The Business Ethics Blog

I’ll put this on the table as a fundamental ethical principle for commerce:

If your business model relies upon customers not understanding your business model, your business model is not an ethical one.

We might justify this principle in at least a couple different ways. We could work from first principles, and say that making sure your customers aren’t deceived goes along with basic standards of respect for other human beings. A decent company wants its customers to benefit, and thinks it has genuine value to offer them. Or we could point out that information is essential to the functioning of markets, and that the moral underpinning of markets requires that market transactions at least approach the ideal of full information for all parties.

Ponzi schemes are the extreme example: they rely entirely on “customers” (i.e., victims) not knowing that they are part of a Ponzi scheme.

But there are plenty of other, less extreme examples. For instance, when pricing is central to your business model (e.g., positioning yourself as an airline offering low-cost flights) then deceiving people about the true cost of your product essentially means hoping they don’t understand your business model, which is essentially as follows: “Advertise low prices but charge high prices by adding hidden fees.”

Here are a few current headlines about companies that seem to violate this principle:

• Subprime loan websites ‘mislead customers’
• New rules require airline ads to include all costs
• Consumers Can’t Sue Credit Repair Companies
• BBB Warns Consumers About Puzzle Contests From Opportunities Unlimited Publications Of Kansas City

Note that this principle doesn’t stipulate that all (or even any) customers actually understand your business model. (There are lots of reputable companies I that I deal with every day without having any real clue what their business model is.) The principle only says that your business model can’t rely upon people not understanding. If you’re relying on people not to understand, that means you essentially have nothing of genuine value to offer them in the first place.

And for that reason, it strikes me that deception about one’s business model is even more egregious than other kinds of deception in business.

Who is responsible for a consumer’s subconscious and erroneous conclusions about a particular product? What if a manufacturer honestly and accurately says “our product does X”, and consumers mistakenly believe, as a result, that the product also does Y?

Case in point: a study was recently reported, indicating that consumers are more likely to perceive chocolate as low in calories when they are told that it is fairly-traded. This is a great example of the “halo effect,” according to which humans have a tendency to attribute a variety of unrelated positive attributes to any person or thing that they perceive in a positive light to begin with.

Now, it’s clear that consumers are being led astray, here, though presumably that deception is not the intention of the sellers of fair-trade chocolate. But, on the other hand, whatever their intentions in the past, the sellers of fair-trade chocolate now know that consumers are susceptible to this error. Do they now have a responsibility to disabuse consumers of this particular misconception about chocolate?

Now hold on, you say. Companies that label and advertise their products accurately and honestly can’t be responsible for every crazy, false idea that enters a customer’s head. Surely companies can assume a degree of common sense; and surely anyone with a bit of common sense knows that there’s no link between fair-trade and calories.

(It’s worth noting that companies sometimes do see fit to warn consumers about matters that ought to be common sense: “Don’t use hairdryer in tub;” “Results are not typical;” “Keep knives away from children.” Etc.)

But here’s the problem. The halo effect is a species of cognitive bias, which is the term applied to any of a large number of pervasive, subconscious mental leanings that tend to lead human reasoning astray. When subject to cognitive biases, humans tend to make decisions that are not rational, not in line with their own values and preferences. The point here is that no one is actually saying to themselves, “Gee, this is fair-trade chocolate, and therefore it must be low in calories.” That would be insane. But cognitive biases don’t work by rational processes; indeed, they short-circuit rational thought. That’s the whole problem.

So, do such effects, when discovered, result in new obligations for companies? Maybe. Sometimes. At least, if the effects of a particular cognitive bias are significant. The example cited above is pretty trivial — presumably the effect in question is not sufficiently powerful to send droves of consumers onto chocolate-eating binges. But more serious cases are easy enough to imagine. And surely some bit of responsibility comes with knowledge: companies tend to have sophisticated knowledge about their products, and are more likely than consumers to know when a dangerous bias is in the offing.

But the real challenge — for both companies and consumers — is that these sorts of subconscious effects are legion. And as more and more of them come to light, we’re going to understand better and better just how little we understand our own minds. Bit by bit, whatever is left of the idea that market exchanges occur under conditions of full information is going to evaporate. What that will mean for business ethics is hard to say; but the time to start thinking about it is now.

Canadian’s largest independent chicken-processing company, Maple Lodge foods, was recently slapped with no fewer than 60 criminal charges related to inhumane treatment of chickens in transport.

