Business Ethics

swoleupinya · November 17, 2010, 5:25pm

[quote]Sloth wrote:
A free-marketer who says businesses have only an obligation to stockholders is a danger to the maximization of freedom in the marketplace. The more individuals and institutions act as if they have no social and community obligations, the more attractive government intervention becomes. If a society’s culture doesn’t constantly stress and reinforce these obligations–which requires the language of moral absolutism–the state will be called in to do it for us. [/quote]

So… are you recommending adherence to some higher moral authority?

Sloth · November 17, 2010, 5:31pm

[quote]swoleupinya wrote:

[quote]Sloth wrote:
A free-marketer who says businesses have only an obligation to stockholders is a danger to the maximization of freedom in the marketplace. The more individuals and institutions act as if they have no social and community obligations, the more attractive government intervention becomes. If a society’s culture doesn’t constantly stress and reinforce these obligations–which requires the language of moral absolutism–the state will be called in to do it for us. [/quote]

So… are you recommending adherence to some higher moral authority?[/quote]

Yes, intelligent or not (I respect kamui’s atheism which, I like to refer to as non-theism for distinction). Bio lab time, so if you have further questions, you’ll have to wait on a reply.

orion · November 17, 2010, 5:53pm

[quote]swoleupinya wrote:

[quote]orion wrote:

[quote]kamui wrote:

saying “now we have the free market” is equivalent to a russian saying “now, we have a classless society” in 1953.

we are acting as if we had a free market, in the hope of getting it one day.

which is the very definition wishful thinking

I know enough about ethics to know that there are several coexisting ethical systemms, each with its own merits and you cannot enforce one without violating the others.

Which brings me back to, preventing fraud and violence yes, creating an ethical agenda no.

YOu are completely free however to patronize any orginazition that panders to your specific set of rationalizations, i.e. ethics.

[/quote]

Your argument completely ignores the ability of a business to have a leveraged effect on society far exceeding the people who they do business with.

A business does not have to have a single paying customer to being producing a product in an unsafe fashion, experience a catastrophic process failure, and take lives as a result.

T-3 laboratories comes to mind - they set up a process plant in an industrial park, producing a fuel additive. They had only one or two customers and were nowhere near profitable, when poor designed caused a detonation of one of their catalyst vessels. It took out a number of buildings in their neighborhood and killed a few people.

At some point, if you follow a libertarian ethic of deregulation, you have to accept that a coin of regulation will be human life… it’s pretty cynical. [/quote]

Unlike other libertarians I do think that there is a place for safety regulations for the very simple reason that noone has a right to expose me to a risk I did not agree to and was not compensated for.

On the other handl, too much regulations can kill and injure more people than it saves, prime example would be the FDA.

LIFTICVSMAXIMVS · November 17, 2010, 6:27pm

[quote]ZEB wrote:
I’m curious as to what the T Nation members think of current business ethics. Do you feel that business owes society something and should actively participate in the betterment of society. Or, do you feel that a corporations only obligation is to its stockholders, and that by doing well they help society indirectly?[/quote]

If a corporation treats is employees and or customers badly then how do they serve the stockholders interests?

Corporations that satisfy stockholder interests are by default satisfying society and participating in its betterment.

Corporations do not “owe” society anything more than their customers, employees, and stockholders owe them. One hand washes the other. Business is not a zero-sum game.

John_S1 · November 17, 2010, 6:28pm

THe only obligation a business owes society is the best product at the lowest cost, if one business can’t provide it I will find another that can.

We call this a market, and it works very well when it is not fucked with.

siouxperman · November 17, 2010, 6:35pm

[quote]John S. wrote:
THe only obligation a business owes society is the best product at the lowest cost, if one business can’t provide it I will find another that can.

