Will Amazon Ban “Ethics”?

A new report from The Intercept suggests that a new in-house messaging app for Amazon employees could ban a long string of words, including “ethics.” Most of the words on the list are ones that a disgruntled employee would use — terms like “union” and “compensation” and “pay raise.” According to a leaked document reviewed by The Intercept, one feature of the messaging app (still in development) would be “An automatic word monitor would also block a variety of terms that could represent potential critiques of Amazon’s working conditions.” Amazon, of course, is not exactly a fan of unions, and has spent (again, per the Intercept) a lot of money on “anti-union consultants.”

So, what to say about this naughty list?

On one hand, it’s easy to see why a company would want not to provide employees with a tool that would help them do something not in the company’s interest. I mean, if you want to organize — or even simply complain — using your Gmail account or Signal or Telegram, that’s one thing. But if you want to achieve that goal by using an app that the company provides for internal business purposes, the company maybe has a teensy bit of a legitimate complaint.

On the other hand, this is clearly a bad look for Amazon — it is unseemly, if not unethical, to be literally banning employees from using words that (maybe?) indicate they’re doing something the company doesn’t like, or that maybe just indicate that the company’s employment standards aren’t up to snuff.

But really, what strikes me most about this plan is how ham-fisted it is. I mean, keywords? Seriously? Don’t we already know — and if we all know, then certainly Amazon knows — that social media platforms make possible much, much more sophisticated ways of influencing people’s behaviour? We’ve already seen the use of Facebook to manipulate elections, and even our emotions. Compared to that, this supposed list of naughty words seems like Dr Evil trying to outfit sharks with laser-beams. What unions should really be worried about is employer-provided platforms that don’t explicitly ban words, but that subtly shape user experience based on their use of those words. If Cambridge Analytica could plausibly attempt to influence a national election that way, couldn’t an employer pretty believably aim at shaping a unionization vote in similar fasion?

As for banning the word “ethics,” I can only shake my head. The ability to talk openly about ethics — about values, about principles, about what your company stands for, is regarded by most scholars and consultants in the realm of business ethics as pretty fundamental. If you can’t talk about it, how likely are you to be to be able to do it?


(Thanks to MB for pointing me to this story.)

Respectful Disagreement About Sanctioning Russia

I’ve written two blog entries over the last two weeks (here and here) arguing in favour of the business community imposing sanctions on Russia, in response to Russia’s unprovoked attack on Ukraine.

I think the reasons in favour of such sanctions are powerful: Putin is a serious and unique threat both to Eastern Europe and to the world as a whole, and it is essential that every possible step be taken both to denounce him and to hobble him. The international community agrees, and the international business community, in general, agrees too.

But not everyone. Some major brands have resisted pulling out, as have some lesser-known ones. And while I disagree with the conclusions arrived at by the persons responsible for those brands, I have to admit that I think the reasons they put forward in defence of their conclusions merit consideration.

Among those reasons:

“We don’t want to hurt innocent Russians.” Economic sanctions are hurting Russian citizens, including those who hate Putin and who don’t support his war. Myself, I think such collateral damage pales in comparison to the loss of life and limb being suffered by the people of Ukraine. But that doesn’t mean it’s not a good point: innocent people being hurt always matters, even if you think something else matters more.

“We have obligations to our local employees.” For some companies, ceasing to do business in Russia might mean as little as turning off a digital tap, so to speak. For some, it means laying off (permanently?) relatively large numbers of people. Again, we might think that this concern is outweighed, but it’s still a legitimate concern. We generally want corporations to think of themselves as having obligations of this kind to employees.

“Sanctions won’t work.” The point here is that we don’t (do we?) have good historical evidence that sanctions of this kind work. Putin is effectively a dictator, and he really doesn’t have to listen to what the Russian people think, and so squeezing Russians to get them to squeeze Putin is liable to fail. Myself, I’m willing to grasp at options the success of which is unlikely, in the hopes that success is possible. But still, it’s a concern worth listening to.

“Sanctions could backfire.” The worry here is that if we in the West make life difficult for Russian citizens, then they could start to see us as the enemy — certainly Putin will try to make that case. And if that happens, support for Putin and his war could well go up as a result of sanctions.

That’s a few of the reasons. There are others.

On balance, I think the arguments in the other direction are stronger. I think Putin is uniquely dangerous, and we need to use every tool available to us, even those that might not work, and even those that might have unpleasant side-effects.

However — and this is crucial — I don’t think that people who disagree with me are bad, and I don’t think they are foolish, and I refuse automatically to think less of them.

It doesn’t help, of course that the folks making the arguments above are who they are. Some of them are speaking in defence of big companies. The motives of big companies are often thought of as suspect, and so claims of good intentions (“We don’t want to hurt innocent Russians!” or “We must support our employees!”) tend to get written off as self-serving rationalizations. Then there’s the specific case of the Koch brothers, and the companies they own or control. They’ve announced that they’re going to continue doing business in Russia. And the Koch brothers are widely hated by many on the left who think of them as right-wing American plutocrats. (Fewer realize that while the Koch brothers have supported right-wing causes, they’ve also supported prison reform and immigration reform in the US, and are arguably better categorized as libertarians. Anyway…)

My point is this: The fact that you mistrust, or outright dislike, the people making the argument isn’t sufficient grounds for rejecting the argument. That’s called an ad hominem attack. Some people’s track records, of course, are sufficient to ground a certain mistrust, which can be reason to take a careful look at their arguments, but that’s quite different from writing them off out of hand.