This is a nice example to use to continue our exploration of the relation between ethics and the law. (Two weeks ago we discussed why what’s legal isn’t always ethical; last week we explored why following the law can be hard and hence breaking the law sometimes ethically forgivable.)

The Maple Lodge case is still before the courts, but let’s make a leap and assume, for sake of argument, that the company’s treatment of its chickens does turn out to be criminal. (I should add that my non-expert sense of things is that these charges are far from making Maple Lodge unique — legal violations seem pretty common in the business of processing animals for food.)

So let’s accept for the sake of argument that ML’s behaviour is criminal. Is it unethical?

I’ll apologize if it strikes you as crazy to ask whether inhumane treatment of animals is unethical, but we can often learn something by asking questions the answers to which seem obvious. There is, on the surface, broad consensus that animals are ethically significant — that they ought not, for example, be abused or tortured — but that consensus papers over an enormous number of differences of opinion with regard to exactly how animals should (and should not) be treated and exactly why.

The ethical basis for the presumption against animal cruelty, as it turns out, is far from clear and far from being a matter of consensus. Is animal cruelty bad because all suffering is bad? Because animals are part of our moral community? Because God made them? Because cruelty to animals engenders cruelty to humans?

And there are indeed respectable philosophical points of view that hold that animals don’t have any (direct) ethical significance at all, though the philosophers who hold such views are often at pains to reconcile those views with common human sympathies. The point here is that it’s not clear that inhumane treatment of animals is unethical per se. It’s clear that all ‘normal’ people feel sympathy for animal suffering, but that’s not the same thing.

The point here is not to pull the rug out from under the idea that hurting animals is unethical. The point is to say that, with regard to particular behaviours, we need to make an argument rather than just attempting to subsume all such behaviours under the general heading of “unethical behaviour.”

There’s another way to get at the ethics of animal welfare, and that’s to point to the general ethical obligation to follow the law.

In a reasonably-well-governed democracy, we all have a basic obligation to obey the law. There are, of course, a few well-understood exceptions. Speeding to get an injured child to the hospital can be ethically justified. And civil disobedience can be ethically OK (or even ethically obligatory) if done right. But such exceptions are rare, and it remains true that most of us should — ethically — follow the law, most of the time. If you disagree with the law, you should try to get it changed; wanton failure to comply isn’t activism, it’s just lawlessness. In a large democracy, there are an enormous number of differences of opinion, and there are always going to be a few laws that you, in particular, don’t really agree with. But you still — generally — need to follow the law. And that goes for corporations, too.

And so there’s a sense in which Maple Lodge’s behaviour may have been unethical, even if we set aside the thorny issue of the moral status of animals, if the company failed in its ethical duty to treat animals as it is legally required to treat them. But of course, that just brings the philosophical question full-circle: laws themselves stand in need of moral justification. And as I argued above, the moral foundation for animal cruelty laws is far from clear. So, question for discussion: in order to justify passing a law, is it enough to have broad social consensus that a business practice is wrong, or do we need to have agreement on the underlying moral principles?

The Globe and Mail reported yesterday that Ontario hospitals are “scrambling” to eliminate executive perks, in the face of new rules stating that compensation practices must be made public. Ontario’s hospitals are funded by tax dollars, and clearly they don’t want to be seen spending those dollars on things the public is likely to find dubious.

A few quick thoughts:

1. To a certain extent, transparency is an alternative to good governance: we the public want access to the details if we worry that the people who are supposed to be taking care of those details aren’t doing a good job of it. Yet the Globe story makes no mention of governance. There are quotations from a couple of board members, but no discussion of what hospital boards do and whether they’ve been doing it well.

2. The comments under the Globe story provide reason (though not necessarily a conclusive reason) against transparency. In particular, many of the comments reveal lack of understanding of what it takes to run a hospital or other major institution, and a general cluelessness about executive perks. (Example: A perk like membership in an exclusive private club might look odd from the outside, but a moment’s reflection should reveal that an executive who is responsible for massive fundraising efforts genuinely needs to be part of the kind of clubs where he or she can network with the right sorts of people.) Of course, if the public has a genuine ‘right to know,’ then that cluelessness is lamentable but not decisive. The public ain’t always right, but it’s always the public.

3. The fact that this story is about taxpayer money makes no difference, ethically. Some people will be aghast at the perks being paid “out of taxpayers’ pockets.” That’s silly. If there’s a good business case for offering perks, there’s a good business case for offering them at a public institution. If there isn’t a good business case, then offering them would be just as much an affront to shareholders as it would be to taxpayers.