We call this a market, and it works very well when it is not fucked with.[/quote]

“cost” being only the price of the product? What about long term environmental damage, societal costs of unfair labor practices, and other costs that don’t get factored in to the price of a product? If the true costs of many products produced in places like china were reflected in the price, it would be a very different market.

swoleupinya · November 17, 2010, 6:36pm

[quote]John S. wrote:
THe only obligation a business owes society is the best product at the lowest cost, if one business can’t provide it I will find another that can.[/quote]

Society provides the framework under which a business is able to function… Do you propose that we just give that away? And, why should we?

Provide for us, please, an example of an unregulated market that has served a society well.

John_S1 · November 17, 2010, 6:41pm

[quote]siouxperman wrote:

[quote]John S. wrote:
THe only obligation a business owes society is the best product at the lowest cost, if one business can’t provide it I will find another that can.

We call this a market, and it works very well when it is not fucked with.[/quote]

“cost” being only the price of the product? What about long term environmental damage, societal costs of unfair labor practices, and other costs that don’t get factored in to the price of a product? If the true costs of many products produced in places like china were reflected in the price, it would be a very different market.[/quote]

On your enviroment damage, could you specify what you are refering too? That would help me answer that one better.

Lets talk labor practices, The greatest cost to business is it’s labor, if the product is low costing then people will still be able to afford it, if they can’t the labor force will leave and go somewhere else to work. The Labor force has just as many strings it can pull as the business.

John_S1 · November 17, 2010, 6:45pm

[quote]swoleupinya wrote:
Provide for us, please, an example of an unregulated market that has served a society well. [/quote]

Industrial revolution, and Hong Kong.

swoleupinya · November 17, 2010, 6:44pm

[quote]John S. wrote:

[quote]siouxperman wrote:

[quote]John S. wrote:
THe only obligation a business owes society is the best product at the lowest cost, if one business can’t provide it I will find another that can.

We call this a market, and it works very well when it is not fucked with.[/quote]

“cost” being only the price of the product? What about long term environmental damage, societal costs of unfair labor practices, and other costs that don’t get factored in to the price of a product? If the true costs of many products produced in places like china were reflected in the price, it would be a very different market.[/quote]

On your enviroment damage, could you specify what you are refering too? That would help me answer that one better.

Lets talk labor practices, The greatest cost to business is it’s labor, if the product is low costing then people will still be able to afford it, if they can’t the labor force will leave and go somewhere else to work. The Labor force has just as many strings it can pull as the business.[/quote]

Yeah… they’ll all just pack up and go somewhere else to work.

Unless there is nowhere else to work… or nowhere better.

Monopolies do happen.

Incidentally, labor is not the greatest cost to all businesses.

John_S1 · November 17, 2010, 6:51pm

[quote]swoleupinya wrote:

[quote]John S. wrote:

[quote]siouxperman wrote:

[quote]John S. wrote:
THe only obligation a business owes society is the best product at the lowest cost, if one business can’t provide it I will find another that can.

We call this a market, and it works very well when it is not fucked with.[/quote]

“cost” being only the price of the product? What about long term environmental damage, societal costs of unfair labor practices, and other costs that don’t get factored in to the price of a product? If the true costs of many products produced in places like china were reflected in the price, it would be a very different market.[/quote]

On your enviroment damage, could you specify what you are refering too? That would help me answer that one better.

Lets talk labor practices, The greatest cost to business is it’s labor, if the product is low costing then people will still be able to afford it, if they can’t the labor force will leave and go somewhere else to work. The Labor force has just as many strings it can pull as the business.[/quote]

Yeah… they’ll all just pack up and go somewhere else to work.

Unless there is nowhere else to work… or nowhere better.

Monopolies do happen.

Incidentally, labor is not the greatest cost to all businesses. [/quote]

Monopolies do not happen unless government gets involved.

Labor force can either leave, or set up terms in which they will work. It is very simple. And what stops the labor force from coming up with a new idea and implementing it, or are you suggesting the labor force is made up of nothing but stupid people who can’t come up with anything?

Perhaps someone in the labor force invents something new and then hires the other people up. Puts the other person out of business or requires the other person to raise wages to stay competitive.

