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Why unethical conduct in business is so common at this time in our history? Why is business ethics almost irrelevant?


076A2032Why unethical conduct in business is so common at this time in our history? Why is business ethics almost irrelevant?

It is now about four years since the catastrophe on Wall Street wrought destruction on this country’s economy. In those three years, the lives of much of the population have become much more difficult while the lives of those who created the disaster seem to have changed but little.

How did we get here? How did doing financial speculation amounting to little more than gambling become respectable? How did the idea of a responsibility to the other citizens of a nation become amusing to the elites?

There are several factors. The first was the advent of the baby boomers to power and authority replacing the Depression and the World War Two Generations. Probably the best date for this transfer would be 1976 when Jimmy Carter became President. He was the first President to not have served in the Second World War since Truman. The significance of this was huge. The previous generation had solid memories of the failures of financial sector and the long hard times that resulted. The difference between study and experience are dramatic. It’s even worse when it’s collective experience. The new generation had stories, movies and television to remind them of the pain of those years, but it didn’t carry the power of the emotions involved, the collective helplessness of more than fifteen years when everything that generation knew was in peril.

The second factor I point to is the advent of the Chicago School of Economics and the doctrines of Milton Friedman. I point in particular to Friedman’s 1970 article in the New York Times Magazine, The Social Responsibility of Business is to Increase its Profits. This is my favorite quote.

But the doctrine of “social responsibility” taken seriously would extend the scope of the political mechanism to every human activity. It does not differ in philosophy from the most explicitly collectivist doctrine. It differs only by professing to believe that collectivist ends can be attained without collectivist means. That is why, in my book Capitalism and Freedom, I have called it a “fundamentally subversive doctrine” in a free society, and have said that in such a society, “there is one and only one social responsibility of business–to use it resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.”

I want you to understand that it appears to me that included in “the doctrine of social responsibility” is duty, honor, religion and patriotism, to name a few. (I like to tell my ethics class that the no religion agrees with this doctrine that doesn’t practice human sacrifice.) Here we have a rejection of those values that constitute Western Civilization. From Wikipedia:

The concept of western culture is generally linked to the classical definition of the Western world. In this definition, Western culture is the set of literary, scientific, political, artistic and philosophical principles which set it apart from other civilizations. Much of this set of traditions and knowledge is collected in the Western canon.

These things that make us human, these things that convey the values – the principles, that are the result of thousands of years of human experience are swept away in a simple doctrine that justifies any action within “the rules of the game.”

I want to point out one more thing: notice that the principles of “within the rules of the game” and “open and free competition without deception or fraud” are in many ways contradictory. If you can make or influence the rules why should you compete? Now get a load of this: Friedman tells businessmen that they are free of any restraint, every limitation of conduct, but they are supposed to hold to the duty of engaging in open and free competition without deception or fraud: Do whatever is necessary to make a profit but be good boys and compete.

The third element is the gradually increasing wave of deregulation which begins in a small way in 1971 when the Nixon Administration recommends the rail and trucking industries be deregulated. By the time, Jimmy Carter is elected the doctrine has gained enormous strength and much wider application. The basic implication that government regulation damages business success hampered any attempt at new regulation no matter what happened. This attitude is critical to what happens next.

The fourth element can be dated roughly as beginning 1981. Hostile takeovers and corporate raiding become regular parts of the business news. The basic significance of this is that it is a war. A war fought between manufacturing and finance, with manufacturing losing at every turn. The secondary effects were only a little less worse. You could make money at it. Not little money like people made from developing new products and making things, big money. T. Boone Pickens, one of the major corporate raiders of the period is worth three billion dollars and is rated currently as the 117th richest man in the world. Now let us add in a related development, the financing of these takeovers. Drexel Burnham Lambert paid Michael Milken 550 million dollars a year during its heyday. What did Michael Milken do to merit this: he created high yield bonds, junk bonds. The era of “financial innovation” begins here. Continuing to the present day, more and more bizarre mathematical creations will be used for investment, financing and speculation.

Now, let’s combine them. Those Americans familiar with the pain of the results pass on the reins of power to a new generation. The Chicago School of Economics will provide the philosophical basis for discarding societal responsibility. The government reacts with deregulation which makes it exceptionally difficult to re-regulate industries. The financial industry begins destroying manufacturing in its search for profits.

All the elements are now in place for what has happened and continues to happen. The American population without previous experience of the fruits of financial speculation have no common idea of what should be done. The ethic of the business world is converted from a complex set of factors motivated by religion, philosophy, the myriad other factors that tie us to one another as a people to one of profit as the only value. The government accepts this philosophy and applies it, making deregulation and not regulating pretty much the official doctrine of the government. The financial industry begins destroying healthy companies making hundreds of millions of dollars for what might kindly be described as little effort. The government does not intervene to stop this, which is a clear demarcation line in history that the power of that part of American that makes things is eclipsed by the power of the deal makers, the part of American society that moves money.

Out of this history we grew a generation of Americans who knew with certainty (and unfortunately with accuracy) that going into the financial industry, taking risks, and pushing the boundaries of the rules could make one a multi-millionaire in short order. The most capable of the students at the great universities many of them Ivy League schools went into finance. Those individuals were supposed to be a wide variety of things especially the keepers of the flame, the torch that is passed from one generation to another, the moral standards, the courage, the willingness to sacrifice for their country and their fellow man so that all can prosper. It is difficult to maintain a system of morals when the rewards are so extreme. My understanding is that ivy leaguers can start at a Wall Street firm for as much as $350,000 in salary. And after that if you are willing to do “what it takes,” the path to being a mere millionaire is quick and easy. These people were supposed to be crusading attorneys, publishers, politicians, administrators – all those things that make societies function. There is an ancient precept that nations succeed based on the wisdom of the learned, the courage of their soldiers and the efforts of the workers. Our best and brightest don’t go there. They go to make money in a moral vacuum.

We are going to pay for this for a long time. When the basic doctrine, the ethos of a country becomes devoted to the acquisition of wealth with not even a tiny lip service to virtue you get unethical conduct on a broad front across the business world. Everything that has happened since then, has grown out of these events that I described. The Savings and Loan Etc. (I was going to list them but you know as well as I do what they are and I find it too depressing to make such a list just at the moment) are all explainable out of these elements.

Now we have the demonstrations on Wall Street that are rapidly forming a counterpoint to the story,  I told above.

Is this the beginning of a brand new story or a small and insignificant chapter in the global rise of financialization?

I am hoping for a new story.

James Pilant

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Niall Ferguson Gets Return Fire

 Niall Ferguson Gets Return Fire

I read the Huffington Post almost every day. Niall Ferguson has written three attacks on Paul Krugman which have appeared in that publication which has me wondering about what’s going on? I was under the impression that Ferguson’s hit piece on Obama has been so awful that his credibility had taken a substantial hit but apparently not a substantial enough hit for the Huffpost not to publish him. I find Ferguson’s beliefs appalling, his attacks on Krugman ridiculous and I am pleased that so many are firing back at Ferguson’s attacks. Here is one from the web site, Beat the Press.

James Pilant

The Ravings of Niall Ferguson, the Real World, and the Needless Suffering of Tens of Millions | Beat the Press


But it is hardly worth wasting time and killing electrons in a tit for tat with Ferguson. What matters is the underlying issues of economic policy. These affect the lives of billions of people. The absurdities pushed by Ferguson and like-minded people in positions of power, in direct defiance of massive evidence to the contrary, have ruined millions of lives and cost the world more than $10 trillion in lost output since the crisis began.

via The Ravings of Niall Ferguson, the Real World, and the Needless Suffering of Tens of Millions | Beat the Press.

From around the web.

From the web site, This is Ashok.


As I have documented in detail before,


Milton Friedman’s Dumbest Idea

Milton Friedman’s Dumbest Idea (The article actually says “the world’s dumbest idea,” but it is longer than the recommended length for titles if you are doing “search engine optimization and I had to cut it. jp)

I wish I had written the article below. I love every word of it, and the most astonishing thing about this writing is where it appears, in Forbes. That takes by breath away. How did he get past the editor?

Well, enough of that –

The article is very much what I have been saying in previous articles on this web site and in public, that is, the idea that a corporation’s sole purpose is to make money for the shareholder is ridiculous. I’d start my analysis with “non-profits,” and get more legally  critical as I went through the various kinds of corporations and what they were used for.