We ought, in other words — in this case and in others — to be able to distinguish between points of view we disagree with, on one hand, and points of view that are beyond the pale. Points of view we merely disagree with are ones where we can see and appreciate the other side’s reasoning, and where we can understand how they got to their conclusion, even though that conclusion is not the one we reach ourselves, all things considered. Points of view that are beyond the pale are ones in support of which there could be nothing but self-serving rationalization. Putin’s purported defence of his attack on the Ukraine is one such view. Any excuse he gives for a violent attack on a peaceful neighbour is so incoherent that it can only be thought of as the result either of disordered thinking, or a smokescreen. But not so for companies, or pundits, that think maybe pulling out of Russia isn’t, on balance, the best idea. They have some good reasons on their side, even if, in the end, I think their conclusion is wrong.

Corporate Vigilantism vs Russia?

Is a corporate boycott of Russia an act of vigilantism?

Some people reading this will assume that “vigilantism” equals “bad,” and so they’ll think that I’m asking whether boycotting Russia is bad or not. Both parts of that are wrong: I don’t presume that that “vigilantism” always equals “bad.” There have always, historically, been situations in which individuals took action, or in which communities rose up, to act in the name of law and order when formal law enforcement mechanisms were either weak or lacking entirely. Surely many such efforts have been misguided, or overzealous, or self-serving, but not all of them. Vigilantism can be morally bad, or morally good.

And make no mistake: I am firmly in favour of just about any and all forms of sanction against Russia in light of its attack on Ukraine. This includes both individuals engaging in boycotts of Russian products by as well as major companies pulling out of the country. The latter is a kind of boycott, too, so let’s just use that one word for both, for present purposes.

So, when I ask whether boycotting Russia a kind of vigilantism, I’m not asking a morally-loaded question. I’m asking whether participating in such a boycott puts a person, or a company, into the sociological category of “vigilante.”

Let’s start with definitions. For present purposes, let’s define vigilantism this way: “Vigilantism is the attempt by those who lack formal authority to impose punishment for violation of social norms.” Breaking it down, that definition includes three key criteria:

  • The agents acting must lack formal authority;
  • The agents must be imposing punishment;
  • The punishment must be in light of some violation of social norms.

Next, let’s apply that definition to the case at hand.

First, do the companies involved in boycotting Russia lack formal authority? Arguably, yes. Companies like Apple and McDonalds – as private organizations, not governmental agencies – have no legal authority to impose punishment on anyone external to their own organizations. Of course, just what counts as “legal authority” in international contexts is somewhat unclear, and I’m not a lawyer. Even were an organization to be deputized, in some sense, by the government of the country in which they are based, it’s not clear that that would constitute legal authority in the relevant sense. And as far as I know, there’s nothing in international law (or “law”) that authorizes private actors to impose penalties. So whatever legal authority would look like, private corporations in this case pretty clearly don’t have it.

Second, are the companies involved imposing punishment? Again, arguably, yes. Of course, some might suggest that they are not inflicting harm in the traditional sense. They aren’t actively imposing harm or damage: they are simply refraining, quite suddenly, from doing business in Russia. But that doesn’t hold water. The companies are a) doing things that they know will do harm, and b) the imposition of such harm is in response to Russia’s actions. It is a form of punishment.

Finally, are the companies pulling out of Russia doing so in reaction to perceived violation of a social rule. Note that this last criterion is important, and is what distinguishes vigilantism from vendettas. Vigilantism occurs in response not (primarily) to a wrong against those taking action, but in response to a violation of some broader rule. Again, clearly the situation at hand fits the bill. The social rule in question, here, is the rule against unilateral military aggression a nation state against a peaceful, non-aggressive neighbour. It is one agreed to across the globe, notwithstanding the opinion of a few dictators and oligarchs.

Taken together, this all seems to suggest that a company pulling out of Russia is indeed engaging in vigilantism.

Now, it’s worth making a brief note about violence. When most people think of vigilantism, they think of the private use of violence to punish wrongdoers. They think of frontier towns and six-shooters; they think of mob violence against child molesters, and so on. And indeed, most traditional scholarly definitions of vigilantism stipulate that violence must be part of the equation. And the classical vigilante, certainly, uses violence, taking the law quite literally into their own hands. But as I’ve argued elsewhere,* insisting that violence be part of the definition of vigilantism makes little sense in the modern context. “Once upon a time,” violent means were the most obvious way of imposing punishment. But today, thinking that way makes little sense. Today, vigilantes have a wider range of options at their disposal, including the imposition of financial harms, harms to privacy, and so on. And such methods can amount to very serious punishments. Many people would consider being fired, for instance, and the resulting loss of ability to support one’s family, as a more grievous punishment than, say, a moderate physical beating by a vigilante crowd. Vigilantes use, and have always used, the tools they found at hand, and today that includes more than violence. So, the fact that companies engaging in the boycott aren’t using violence should not distract us here.

So, the corporate boycott of Russia is a form of vigilantism. But I’ve said that vigilantism isn’t always wrong. So, what’s the point of doing the work to figure out whether the boycott is vigilantism, if that’s not going to tell us about the rightness or wrongness of the boycott?