And yes employee real wages are one of the greatest costs of business.

orion · November 17, 2010, 6:51pm

[quote]swoleupinya wrote:

[quote]John S. wrote:

[quote]siouxperman wrote:

[quote]John S. wrote:
THe only obligation a business owes society is the best product at the lowest cost, if one business can’t provide it I will find another that can.

We call this a market, and it works very well when it is not fucked with.[/quote]

“cost” being only the price of the product? What about long term environmental damage, societal costs of unfair labor practices, and other costs that don’t get factored in to the price of a product? If the true costs of many products produced in places like china were reflected in the price, it would be a very different market.[/quote]

On your enviroment damage, could you specify what you are refering too? That would help me answer that one better.

Lets talk labor practices, The greatest cost to business is it’s labor, if the product is low costing then people will still be able to afford it, if they can’t the labor force will leave and go somewhere else to work. The Labor force has just as many strings it can pull as the business.[/quote]

Yeah… they’ll all just pack up and go somewhere else to work.

Unless there is nowhere else to work… or nowhere better.
[/quote]

Yeah well, if they are already working at the best place there is for them, why would they leave?

siouxperman · November 17, 2010, 7:44pm

[quote]John S. wrote:

[quote]siouxperman wrote:

[quote]John S. wrote:
THe only obligation a business owes society is the best product at the lowest cost, if one business can’t provide it I will find another that can.

We call this a market, and it works very well when it is not fucked with.[/quote]

“cost” being only the price of the product? What about long term environmental damage, societal costs of unfair labor practices, and other costs that don’t get factored in to the price of a product? If the true costs of many products produced in places like china were reflected in the price, it would be a very different market.[/quote]

On your enviroment damage, could you specify what you are refering too? That would help me answer that one better.

Lets talk labor practices, The greatest cost to business is it’s labor, if the product is low costing then people will still be able to afford it, if they can’t the labor force will leave and go somewhere else to work. The Labor force has just as many strings it can pull as the business.[/quote]

I don’t believe that labor forces in developing nations have quite the power that you say they do. There are many companies that operate in a similar fashion as the mining industry did some years ago. The employees are basically forced to pay the company for things such as living quarters, uniforms, etc. and in effect are indebted workers to the corporation. I’m sure they could leave, but it’s better to be indebted and have a roof than no job and no home.

As far as environmental damage, how about hydraulic fracturing poisoning water supplies and potentially making huge reservoirs of water undrinkable? None of that gets factored into the “cost” of the extracted gas. For many “cheap” products, the true cost is not reflected.

Spartiates · November 17, 2010, 7:53pm

[quote]John S. wrote:

On your enviroment damage, could you specify what you are refering too? That would help me answer that one better.

[/quote]

Come on John, you’re not stupid. There are about a billion examples we could come up with. Companies used to simply dump or bury their manufacturing waste in the easiest spot possible. Chemicals that have adverse effects, and easily make their way into water supplies used to be a major problem.

These are all “hidden” costs (safe disposal of hazardous materials) that private interests have demonstrated time and time again they will pass off onto someone else if they are not forced through fines and regulation to pay themselves. That’s the super-easy example.

Wal-Mart was another great example of a slightly more sophisticated way of doing this: pay your employees little enough, and cut their hours enough, that they still qualify for public assistance.

Anyone who pollutes water and land that they don’t own… like sends anything downstream, or into an underground water supply, destroys the livelihoods of anyone who makes a living off the land or water “downstream”.

Do we really believe that BP would be paying out any money to any gulf-fishermen without government pressure?

John_S1 · November 17, 2010, 8:27pm

[quote]Spartiates wrote:

[quote]John S. wrote:

On your enviroment damage, could you specify what you are refering too? That would help me answer that one better.

[/quote]

Come on John, you’re not stupid. There are about a billion examples we could come up with. Companies used to simply dump or bury their manufacturing waste in the easiest spot possible. Chemicals that have adverse effects, and easily make their way into water supplies used to be a major problem.

These are all “hidden” costs (safe disposal of hazardous materials) that private interests have demonstrated time and time again they will pass off onto someone else if they are not forced through fines and regulation to pay themselves. That’s the super-easy example.