This is a quote of mine from 2010 –


Generally speaking, articles dealing with the crisis focus on derivatives, Sallie Mae, the business press, rating agencies, etc. They all share blame and a lot of it. I have always been convinced that the underlying problem was greed, self interest, the corrosive effects of Milton Friedman’s bizarre doctrine of economic utopia, and the replacement of critical scrutiny by frantic cheerleading in the financial press, and I have some more villains to name.

Bogle doesn’t dodge the ethical question. He wonders how we got here and how we can get out. He longs for the day when businessmen understood the value of trust and fair dealing. I’m not surprised to find that Mr. Bogle has no simple solution. It took four decades of worship of the financial means of production of little more than electronic impulses to triumph over the creation of actual goods. This isn’t going to be easy, and it it likely to fail subjecting this country to a chain of financial meltdowns each one of which will severely damage the lives of millions of Americans who will bear the chief cost not only of their way of life but paying for the meltdown themselves out of their “widow’s mite.”

This is another from 7/25/2010.


This is capitalism run off the tracks. Greed out weighed simple good judgment. Obvious signs of trouble, not just obvious but certain evidence of approaching disaster, were ignored as money piled up.

The market was supposed to be self regulating. Read a little Milton Friedman. This economic freedom to innovate was supposed to lead to better lives for all Americans, perhaps the whole world. This utopia, this nirvana, has thus far failed to appear. But incomes in a handful of the well placed are measured in the billions.

And another from 12/20/2009.


Now, you could make a good argument that this kind of business thought (Milton Friedman, etc) actually falls into the second level where self interest and avoidance of punishment become primary concerns.  However, making moral decisions at the second level of Kohlberg’s six stages is just about as insulting as reasoning at the first.

My second point is when business is considered only as a money making endeavor, all the other levels of moral development don’t just become irrelevant, they become a block and a hazard to making maximum profit.

If you are short on time, please read the brief excerpt below, but if you have time click on the link and read the whole article. It merits it.

James Pilant


No popular idea ever has a single origin. But the idea that the sole purpose of a firm is to make money for its shareholders got going in a major way with an article by Milton Friedman in the New York Times on September 13, 1970.

As the leader of the Chicago school of economics, and the winner of Nobel Prize in Economics in 1976, Friedman has been described by The Economist as “the most influential economist of the second half of the 20th century…possibly of all of it”. The impact of the NYT article contributed to George Will calling him “the most consequential public intellectual of the 20th century.”

Friedman’s article was ferocious. Any business executives who pursued a goal other than making money were, he said, “unwitting pup­pets of the intellectual forces that have been undermining the basis of a free society these past decades.” They were guilty of “analytical looseness and lack of rigor.” They had even turned themselves into “unelected government officials” who were illegally taxing employers and customers.

How did the Nobel-prize winner arrive at these conclusions? It’s curious that a paper which accuses others of “analytical looseness and lack of rigor” assumes its conclusion before it begins. “In a free-enterprise, private-property sys­tem,” the article states flatly at the outset as an obvious truth requiring no justification or proof, “a corporate executive is an employee of the owners of the business,” namely the shareholders.

Come again?

If anyone familiar with even the rudiments of the law were to be asked whether a corporate executive is an employee of the shareholders, the answer would be: clearly not. The executive is an employee of the corporation.

From around the web.

From the web site, Brad DeLong.


But Friedman also produced a less felicitous legacy. In his zeal to promote the power of markets, he drew too sharp a distinction between the market and the state. In effect, he presented government as the enemy of the market. He therefore blinded us to the evident reality that all successful economies are, in fact, mixed. Unfortunately, the world economy is still contending with that blindness in the aftermath of a financial crisis that resulted, in no small part, from letting financial markets run too free.

The Friedmanite perspective greatly underestimates the institutional prerequisites of markets. Let the government simply enforce property rights and contracts, and – presto! – markets can work their magic. In fact, the kind of markets that modern economies need are not self-creating, self-regulating, self-stabilizing, or self-legitimizing. Governments must invest in transport and communication networks; counteract asymmetric information, externalities, and unequal bargaining power; moderate financial panics and recessions; and respond to popular demands for safety nets and social insurance.

From the web site, Reflection to Transformation.


The birth of the shareholder value movement is commonly traced to a speech Jack Welch gave at New York’s Pierre hotel in 1981, shortly after taking the helm at GE.  In that famous speech, entitled “Growing Fast in a Slow-Growth Economy,” Jack Welch outlined his beliefs in selling underperforming businesses and aggressively cutting costs in order to deliver consistent profit rises that would outstrip global economic growth.  He told analysts then, “GE will be the locomotive pulling the GNP, not the caboose following it…,” according to reports of the speech.