4. Beware the perverse effects of transparency. In the the world of corporate (private sector) executive compensation, it’s been suggested that transparency is part of the problem. The worry is that a CEO at one firm sees how much executives at other firms are making, and not surprisingly asks to receive the same or more. And boards, not wanting to publicly declare their own CEO to be “below average”, give in. So transparency fosters a ratcheting effect that is partly responsible for current insane levels of compensation. Will the same happen at hospitals?

5. Currently, it looks like transparency is driving hospitals to eliminate perks. But the more likely long-term effect is that, rather than accepting reduced overall compensation, executives will simply ask for the cash equivalent of the perks they no longer receive. I’m not an expert on compensation, but my intuition says that that would end up costing hospitals (and hence taxpayers) more. Compare: my own contract with the university I work for allows me some benefits that I don’t make use of (and that, hence, the university ends up not paying for). If I demanded the cash value of those benefits instead, it would cost my employer more. So again, we need to return to the question of governance. If institutions are well-governed, then we on the outside shouldn’t sweat the details. If they’re not being well governed, the key question should be why not?

The The FCPA Blog recently published a useful roundup of enforcement actions taken under the US Foreign Corrupt Practices Act during 2011. It’s a fascinating window into what is a huge and fascinating topic, namely law-breaking by or at corporations.

For businesses, following the law doesn’t exhaust ethical responsibilities, but it’s an awfully good start. Most of us probably think that following the law is absolute minimally-decent behaviour for business. You absolutely must follow the law, and a business certainly shouldn’t be praised for achieving that basic minimum, right? But in fact, it’s not always so easy for companies to follow the law.

Part of the problem is that “the law” is not a simple, straightforward thing. Particular laws can be vague or ambiguous. And what counts as legal cannot always just be looked up, in part because so much depends on prosecutorial discretion. Many people have commented on the difficulty of knowing, in advance, what sorts of behaviours prosecutors are going to decide to take a swing at, whether in applying the Foreign Corrupt Practices Act or deciding when CEOs have neglected their duties to shareholders.

The other problem has to do with scale. If you operate a business with 100,000 employees, there’s a pretty high likelihood at any given moment that, despite your best efforts, one of those employees is doing something either illegal or in a legal grey zone. Compare how likely it is to achieve a zero crime rate in a town of 100,000 citizens. Of course, the citizens of a town aren’t part of an authority hierarchy the way that employees of a corporation are, but still you see the problem scale brings.

(Also compare this to the FDA’s food contaminant standards. The fact that there’s an allowable number of rodent hairs for a jar of peanut butter may be disgusting, but it shouldn’t be surprising: it is inconceivable that there could be a large-scale food-production system with zero contaminants.)

Another factor is the number and complexity of laws and regulations. For you & me, the legal rules to follow in our everyday lives are few and simple and minimally disruptive: don’t kill, don’t steal, etc. Not so for many companies. Companies in some industries are subject to perhaps hundreds or thousands of separate legal requirements. Note, for instance, that the full text of the Dodd–Frank Wall Street Reform and Consumer Protection Act is over 2000 pages long.

A final factor worth pointing out is the apparently-criminogenic nature of corporate workplaces. For a range of reasons much more complex than is commonly acknowledged, people seem more willing to break the law at work than they are at home. Among the likely factors are competitive zeal, the desire for career advancement, tunnel vision, and group-think.

The net result of all these factors is that, for a big company, consistently complying with the law is actually a significant achievement. Getting employees consistently to follow the law is in fact a fundamental managerial challenge. The US Federal sentencing guidelines reward companies for even attempting to do a competent job of implementing an ethics and compliance program.

But compliance with the law is unlikely to win a company kudos from very many observers, focused as so many are on the “above-and-beyond” stuff normally associated with Corporate Social Responsibility. But when a particular behaviour is so incredibly difficult, and so incredibly important, what on earth could possibly be more deserving of praise?

It is an indicator of the growing interest in the field of Business Ethics that a number of universities now offer opportunities for students to earn a PhD in the topic.

I often get email from students and professionals looking for advice on how and where to study ethics at the graduate level. I point out that there are two main ways to get a PhD in Business Ethics. One traditional way is to do a PhD in Philosophy like I did — Philosophy departments are the traditional home of ethics scholarship at universities — and focus on ethical issues in business. The other way is to find a Business school that offers either a PhD program specifically in Ethics, or one with a PhD program that is at least open to students who wish to specialize in ethics.

