Business Ethics

[swoleupinya]

[quote]John S. wrote:

[quote]swoleupinya wrote:

[quote]John S. wrote:

[quote]swoleupinya wrote:

[quote]John S. wrote:

[quote]swoleupinya wrote:
Saying this and making a distinction as to how and why what happened there was dependent upon said government regulation are two different things.

What I am asking you to consider the effect of such an event.

And, actually, Chernobyl is a perfect example of the psychology of risk and the heuristic trap of experience. If an individual or an organization exposes themselves to risk on a regular basis, the longer they go without experiencing the downside of that risk, the less seriously they will treat that risk. They are also likely to experience an increasing degree of downside.
[/quote]

No, you act as if a government controlled market is free of all errors, then bring up chernobyl.[/quote]

‘No’ to what?

There is no acting here… only writing. Don’t start injecting straw men.

Accidents happen, people learn from them and go on. Again if a business does something that harms someone else they are responsible under property rights.

Energy and chemical technology (since we’re on that topic) is simply too advanced, complicated and dangerous to expect that you can protect the safety of the public reactively. In the process and chemical industries in particular, most safety and much of the efficiency innovations are driven by partnerships between corporations and regulatory boards. Without rigorous and thorough regulations, you get situations like the disaster at T3 laboratories… essentially a couple of amateurs in over their heads with some pretty damn dangerous technology.

Feel free to peruse this site for more examples:
http://www.csb.gov/investigations/investigations.aspx?Type=2

Aside from the safety of the general public, worker safety in these types of operations must be considered. It would be completely unfeasible for plants to hire technicians and operators who were qualified/educated enough to reverse engineer their process designs and thus provide for their own safety.

All this, of course, could mean absolutely nothing to you, if you accept that human life is acceptable coinage in regulating business.

Lets take a look at reactors, today they are finding better materals to put in them. Thorium is what scientists are talking about now. I don’t claim to know much about the subject but from my understanding it is a lot safer both for people and the enviroment.

Largely driven by the regulatory atmosphere… You’ve actually struck on a specific topic that I have a little knowledge about, and I have access to some people with a lot more.

Lets take a look at BP, due to government manipulation of the market they made it so the oil companies went into very deep water, when an accident happened they where unable to contain it. There is/was safer places to drill but because of market manipulation a horrible accident happened and for a long time where powerless to stop it.

You’re making some huge assumptions here regarding fault in the Deepwater Horizon accident. BP has a terrible safety record, and as far as I know are considered a joke within the industry… especially domestically.
[/quote]

You bring in Chernobyl as an example, yet it happened in the most regulated country to ever exist. This is not a staw man, it shows that big government has done somethiung a free market has never done.[/quote]

Actually, the catastrophe at Chernobyl was the DIRECT result of a lack of regulation. Don’t confuse state ownership with regulation.

The incident there occurred because there was not an adequate structure in place of safety standards, nor was there any real system in place to monitor safety conditions. On top of that there was almost no system in place to filter for competency at the level necessary for many of the operating environments.

Two undereducated and under-monitored operators were given free reign to experiment. They had no idea what they were doing, and they ended up melting the damn thing down.

Regulators are worthless, the private sector regulates far better. Insurance companies can/could be the greatest regulatory force on the planet.

You might then want to explain then, why the insurance industry only exists in a subsidized state.

You make the assumption that without the government regulations the private sector would act crazy, but when you inject property rights into the mix the whole story changes. Again I am not advocating anarchy which is what you are trying to turn my postitions in too. If you believe in property rights, and that when someone violates another persons property rights the victim must be compensated then the whole story changes.

I’m not making any unfounded assumptions here. I’m offering evidence to my opinion. Feel free to explain to me how disasters like the T3 laboratory explosion, or the Imperial Sugar mill explosion in Georgia, or the Texas City refinery detonation… would have been preempted by taking regulation out of the picture. Here’s the link, in case you missed it last time:

http://www.csb.gov/investigations/investigations.aspx?Type=2

I am not making any assumption about deep horizon, due to government laws and regulations it was cheaper for them to go out into the deep water, this is a well known fact. And if BP had decided to play by the laws they wouldnt have had to pay nearly as much money as they did.