Jack Welch said in the interview given on 11-March-2009 that he never meant to suggest that setting, and meeting, profit expectations quarter after quarter in an effort to boost a company’s share price should be the main goal of corporate executives.

“It is a dumb idea,” he said. “The idea that shareholder value is a strategy is insane. It is the product of your combined efforts – from the management to the employees”.

What he was talking about is the commonly held belief that the purpose of business is to increase shareholder value. That belief is variously attributed to Milton Friedman, Adam Smith, and perhaps common sense.  BUT, it was the operating principle that resulted in two market busts and innumerous scandals in the past decade. The fact that Welch was one of the main proponents certainly adds a fair amount of gravitas to his comments.

Profitability, shareholder value, and measures like economic value added (EVA) completely miss a point that Welch articulated so well. Namely, increased “shareholder value” is a result, not a strategy.

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Doug Guthrie addresses Business Ethics

Doug Guthrie addresses Business Ethics

Business Ethics and Social Responsibility – YouTube


I listened to this video and enjoyed it, particularly the discussion of Adam Smith and Milton Friedman early in the lecture.

Dean Guthrie’s background in Chinese studies is particularly interesting to me, since I also have a great interest in the nation’s culture. I am less sanguine about that nation’s prospects than he is. China’s long term geographical and political ambitions are not compatible with continued economic cooperation with the United States.

James Pilant

The glacier like movement of business ethics

The glacier like movement of business ethics


From around the web –

From the web site, Capitalism and Friedman:

There’s no way to appreciate fully the contributions of Nobel Prize-winning economist Milton Friedman (1912-2006), who would have turned 99 years old this weekend, to the growth of libertarian ideas and a free society.

This is the man, after all, who introduced the concept of school vouchers, documented the role of government monopolies on money in creating inflation, provided the intellectual arguments that ended the military draft in America, co-founded the Mont Pelerin Society, and so much more. In popular books such as Capitalism and Freedom and Free to Choose, written with his wife and longtime collaborator Rose, he masterfully drew a through-line between economic freedom and political and cultural freedom.

From the web site, Lisa Richards, Rock and Roll Politics:

The federal government appears to be under the impression Wall Street CEO’s are better at managing the United States Treasury than trained economists.[26] [27] [28]  America has over two centuries of proof that bankers and legislators cannot be trusted with the people’s money,[29] yet, despite forewarnings from Adam Smith to Milton Friedman, Washington ignores the experts and continues helping itself to the Treasury. 

     America has gained and lost many times,[30] learning repeated lessons the central government continues committing: monetary stupidity.  In truth it is useless to wonder why Washington continues creating and wreaking economic havoc when it is obvious that human nature has proven those with power will continue doing harm[31] as long as mankind exists.  It is for this reason economics was invented, is practiced and taught: too often, lack of common sense has been in charge of money and the need for fiscally wise minds analyzing trade and industry is cost effective to society overall.  That being said, financiers tend not to listen to the money-wise discussed here: men who forewarned disaster if certain fiscal policies were not implemented, and devised solutions to resolve and repair monetary failure.  

And finally, from the web site, UNLADTAU:

To all fellow men and women out there who may have deep fondness for the liberal capitalist model of economic adaptation, I hope that you can make some adjustments in your cognitive banks. Capitalism is not a permanent facet of human life, but merely one among various epochs that will come to pass. Only impermanence is sacrosanct in the cosmos, so please refrain from singing hallelujah to a world system that is on its death knell as I articulated in a previous article.

And please refrain from swallowing hook-line-&-sinker the contentious propaganda of Francis Fukuyama about the ‘end of history’, that accordingly history had concluded with the galvanization of liberal capitalism, that history makes no more sense. Fukuyama’s theory is a slapstick narrative of hyper-valuation of the ‘mad economics’ of late capitalism and hypo-statization of reality that has no relation at all to the real in the world out there. Fukuyama had taken as ‘real’ what is actually ‘virtual’, and froze time much like unto a fairy tale of timelessness, of history-less Nietzschean moment that is fit more for infants than for adult humans. 