For students with a background in Philosophy, doing a Philosophy PhD is the obvious route [though not necessarily best route*], and there are literally dozens if not hundreds of Philosophy departments where you could do a PhD in Business Ethics — all that’s required, really, is a willing and qualified supervisor. But this route is typically only open to students with a background (at least an undergraduate degree, and preferably a Master’s degree) in Philosophy.

The situation is less clear for students with a background in Business — B-school programs are out there, but they’re harder to find. So I’ve done a bit of digging and prepared the following list.

Caveats:
The following information was gathered fairly casually by word-of-mouth. No guarantees, and no endorsement is implied. Please contact the directors of particular programs for further details.

Business School PhD Programs in Business Ethics:

In no particular order…

• Rutgers Business School (my pal Miguel Alzola, who now teaches at Fordham, got his PhD there, under the direction of Ed Hartman.)
• Wharton (at UPenn) has a PhD program in Ethics and Legal Studies
• The PhD program at the Darden School of Business lists ethics among the areas on which students can focus.
• The University of Groningen (in the Netherlands) doesn’t have a “program” in business ethics, but I’m told that both the Faculty of Philosophy and the Faculty of Economics and Business welcome applications from students interested in doing research in business ethics.
• Benedictine University has a Doctor of Philosophy/Doctor of Business Administration (Ph.D./D.B.A.) Program in Values-Driven Leadership
• Penn State: Ph.D. in Business Administration – Management and Organization
• The PhD program in Organizational Behaviour at Utah has several faculty members who specialize in ethics.
• PhD program at the Schulich School of Business (where my friends Andrew Crane and Dirk Matten teach) encourages work in Ethics and CSR.
• Students in the Ph.D. program in business at the University of Kansas can study topics in business ethics via the program’s Organizational Behavior concentration.
• Students at Nottingham University Business School can do a Phd in CSR.

If you know of programs that should be added to the list, email me.

For additional perspective, you can also find out which business schools take ethics seriously by looking at the “Beyond Grey Pinstripes” rankings — but not all of the schools listed there will have PhD programs.

(Note: This is an updating of the list I did back in 2008, based on an informal survey of colleagues, of PhD Programs in Business Ethics. The information there may still prove useful, though I haven’t been able to verify that all the schools listed there still allow or encourage PhD work in ethics.)

——
Addendum: I’m told that people have recently done ethics-related PhD’s at Michigan, Maryland, and Central Florida. I had originally omitted those schools because their PhD programs make no specific mention of ethics.
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*Addendum 2: A reader has rightly pointed out to me that those with an undergraduate or MA in philosophy can also do a PhD in business, that doing so broadens a student’s perspective, and that doing so is likely to improve chances at employment.

Two weeks ago I blogged about a Bloomberg story on the use of child labour in the cotton fields of Burkina Faso, and the purchase by Victoria’s Secret of the resulting cotton. I argued that while child labour is always bad, always regrettable, it isn’t on net always morally wrong. Victoria’s Secret isn’t necessarily doing anything wrong, despite the fact that some of their cotton is, yes, the result of child labour. Burkina Faso is desperately poor, and persistent child labour is a sad reality there: poor families simply cannot afford a better life for their children. And both the children and their families would be worse off were it not for the livelihood provided by VS.

But a soft line in child labour doesn’t sit well with everyone. And so, last week, my Canadian Business colleague Samson Okalow took issue with my arguments and posted a response. The solution to child labour, Okalow argued, is not as complex as I’d made it out to be.

Okalow makes a number of good points, and his commentary is well worth reading. But I’m standing by my original argument, and I’ll make just two points by way of explanation.

The first has to do with the facts of the case. In my original posting, I questioned what the net impact would be of VS volunteering to pay more for cotton. Would the extra money improve the prospects of child labourers, or just draw more people into the business and drive prices (and wages) down? In his commentary, Okalow rightly presses me on the details. But the fact that neither Okalow nor I knows the answers to those questions is just the point: we should be cautious about prescribing medicine without understanding its side effects.

The second point has to do more straightforwardly with ethics, with what VS (and other companies in similar situations) is obligated to do.

Okalow rightly points out that the plight of Burkina Faso’s child labourers needn’t be quite so bleak. VS could certainly do more to help; in particular, the company could opt to pay even more than it already does for premium organic fair-trade cotton, and therefore to make a smaller profit. As Okalow rightly points out, maximizing profits isn’t the only option VS has. It’s also possible to settle for merely sufficient profits: there certainly are organizations set up to operate that way.

