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PART 1: Business Ethics: An Oxymoron You'll find this story in any major city. It's a true story, and
this time it was in San Francisco. A young single mother has a
job, indeed, she works full time--but she's living in a shelter
with her ten year old. A public shelter? With the winos? Oh, yes.
She's homeless. Why? Overwhelmed by debts? Not at all. She just
can't afford rent at the rate she's being paid.
She gets the minimum wage--which is $4.50 an hour.
It's gone up since 1981, when it was $3.35 (or so the
reference librarian tells me), but not nearly enough to meet her
most basic needs. My brother is a psych tech, who makes about $15
an hour. He doesn't squander his money, he has a junker car, and
he pays only $500 a month in rent, but he still just barely
makes ends meet for him and his son. He makes three times what
our single mother makes. High rents in San Francisco are a
factor--but millions of people live in big cities, where rents
are high, and people like our young mother can't afford to move
to Muskogee where, presumably, rents are low--and where there
isn't likely to be any work for her anyway.
The simple fact is, minimum wage is too low--and has been,
for decades. But in the current atmosphere of runaway housing
costs, and sales taxes on everything in sight, it's outrageously
low. And it's kept that way by business lobbies; by pressure from
industry campaign contributors.
In San Francisco, as in many other big cities, statisticians
find that to rent even the most minimal apartment for a mother
and child, the renter must earn between $9 and $16 an hour. But
most of the available work is minimum wage to $6 per hour.
That can't be the case, really, can it? It's only reasonable that
people be paid enough to obtain minimal housing after putting in
a full work day...isn't it?
More statistics: at least 25% of the homeless work full or
part time.
But wait--that must be a misprint. It's well known, isn't
it, that homeless people are all layabouts who don't want to
work? They're out of a home because they're lazy, right? No
significant percentage of them could be working...could they?
Evidently they could.
But surely higher paying jobs are available to everyone who
has a skill...aren't they?
Officials from the Equal Employment Opportunity Commission
have charged there's a "national crime wave of discrimination by
employment agencies" against people of color. Personnel firms
use code words. Eg, "suite 80 through 35" scribbled on inter
office memos actually means, at one company: This person is black
or Hispanic so don't refer them. The government has more than a
hundred active probes of employment agencies around the country
and more to come. Actual cases of discrimination are believed to
far surpass those reported.
Personnel firm insiders claim that they are doing only what
businesses request "off the record". Employers--as well as the
personnel firms--are guilty of not only racism and unethical
behavior, but a mole-like cultural myopia. They're living in the
past.
A reality check: it's 1992. In the 90s we have a vast
immigrant population. Demographic projections have it that in the
near future Hispanics will be the biggest slice of the population
in heavily industrialized states like California. Blacks and
Asians will be very hefty percentages. Minorities? Not for much
longer. Yet we're systematically relegating these people to
poverty--people who will be the majority of our population.
Seth Klaren, president of The Baupost Group, an investment
management firm--surely no bleeding heart liberal--recently
wrote, "During the decade of the 1980s, investors and lenders
abandoned historical yardsticks of value. . .When their self
interest is allowed to run unchecked...excess becomes the order
of the day and prudence is checked at the door." A massive
economic downturn partly traceable to junk bond trading and the
collapse of much of the banking industry, is further traceable to
the deregulation of the Reagan/Bush years. It's traceable to a
tacit philosophy, an attitude: anything goes. Nothing in business
is forbidden if you can get away with it legally. The same
attitude that allows the wildly irresponsible policy--regardless
of obvious long-term social consequences--of keeping down the
minimum wage for the convenience of business.
Top American manufacturers think nothing of--as in the case
of one particular company--laying off 75,000 American workers at
a stroke, whining about how painful it is, and then immediately
hiring 75,000 workers overseas, at one-tenth (or even less) the
salary. They'll claim it was a choice they were forced into
because of an economic crisis in their company; but when the top
people in the company are so stunningly overpaid, how bad could
the crunch really be? A survey demonstrated that American CEOs
are the world's most wildly overpaid. The ratio of pay for a
Japanese CEO as compared to a low echelon worker in his company
was 50 to one. That's high, globally. But American CEOs? The ratio
was 1000 to one.
Caught sleazing about with other people's money, American
businesses typically look for someone else to lay the
responsibility onto, so the top men can continue to make
satisfied grunting sounds at the trough. Take for example the
rescue of the S&L industry with taxpayer money...a government
subsidization that, to me, smacks of Communism. Take for example
the bail out of Chrysler. And then there's the sort that goes on
despite government desire: the case of Drexel Burnham Lambert
Inc. According to the Wall Street Journal, DBL paid more than 250
million dollars in bonuses to 280 top level former employees just
before February 1990-- when they filed for chapter 11 bankruptcy.
This quarter-billion sucked away by the top people -- one Leon
Black got 16.6 million, apparently an amount established by his
high rank -- would otherwise have have gone to creditors. The
businesses DBL owes money to on stock it traded in are therefore
destabilized when DBL defaults on paying off--and they've got to
lay off a lot of employees, cut salaries, and so forth. DBL
doesn't care. It got away with it.
Nationally--but particularly in California--Reagan/Bush's
simpleminded free market philosophy of no interference has made
it possible for major insurance companies to routinely cheat tens
of thousands of policy holders out of their benefits. They're
able to do it legally because of the hands-off policy, the
no-regulation policy, promulgated by Reagan and friends. In 1990
some 50,000 people who developed serious illnesses were simply
cut off by their insurance companies in California the instant
their illness (any of a variety of serious illnesses) was
discovered. What did they pay those premiums for? Aspirin for
sinus headaches?
