Archive for March, 2011|Monthly archive page
Should Celebrities Regret Singing for Gadhafi’s Family?
Filed under: accountability, boycott, brands, charity, entertainment, ethics, excuses, international, profits |
Leave a comment I blogged nearly two weeks ago about the Ethics of Doing Business in Libya. The concern there was about the ethics of involvement in Libya by, well, “businesses” in the traditional, i.e., corporate, sense of that word. But the controversy that emerged short after that, and that continues still, concerns high-profile members of the entertainment business — celebrities like Usher, 50 Cent, and Mariah Carey. Basically, it has come to light that a whole fistful of such stars have, at various times, done private concerts for members of the Gadhafi family. And now, in light of the continuing violence in Libya, most of those stars are expressing regret and doing things like donating the money to charity. (For details, see Public consequences of pop stars’ private gigs, by By Reed Johnson and Rick Rojas for the Los Angeles Times.)
A few people have pointed out that the timing of the celebs’ crisis of conscience is just a little bit off. Libya has been a dictatorship for decades, and its leader has been a vicious madman just as long. As Tim Cavanaugh wrote on his blog at Reason, “Even assuming Qaddafi is so toxic you can’t with sound conscience take his dinars, that didn’t just become the case a few weeks ago.” If it’s right to give the money back now, it was likely wrong to take it in the first place.
But we can also question whether anyone does, or should, give much of a hoot over where these celebs sing, or for whom. The LA Times quotes Sting — a star with a reputation for charity work and activism — as defending having sung for the daughter of Uzbekistan dictator Islam Karimov:
Sting addressed criticism saying he was “well aware of the Uzbek president’s appalling reputation in the field of human rights as well as the environment. I made the decision to play there in spite of that.” He added, “I have come to believe that cultural boycotts are not only pointless gestures, they are counterproductive, where proscribed states are further robbed of the open commerce of ideas and art and as a result become even more closed, paranoid and insular.”
The man has a point. Though it may sound like a self-interested argument, that doesn’t mean it’s a bad one.
(Cavanaugh’s blog entry has a wonderful quote from, of all people, Adolf Hitler, who shrugged off artists behaving in ways that might have taken by him to be treasonous: “I don’t take any of that seriously. We should never judge artists by their political views. The imagination they need for their work deprives them of the ability to think in realistic terms.”)
But this leads me wonder: just what is the objection to singers singing for dictators? Is the money the problem, or is it having sung for (or more generally having done business with, or having provided a service for) an evil man’s family? Consider: if the money really is the problem — i.e., if this really is a case of filthy lucre — then donating the money to charity really does utterly absolve the stars in question of any blame. Or at least it would if the timing weren’t so questionable. Singing for free would also be OK. Indeed, if the money is all that matters, then stars might have a positive obligation to sing for wealthy tyrants and give the money to charity. After all, what could be better than squeezing a few million out of a mad dictator’s family in order to do something good with it? And if singing for free (or singing for money and donating it to charity) isn’t OK, then that seems to imply that the money isn’t the problem either.
Critical Thinking in Business Ethics, Part 3: Fallacies
Filed under: complexity, critical thinking, decision-making, definitions, ethics, excuses |
Comments (2) 
This is the 3rd in a series of occasional postings on the role of critical thinking in business ethics.Critical thinking is about a) how to construct good arguments, and b) how to spot and avoid bad ones. The focus of this posting will be on the latter. Bad arguments come in many forms, in many shapes and sizes. But some faulty arguments follow patterns of reasoning that are so common that they’ve acquired names. The general term for such named patterns of faulty argumentation is “fallacy”. There are many known fallacies, and textbooks on critical thinking typically devote a chapter to discussing a dozen or more of the most common ones.
Here are just a few examples of fallacies that could hinder good reasoning about Business Ethics.
One common fallacy is known as “the fallacy of composition.” We commit the fallacy of composition any time we assume, without justification, that the characteristics of the parts of a thing are automatically shared by the thing as a whole. A silly example: the fact that each piece of a motorcycle is light enough to lift doesn’t mean that the motorcycle as a whole is light enough to lift. Likewise, the fact that each member of a committee is talented and effective does not mean that the committee as a whole will be talented and effective — group dynamics matter. A business-ethics example follows pretty quickly from that one: from the fact that each member of your organization is ethical and well-intentioned, it does not follow that your organization, as a whole, will always act ethically. Team dynamics and institutional structure matter. That’s not to say that having ethical employees isn’t important. It obviously is. The point is just that you can’t automatically assume that, because you’ve got good employees, the net result of their behaviour will always be ethical. Another important example: from the fact that individual ethical acts don’t always pay, it doesn’t follow that an ethical pattern of behaviour won’t pay off in the long run.
Here are some other standard fallacies with clear relevance to business ethics. I’ll leave it to the reader to think up examples.
- “Appeal to the Person” (a.k.a. ad hominem attack), which generally involves attacking the person putting forward a point of view, rather than examining the strengths and weaknesses of that person’s argument. It’s important to keep in mind that a well-reasoned argument from someone you don’t like is still a well-reasoned argument.
- “Appeal to Tradition“, which typically means using the fact that “we’ve always done things this way” as a reason for continuing to do things that way. Clearly a recipe for disaster.
- “Appeal to Popularity“, which involves appealing to the fact that a particular point of view or practice is popular as a reason in favour of that view or practice. But being widely-believed is of course a very poor indicator of whether or not a claim is actually true.