Wait… did you just say, “And if BP had decided to play by the laws they wouldnt have had to pay nearly as much money as they did.”???

I’m pretty sure that supports my position.

Yet in my free market solution, the first thing I would do is sell the land they where drilling on, then if an incident like this happened one of two things would have gone down. First, they would have had insurance on the well and the insurance company would have made damn sure they had the best gear. Then there is option 2, they would have no insurance something like this would happen and they would go bankrupt cleaning it up, thus being washed out of the market.

So… you’re anti-regulation… but, you want them to carry insurance… but, if they don’t they can invoke bankruptcy protection… or just run out of money and dissolve… in either case, we ended up footing the bill of the mess they made.

How is this supposed to work?

What motivation could there possibly be in this scenario for executives at BP to behave in a more thoroughly safe manner? There compensation isn’t tied to it in any meaningful way.

Now lets get back to reactors, with government regulators how long has it taken for them to come up with a good idea? If that is the speed of the government I say no thanks lets get private sector in and actually do something.

So, can you prove that there would be motivation to innovate if it wasn’t forced by regulation?

I can prove the opposite.
[/quote]

You bring up T3 as if regulations could have saved it, using hindsight anyone could say that. In a free market they would be wiped out/insurance company would have imposed regulations. Again confusing my point with Anarchy.[/quote]

The only thing you are offering here is to replace government regulation with regulation via insurance.

And, of course anyone can say that regulation would have stopped the T3 incident from occurring… That’s the point of examining incidents!!!

And you should take a look at the deep ocean drilling laws to understand what I am talking about. The Federal government set a cap on what they are liable for, this goes against the free market, and is one of the main reasons we have drilling so far out there. Like I said if BP followed the law that is in place they would not have had to pay as much as they did because GOVERNMENT REGULATIONS made it so.

You might want to sharpen your logic skills here.

1. I’m familiar with the laws. I’m also familiar with the general condition of the Gulf of Mexico, the technology of drilling wells, and the implications of drilling closer to the shore. Unless you find it acceptable to turn the Gulf of Mexico into a sticky pit, then it’s best for them to stay in the deep waters… of course, you could always require oil companies to improve their technologies and operate at higher slip (loss and waste) efficiencies as a condition of the leases, but this would be regulating.

2. On one hand you claim that the government seat a cap on what they are liable for… and on the other hand you make the argument that it they had followed the law BP would not have had to pay so much. #1, that cap is on cleanup costs and was the brainchild of free-market republicans. It also carries with it subscription to a risk-aversion pool, which BP has been paying into as a condition of doing business in the Gulf. It does not set a cap on punitive damages… which happen to be one method by which the government can recoup the costs of the cleanup. So, in practice, the cap was no more than leverage to get the oil companies to pay into the risk pool… It is having no actual effect on our ability to charge BP for the cleanup.

Also the main thing big government lovers fail to forget is that a state with the power to regulate gets bought by big business.

There is no such thing as a perfect government or perfect market. This is why citizen diligence and participation is so vital.

And insurance can exist without subsides, a free market brings much greater wealth and people are very easily able to afford it. trying to use current conditions to prove capitalism is wrong, when the more government regulations leads to greater subisides in insurance completely disproves your notion and is being dishonest, not with me but with yourself. You are looking for something that has always led to either socialism, or something far worse which is the course we are on now, Fascism.

How about this. I think it would be a useful exercise:
Make a solid case for profitability for an insurance company to underwrite off-shore drilling platforms. Use real numbers and real risk charts… saying “a free market brings much more wealth” is just hyperbole.

[swoleupinya]

BTW - are you ceding the Chernobyl example as supporting my position, or are you just ignoring it?