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Business Ethics Roundup 10/11/2011

1. The Ethics Sage has a new post on the civility movement at Harvard  entitled –

Harvard University Jumps on the Civility Bandwagon

Here’s a key paragraph:

The fact is administrators at Harvard are pressuring the Class of 2015 to do something no other student class has ever been asked to do in 375 years: Sign a civility pledge. The “Class of 2015 Freshman Pledge” was presented to students before an opening convocation last month. The message serves as a kind of moral compass for the education Harvard imparts. In the classroom, in extracurricular endeavors, and in Harvard Yard and Houses, students are expected to act with integrity, respect, and industry, and to sustain a community characterized by inclusiveness and civility. The “Pledge” idea seems a bit odd to me. Is Harvard saying its students have not acted civilly up until now? Has Harvard ignored civic virtue in its teachings?

It’s a good article. Certainly, I think a few more pledges in the direction of civility and morality are merited. The current American ethos seems to be heavily drawn from Milton Friedman and Gordon Gekko, in equal parts.

2. Professor Chris MacDonald writing in the Business Ethics Blog has an article intriguingly entitled –

Bullying in Pursuit of the Public Good

This would be my preference for the key paragraph – not as lively as some of the others but it contains the heart of the message – Don’t assume one side is right all the time.

Now most people are generally not very worried about major corporations, or large institutions of any kind, being bullied. And it’s easy enough to understand why. We’re usually more worried about corporations having too much power, rather than too little. But to uniformly celebrate victories of NGOs over corporations is to assume that NGOs are always right. And that’s a mistake. It’s also a mistake to assume that NGOs are in any important sense democratic, or automatically representative of the public interest.

3. Lauren Bloom writing in her blog has a new article called –

A Loving Tribute to Steve Jobs

This is the best paragraph –

But the thing that keeps coming to my mind as I think about Steve Jobs was his dedication to creating extraordinary products that inspired unprecedented customer devotion. Everyone uses cell phones, computers, and other portable electornic devices these days, but if I hear someone say they “absolutely love” one of those devices, more often than not it turns out to be an Apple product. And while cartoons aren’t everyone’s cup of tea, film buffs who enjoy animation typically love Pixar movies. One might disagree on which of Pixar’s films is the best (my personal favorite is Ratatouille but my brother lobbies hard for The Incredibles), but to my recollection, there’s been something to love about every movie Pixar has ever produced.

4. Josephson on Business Ethics and Leadership has an article called –

Hunger and Poverty: Consequences of deregulating food markets

Millions of poor people are starving in famines right now because the U.S. has relaxed regulations on commodities trading over the past 10 years. Into the breach have rushed financial companies like Goldman Sachs that poured millions of dollars into food commodities trading, in pursuit of short-term profits. In the process, they’ve created artificially soaring food prices that affect the whole world.

As went tech stocks in the 90s, and housing prices in the 00s, the price of food is now set on a financial bubble.  And human agony and death is the result.

I wish the author had developed the topic in more detail. I fell like I was in the middle of a good strong read and then was cut off in the middle.

James Pilant


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My response to Andi’s Questions

Andi concluded his comments on my last post by asking me these questions, which I will now try to answer.

Whether protests are morally right or wrong, is difficult. What do you think about the following questions?:

Can a protest really influence decisions that there are fair outcomes for everybody? Or is it only a way to highlight unfair procedures?

I have no utopian vision of a world where everyone has a just outcome. It’s not going to happen. Life is messy and many things unfair. However, governments and economies are man made creations and there is no natural law governing them only numerical limitations, so if outcomes are produced by men those outcomes can be changed by men.

Income inequality only reached this level over many years and as a result of many changes both international and purely domestic. So, what can be changed in one direction can be moved into another.

Change is possible.

Now, can the protestors generate any change in the philosophy of the marketplace. Yes,

Over the last 150 years two basic philosophies have run through American Business. The first set is based on Christianity. It’s most pure economic form is the Social Gospel. This continues to the modern day with parallel visions like Marxism which is essentially an economic religion.

The second set is Social Darwinism. Herbert Spencer will be its prophet and it may very well have culminated philosophically with Milton Friedman. Edmund Spencer took the survival of the fittest concept from Darwin. Milton Friedman added Darwin’s concept of natural selection, that is, the process of evolution must not be interfered with to favor the weak.