In some cases, we ask whether a particular behaviour is a case of a particular category of behaviours (“Was that really murder?” or “Did he really steal the car?” or “Was that really a lie?”) as a way of illuminating the morality of the behaviour in question. If the behaviour is in that category, and if that category is immoral, then (other things equal) the behaviour in question is immoral. Now I said above that that’s not quite what I’m doing here – instances of vigilantism may be either immoral or moral, so by asking whether boycotting Russia is an act of vigilantism, I’m not thereby immediately clarifying the moral status of boycotting Russia.

But I am, however, doing something related. Because while I don’t think that vigilantism is by definition immoral, I do think that it’s a morally interesting category of behaviour.

If our intuition says (as mine does) that a particular activity is morally good, then we need to be able to say – if the issue at hand is of any real importance – why we think it is good. As part of that, we need to ask whether our intuitions about this behaviour line up with our best thinking about the behavioural category or categories into which this behaviour fits. So if you tend to think vigilantism is sometimes OK, what is it that makes it OK, and do those reasons fit the present situation? And if you think vigilantism is generally bad, what makes the present situation an exception?

* MacDonald, Chris. “Corporate leadership versus the Twitter mob.” Ethical Business Leadership in Troubling Times. Edward Elgar Publishing, 2019. [Link]

Business & the Russian Invasion of the Ukraine

A number of prominent corporations have added their weight to the international effort to impose sanctions on Russia. More and more companies are pulling out of Russia in response to Vladimir Putin’s war of aggression.

The list of companies is growing, and—crucially in the information age—includes tech giants such as Google, Apple, Microsoft, Dell, PayPal, and Netflix, among others. (See the growing Twitter thread being maintained by @NetopiaEU here.) Most recently, perhaps, both KPMG International and PricewaterhouseCoopers have suspended operations in Russia and Belarus (according to a tweet from the Kyiv Independent). Perhaps most significantly, Mastercard and Visa have suspended operations in Russia.

Is this a good thing? On balance, I think the answer is yes. But it’s always worth at least looking at the arguments on both sides.

The most obvious ethical question has to do with collateral damage. Most of the companies pulling out of Russia aren’t pulling their services away from Vladimir Putin, or from the Russian government or the Russian army, but from regular Russians—-some but not all of whom support Putin and his war. (There are some indications that Putin’s popularity is up since the invasion began, but the key polling was done by an organization owned by the Russian government, so perhaps take that with a grain of salt.) If sanctions (corporate or otherwise) make the lives of regular Russians hard, that’s generally a bad thing. It’s not as bad as the civilian deaths currently happening in the Ukraine, but a bad thing non the less. The question is whether, on balance, the good to be achieved by corporate sanctions is worth the cost. I think it clearly is, for reasons I’ll return to below.

Then there’s the question of corporate activism. The backdrop for this issue—the thing that even makes pulling out of Russia a question—is the general question of whether companies should, in brief, be political. Do the companies named above, and others like them, have the moral authority to impose sanctions, on Russia or on anyone else? And what do corporations know, after all, about international affairs? What special competency does Netflix or Microsoft have to assess Putin’s (admittedly nutty) claims about how the Ukraine is, in reality, part of Russia? In days past, the question of corporate moral authority has taken less acute forms: Should companies take sides in domestic political disputes? Should companies be ‘woke?’ Should companies have views on human sexuality? And so on. But then, Putin’s behaviour in this case is truly beyond the pale. It constitutes naked aggression against a sovereign people, and the companies that have taken action are doing so 100% in line with international consensus.

Of course, enthusiasm for corporate sanctions in the present case immediately leads to questions about which other countries, beyond Russia, should be the target of corporate sanctions. After all, as horrific as the suffering in the Ukraine is, it’s arguably no greater than the suffering being experienced by ethnic minorities in China (see for example the forced labour imposed upon the Uighurs), or the violence against Tigrayans in Ethiopia, which some have characterized as genocide. Those are just a couple of examples, picked more or less at random. The list of countries with which respectable companies arguably shouldn’t do business is a long one. But on the other hand, outside of crisis moments, there are good arguments to the effect that maintaining trade is a useful mechanism in building ties and in fostering liberal democratic values.

I think the only real question with regard to the corporate sanctions is how long such sanctions should last. Some think these corporate actions will, as a matter of fact, be relatively limited in duration. But how long should they last? One plausible view is that sanctions should last until aggression against the Ukraine stops. After all, if sanctions are the stick, then eliminating sanctions is the carrot. Likely no one thinks corporate sanctions will matter to Putin directly, but they might matter enough to regular Russians for them to put pressure on Putin, who will be incentivized to find a way out of what is, in the view of some, becoming a quagmire anyway. Another plausible view: they should last until Putin is out of power. After all, Putin isn’t a symptom; he’s the problem. And for most of the big companies involved, the Russian market probably isn’t big enough to matter much to the bottom line, so it’s not an unreasonable request. There is nothing in this story that suggests this is a one-time thing for Putin. He has expansionist impulses, and weird theories about geopolitical history. The world will be safer when—and only when—he is gone. And economic isolation is one piece of a larger strategy to achieving that goal.

Avoiding Mistakes About Adam Smith’s Wealth of Nations

I teach my business ethics students that in order to understand ethical issues in the world of commerce, you need to understand a little bit about markets, about modern corporations, and about the role of management. And for practical purposes, understanding the role of markets begins with the work of Adam Smith.

Adam Smith’s 1776 masterpiece, An Inquiry into the Nature and Causes of The Wealth of Nations, is undeniably one of the most important works of the last several centuries. But it is easily misunderstood.