[orion]

[quote]swoleupinya wrote:

[quote]orion wrote:

[quote]makkun wrote:

[quote]Sloth wrote:

[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. [/quote]

Of course they do. And yes, they should. [/quote]

Agreed.

Makkun[/quote]

Laughable.

What exact obligation do they have, who defines those obligations, how are they enforced and most importantly, how are we going to prevent people from imposing their moral values once again with force when the term itself is exceedingly vague and allows for practically everything?

[/quote]

Answers:

1. No business operates without the use of the commonwealth (roads, postal service, fire service, police, army, etc…). So, at a bare minimum, the owe the country for that use.

2. In the US at least, representative democracy defines those obligations.

3. See above.

4. See above.

[/quote]

1. Sure, and they should pay for that, preferably on a pay as you go basis.

2-4. Oh I see. We are doomed arent we?

[swoleupinya]

[quote]orion wrote:

[quote]swoleupinya wrote:

[quote]orion wrote:

[quote]makkun wrote:

[quote]Sloth wrote:

[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. [/quote]

Of course they do. And yes, they should. [/quote]

Agreed.

Makkun[/quote]

Laughable.

What exact obligation do they have, who defines those obligations, how are they enforced and most importantly, how are we going to prevent people from imposing their moral values once again with force when the term itself is exceedingly vague and allows for practically everything?

[/quote]

Answers:

1. No business operates without the use of the commonwealth (roads, postal service, fire service, police, army, etc…). So, at a bare minimum, the owe the country for that use.

2. In the US at least, representative democracy defines those obligations.

3. See above.

4. See above.

[/quote]

1. Sure, and they should pay for that, preferably on a pay as you go basis.

2-4. Oh I see. We are doomed arent we?

[/quote]

1. It’s called taxation. I’m glad we agree.

[orion]

[quote]swoleupinya wrote:

The only thing you are offering here is to replace government regulation with regulation via insurance. [/quote]

Do insure companies have standing armies?

Do you have to emigrate if you are no longer happy with your services?

So “all he wants to do” is freeing companies from stupid regulations they cannot escape from?

That is quite a lot, actually.

How about this. I think it would be a useful exercise:
Make a solid case for profitability for an insurance company to underwrite off-shore drilling platforms. Use real numbers and real risk charts… saying “a free market brings much more wealth” is just hyperbole.

No, that is a logical necessity given the subjective, ordinal nature of wealth.

[orion]

[quote]swoleupinya wrote:

[quote]orion wrote:

[quote]swoleupinya wrote:

[quote]orion wrote:

[quote]makkun wrote:

[quote]Sloth wrote:

[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. [/quote]

Of course they do. And yes, they should. [/quote]

Agreed.

Makkun[/quote]

Laughable.

What exact obligation do they have, who defines those obligations, how are they enforced and most importantly, how are we going to prevent people from imposing their moral values once again with force when the term itself is exceedingly vague and allows for practically everything?

[/quote]

Answers:

1. No business operates without the use of the commonwealth (roads, postal service, fire service, police, army, etc…). So, at a bare minimum, the owe the country for that use.

2. In the US at least, representative democracy defines those obligations.

3. See above.

4. See above.

[/quote]

1. Sure, and they should pay for that, preferably on a pay as you go basis.

2-4. Oh I see. We are doomed arent we?

[/quote]

1. It’s called taxation. I’m glad we agree.

[/quote]

On taxation for the police, army and if absolutely necessary firemen and roads yes.

But this is pretty much all the obligation they have.

[swoleupinya]

[quote]orion wrote:

[quote]swoleupinya wrote:

The only thing you are offering here is to replace government regulation with regulation via insurance. [/quote]

Do insure companies have standing armies?

Do you have to emigrate if you are no longer happy with your services?

So “all he wants to do” is freeing companies from stupid regulations they cannot escape from?

That is quite a lot, actually.