These have fluctuated in power and influence. Currently, the debate leans very heavily in the direction of free market fundamentalism, the Chicago School of Economics.

What effect can the Wall Street Protests have?

First, they shift the discussion. For most of the previous year, the public was assailed with tales of the dangers of deficit spending, a discussion focus of the American beltway elites but a subject with precious little importance to the great mass of Americans.

Second, it makes the wealthy and the beltway elites uncomfortable. The disdain and over reactions from the right wing media are palpable. You have to understand that in this country, the wealthy are insulated from virtually any criticism. Over the last forty years wealth has become a sign of virtue in many circles. They live in world where the media idealizes them, where the government is an ally which takes their needs seriously and where the lower classes are discussed as overpaid, lazy, fat and lacking initiative. To hear a contrary dialogue is to them astonishing. Let them be astonished.

Third, and most critical, the movement is laying the groundwork for groups of citizens to follow, a template for action. This means that in the future when there is a policy placed before the public, these groups spawned by this political action will be able to present alternatives or start initiatives of their own. Policy battles that have been one-sides will become disputes where more than one point of view is heard.

James Pilant

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Wikileaks Shares U.S. Cable from Ecuador

This should raise some eyebrows. Back in 2006 when the Neoliberal polices (Chicago School Economics) seemed to be taking the world by storm before the pretty theories collapsed like a shack in a hurricane, the U.S. Embassy was not seeing those policies in a positive light. In fact, the embassy says the policies are counterproductive and the nation of Ecuador is moving in the opposite direction.

I find it astonishing how little coverage of the Wikileaks publication of these diplomatic cables there is in the United States. These are front page headlines in nations all over the world often having dramatic political implications like the anti-corruption movement (Anna Hazare) in India. How controlled is American media? What aren’t we seeing in this nation?

James Pilant

Neoliberal policies “which have fed the
growing political disaffection of Bolivia‘s majority poor, have helped fuel the
country’s rolling ‘social revolution.'”

This was how a May 6, 2006, US embassy cable from La Paz recently released by
WikiLeaks viewed the powerful wave of struggle that led to the election of
Bolivia’s first indigenous president, Evo Morales, in 2005.

This secret assessment came despite Washington publicly trumpeting neoliberal
policies as the way to solve the problems of Latin America’s poor.

In 1985, under the advise of US economist Jeffrey Sachs, the Victor Paz
Estenssoro government opened up Bolivia’s economy to foreign transnationals.

A number of state-owned companies were privatised, including the crucial
mining sector. Restrictions on foreign capital were removed and labour security

The US embassy admitted in its cable: “Notwithstanding the promises of
politicians … poverty was largely impervious to the liberal reforms of the
late 80s and 90s.”

It noted the percentage of Bolivians living below the poverty line remained
“virtually unchanged (over 60%) … and even increased during the economic crisis
of 1999-2003”.

At the same time, neoliberal reforms “clearly failed to meet public
expectations for increased incomes and jobs”.

“In fact, reforms had a palpably negative effect on jobs in the short term,
immediately causing a 17 percent drop in public sector employment and triggering
the dismissal of thousands of public sector miners when resource draining
state-owned mining enterprises were shut down.”

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Kyle Willis Dies Because He Couldn’t Afford His Meds

This is from ABC news

A 24-year-old Cincinnati father died from a tooth infection this week because he couldn’t afford his medication, offering a sobering reminder of the importance of oral health and the number of people without access to dental or health care.

According to NBC affiliate WLWT, Kyle Willis’ wisdom tooth started hurting two weeks ago. When dentists told him it needed to be pulled, he decided to forgo the procedure, because he was unemployed and had no health insurance.

When his face started swelling and his head began to ache, Willis went to the emergency room, where he received prescriptions for antibiotics and pain medications. Willis couldn’t afford both, so he chose the pain medications.

The tooth infection spread, causing his brain to swell. He died Tuesday.

I can’t help but remember during the debate over whether some form of universal health care was necessary, I heard many, many times that it wasn’t because you could always go to the emergency room.

That isn’t always enough.

Humans are valuable. Even though we are at more than nine percent unemployment, there is no need to kill off the surplus population ala Scrooge.

I wonder about people who feel that when we act in brotherhood by helping the weak, the helpless, the young and the poor that we damage society, weaken it in some fundamental way.