Smith himself, of course, was a star. He was to economics what Darwin was to evolutionary biology: he didn’t invent the field, but the insights he had, and the way he synthesized what was known about the topic during his time, had a revolutionary impact. And while economists regard Smith as the grandfather of economics, philosophers regard him as an important moral philosopher of the Scottish Enlightenment period.

Regardless, Smith is often misunderstood. Smith is sometimes seen (both by fans and by detractors) as being a hardcore defender of unfettered markets. The truth is of course much more complex than that. In Wealth of Nations, Smith does rail against certain kinds of government interference in trade — he believes that, for the most part, people’s economic decisions should be made under conditions of what he calls “natural liberty.” In particular, he has harsh criticism for any government policy that limits or distorts trade in an attempt to protect the interests of a particular class of merchants (at the expense of the general population). In other words, Smith is against crony capitalism — a practice that very few today would openly support, in spite of how common it might, regrettably, be.

But Smith also evidences a strong mistrust of business. The Wealth of Nations includes many critical passages, but perhaps the most famous such passage is this: “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public.” If you think Smith was an unabashed admirer of business and businesspeople, you’re wrong.

But there’s another, much more basic way to end up misunderstanding Smith, and that’s to literally misunderstand the words he uses.

I recently made an effort to help with that problem, by writing what I believe to be the most extensive Glossary for The Wealth of Nations ever published for free online. Why a glossary? Smith after all was a relatively clear writer. But he was writing in the mid- to late 18th Century, and the English language was a bit different then. So some of the words Smith uses in Wealth of Nations are not in current usage. Almost no one would use the words artificer, or higgling, or manufactory today — and certainly not in everyday conversation. Other words Smith uses may seem familiar, but were used very differently in Smith’s time than in ours. For example, Smith uses the verb to afford to mean to yield or to produce, rather than meaning to be able to pay for something. He uses the word anciently where we would simply say previously or formerly. And when Smith refers to carriage, he’s not talking about a horse-and-carriage, but what we would call simply shipping (whether by land or by sea). Those are just a few examples. But the net result is that the average reader (or even a very educated one) can easily misunderstand many of Smith’s sentences, or even entire passages. And that’s a shame.

My hope is that — for students, at least, but perhaps also for others — my Glossary will help. If you find it useful, please feel free to share. If you find errors or important omissions, please let me know (at chris.macdonald@ryerson.ca) .

Here’s the link: Glossary — Adam Smith’s Wealth of Nations.

The President, the Artist Son, and the Pursuit of Improper Influence

An interesting story came up last week, concerning Hunter Biden — president Joe Biden’s son. Hunter Biden is an artist, and it is anticipated that his work could sell for for hundreds of thousands of dollars, a price range no doubt not unrelated to his status as the president’s son. The ethical concern, of course, is related to that fact: the worry is that some may want to buy his art, potentially at shall we say ‘generous’ prices, in order to curry favour with Biden Junior in hopes of gaining favour with Biden Senior.

The interesting twist: White House officials have helped create a system that they hope will insulate both Bidens from influence, and thus allay any ethical concerns. The system basically includes a firewall such that Hunter Biden’s dealer will handle all bids and sales, and keep the relevant information to himself. If neither Biden knows who bought a given painting, then it’s hard for the buyer to have any influence…in principle. (The Washington Post covered the story here.)

Several points are worth making, here:

  1. Yes, there’s cause for concern, here. Many, many people want to influence President Biden (and anyone else with substantial power), and history teaches us that those people can get very creative and persistent in their attempts to do that sort of thing. (This is part of what makes it so hard to stamp out corruption in politics and international business — as soon as you put a law in place or build an internal compliance system to prevent improper influence, those seeking influence will invent innovative new ways to get around it. You can outlaw giving gifts to senators, but it’s harder to outlaw making donations to a senator’s best friend’s favourite charity. And so on.) As news articles have pointed out, the price of a painting is, well, subjective. So if a particular lobbyist outbids everyone else for a Hunter Biden painting, who’s to say that she doesn’t just really, really like that painting? It’s a hard thing to police. (Compare this to selling a house, where there will likely be a pretty clear market price for the property.)
  2. It’s a mistake to focus on Hunter Biden making money off his relationship with the President. Of course he’s going to. Offspring of presidents (and other powerful folks) have done that forever. It’s inevitable, and not unethical. Of course people want to do business with the son of a famous and powerful person. That’s human nature. As long as that’s all there is to it — no intention or attempt to buy or sell influence — it’s not unethical.
  3. Having a relative hold public office shouldn’t kill a person’s business opportunities. That is, Hunter Biden shouldn’t be punished for the fact that his dad is president. He shouldn’t be forbidden, for example, from selling his art — even though selling art in principle raises challenges. (Compare: the fact that I work at a university shouldn’t make my sister ineligible to applying for a job there — it just means that I can’t be on the hiring committee, and need to be kept strictly away from it.)
  4. We need more details about the system being put in place. What mechanisms are in place for ensuring secrecy? Hunter Biden won’t be told who bought a given painting, or for how much — but that’s a hard secret to keep, especially once the painting sitting in a lobbyist’s office or on the wall of a corporate board room. In principle, a buyer could buy the painting and have it sit in the dealer’s vault until later? And how long will the details be secret? For a year? For the duration of the Biden presidency? Longer? The details here matter.
  5. Sometimes these sorts of things, because they can’t be forbidden, need to be managed. That’s normal in many cases that involve influence, gift giving, or conflict of interest. And that’s what the White House is attempting to do — manage the situation to mitigate concers. Whether or not they can manage it effectively, adequately, remains to be seen.