How about this. I think it would be a useful exercise:
Make a solid case for profitability for an insurance company to underwrite off-shore drilling platforms. Use real numbers and real risk charts… saying “a free market brings much more wealth” is just hyperbole.

No, that is a logical necessity given the subjective, ordinal nature of wealth.

[/quote]

No offense, Orion, but you are conflating multiple issues here. We were talking specifically about regulatory mechanisms. In John’s argument, he offered that preemptive regulation should be the domain of insurance companies. I posit that insurance companies are infinitely more risk averse than governments as a function of their need to be profitable. Consequently, it is likely (and born out in current contracts) that they would be multiplicative degrees more odious in their requirements that government could ever be.

Insurance is really quite a ridiculous idea, when it comes down to it. As soon as the potential downsides get to a certain point, there is no way for insurance to work as a business model. For example, there is no way that an insurance company could underwrite off-shore drilling platforms, because the cost of doing that business is so great that no oil company could ever afford it.

Like I said, go ahead and try to prove that it could be done profitably. If you can’t all you’re offering is hyperbole… certainly not a substantive argument.

[swoleupinya]

[quote]orion wrote:

[quote]swoleupinya wrote:

[quote]orion wrote:

[quote]swoleupinya wrote:

[quote]orion wrote:

[quote]makkun wrote:

[quote]Sloth wrote:

[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. [/quote]

Of course they do. And yes, they should. [/quote]

Agreed.

Makkun[/quote]

Laughable.

What exact obligation do they have, who defines those obligations, how are they enforced and most importantly, how are we going to prevent people from imposing their moral values once again with force when the term itself is exceedingly vague and allows for practically everything?

[/quote]

Answers:

1. No business operates without the use of the commonwealth (roads, postal service, fire service, police, army, etc…). So, at a bare minimum, the owe the country for that use.

2. In the US at least, representative democracy defines those obligations.

3. See above.

4. See above.

[/quote]

1. Sure, and they should pay for that, preferably on a pay as you go basis.

2-4. Oh I see. We are doomed arent we?

[/quote]

1. It’s called taxation. I’m glad we agree.

[/quote]

On taxation for the police, army and if absolutely necessary firemen and roads yes.

But this is pretty much all the obligation they have.

[/quote]

How do you ensure that the roads are maintained and that the police, army and firemen do their job well?

[orion]

[quote]swoleupinya wrote:

[quote]orion wrote:

[quote]swoleupinya wrote:

The only thing you are offering here is to replace government regulation with regulation via insurance. [/quote]

Do insure companies have standing armies?

Do you have to emigrate if you are no longer happy with your services?

So “all he wants to do” is freeing companies from stupid regulations they cannot escape from?

That is quite a lot, actually.

How about this. I think it would be a useful exercise:
Make a solid case for profitability for an insurance company to underwrite off-shore drilling platforms. Use real numbers and real risk charts… saying “a free market brings much more wealth” is just hyperbole.

No, that is a logical necessity given the subjective, ordinal nature of wealth.

[/quote]

No offense, Orion, but you are conflating multiple issues here. We were talking specifically about regulatory mechanisms. In John’s argument, he offered that preemptive regulation should be the domain of insurance companies. I posit that insurance companies are infinitely more risk averse than governments as a function of their need to be profitable. Consequently, it is likely (and born out in current contracts) that they would be multiplicative degrees more odious in their requirements that government could ever be.

Insurance is really quite a ridiculous idea, when it comes down to it. As soon as the potential downsides get to a certain point, there is no way for insurance to work as a business model. For example, there is no way that an insurance company could underwrite off-shore drilling platforms, because the cost of doing that business is so great that no oil company could ever afford it.

Like I said, go ahead and try to prove that it could be done profitably. If you can’t all you’re offering is hyperbole… certainly not a substantive argument. [/quote]

There are insurers for insurers, for example the Muenchner Rueck.

So yes, they can insure undertakings of that magnitude.

Also, if they are a little pesky, good for them, as long as they do it in a somewhat cost efficient manner.

