Mage - great post! It seems the arguing is over unethical individuals rather than an economic system.
You can’t “extract” the unethical individuals and claim they are the problem instead of the system.
There will always be unethical individuals and we need to realize this. If our systems don’t handle this reality, that is a deficiency of the system.
Unethical people are not going to magically go away so the system can be perfect.
[quote]vroom wrote:
You can’t “extract” the unethical individuals and claim they are the problem instead of the system. [/quote]
–Why not? Can’t we extract cancer cells and claim they are they problem instead of the human system?
[quote]vroom wrote:
There will always be unethical individuals and we need to realize this. If our systems don’t handle this reality, that is a deficiency of the system. [/quote]
–It does, by pointing them out and removing them from positions of power. Stockholders will not stand for it. Does it happen every time? No.
[quote]vroom wrote:
Unethical people are not going to magically go away so the system can be perfect. [/quote]
–It’s not magic. It’s a product of a good managerial system. And the system is not perfect. Nothing is perfect, but with experience and learning from mistakes, it can be made better.
Iago, you are talking about people in a position of power taking advantage of their power.
This is not something you can simply catch and eliminate. People always have found ways to circumvent the system.
People, some anyway, are bad. Others are simply unwise. Others are lazy. Others are stupid. Expecting to find and/or remove them all is very wishful thinking.
You can’t simply cherry pick the type of people that a method of societal organization must be able to handle. It must be able to handle the behavior of people.
Our system is pretty good. There are problems when the watchers themselves get corrupted, but I’m not trying to condemn it in any way specifically.
My point is that we know these things about human nature. However, we tend to stick our heads up our asses and pretend that we are noble in some way. Then we build organizations and societies based on this noble view of ourselves.
Surprise, surprise, we aren’t so noble and these systems get abused. When this happens enough, the people that aren’t getting the benefit of the abuse get pissed off and reject the system.
Woohoo for the right to bear arms!
[quote]vroom wrote:
Iago, you are talking about people in a position of power taking advantage of their power.
[/quote]
–No I’m not. Maybe I’m failing to get my point across. I’m describing a way of doing business that is fair and honest, promotes people with integrity, places people in positions that they love, and is able to listen to their customers to give them what they want. The best examples of this are Jack Welch’s GE (he’s retired now) and Richard Branson’s Virgin.
[quote]vroom wrote:
People, some anyway, are bad. Others are simply unwise. Others are lazy. Others are stupid. Expecting to find and/or remove them all is very wishful thinking.
[/quote]
–You can’t remove them all. In the real world models I’m describing, these people do not get ahead and the business system will eventually get rid of them. You can not hide from yearly reviews and 360s. Good companies with sound values will get rid of them. None of this is pie-in-the-sky, this happens.
[quote]vroom wrote:
You can’t simply cherry pick the type of people that a method of societal organization must be able to handle. It must be able to handle the behavior of people.
[/quote]
–Yes you can. Companies have cultures. The head of Human Resources needs to have as much authority as the CFO. A “type” of person is hired to fit in with the companies culture and values. It doesn’t mean that the new hire won’t try to cheat along the way, but that person will not get ahead in an environment of openness.
Managerial techniques have shifted dramatically since the tech boom. In companies that want to survive, walls have come down and a culture of openness and support has blossomed. Coaches are hired to support new managers and turn them into respected leaders. Yearly seminars are held to develop frankness and insurance of career paths.
The latest trend, one which I love, is business owners becoming friends with the comeptition. The idea is more can be accomplished together than apart. That’s what I’m talking about.
[quote]The Mage wrote:
First of all I see in your discussion a belief that business people are inherently evil. That to make money is inherently evil. Forgive me but where does this come from?[/quote]
No, I do not believe that. I believe that there are many people that are able to do morally reprehensible things in order to make (more) money.
Now, since you are a Capitalist, I don’t expect you to care in that way about other people; after all, Capitalists strive for self-interest, believing that is ultimately for the best – so I believe that the reason you are arguing is because you feel that I’m implying you are evil because you’re a Capitalist. Worry not: I’m not implying such a thing. I don’t believe you are evil, I just belive you’re deluding yourself. 
My point is that even though you may argue that Capitalism doesn’t necessarily incite greed, the problem is – that many humans are greedy, and ignorant, and will do things that ultimately hurt them – in any political system.