They point to some strange future in which the society crumbles into clusters of helpless idlers watching television and waiting for their government hand out.

I suspect this has something to do with Ayn Rand, Milton Friedman and most particularly, a fellow named Friedrich Nietzsche. He points to a “master slave mentality.” Let me allow Wikipedia to explain –

Master-slave morality is a central theme of Friedrich Nietzsche‘s works, in particular the first essay of On the Genealogy of Morality. Nietzsche argued that there were two fundamental types of morality: ‘Master morality’ and ‘slave morality’. Master morality weighs actions on a scale of good or bad consequences unlike slave morality which weighs actions on a scale of good or evil intentions. What Nietzsche meant by ‘morality’ deviates from common understanding of this term. For Nietzsche, a particular morality is inseparable from the formation of a particular culture. This means that its language, codes and practices, narratives, and institutions are informed by the struggle between these two types of moral valuation. For Nietzsche, master-slave morality provides the basis of all exegesis of Western thought. While slave morality values things like kindness, humility and sympathy, master morality values pride, strength, and nobility.

I am a happy victim of the slave mentality. I want to be kind and sympathetic to those in trouble. But I can’t help but notice that I also try to live my life as a gentleman and a scholar, values that seem to derive from the master morality.

Perhaps, Rand, Friedman, and their confederates err in believing too much in self-interest. Instead of accepting the master morality as a different version of responsibility (nobility), they refine or reduce it to a philosophy of self worship. In other words, we exist only as individuals in fierce competition. We are no more than individual atoms in conflict with one another incapable of real connection.

It is an interesting point of view. You might call it cruel. But it aims at results. Those who are productive, for instance – job creators, should be rewarded by society while the non productive classes should be reduced in number by enforcing on these poor non-producers the need to compete and exert themselves.

So, the best of all possible worlds is one in which the weak are discarded when they fail to measure up.

Mr. Willis is an unfortunate example of the slave mentality in action. If he would have only had the proper mentality, that of the master morality, he would have found a job, removed the tooth himself; you know – he would have discovered self-reliance. But Mr. Willis lived in a society with 35 million unemployed. Wisdom teeth are difficult to get at without the right tools and self-reliance is a good deal if you have loads of money, the rest of us have to depend on each other.

I disagree with the master philosophy when it is interpreted as a form of self-interest. We are all brothers and sisters sharing a responsibility one to all and all to one.

I adhere to a slave mentality in many ways. For instance – this one –

Luke 7:22-23
22 And he answered them, “Go and tell John what you have seen and heard: the blind receive their sight, the lame walk, lepers are cleansed, and the deaf hear, the dead are raised up, the poor have good news preached to them.
23 And blessed is he who takes no offense at me.”

Of course, by the standards of some philosophies, this was a cruel weakening of the Hebrew nation. But once again, I will disagree.

That a fellow named Kyle Willis is dead is a tragedy for us all. It is a testament to the tragedy of unemployment, to the problem of a nation without universal health care, and to a population hardened by years of media reinforcement of self worship and cruelty to others.

James Pilant

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When You Have A Second Rate Infrastructure, You Have A Second Rate Country



Here in the United States, it seems we are besieged by the label, Made in China. No longer just Wal-Mart toys but bridges, major building projects and the new Martin Luther King Memorial come from the Communist giant of Asia.

How did we get here?

It’s easy. There was a unified effort on the part of business and many of our politicians to defund the government and make it powerless. Businesses don’t want to pay taxes, that’s to be expected. What was not expected was an extremely well-financed coterie of bought theorists and servile politicians of the worst sort who successfully pushed the idea that taxation was a form of theft.

Successful societies are not built on the success of the financial elites. They are not built on the size of the military. Those are elements of a successful society, though we overvalue and over invest in both.

Successful nations build on good infrastructures. We have a deteriorating one – read this from Popular Mechanics

To fix our infrastructure, from dilapidated levees to congested roadways and ports, the American Society of Civil Engineers (ASCE) has estimated that the country needs to spend $1.6 trillion over five years. Only $1 trillion of that, the organization says, has been allocated or promised. Accepting those numbers, we need an additional $600 billion to reverse the slide of infrastructure, a figure that seems as difficult to produce as it is to comprehend.

I have talked with visitors to the United States and they tell me how shocked they are by how run down everything looks. Well, it is run down. We have not been paying for keeping it up.

