From the web site, Evacuate Fukushima.


For the first time since the triple meltdown at the Fukushima No. 1 nuclear power plant three years ago, the government is lifting an evacuation order in a restricted area, allowing residents to return to their homes.


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