The problem, here, is that it confuses the good with the obligatory. Helping those in need is a good thing to do. If Victoria’s Secret opted to donate money to the poor of Burkina Faso, by over-paying for cotton, they might well deserve praise, just as you would if you donated money to a charity set up to aid the desperately poor. But so far I see no reason why VS, in particular, or their customers or shareholders, in particular, are obligated to do so. All of the above are certainly obligated not to make the lives of children in Burkina Faso any worse. That’s the moral baseline for business everywhere, the thing that underpins the very legitimacy of private enterprise. But that’s different from being obligated to help; an obligation to help doesn’t just spring out of thin air.

And remember, VS (and its customers and shareholders) are already doing more for the children of Burkina Faso than other companies (and their customers and shareholders) are. To criticize a company like VS for daring to help (by investing in) Burkina Faso, without helping as much as it could, is not just hypocritical but surely also counterproductive. After all, it would be simpler for VS simply to buy American cotton and avoid all this controversy. And that would certainly make plenty of “Buy American” zealots happy. But it would also make the children of one of the world’s most brutally-poor countries worse off.

The fact that something is legal doesn’t make it ethical. You might think it’s obvious, but it’s not, as evidenced by the fact that a former student recently told me that his Finance professor explicitly told him that if something is legal, it’s ethical…full stop. Of course, the student — my student — knew better, and related the story to me while rolling his eyes.

So let’s make the case explicitly, and explain why legality doesn’t determine ethics.

First, we can proceed by enumerating a few counter-examples:

1. Most kinds of lying are perfectly legal, but lying is generally recognized as being unethical;
2. Breaking promises is generally legal, but is widely thought of as unethical;
3. Cheating on your husband or wife or boyfriend or girlfriend is legal, but unethical, though the rule against it is perhaps more honoured in the breach;
4. …and so on.

So, if you want to hold that what is legal is also ethical, you’ve got to bite an awful lot of bullets, and accept as ethical a lot of behaviours that you very likely don’t want to accept.

Of course, it could be that the aforementioned Finance professor wasn’t making a general claim about the relationship between ethics and law at all, but was instead making a more subtle point about ethical standards in competitive domains. After all, ethical rules are different in adversarial situations, and it might well be argued that in the highly-regulated world of commerce, businesses should feel justified in helping themselves to whatever strategies aren’t specifically outlawed.

But that rationale is, at best, incomplete, and leaves open a different line of argumentation, one that applies even within competitive domains, and one that should truly drive a stake through the heart of the “legal=ethical” nonsense.

The ultimate disproof lies in the hidden circularity of the Finance professor’s argument, which we can illuminate by contemplating the process by which something is made illegal.

Consider: on what general basis is something made illegal? Let’s set aside cases of unscrupulous legislators passing laws simply to benefit themselves or their friends. In all legitimate cases of lawmaking, the law always has a moral purpose — generally, either to make people’s lives better and safer (e.g., seatbelt laws) or to protect some important right (e.g., food-labelling laws).

But if the aforementioned Finance professor were right, there would be no possibility of finding a moral rationale for any new law. After all, according to him, if a behaviour is legal (right now) then it is ethically OK (right now). On what basis could new laws ever be passed? Certainly not on ethical grounds, because per hypothesis if something is currently legal is must be ethically OK. What if some horrible new toxin is discovered, the use of which by industry would pose significant risks to workers or consumers? Should it be banned? According to the Finance professor, it cannot be. After all, using it is legal, so it must be ethical; and if it’s ethical, it cannot be made illegal.

Anyone who tells you, or simply implies, that whatever is legal is also ethical is most likely indulging in self-serving rationalizations. When that idea comes up in the private sector, it’s likely that someone is trying to justify some profitable behaviour that is unethical but not-yet illegal. When that same idea comes up in academic circles, it’s more likely the self-interest they are trying to preserve is their own interest in avoiding the hard work of figuring out which business behaviours are unethical, and why.

As you’ve probably all heard by now (and as Canadian Business reported last week) the fruit company Chiquita has joined a boycott of fuel originating in Alberta’s oilsands. The folks flying the “ethical oil” banner have responded by suggesting Canadians should boycott Chiquita.

This story of boycott and counter-boycott actually started last year when a group led by Forest Ethics and Corporate Ethics International called for a boycott of Alberta tourism.