Is a Boycott an Act of Violence?

People tend to think of boycotts as classic non-violent direct action. Power to the people! and so on. Often, in recent years, boycotts have been used by consumers to pressure companies on a range of progressive issues, such as gun control and marriage equality.

But of course, boycotts have not always been a progressive thing — they’re used by activists on all parts of the political spectrum. And historically, they’ve sometimes been used for some rather nasty purposes. In the 1920s, for example, the Ku Klux Klan quite openly used boycotts to drive Black-owned stores (along with stores owned by Jews and Catholics) out of business. This was a strategy aimed ultimately at driving out entire minority populations out of particular towns and states.

Kathleen Blee, in her book Women of the Klan: Racism and Gender in the 1920s, notes with apparent surprise that among the informants (former Klan members) she interviewed, “None saw [such use of economic power] as an act of violence.” Linda Gordon, in her own book, The Second Coming of the KKK: The Ku Klux Klan of the 1920s and the American Political Tradition, cites Blee on this point. Both authors, seem to find this remarkable, implying that they (these authors) do see Klan boycotts as a form of violence. I’m tempted to agree with them.

But wait, shouldn’t we distinguish boycotts from the genuinely violent behaviours engaged in by the KKK? Isn’t “violence” here just a metaphor?

Maybe. But it’s worth noting that economic harms are genuine harms. Economic losses can mean the inability to eat, or to feed your family. The owner and employees of a Catholic-owned business in a small town in Indiana in the 1920s might have suffered very real hardship if the Klan convinced a sufficient proportion of the town’s population not to shop there, as they sometimes did. I suspect many people would, if pressed, prefer to suffer some measure of literal, physical violence (a black eye? a moderate beating? a few broken windows?) to the kind of economic loss such boycotts implied. Economic harms are meaningful.

Granted, not all cases are so dramatic: when Democrats in the US boycotted In-N-Out Burger in 2018 for donating to the Republican party, it was highly unlikely that In-N-Out was going to be driven out of business. Real economic damage (of a kind we might think of as akin to violence) was highly unlikely.

The goals of the In-N-Out boycott (and others like it) were different, too. No one really wanted to harm In-N-Out — applying economic pressure was a mere tool. The goal was more likely symbolic, or at most aimed at producing enough economic pain to get In-N-Out to reconsider its approach to political donations. But then, boycotts were arguably a ‘mere tool’ for the KKK, too. They arguably had nothing against boycotted businesses, themselves, but used boycotts to exert economic pressure intended to get the proprietor-owners to leave town. Killing the business wasn’t the point. Getting rid of ‘the wrong sorts of people was the point.

Another possible difference: the KKK had shown itself fully willing to engage in physical violence. So there was always the knowledge that if the boycott didn’t work, things could end going in a different direction. Once violence is on the table, so to speak, then every other tactic being used is suffused with violent potential. There was no indication in 2018 that Democrats were going to turn violent to augment the force of their boycott, or that things would get physically violent if In-N-Out didn’t give in. So in that sense, the 2018 boycott was more clearly non-violent than the KKK boycotts of the 1920s.

Still, the question does give pause. Boycotts do occupy part of a spectrum of direct-action activities, understood as extra-legal activities designed to change someone’s behaviour. They are attempts to go beyond rational persuasion to take matters into one’s own hands, to force an outcome that one is unable or unwilling to argue for. Of course, that’s probably sometimes morally required. But it’s not to be taken lightly.

Restaurant Delivery: Is it Ethical to Use Uber Eats and DoorDash?

Foodora Bike CourierA couple of days ago, the NYT featured a story about the ethics of using delivery services like Uber Eats and DoorDash (See: As Diners Flock to Delivery Apps, Restaurants Fear for Their Future). The basic gist of the story is that these services are predatory, in that they insist on such a large cut of the overall order price that, in some instances, the restaurant in question doesn’t make a dime on the order.

Just how big a cut do the delivery services take? Generally around 30%. (That’s true except where limited by law. In Jersey City, for example, delivery fees are limited to 10%.) So, in most places, if you order $100 worth of food, the restaurant only gets $70. In an industry where profit margins are often in the single-digit range, it’s easy to wonder how that’s remotely attractive, let alone sustainable.

And where does that leave you as a consumer? Suppose you’re someone living in a city where all the restaurants are closed except for pickup and delivery. And further suppose that you are someone who loves restaurant food, and who also wants to help their favourite restaurants survive. What are you to do?

The answer clearly depends on some details, here, and I’m no expert on this particular industry. Indeed, beyond having read Kitchen Confidential and spending too much on restaurant food myself, the industry is a bit of a mystery to me. So I spoke to a friend who is general manager for a small chain of 3 restaurants here in Toronto. I asked him why he dealt with food delivery services at all, given the bad rap those services get, and whether I should feel bad about ordering food that way. The conversation was pretty enlightening.

My friend confirmed that most food delivery services take a 30% share of the bill. How can that make sense? Why would a restaurant accept these deliveries demanding such a greedy share of the pie?

Here’s the explanation. He told me that way back in pre-Covid times, restaurants had a couple of different reasons for accepting the harsh terms offered by the delivery services. First, there’s marketing. Every Uber Eats and DoorDash order represents not just an order, but a potential new customer — one who might not previously have known about the restaurant, and who might just come to the restaurant in person next time, and then the restaurant gets full benefit.

Second, when you’ve already paid your rent and paid your staff to be on duty, an Uber Eats sale is an ‘incremental’ sale: if overhead is already paid, then fulfilling an Uber Eats order on top of that is kind of painless. “At the margin” (as economists say) an extra meal costs very little to produce, so even Uber Eats’s 30% leaves a healthy profit.

Now, fast forward to the Covid-19 pandemic: with restaurant doors shut, neither of the factors listed above would generally matter much. You can’t use DoorDash as a marketing ploy, because (here in Toronto at least) your doors are closed to that more lucrative in-restaurant dining. And if you’re not operating at full capacity, you may not necessarily have the capacity to treat a DoorDash order as a relatively easy addition to the kitchen’s duties. But today, in Canada at least, there are substantial government subsidies that keep cost of staffing manageable, so at least some restaurants are able to keep more staff available to fulfill delivery (and curb-side pickup) orders. And as of now, those orders (in places like Toronto, where restaurants are definitely closed to walk-in business), Uber Eats at the like are a lifeline.

Bottom line: if you have qualms about Uber Eats (etc.) it shouldn’t be because you think the restaurant is suffering. Uber Eats, DoorDash, and the like are helping, not hurting, your favourite restaurant.

Now, a major ethical question remains. In spite of what I’ve said above, the question remains whether services like Uber Eats and DoorDash are a good thing? After all, they charge restaurants very high fees, and restaurants are likely signing up for fear of being left out and jostled aside by the competition. And (though views vary) they arguably underpay their delivery drivers. And yet — interestingly — the services themselves still aren’t profitable. And while consumers benefit from the relative convenience of being able to enjoy restaurant-quality food at home, they’re also ultimately going to eat at least part of the increase in prices that will naturally go along with these companies having inserted themselves into the restaurant ‘value chain.’ (You surely didn’t think consumers wouldn’t end up footing the bill, directly or indirectly, did you?) So it’s tough, overall, to judge the coming of DoorDash and Uber Eats as a good thing. Yes, some form of delivery would be really great, if a model could be figured out that benefits everyone, but these organizations haven’t figured out how to do that yet.

The problem here is really a classic collective action problem. Because even if none of us is happy about the advent of these delivery services, in their present form, each of us benefits from the convenience they provide. And the same dilemma applies to the restaurants using these services. A given restaurant manager can regret what these companies are doing to the industry, but at the same time see dealing with them as good for her restaurant, in the here and now. And because of that pattern of incentives, everybody is motivated to keep participating in a system that they think is, on balance, a bad one. It’s a pernicious kind of problem.

What alternatives are there? Can a consumer do better by their favourite restaurant than to order via Uber Eats? There are a couple of alternatives. In some places, smaller, more equitably-minded delivery services have popped up, in some cases supported by municipal governments. And some restaurants are doing their own deliveries, though there are barriers to that becoming very common, not least among them the cost of hiring and insuring drivers.

So, what’s the result, from the perspective of ethical consumerism? If you think the model is regrettable, and don’t want to participate in it, then go ahead and avoid it. It’s perfectly reasonable to stand on principle, and some will say it’s even ethically required. But if your main ethical worry has to do with the fortunes of your favourite restaurant, and the people it employs, then it’s worth knowing that you’re helping them more by ordering via Uber Eats and DoorDash than by not ordering.

Corporate Responses to the Covid-19 Pandemic

NOTE: this is, for now, a living document, being modified/updated regularly as of March 14, 2020.

Here is a non-exhaustive list — just a sample, really — of corporate Covid-19 pages and statements responding to the Covid-19 (coronavirus) pandemic. Because websites change, where possible I’ve also taken screen caps of these pages & statements as of March 14, 2020, in case the content changes or disappears. (In some cases, the item linked is something specific — like a notice for visitors to corporate locations, etc., because that’s what I found. The company may or may not have put out additional notices that I simply didn’t find.)

I’ll add to the list in the coming days.

Note: I will not be updating each company’s link if/when they make changes. The dates show are the dates provided on each page when I looked at them.

 

Travel

Delta (undated) [screen cap] plus a special statement on cleaning (March 13) [screen cap]

Via Rail (March 12) [screen cap]

Air Canada (undated) [screen cap]

Marriott International (February 28) [screen-cap] (Plus a separate statement on cleaning protocols) (March 10) [screen cap]

Uber (undated) [screen cap]

Porter Airlines (undated) [screen cap]

Expedia Group (March 13) [screen cap]

Lime (March 12) [screen cap]

Metrolinx (March 13) [screen cap]

Princess Cruise Lines (March 11) [screen cap]

Disney Cruise Line (March 13) [screen cap]

Hilton (undated) [screen cap]

AirB&B (undated) [screen cap]

VRBO (March 12) [screen cap]

 

Food & Beverage

Jimmy John’s (undated) [screen cap]

Cracker Barrel (March 11) [screen cap]

McDonald’s (March 6) [screen cap]

Yum! Brands (undated) [screen cap]

Starbucks (March 4) [screen cap]

Aramark (undated) [screen cap]

Sircorp (undated) [screen cap]

 

Retail

Walmart (employee health) (March 10) [screen cap]

Home Depot (March 12) [screen cap]