Governments know no such concerns.

[swoleupinya]

[quote]orion wrote:

[quote]swoleupinya wrote:

[quote]orion wrote:

[quote]swoleupinya wrote:

The only thing you are offering here is to replace government regulation with regulation via insurance. [/quote]

Do insure companies have standing armies?

Do you have to emigrate if you are no longer happy with your services?

So “all he wants to do” is freeing companies from stupid regulations they cannot escape from?

That is quite a lot, actually.

How about this. I think it would be a useful exercise:
Make a solid case for profitability for an insurance company to underwrite off-shore drilling platforms. Use real numbers and real risk charts… saying “a free market brings much more wealth” is just hyperbole.

No, that is a logical necessity given the subjective, ordinal nature of wealth.

[/quote]

No offense, Orion, but you are conflating multiple issues here. We were talking specifically about regulatory mechanisms. In John’s argument, he offered that preemptive regulation should be the domain of insurance companies. I posit that insurance companies are infinitely more risk averse than governments as a function of their need to be profitable. Consequently, it is likely (and born out in current contracts) that they would be multiplicative degrees more odious in their requirements that government could ever be.

Insurance is really quite a ridiculous idea, when it comes down to it. As soon as the potential downsides get to a certain point, there is no way for insurance to work as a business model. For example, there is no way that an insurance company could underwrite off-shore drilling platforms, because the cost of doing that business is so great that no oil company could ever afford it.

Like I said, go ahead and try to prove that it could be done profitably. If you can’t all you’re offering is hyperbole… certainly not a substantive argument. [/quote]

There are insurers for insurers, for example the Muenchner Rueck.

So yes, they can insure undertakings of that magnitude.

Also, if they are a little pesky, good for them, as long as they do it in a somewhat cost efficient manner.

Governments know no such concerns.

[/quote]

Sorry… but, reinsurers of the magnitude of Muencher Rueck can’t exist outside of some form of societal safety net.

Witness AIG.

Incidentally, you just agreed in your above post that further regulation would be a good thing, as long as it’s not in the form of a government. So, how do you propose to enforce this type of regulation? By requiring operators to carry insurance?

[thecage41]

[quote]John S. wrote:

A pefect market is what I call a free market. Any government intervention is against free market, thus making it not free.
[/quote]

Did you read the link? That’s not what a perfect market is, you just redefined the term.

And to your point about labels, If people wanted it a company would come along and start using it. People would buy that product and eventually the rest would catch on.

Sure, I agree with you in theory, but in practice most people do not know about perfect market theory :). Also, the accuracy of the government needs to be enforced (most likely by the government).

[orion]

[quote]swoleupinya wrote:

[quote]orion wrote:

[quote]swoleupinya wrote:

[quote]orion wrote:

[quote]swoleupinya wrote:

[quote]orion wrote:

[quote]makkun wrote:

[quote]Sloth wrote:

[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. [/quote]

Of course they do. And yes, they should. [/quote]

Agreed.

Makkun[/quote]

Laughable.

What exact obligation do they have, who defines those obligations, how are they enforced and most importantly, how are we going to prevent people from imposing their moral values once again with force when the term itself is exceedingly vague and allows for practically everything?

[/quote]

Answers:

1. No business operates without the use of the commonwealth (roads, postal service, fire service, police, army, etc…). So, at a bare minimum, the owe the country for that use.

2. In the US at least, representative democracy defines those obligations.

3. See above.

4. See above.

[/quote]

1. Sure, and they should pay for that, preferably on a pay as you go basis.

2-4. Oh I see. We are doomed arent we?

[/quote]

1. It’s called taxation. I’m glad we agree.

[/quote]

On taxation for the police, army and if absolutely necessary firemen and roads yes.

But this is pretty much all the obligation they have.

[/quote]

How do you ensure that the roads are maintained and that the police, army and firemen do their job well?[/quote]

How do you insure it now?

In fact, the more a government does, the less influence you have as a voter.