- “Straw man” argument, which involves setting up, and then knocking down, a weak or foolish-looking “dummy” version of your opponent’s argument. This is a common rhetorical device. Whenever someone criticizes a particular bit of regulation, for example, it’s easy (but wrong) to paint them as a “rabid free-market neoliberal,” and then to attack that ideology, rather than looking at the substance of their argument.
One of the reasons such fallacies are so dangerous is that they tend to be psychologically appealing. Sometimes they’re appealing because they play to our biases. And sometimes they’re appealing just because they act as short-cuts, letting us take the easy (i.e., lazy) route straight to a simple conclusion, without doing the hard work of actually looking critically at the case at hand. But in business ethics, what we really need are the best answers, not the easiest ones.
——–
See also Part 1 and Part 2 in this series.
Regulating Wall Street Bonuses
Filed under: accountability, competition, decision-making, employees, finance, government, pay, regulations, wages, white collar crime |
Comments (5) The U.S. Securities and Exchange Commission has just announced its intention to exercise oversight over levels of pay on Wall Street. Is this an example of overreaching regulation, or of justified intervention in the public interest?
Here are the details, from Ben Protess and Susanne Craig, on the NYT‘s DealBook blog: S.E.C. Proposes Crackdown on Wall Street Bonuses:
Lavish Wall Street bonuses, long the scorn of lawmakers and shareholders, have met a new foe: the Securities and Exchange Commission.
The agency on Wednesday proposed a crackdown on hefty compensation awarded at big banks, brokerage firms and hedge funds — a move intended to rein in pay packages that encouraged excessive risk-taking before the financial crisis.
The proposal would for the first time require Wall Street firms to file detailed accounts of their bonuses with the S.E.C., which could then ban any awards it deemed excessive. The rules would be aimed at top executives and hundreds of rank-and-file employees who receive incentive-based pay….
In general, we should probably have as our starting point a healthy skepticism about government attempts to regulate pay in particular industries. Remuneration for high-level jobs is typically based on some combination of rewarding past performance and incentivizing future performance, in addition to sensitivity to things like skill, experience, and the scarcity of the particular talents the job requires. And it’s highly unlikely, again speaking in generalities, that government agencies are going to have the right information and motives to allow them to determine with any degree of precision and efficiency just what a private company’s pay structure should be. Now of course governments aren’t the only ones who could err in setting up compensation schemes; private companies are perfectly capable of screwing that up pretty badly themselves. But for the most part, if private companies screw up in that regard, it’s their shareholders that should hold them accountable, just as it is shareholders who ought to hold them accountable for any other foolish spending.
But there are likely to be justified exceptions to the general presumption in favour of the government taking hands-off approach to compensation. If it is the case — and this seems to be the S.E.C.’s conclusion, here — that compensation schemes in a particular industry are seriously and chronically causing harm beyond the walls of the organization, that seems to be a pretty good argument in favour of government action. This is especially true when the damage being done is not “merely” damage to particular individuals or groups, but to the stability of the economy as a whole. And as Protess and Craig point out, “The move by regulators to have more say on Wall Street pay highlights the huge role financial institutions play in the economy.” That is what arguably makes the harm done by Wall Street compensation not just a matter of private wrongs, but of public ones.
But of course, this argument doesn’t mean the S.E.C. should rush in like a bull in a china shop. All of the concerns mentioned above still apply — there are reasons why Wall Street firms have the compensation policies they have, and it’s pretty likely that at least some of those reasons are pretty good ones related to the necessities of the industry. Indeed, the S.E.C.’s chairwoman, Mary L. Schapiro, says that “This is an area where we want to be very attuned to unintended consequences.” The S.E.C.’s objectives here, seem to be good ones; the question will be whether the quality of the agency’s methods live up to the nobility of its goals.
Ethics of Doing Business in Libya
Filed under: corporate citizenship, ethics, government, international, risk, trade, workplace safety |
Comments (1) 
Amidst the upheaval in Libya, questions arise about foreign companies doing business there. Many firms, of course, are pulling out and evacuating any employees currently on the ground, for obvious reasons related to safety. But there are apparently still a few reasonably safe places in Libya, places far from the major cities that are the focus on the current fighting. And certainly business done from afar is still an option. So, that leaves companies with choices. Should Libya be considered entirely off-limits? At this point in the conflict, various governments have issued orders that put restrictions in place. But that doesn’t mean that Libya is, from a legal point of view at least, a no-go zone. (Canada’s government, for example, has clarified that Canadian firms are still allowed to do business in Libya, generally, but not with the Libyan government or with the Libyan Central Bank.)
I’m sure many will be tempted to say that foreign companies should pull out entirely. But then, it’s not clear that such a blanket prohibition does much good for the people of Libya as a whole. Note, for example, that Libya currently imports about 75% of its food. Stopping doing business with Libya would mean starving its population.
Of course, even before the current crisis, Libya was a dubious place to do business — at least some kinds of business. Note, for example, that a Canadian company has faced questions about its role in building a fancy new prison for the Gadhafi government. (From the Globe & Mail, see: SNC-Lavalin defends Libyan prison project.)
(An interesting side-note: SNC-Lavalin was recently ranked as one of the best-governed corporations in Canada. Note also that the companies shares are down, apparently because of worries not just about Libya, but about the entire region. About a quarter of the country’s income comes from the Middle East and Africa.)
Building a prison for use by a dictatorship is exactly the kind of project that is likely to draw fire. But that’s not entirely fair, either. As the G&M notes, Libya has been under international pressure to modernize its prisons. And if it is a legitimately good thing for a dictator to upgrade his prisons, then it’s hard to claim that it’s unethical for a company to make a profit by helping him do so.
The Business Ethics Blog 