It’s our nature. We are self-destructive. If we weren’t, how do you explain people smoking? Or going to fast-food restaurants? Or watching TV rather than lifting weights?
It’s the job of a government to effectively prevent that greediness and ignorance from hurting other people. And it’s the job of churches to prevent that greediness and ignorance from hurting ourselves.
Unfortunately, both seem to be doing a pretty lousy job at it (and interfering with each other). The incentives – or disincentives – they provide to prevent that behavior are not working. People just enter denial-behaviors: “I’ll lie/steal/kill and won’t get caught”; “I’ll sin but I’ll still be saved”.
For example, saying stuff in the Bible like in 1 Timothy 6:10 and Proverbs 11:28 – that the love of money is evil – and that the righteous, not the rich, thrive, doesn?t seem to make any difference, because people somehow seem to believe that Capitalism doesn?t create a money-loving environment and self-righteousness (that Capitalism believe in) and righteousness are the same thing. Even really clear stuff, like saying that “Keep your lives free from the love of money and be content with what you have” (Hebrews 13:5) seems to not be enough. People will still do what it takes to get that promotion!
[quote]The Mage wrote:
Now I notice you referring to capitalism as “The accumulation of the means of production” -ok, first of all this sounds very socialist, but to continue- “as property into a few hands…”
Means of production, and into the hands of few. This is not any definition I know, unless it is from some socialist rag.[/quote]
This definition is basically based on the observation of the distribution of the means of production of wealth in capitalist countries. In EVERY SINGLE CAPITALIST COUNTRY IN THE WORLD (with NO exception) at least 80% of the means of production of wealth is in the hands of less than 20% of the population. In the US it’s actually more acute than that – it’s 90% in the hands of 10%.
Am I implying there’s anything “evil” with that? Nope. But it’s reality, and you have to accept it as such – even if you don’t like how it sounds.
[quote]The Mage wrote:
Now I have read before where you seem to be against competition, instead being for collaboration, assuming that people will work together in harmony. While I understand this wonderful philosophy, it does not work. That should be obvious with all the money going into college sports.[/quote]
You’re contradicting yourself. You’re saying that, on one hand, that business owners will do the right thing (as in: be righteous) because they’re smart enough to realize it’s in their best interest, but the worker bees are surely too stupid to realize collaboration – rather than competition – is in their best interest too, and will blindly compete amongst themselves anyway?
If that is not right-wing elitism, I don’t know what it is.
Read this, please (it’s compulsory reading for my students, by the way):
http://www.gsb.stanford.edu/community/bmag/sbsm9911/feature_contest.html
Now, I never assumed “that people will work together in harmony”. As the article explains, it’s not easy to create an incentive for them to do so, especially in a Capitalist environment, which is intrinsically competitive. But a good manager can create micro-environments where the incentive to collaborate is strong and obvious enough that they will.
[quote]The Mage wrote:
Actually OPEC has a lot of countries collaborating on keeping the price of oil high. But this is where competition can come in and help.[/quote]
Sure. But I never said that competition was bad between companies. On the contrary. I am, however, for collaboration between workers of the same company.
Much like lions, or ants, or bees, or any species that lives in a society: they collaborate within their family / colony, but compete with others outside.
[quote]The Mage wrote:
If people can get off their duffs, and get things like ethanol and biodiesel going, they would have real competition, and prices will slide, benefiting the consumer.[/quote]
Have you realized that the ethanol and biodiesel industries are in the hands of the same oil companies, as will hydrogen? Just go to, say, www.shell.com and see for yourself.
Wake up and smell the coffee: Oil Prices will NEVER slide, unless the Government establishes them. They will, in fact, keep increaseing until there’s no more Oil to sell.
[quote]The Mage wrote:
I do dislike the oil cartel, as it is not very capitalistic. It might seem like capitalism, but these are countries deciding on how much they should produce to manipulate the markets.[/quote]
Is it you, Ayn Rand?
Now, tell me, what can break the Cartel? Is there anything within capitalist theories that can prevent something like this from happening?
Note that I know, from the Rules of Economy, that Capitalism does provide an incentive to break Cartels; however, Game Theory proves that incentive is not enough, because it is within our human nature to create Cartels.