If a government stays small, concerned citizens actually have a chance to keep an eye on it.

[orion]

[quote]swoleupinya wrote:

[quote]orion wrote:

[quote]swoleupinya wrote:

[quote]orion wrote:

[quote]swoleupinya wrote:

The only thing you are offering here is to replace government regulation with regulation via insurance. [/quote]

Do insure companies have standing armies?

Do you have to emigrate if you are no longer happy with your services?

So “all he wants to do” is freeing companies from stupid regulations they cannot escape from?

That is quite a lot, actually.

How about this. I think it would be a useful exercise:
Make a solid case for profitability for an insurance company to underwrite off-shore drilling platforms. Use real numbers and real risk charts… saying “a free market brings much more wealth” is just hyperbole.

No, that is a logical necessity given the subjective, ordinal nature of wealth.

[/quote]

No offense, Orion, but you are conflating multiple issues here. We were talking specifically about regulatory mechanisms. In John’s argument, he offered that preemptive regulation should be the domain of insurance companies. I posit that insurance companies are infinitely more risk averse than governments as a function of their need to be profitable. Consequently, it is likely (and born out in current contracts) that they would be multiplicative degrees more odious in their requirements that government could ever be.

Insurance is really quite a ridiculous idea, when it comes down to it. As soon as the potential downsides get to a certain point, there is no way for insurance to work as a business model. For example, there is no way that an insurance company could underwrite off-shore drilling platforms, because the cost of doing that business is so great that no oil company could ever afford it.

Like I said, go ahead and try to prove that it could be done profitably. If you can’t all you’re offering is hyperbole… certainly not a substantive argument. [/quote]

There are insurers for insurers, for example the Muenchner Rueck.

So yes, they can insure undertakings of that magnitude.

Also, if they are a little pesky, good for them, as long as they do it in a somewhat cost efficient manner.

Governments know no such concerns.

[/quote]

Sorry… but, reinsurers of the magnitude of Muencher Rueck can’t exist outside of some form of societal safety net.

Witness AIG.

Incidentally, you just agreed in your above post that further regulation would be a good thing, as long as it’s not in the form of a government. So, how do you propose to enforce this type of regulation? By requiring operators to carry insurance? [/quote]

Interesting assumption, I do not agree with it.

AIG failed as a company and should have been liquitated. Now that constitutes a “failure” of the marketplace if you will, but unlike government companioes that fail do not extort even more money out of you to cover their asses.

And yes, I would require them to carry insurance, just like I would require everyone who operates a car to carry insurance.

[swoleupinya]

[quote]orion wrote:

[quote]swoleupinya wrote:

[quote]orion wrote:

[quote]swoleupinya wrote:

[quote]orion wrote:

[quote]swoleupinya wrote:

The only thing you are offering here is to replace government regulation with regulation via insurance. [/quote]

Do insure companies have standing armies?

Do you have to emigrate if you are no longer happy with your services?

So “all he wants to do” is freeing companies from stupid regulations they cannot escape from?

That is quite a lot, actually.

How about this. I think it would be a useful exercise:
Make a solid case for profitability for an insurance company to underwrite off-shore drilling platforms. Use real numbers and real risk charts… saying “a free market brings much more wealth” is just hyperbole.

No, that is a logical necessity given the subjective, ordinal nature of wealth.

[/quote]

No offense, Orion, but you are conflating multiple issues here. We were talking specifically about regulatory mechanisms. In John’s argument, he offered that preemptive regulation should be the domain of insurance companies. I posit that insurance companies are infinitely more risk averse than governments as a function of their need to be profitable. Consequently, it is likely (and born out in current contracts) that they would be multiplicative degrees more odious in their requirements that government could ever be.

Insurance is really quite a ridiculous idea, when it comes down to it. As soon as the potential downsides get to a certain point, there is no way for insurance to work as a business model. For example, there is no way that an insurance company could underwrite off-shore drilling platforms, because the cost of doing that business is so great that no oil company could ever afford it.