What is run-down in the United States that we might want to fix? According to a special report from Popular Mechanics (cited above), we need to fix the 14,000 miles of levees supervised by the federal government, fix the power grid in the United States (currently 400 billion kilowatt-hours are lost as current flows over long distance lines), fix the one-quarter of the 599,893 bridges in the United States that have structural problems or outdated designs, upgrade our ports to handle shipments more effectively and fix our canal locks on the 12,000 miles of U.S. inland waterways.

That would be a start. That would be just to get back even again.
What would we want to do to become a first-rate economy? We could build high-speed rail, invest in green development, the new urbanism and land recycling. That would be a start.
We have the know how and the people to build a wonderful America, but is there any political will in our spineless bickering ruling class?
Here’s what David Sirota thinks –

This problem is most obvious — and shocking — in our government. As opposed to multinational corporations, which care only about maximizing shareholder profit, our public-policy arena is supposed to be focused on building America. But in this golden age of big-money politics, with multinational corporations buying our lawmakers, we get the opposite — even during an unemployment crisis. Today, municipalities outsource public works projects, congresses water down “Buy America” laws, and presidents champion trade deals that encourage companies to send jobs overseas. That trickles down to give us American iconography made in Chinese factories, American real estate owned by Chinese companies, and American civil rights memorials constructed with Chinese slave labor.

I have no argument with his conclusions. Our government staggers, brain-dead and stupid, while competing nations best us in one area of endeavor after another.

It’s sickening. It’s depressing.

Where is the America that did things?

How do you find that America when every magazine and news service talks about is where the taxes are lowest as if that were the only value in a society?

Maybe that America is gone and cannot return. Maybe Milton Friedman stabbed it in the heart and it is in the middle of its death agony? Maybe the John Gaults of the world have moved to offshore oil platforms and abandoned it? Maybe we have monetized every human value and there is nothing left of greatness here?

But I’ll bet on this nation. In spite of its leadership, in spite of lunatic billionaires, in spite of bizarre self-serving philosophies of greed and self centeredness, I still believe in America and its possibilities.

James Pilant

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Steven Mintz Has Written a Pair of Essays on Corporate Social Responsibility

Steven Mintz, the Ethics Sage, has written two quite intelligent essays on corporate social responsibility.

Steven Mintz, the Ethics Sage

The first was 8/24/2011. Entitled What Are Corporate Social Responsibilities (CSR)? , the article is a basic description of the concept with the best paragraph being the following –

In a previous blog I made the case for increased regulation due to the narcissistic behavior of some on Wall Street. The Republicans seem to have short memories and are in denial as to the main cause of our economic woes. The public has lost billions in wealth as measured by losses in investments, retirement funds, and their home equity. Little regulation existed at the time to curtail risky behavior and corporate fraud including misleading and deceptive disclosures on real estate transactions. The expansion in business regulation is directly the result of unethical activities by corporate America with the result being Sarbanes-Oxley and Dodd-Frank. In short, corporate America has no one to blame but itself for the “over-regulation.”

The following article appeared on 8/26/2011 and is entitled: Social and Ethical Obligations of US Multinational Companies.

My favorite paragraph is the one explaining the Rights Theory. Here it is –

In ethics we sometimes use the Rights Theory to evaluate actions and decisions. We could apply the universality perspective to outsourcing by asking: “Would I want other companies to shut down their US plants and move them overseas in similar situations for similar reasons?” In other words, if one corporation moves its plant overseas for cost savings, would I be comfortable if all corporations did the same? Taken to its logical conclusion this would mean a potentially catastrophic exodus of jobs from the US with all the related damages to our economy. Moreover, from a utilitarian perspective an argument could be made that outsourcing causes more harm through lost jobs and economic stagnation in the US compared to any utilitarian benefits that, after all, accrue mostly outside the US.

Generally, Professor Mintz and I agree on most things. However, in the first article he is more charitable to Milton Friedman than I am. I find Friedman’s theories about corporate purpose to echo Machiavellian ethics minus the idealism. I think they are a repudiation of the values of Western civilization and certainly all religious systems.

Aside from that, the Ethics Sage and I share a common opinion on the rest of the issues.

In all events, this is fine writing and deserves your attention.

I recommend you subscribe, at least favorite, the Ethics Sage and read him regularly.

James Pilant



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