Target (March 10) [screen cap]

 

Health

Kroger Health (undated) [screen cap]

CVS Health (undated) [screen cap]

Walgreens — customers (undated) [screen cap]

 

Tech

Apple (March 13) [screen cap]

Google (March 6) [screen cap]

 

Sports

NHL (March 12)

MLB (undated) [screen cap]

NBA (March 13) [creen cap]

 

Entertainment

Enterprise Center (March 13) [screen cap]

Cineplex Movie Theatre (March 12) [screen cap]

 

Financial Services

RBC (clients) (undated) [screen cap]

Fannie Mae (undated) [screen cap]

CommunityWide Federal Credit Union (undated) [screen cap, because statement was on main page & likely to disappear]

Citi (undated) [screen cap]

Scotiabank (undated) [screen cap]

Wells Fargo (undated) [screen cap]

Canada’s 6 biggest banks have jointly announced Action to Help Customers Impacted by Covid-19 (March 18) [screen cap] (via TD Bank’s website)

Other

General Motors for employees (undated) [screen cap]

Ford (for visitors) (March 6) [screen cap]

Lockheed Martin (employees)(March 10) [screen cap]

Boeing (undated) [screen cap]

KPMG Australia (March 12) [screen cap]

UPS (March 13) [screen cap]

FedEx (undated) [screen cap]

AT&T (undated) [screen cap]

Goodlife Fitness (undated) [screen cap]

 

Why It’s Essential to Treat Corporations as Persons, Except When It’s Not

I’ve long held that you can’t understand much about business ethics if you don’t understand a bit about markets (their role and limits), corporations (their nature and purpose), and managers (their role and the limits on it). Of those three, it is perhaps the corporation that raises the most controversy, although the other two certainly generate their share.

A corporation is, very roughly, an entity recognized by the law and that exists independently of the people who form it. The general term “corporation” includes business corporations (Walmart, Amazon, etc.), as well as cooperatives (such as ACE Hardware and Dairy Farmers of America) and nonprofit corporations (including charities, universities, hospitals, etc.). Some churches are corporations too.

Corporations are treated as persons under the law just about everywhere. The notion has raised controversy in the US, especially in the wake of the 2010 Citizens United* decision of the US Supreme Court. But that controversy sometimes leads people to miss the fact that corporate personhood isn’t some idiosyncratic American thing. Corporations are treated as persons pretty much everywhere. (If you know an exception, let me know in the Comments section below). Take Canada’s criminal code, for example. The Criminal Code is full of sentences that say “every one who” or “every person who” does such-and-such is guilty of a crime. In the Definitions section of the Code, it clarifies that those terms (“every one” and “person”) are to be read as including organizations, and that “organization” means “a public body, body corporate, society, company, firm, partnership, trade union or municipality” (and certain kinds of associations).

What does this mean in practice? Well, first, it means that corporations can be charged with crimes under the Criminal Code. But corporate personhood under the law also means that corporations can do things like own property, make contracts, borrow money, and own other corporations. It also means that they have certain rights, like the right against unreasonable search and seizure.

The fact corporations are persons under the law — persons, not people by the way — is sometimes described as a “legal fiction.” A legal fiction is a kind of expedient that courts engage in on a practical basis. A good example is the “doctrine of survival”. That doctrine says that when two people die for example in the same car crash, and when it is not known who died first, the older person is taken to have died first, even in the absence of any evidence to that effect. (The order in which people have died is sometimes important, as when they are named as beneficiaries in each other’s wills.) This stipulation that the older person died first is a “legal fiction.” No one believes (or needs to believe) that it is true that the older person actually died first in a particular case. The court just needs a way to move forward, and having a standard assumption is better than, say, flipping a coin.

So, many have regarded corporate personhood as a legal fiction of that sort. We don’t need to hold, in other words, that corporations really have the properties that human persons have (rationality, or intentionality, or a soul, or whatever) in order to justify treating them as persons on public policy grounds. After all, it would be incredibly dangerous to the public good for courts not to include corporations as persons under the law, since that would mean that corporations couldn’t be sued for the harm they sometimes do, they couldn’t be forced to honour warranties, and the money you invest in them wouldn’t be safe from arbitrary seizure by the government. But still, the question lingers: is corporate personhood merely a legal fiction, or does regarding them as persons make good, literal, sense?

One mistake that it is important to avoid is this: some people argue that corporations just can’t be persons, because doing so would have morally intolerable consequences. If we let corporations be persons, this argument goes, then they get all the rights ‘real’ people have. And that’s intolerable. We can’t, for example, reasonably contemplate a world in which corporations — like human persons — have the right to adopt children. But it just doesn’t follow from according corporations personhood that they must have exactly the same rights as human persons. After all, personhood already comes in many varieties, with varying clusters of rights. Adult persons, for instance, have rights that child persons do not. And tourists generally have a different set of rights than citizens have. Personhood isn’t one thing, but many.

A person, at heart, is just a kind of agent — an entity capable of taking action and intentionally shaping the world. Since they area capable of intentionally shaping the world, they are also subject to being held responsible fo the choices they make in doing so.

So, are corporations persons, in that sense?

One option is of course skepticism. Skeptics argue that corporations can’t be persons, because they don’t have minds. Since they don’t have minds, they’re not capable of intending anything. And if they can’t intend, they can’t be persons. Versions of this view are popular among people of widely divergent political stripes. One prominent person who famously held a version of this view was the Nobel-prizewinning economist, Milton Friedman. Friedman made his view of personhood clear in his argument against Corporate Social Responsibility (CSR). He argued that corporations can’t have responsibilities, because they aren’t capable of taking action. A corporation’s managers take action, and so they can have responsibilities. But to Friedman, all this stuff about CSR was just silliness.

At another corner of the political landscape are folks who share Friedman’s skepticism, but for different reasons. A range of critics of corporate behaviour worry that if we attribute personhood to corporations, we’ll be so busy holding the corporations themselves responsible for wrongdoing that we’ll neglect to hold the flesh-and-blood humans within the corporations — the ones who actually ‘pulled the trigger,’ so to speak — responsible. But of course, that outcome isn’t necessary, though it’s surely plausible in particular cases. The fact is that the law generally makes it possible both to prosecute the corporation itself and to prosecute the relevant executives for their role in corporate wrongdoing. And besides, this practical worry doesn’t exactly settle the metaphysical question.

There have been various attempts, though, by philosophers to argue that literal corporate personhood is indeed possible. Peter French, for example, argued forty years ago that corporations are indeed capable of intentionality. French argued that if you want to locate corporate intentions, you just need to look to what he called the corporation’s “Internal Decision Structure.” That is, look to the corporation’s rules about things like whose signature is required to authorize what decisions, and look as well to the corporation’s stated objectives. A decision that is in line with corporate objectives and that is made through the proper administrative processes is, in every relevant sense, made in line with corporate intentions.

Other attempts have been made to outline ways in which we can justifiably understand corporations as persons, including for example Denis Arnold‘s attempt to formulate a theory of corporate personhood based on the capacity for planning — a capacity that corporations generally do have, above and beyond the planning capacity of any individual employed by the corporation.

But the issue is, shall we say, far from settled.

My own view is that much of the hubbub about corporate personhood results from a wrongheaded kind of essentialism — a search for the true essence of the corporation, for the truth about what a corporation really, really is, at heart. Is the corporation essentially (and not just incidentally or for convenience) a person? A group of persons? A nexus of contracts? An engine of wealth creation? A mechanism for rapacious aggregation of wealth?

I think such essentialism is a mistake. The corporation — indeed, any particular corporation — is many things to many people. And there are many lenses through which we can view the corporation, lenses that make more or less sense depending on the topic at hand.

I argued above that for a range of mundane purposes, thinking of the corporation as a person (an entity capable of having rights and duties) is essential. For corporations not to have at least some rights and responsibilities would be disastrous, both in human and in economic terms.

But for other topics, it may be that thinking in terms of personhood obscures more than it illuminates.

Take, for example, the question of corporate political activity. Should corporations be allowed to use their power to lobby government? Should corporate spending on political communications be regarded as protected ‘free speech’ (and hence virtually unlimited)? The latter question was dealt with in the Citizens United case, and many people take that case to have hinged on the question of personhood. That is, they take the court’s decision as having expanded the political rights that corporate persons have.

Independent of that court decision (which as a matter of fact barely mentioned corporate personhood), I think it’s basically unhelpful to think of corporate political action in terms of personhood. In the political realm, personhood is a fraught concept, and one that has historically been the subject of important battles. It was only in 1928, for example, that the Supreme Court of Canada ruled that women were indeed persons under the law (and hence eligible to be appointed to the Senate). Discussion of corporate personhood, in this context, inevitably leads to awkward and contentious comparisons with such hard-won legal changes.

I think that a good argument can be made that politics is fundamentally about relations between citizens (and between citizens and their government). And it’s unhelpful to think of corporations as a “new” kind of persons inhabiting this domain, and to try to figure out what political rights these new, artificial beings “really” (essentially) have.

What I recommend instead, for discussion of ethics in corporate political activity, is to view corporations as a particular kind of instrument. So rather that asking whether corporations may legitimately lobby government, I suggest asking whether it is legitimate for citizens to use corporations as a mechanism for lobbying government (given that lobbying government is undeniably a right every citizen has), and to ask what the proper limits are on citizens’ use of that mechanism. And given that citizens have a right to free speech with regards to politics, what limits (if any) are there on the use of the corporation as a tool for conveying (and amplifying) their views? Compare: the right to free speech doesn’t permit you to use a bullhorn to express your views six inches from your neighbour’s ears. There are limits on the technology you may use to express your views.

Thinking of the corporation as a technology means asking an entirely different set of questions than thinking in terms of personhood.

When thinking about the ethics of corporate political action, thinking in terms of personhood is a red herring. We don’t need to ask whether the corporation is a person in order to talk about corporate free speech, any more than we need to think about my house as a person in order to ask whether my house should be free from arbitrary search by police. Both the corporation and the house serve human ends, and it is in those terms that we ought to be thinking.

Corporations must be treated as corporations, for many purposes, in order to preserve the rights and protect the interests of the persons involved with them. Owners, customers, employees, and creditors would all be worse off if corporations were not treated by courts as persons. But personhood is best thought of as a lens — useful for some purposes — rather than as a deep truth about the nature of corporations.

That is why it is essential to treat corporations as persons, except when it’s not.

 


*Citizens United v. Federal Election Commission, 558 U.S. 310 (2010)


(This is based in part on a presentation I gave on November 22, 2019, in the Business Ethics Speakers Series, and a paper I published in the Georgetown Journal of Law & Public Policy, called “The Right to Bear Corporations”).

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