Wal-Mart was another great example of a slightly more sophisticated way of doing this: pay your employees little enough, and cut their hours enough, that they still qualify for public assistance.

Anyone who pollutes water and land that they don’t own… like sends anything downstream, or into an underground water supply, destroys the livelihoods of anyone who makes a living off the land or water “downstream”.

Do we really believe that BP would be paying out any money to any gulf-fishermen without government pressure?[/quote]

I was not asking the question to be stupid, I was trying to guage what he was looking for, if it was some they pump CO2 into air and we are all going to die from global warming, then I was going to just ignore it. If it was an example like you used of water I can explain how that works.

Who owns the water? The state or a private company. So if a company dumps the chems into the water they are damaging onther persons property that would be illegal and they are responsible for cleaning it up/compensating. As long as you believe in property rights situations like this, while they will happen can be minimized and punished. This reason right here is why I am not an anarchist.

And your thing about BP, maybe they wouldn’t have paid, but you think without government pressure the fishermen wouldn’t have gotten revenge on BP? But again this goes back to property rights. Property rights do not interfer with a free market, they are what make a free market run.

swoleupinya · November 17, 2010, 8:35pm

Funny that you mention property rights, John s.

To your two examples offered:

In Hong Kong, the government owns all the land. Also, the propping up of their trade structure by China is a major reason for their stability.

As for the industrial revolution, you come back to the coinage of human life… those textile factories were pretty awesome!

kamui · November 17, 2010, 8:39pm

the only revenge they could get in a libertarian society would be reactive boycott.

can you provide us with one historical example of a reactive boycottt who has been really successful and managed to end such unethical practices on a market-wide level ?

you don’t need to take an example on the history the energy market.
any successful boycott will do it.

swoleupinya · November 17, 2010, 8:41pm

[quote]John S. wrote:

[quote]Spartiates wrote:

[quote]John S. wrote:

On your enviroment damage, could you specify what you are refering too? That would help me answer that one better.

[/quote]

Come on John, you’re not stupid. There are about a billion examples we could come up with. Companies used to simply dump or bury their manufacturing waste in the easiest spot possible. Chemicals that have adverse effects, and easily make their way into water supplies used to be a major problem.

These are all “hidden” costs (safe disposal of hazardous materials) that private interests have demonstrated time and time again they will pass off onto someone else if they are not forced through fines and regulation to pay themselves. That’s the super-easy example.

Wal-Mart was another great example of a slightly more sophisticated way of doing this: pay your employees little enough, and cut their hours enough, that they still qualify for public assistance.

Anyone who pollutes water and land that they don’t own… like sends anything downstream, or into an underground water supply, destroys the livelihoods of anyone who makes a living off the land or water “downstream”.

Do we really believe that BP would be paying out any money to any gulf-fishermen without government pressure?[/quote]

I was not asking the question to be stupid, I was trying to guage what he was looking for, if it was some they pump CO2 into air and we are all going to die from global warming, then I was going to just ignore it. If it was an example like you used of water I can explain how that works.

Who owns the water? The state or a private company. So if a company dumps the chems into the water they are damaging onther persons property that would be illegal and they are responsible for cleaning it up/compensating. As long as you believe in property rights situations like this, while they will happen can be minimized and punished. This reason right here is why I am not an anarchist.

And your thing about BP, maybe they wouldn’t have paid, but you think without government pressure the fishermen wouldn’t have gotten revenge on BP? But again this goes back to property rights. Property rights do not interfer with a free market, they are what make a free market run.[/quote]

In many instances. the land is part of the commonwealth… convenient, because it offers a framework within which we can all transport goods, etc… Nonetheless, if your only strategy for protecting the safety of the public is to react to infractions, you open the door to essentially limitless degrees of risky behavior. You give businesses the opportunity to roll the dice to such a degree that the infraction could far outweigh any punishment.

Consider Chernobyl.

John_S1 · November 17, 2010, 8:44pm