Now, this is not just a matter of tit-for-tat; there’s more moral significance to it than that. To begin, you don’t have to be a big fan of the oil sands to acknowledge that it is with some justice that the “ethical oil” advocates suggest that what the boycott means, in practice, is that Chiquita is going to be getting its oil from sources at least as ethically-fraught as the oil sands. Defenders of the oil sands have also pointed out that Chiquita’s own history is not without its ethical blemishes. See, for instance, the fine Chiquita paid for its involvement with Columbian paramilitary groups.

OK, so nobody’s perfect. But should we really limit stone-throwing to those without sin? Probably not. Being a hypocrite is different from being wrong. And so if — if — Chiquita is right about oil-sands oil being not just bad, but the worst, then there’s nothing wrong with them expressing that view, that company’s own ethical shortcomings notwithstanding.

No, the real problem with this boycott is that, like most boycotts, it is such a disastrously blunt instrument. Although typically portrayed as sending a message, boycotts actually send their message through brute force: they are — if and when they work — a form of bullying. Boycotts are populist, rather than democratic. And maybe that’s OK. Power to the people, and so on. But I wonder how ready the average ‘green consumer’ is to wave the people-power banner, when the ‘people’ exercising the power are really corporate persons.

Child labour is always bad, but it’s not always wrong. And here’s why.

Of all of the issues that fall under the very broad heading of “business ethics,” child labour is among those least likely to be seen as grey. Most people agree, I think, that play, and learning, rather than labour, should be the dominant features of a child’s life. For a kid, learning to tidy up your own room is a fine form of “work,” as is taking out the garbage or helping dad rake the leaves on the weekend. But kids, most will agree, shouldn’t be working in factories or toiling in the fields.

Unfortunately, the world isn’t like that. Bloomberg yesterday featured an utterly heartbreaking story about child labour in the cotton fields of Burkina Faso. The story, which focused on the hard life of 13-year-old Clarisse Kambire, resulted in an avalanche of tweets aimed at Victoria’s Secret.

Why Victoria’s Secret? Because the lingerie company buys almost all of the cotton produced by Burkina Faso, under a deal that features 3rd-party monitoring intended to ensure that the cotton is organic and fair-trade. The root of the story is that the monitoring system failed, and cotton that was supposed to be harvested without the use of child labour was not. Desperately-poor farmers in Burkina Faso, it turns out, have been using their children (and the children of relatives and neighbours) in their cotton fields.

In other words, the company tried to do something good, and the good stuff it did turned out to be less-good than they thought it would be. But if all you saw were the breathless tweets and the headlines of the me-too stories, you’d swear that Victoria’s Secret models themselves were out in the fields, beating children to work faster, faster, to feed the world’s hunger for thongs.

The case of Victoria’s Secret’s cotton supply illustrates a clear failure of third-party supply-chain monitoring, but it is also an illustration of the complexity of third-party supply-chain monitoring. It’s a lovely idea to promise your customers organic, fair-trade cotton, but making good on the promise is another thing altogether.

The fundamental problem, though — the one that makes the life of a parentless child in Burkina Faso so miserable — is that Burkina Faso is a miserably poor country. The sad truth is that for some kids there, labour in the cotton fields is their best alternative; their families can’t really afford to feed them, let alone to send them to school. This is why I say that while child labour is always bad, it’s not always wrong.

So consider: what will the effect be of the spotlight currently being shone on the use of child labour in Victoria’s Secret’s supply chain? One possibility is that the rule will now be enforced. Clarisse Kambire will then be out of a job, and then what? Another possibility is that companies like VS will decide to keep their hands clean, and abandon Burkina Faso altogether. That would let them avoid nasty headlines in the future, but it would also mean a significant economic hit for a country that can’t exactly take it in stride.

But if Victoria’s Secret is truly committed to keeping its supply chain free of misery, couldn’t it simply offer to pay more for cotton, so that kids like Clarisse Kambire could get at least one solid meal a day and maybe attend a bit of school? Perhaps. But it’s not obvious how effective that would be. Pouring more money into a supply chain has complex effects. As I’ve pointed out before in regards to fair-trade coffee, paying more for something draws more people into the business, which increases supply, which drives down prices. Note also that if VS customers are willing to pay more for the cotton in their panties, that inevitably means they’re spending less money on something else — and spending less on something else means someone else, somewhere, is earning less money. Will that be someone who needs it more, or less, than Clarisse Kambire? I have no idea.

We should never, ever be complacent about child labour. But nor should we delude ourselves into thinking that good intentions, or a few extra pennies spent on a pair of panties, can make the problem go away.