[quote]The Mage wrote:
And the pharmaceutical companies you mentioned. The problem with them is actually government involvement which is very anti-consumer. Drugs are actually going up in price instead of going down. The FDA doesn’t work for us, they work for the drug companies. Again a sign of government regulations hurting the consumer. Along with the different rules for refining oil for every freekin state.[/quote]
Do you really think that if the government wasn’t involved, the prices would fall? How so? Why would they?
[quote]The Mage wrote:
Now if you really want to know about ethics in business, here is a good article:[/quote]
I am NOT arguing against the fact that righteousness is best for business, and for any society for that matter. On the contrary – I know, as a scientific fact, that it does. What I’m saying is that most people are too ignorant and too greedy to realize that – much like they are too ignorant to stop stuffing themselves and their kids with junk food – and, hence, a successful political system has to be able to create an environment that is better at punishing greed.
Even if Capitalism does not create an incentive for greed, it ALLOWS it. By enshrining self-interest, it also ALLOWS wealth to end up being very poorly distributed, which inevitably creates implosions in the economy, taking many people with them.
That’s my problem.
(On a moral level, I’d like to hear where all the Christians read in the Bible that enshrining self-interest – the foundation of Capitalism – was morally acceptable in any circumstances or for any self-righteous reason, but that’s another story)
[quote]IagoMB wrote:
–No I’m not. Maybe I’m failing to get my point across. I’m describing a way of doing business that is fair and honest, promotes people with integrity, places people in positions that they love, and is able to listen to their customers to give them what they want. The best examples of this are Jack Welch’s GE (he’s retired now) and Richard Branson’s Virgin.[/quote]
I’ve worked – and know people who work – in several of those companies that have “fair and honest” CEOs, and theoretically promote people with integrity, places people in positions that they love, and are able to listen to their customers to give them what they want. You know what? There’s so much backstabing and lying and cheating going on in the ranks of those companies as everywhere else. It’s just that CEOs have no idea what’s going on.
[quote]IagoMB wrote:
–You can’t remove them all. In the real world models I’m describing, these people do not get ahead and the business system will eventually get rid of them. You can not hide from yearly reviews and 360s. Good companies with sound values will get rid of them. None of this is pie-in-the-sky, this happens.[/quote]
I read a recent survey that said there isn’t a SINGLE company native to the Silicon Valley that has 360s. NOT A SINGLE one.
I’ve known several people that were promoted in many of those companies by lying and cheating. And they got away with it for YEARS. They’re still there. I also know of several managers that protect themselves by firing everybody that is not loyal to them nad then only hiring people that they know and are loyal and creating a circle of confidence. So when their managers go to the peers to ask for feedback, it’s all rosy, independently of all the stuff they do in the back.
I’ve seen many “alliances in cheating” being formed over the years, and people getting away with them for the longest of times.
Even when they do get caught, it takes so long (usually years), that it does not prevent them from having done a lot of damage to the company and the people who worked for them during a period of time.
[quote]IagoMB wrote:
–Yes you can. Companies have cultures. The head of Human Resources needs to have as much authority as the CFO. A “type” of person is hired to fit in with the companies culture and values. It doesn’t mean that the new hire won’t try to cheat along the way, but that person will not get ahead in an environment of openness. [/quote]
In every single company I know people from, the Head of HR is essentially somebody’s b*tch. Truly (i.e., somebody that slept with somebody to become the head of HR) or figuratively (they will do whatever the department heads ask him/her to do). And because Heads of HR departments have so much dirty laundry on so many people, they NEVER get fired.
[quote]IagoMB wrote:
Managerial techniques have shifted dramatically since the tech boom. In companies that want to survive, walls have come down and a culture of openness and support has blossomed. Coaches are hired to support new managers and turn them into respected leaders. Yearly seminars are held to develop frankness and insurance of career paths. [/quote]
Interesting. I’ve observed the exact opposite over here in the Valley. Companies locked down, and managers are essentially unreacheable Gods that are Always Right.
They also treat their employees like crap, and expect them to smile while they work 60 hours a week for next to nothing (the average starting salary for an IT worker in the Valley plummeted from $80k to $35k, while the house prices increased 20% year over year. So people have two, three, sometimes four jobs and gave up on things like weekends, vacation or even sleeping more than 4 hours a night).
[quote]IagoMB wrote:
The latest trend, one which I love, is business owners becoming friends with the comeptition. The idea is more can be accomplished together than apart. That’s what I’m talking about. [/quote]
What industry are you in? I want that piece of heaven too!
Iago,
I will happily admit that it does certainly happen. People will set up companies in such a way as to root out these issues.
However, this isn’t inherent in the system, it is just luck. Good companies will turn bad and bad companies will turn good. It just takes time and depends on the culture and people involved.
If a man or woman of quality is running the company and recruits other such people of quality, then we win. If someone gets to the top, the prefers to hear the advice of yes men, or has worse qualities, the poison will pervade.
The alternative is to dictate how companies must be run. When you start going down that road too far, you end with a system other than free market capitalism, don’t you?
[quote] hspder wrote:
I’ve worked – and know people who work – in several of those companies that have “fair and honest” CEOs, and theoretically promote people with integrity, places people in positions that they love, and are able to listen to their customers to give them what they want. You know what? There’s so much backstabing and lying and cheating going on in the ranks of those companies as everywhere else. It’s just that CEOs have no idea what’s going on.
[/quote]
–If the CEO doesn’t know what’s going on then the managerial system is not open and he or she is not building leaders from within. That’s not capitalism fault. That’s the fault of an improperly executed business model. Leaders must be diligent and spark enthusiasm.
[quote] hspder wrote:
I read a recent survey that said there isn’t a SINGLE company native to the Silicon Valley that has 360s. NOT A SINGLE one. [/quote]
– I would not work for a company that did not implement a 360. It’s clear sign of no integrity. The same thing with the HR example you had. If there is no accountability, run for the hills.
[quote] hspder wrote:
Interesting. I’ve observed the exact opposite over here in the Valley. Companies locked down, and managers are essentially unreacheable Gods that are Always Right. [/quote]
–Not here in NYC. Maybe because NYC is the business capital of the world? I’m not trying to sound condescending; I think it is a reason.
[quote] hspder wrote:
What industry are you in? I want that piece of heaven too! [/quote]
–Business and Executive Coaching. It is heaven on earth. It’s called capitalism. It’s allowed me, an idealist, to turn my dreams and the dreams of others into reality. We’ve been able to help entrepreneurs build strong businesses with sound missions and values, promote people with integrity, create environments of openness where everyone has a voice, where people are held accountable, and internal competition is encouraged and rewarded since that will bring out the best results in everyone. Will every business we help become a shining example of virtue? No, the problems you described will also show up someplace, but that is not the fault of capitalism.
[quote]vroom wrote:
However, this isn’t inherent in the system, it is just luck. Good companies will turn bad and bad companies will turn good. It just takes time and depends on the culture and people involved.
The alternative is to dictate how companies must be run. When you start going down that road too far, you end with a system other than free market capitalism, don’t you?[/quote]
Amen!
Seeing that we share common experiences in the “business world”, and knowing that those experiences were in the same industry (IT), I can’t help but think that IT is particularly prone to “badness”.
Now, what is definitely unique about IT is that it’s the closest thing to pure, “laisez-faire”, capitalism there is: there are no unions, the market is essentially deregulated, there are no Cartels and there is INTENSE competition.
So, is it that much of a stretch thinking that the purest capitalism is (i.e. the less socialist, i.e., the more “laisez-faire” is capitalism), the more it is prone to allowing bad / unethical behaviors to breed?
[quote]IagoMB wrote:
– I would not work for a company that did not implement a 360. It’s clear sign of no integrity. The same thing with the HR example you had. If there is no accountability, run for the hills.[/quote]
Do you really think people have that kind of a choice when the job market in IT is the way it is? Not everybody can move; not everybody can go back to school and move out of IT. So do you really always have the option of refusing to work for a company that does not do 360s?
[quote]IagoMB wrote:
–Not here in NYC. Maybe because NYC is the business capital of the world? I’m not trying to sound condescending; I think it is a reason. [/quote]
I won’t argue with that; with my own experience with NY-native MBA students, I’ve seen that there is clearly a much better sense of business ethics in the East Coast than in the West Coast. But you can’t possibly expect that everybody moves there, can you?
[quote]IagoMB wrote:
–Business and Executive Coaching. It is heaven on earth. It’s called capitalism.
[/quote]
I’m sorry to say this, but it has nothing to do with capitalism – you could as easily be a Government advisor in a Socialist country! You’re an intelligent person with the right ideals and the right mindset about how to coach and manage people; that can be done in any political environment. I’m sure you’d find people willing to listen to you in The Netherlands or in Germany as easily as you do here. Maybe even more.
[quote]IagoMB wrote:
Will every business we help become a shining example of virtue? No, the problems you described will also show up someplace, but that is not the fault of capitalism. [/quote]
No, it’s not – it’s the fault of human nature; my point is that capitalism does a lousy job of preventing those problems.
It’s more then luck. It’s education, and understanding that capitalism rewards companies with integrity by allowing them to create the most prosperity for the owners, employees, customers and the economy at whole. BTW, luck is just being prepared when the opportunity comes.
[quote] hspder wrote:
Do you really think people have that kind of a choice when the job market in IT is the way it is? Not everybody can move; not everybody can go back to school and move out of IT. So do you really always have the option of refusing to work for a company that does not do 360s?
[/quote]
–Then that is a problem of creating a job market. The more companies run with integrity, the faster the growth and the better the market. Also, why everyone? Not everyone can win, and it is the fault of those business that don’t do what I describe as well as individuals not motivated to succeed.
[quote] hspder wrote:
I won’t argue with that; with my own experience with NY-native MBA students, I’ve seen that there is clearly a much better sense of business ethics in the East Coast than in the West Coast. But you can’t possibly expect that everybody moves there, can you? [/quote]
Nope, but I sure can expect the values here to spread there.
[quote] hspder wrote:
No, it’s not – it’s the fault of human nature; my point is that capitalism does a lousy job of preventing those problems. [/quote]
– But the right managerial system placed inside a competive capitalistic economy can bring out the best in individuals.
Iago,
Sometimes I am the one receiving the criticism of being an ivory tower idealist, but happily I get to cast that epithet on you today.
[quote]lothario1132 wrote:
The last time I checked, government is made up of folks just like you and me. [/quote]
???
are you an affluent W.A.S.P.???
did you/your daddy go to an ivy league school?
are you exempt from fighting in wars?
I know i dont meet those criteria.
(yes, i realize there are many exceptions but for the most part that is who runs this great land of ours)
[quote]IagoMB wrote:
–Then that is a problem of creating a job market. The more companies run with integrity, the faster the growth and the better the market. Also, why everyone? Not everyone can win, and it is the fault of those business that don’t do what I describe as well as individuals not motivated to succeed. [/quote]
So, if you don’t have a rich Sugar Daddy/Momma and hence you cannot afford to spend months – or years – looking for a company with the right values, it’s just that you are not “motivated to succeed”?
Heck, and people complain about John Kerry marrying a rich woman: apparently that’s the way to go! He’s the ideal, “motivated to succeed”, capitalist!
[quote]IagoMB wrote:
– But the right managerial system placed inside a competive capitalistic economy can bring out the best in individuals.[/quote]
Sure! And enough (negative) energy can help create a wormhole that is stable and large enough for me to take an instant trip to the Andromeda Galaxy (M31, pictured above). But you don’t see me packing just yet, do you?
I jumped out of that tower years ago and ran far away to the real world! Everything starts with a vision, an ideal. But what I do and what I’ve seen is very real. This isn’t theory, this is reporting on results. This is the bottom line.
I think the problem is very few people can picture an impossible future for themselves and then make it happen (I don’t mean you, I mean most business people). I look to help managers to become great leaders and businesses to prosper.
I don’t understand your last post.
Too many thinkers - not enough doers…mmm…dewars…mmm…
Iago,
I have no problem with what you do or what you argue, I just don’t believe it is inherent within capitalism.
Capitalism certainly allows it, and it is theoretical economics to assume it should be preferred, but as has been mentioned over and over, people are not good at doing the theoretically appropriate behavior in these situations.
So, of course, promote ethics and proper business practices and the results that they can bring, but leave out the assumption that they are inherent in our system. Some companies look for these systems and others do not.
It always has been so and unless we get into a command economy it will always be so.
Especially given that so many of our companies are in fact fairly small and unprofessional. The things you talk about really only apply to large corporations – where you the income to hire and train the best.
Joe Schmo down the street running the local Subway or McDonalds does not give a rats ass about your theories. Neither do his employees.
Guess how much of the economy these mom and pop companies and franchises comprise?