Like I said, go ahead and try to prove that it could be done profitably. If you can’t all you’re offering is hyperbole… certainly not a substantive argument. [/quote]

There are insurers for insurers, for example the Muenchner Rueck.

So yes, they can insure undertakings of that magnitude.

Also, if they are a little pesky, good for them, as long as they do it in a somewhat cost efficient manner.

Governments know no such concerns.

[/quote]

Sorry… but, reinsurers of the magnitude of Muencher Rueck can’t exist outside of some form of societal safety net.

Witness AIG.

Incidentally, you just agreed in your above post that further regulation would be a good thing, as long as it’s not in the form of a government. So, how do you propose to enforce this type of regulation? By requiring operators to carry insurance? [/quote]

Interesting assumption, I do not agree with it.

AIG failed as a company and should have been liquitated. Now that constitutes a “failure” of the marketplace if you will, but unlike government companioes that fail do not extort even more money out of you to cover their asses.

And yes, I would require them to carry insurance, just like I would require everyone who operates a car to carry insurance.

[/quote]

There was nothing to “liquidate” in AIG. It had no liquidity… that’s why it failed. What we were left with as a society and an economy was a massive amount of unsecured debt that could no longer be insured, that was subsequently creating an unprecedented drain on liquidity across all of our markets.

If you want, we could have a looooooonnnnnng discussion about the impetus, origins, etc… of their mistakes. I have a long 3 days at work ahead of me, though… so, I won’t be able to really go into any depth until at the earliest Tuesday.

You should also consider that in requiring that operators of off-shore drilling wells to carry insurance, you are contracting with a third party to provide regulation. I hear this assertion often from the more orthodox free-market types often, and it blows my mind. This type of arrangement has ALWAYS served to expand bureaucracy… simply because you are introducing a profit-based bureaucracy into the mix which then has to be monitored to some degree by the government bureaucracy. This can come in a number of forms; preemptive monitoring, criminal, legal, etc… no matter how you slice it, though, you are going to be interfacing two or more entirely different animals, and that ALWAYS ends up causing expansion of personnel.

To put it another way; if two companies were considering a merger, an they realized that their motivations and consequently their structures were as different as those of a government and a private company, the talks would probably stop there. If the goal is to create efficiencies, you have to start with similarities.

[NealRaymond2]

[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]

Generally, I would say a stockholder-owned business is morally obligated to deal “justly” with society at large, customers, employees, and neighbors, while seeking to maximize value for stockholders within those limitations. I am certain that a business owes it to society to refrain from defrauding and stealing, even in a hypothetical situation where it could get away with it to the benefit of its stockholders. I would say a business is morally obligated to avoid excessive pollution, and to compensate society in some way for any “necessary” or “reasonable” pollution, even if it could get away with not doing so to the benefit of its stockholders.

I am not so sure regarding betterment of society in ways that go beyond justice, while reducing value for stockholders. I understand that corporate charitable giving and corporate sponsorships are necessary for public relations and employee morale, which both help increase stockholder value. But beyond that, I am inclined to think that it should be up to the stockholders to make charitable donations of their own choosing, and not have the corporation decide for them.

There are some areas that seem somewhat “gray”. What about making a product that does not injure anyone but does not last as long as it could, vs. making a product that lasts longer but is not as profitable? One cannot just say that products should be made to last as long as possible no matter the cost, because hypothetically additional layers of slowness and redundant inspection can be added to any process with ever-diminishing increases in quality in exchange for exponentially increasing costs. On the other hand, I don’t think I would fault a corporation’s management for making a product that is half-way decent even though they could have provided a little more value for the stockholders by turning out junk. In some “gray” areas (quality vs. cost is one example) I think perhaps the moral obligation of management is to balance interests, with a bias in favor of the stockholders.

[Tiribulus]

As with a lot of things, here there is a divide between what I’d like to see someone do and whether I’d like the government to see that they do it.