Because of the emphasis on cheap building, the contemporary
work environment, particularly in office buildings, has recently
been found to be plagued with toxicity. "Sick Buildings" has
become a buzzword for office spaces--and apartment spaces--in
which toxins build up, and the expense of ventilation is skirted.
Thousands of American workers are becoming ill, in the short and
long term. The EPA has tried to do something about it--but
business lobbies have put a stop to the expensive reform efforts.
They know their workers are being poisoned. They simply don't
give a damn.
Whenever Congress is close to passing effective Clean Air
regulation, pressure by lobbyists and business's political
cronies--and vetoes from Bush, the ultimate big business
political crony--squash or severely weaken the new laws. The
excuse? They're protecting business from excessive regulation,
they're protecting jobs, protecting the economy...evidently, at
any cost to the society.
All of the above, it seems to me, goes beyond free market
philosophy. It is free market hysteria. Is everything and
everyone to be sacrificed to the principle that business must be
allowed to operate completely without interference?
But there's a question that's never asked. It's a question
that has many incarnations--but in the final analysis it's always
the same question. Are we ethically wrong?
Is it fundamentally wrong to force people to work for a
wage so unfair they can't afford minimal housing? Is it
substantively wrong to thereby force their children to live in
shelters or in the family cars or on the streets even though
their parents are working?
Is it, simply put, ethical to pay $4.50 an hour in 1992?
Is it ethical to provide no housing at all for working
people at the bottom of the wage ladder?
Where is the ethic in today's work ethic? Do we simply
work--without ethic?
Is it morally wrong to discriminate in higher-paying jobs
against minorities? Is it ethical?
Is it ethical to knowingly pollute with toxins that you know
cause cancer and birth defects and brain damage? Is it immoral to
suppress legislation that would make workplaces reasonably
healthy?
Is it decent to yank medical insurance that people have paid
for over years, when they need it most?
Are we completely indifferent to ethics?
Mike Milken, Ivan Boesky, and friends soaked the nation. The
S&L's--with their friends, the Mafia--are further bleeding the
nation. (Read the book Inside Job for the Mafia connection in the
S&L crisis--something that's been strangely under-reported in
most other media). We're going to be paying for both, for years.
Could it be that the fundamental cause of this criminal
greed--and the subsequent economic downturn--was a simple lack of
business ethics? Could it be that those who maintain that
business ethics has any place in contemporary American
society...are lying? That decent behavior in American business is
only skin deep, superficial, all lip service and veneer? Could it
be that this lie is killing us? Could it be that ethics is not a
luxury--but a necessity for a healthy society?
Ethics is a social spine. A nation is reborn every
generation, in some sense, and this nation has been born, this
time, without a spine. It's ironic that the nation itself is
showing the consequences of this social birth defect--since the
instances of literal, physical birth defects, children born
without spines, or with other terrible deficiencies, has been
shown by recent studies to be significantly on the increase.
Researchers suspect the cause to be environmental toxins--which
are widespread due to absurdly inadequate regulation of
industry. Children born without spines, literally, because the
nation is reborn without a spine, metaphorically.
We are a nation without a conscience. We are an increasingly
Dickensian nation. The differences between our world and the
world of Charles Dickens are becoming less apparent.
In Dickens' time, at least, some profound changes were made;
partly due to his hugely popular books, people tried to make
improvements. There was a national conscience. I can detect
almost none at all, now.
But it's probably illusory to suppose that people were
significantly more ethical in earlier times. Chances are, the
inherent lack of ethics in the way we do business is simply more
obvious in the Age of Information. A lot of bad things have been
perennial; that doesn't make them right. We're supposed to be
evolving as a society. The time has come to see to it that
business ethics--at all levels--are deeply integrated into our
new global society; integrated culturally, sociologically, from
early on.*
A conscience, social scientists and psychologists tell us,
is an important function of a healthy social animal. People
without them are called sociopaths, and--if they do not become
CEOs or dictators--are generally relegated to Death Row, and to
insane asylums. A social being without a conscience can easily go
beyond simple self interest and sociopathy--its isolation will
make it psychotic. A conscience is a kind of sensory organ--one
we eventually go mad without.
If we think of businesses as organisms, we note the
following fact in the zoology of the business animal: The larger
the company, the smaller the organ of conscience. It's as if some
sort of instinctive blinding of empathy comes about when the
fiscal organism reaches a certain size. Since there are few rules
governing its relations with other fiscal organisms, it must
flail about blindly, without regard to external consequences, in
order to survive--for all the other organisms are doing the same.
It's been clearly demonstrated that healthy societies--and
healthy businesses--encourage individuality; individual
initiative and creativity. They cannot demand an over-riding
subjugation to the will of the organism, social or fiscal.
Conformity is stupefying and stagnating. But taken to extremes,
this principle loses touch with its original meaning.
Individuality is meaningless without cooperation, at least on
some level. Some comparison of values; a fundamental code that's
consistent and nourishing in its mutuality.
Our zoological specimen has no such reference point. If
there was some regulatory ethic--in law and in social
conscience--to guide its movement among its fellows, it might
thrive without crushing its own young.
We've seen two levels of organism here. We've looked at the
individual "business creature", the large company. There's also
the organism that's the collective of all the individual beasts:
the society as a whole. No matter how Libertarian or independent
we'd like to be, if we work within the standing economy, we--and
our businesses--are part of the greater organism. The social
organism. If the individual parts are blind, are conscienceless,
are socially spineless--the whole nation will be.
The prognosis for this national organism plagued with birth
defects? Increased dis-organism; and therefore, increased
entropy. Which is the downhill path to death.
*How? See the next installment of this essay.
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THE SOCIAL FUTURE: