I do take Brad’s point about excessive concentration of power in the hands of either individual corporations or governments.

Exon Mobil and their apparent disregard for any form of environmental or social responsibility is a good example of the consequences of excessive power in the hands of a corporation.

For the consequences of excessive government power, we only have to look at examples such as China or Russia, or worse, Zimbabwe, Myanmar or North Korea just to name a few.

Brad’s example above does provide a demonstration of the dangers of government interference even in a free, stable democracy like America.

I still do believe that governments should take a proactive stance in encouraging ethical conduct, and with respect to Lauren’s point, I do believe that effective laws as well as an effective system of law enforcement and justice is necessary in order to limit unacceptable corporate behavior.

With regards to Brad’s point about small business and small government, I do agree that excessive concentration of power is fraught with potential problems. However, at the other end of the spectrum, highly fragmented industries produce ethical problems of their own, particularly in cases of industries which are characterized by low transaction volumes and high margins per transaction.

I am not familar with the situation in America, but in Australia, such industries such as construction, real estate sales or used car sales appear to be amongst the industries most fraught with ethical abuses.

True, over concentration of power in the hands of few industries players leads to potential ethical abuses, but so too does can an undue extent of industry fragmentation.

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Thank you both for your kind words and comments.

In relation to Lauren’s point, I too, feel that at times, ‘the market’ is given a little too much reverence.

Don’t get me wrong, I believe fully in a free market economy whereby individuals are free to conduct business in an innovative manner without undue interference from government.

But I do believe that the market has its flaws, and sensible government intervention is sometimes required to ensure fairness and equity in the system.

Let me stress, I am only referring to sensible government intervention. As per Karen’s point, in cases where legislation is either poorly drafted or unnecessarily overbearing, it can be counter productive in terms of encouraging ethical behavior or producing fair social outcomes.

Cheers

Andrew

Great discussion Andrew and I appreciate you challenging us to think and talk about these important issues.

Karen

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With due respect to my fellow commenters, I think your observations are right on. If making money was the only measure for corporate success, we’d have no environmental laws, no labor laws, no antitrust laws, no fraud prevention laws, and we’d be in one heck of a mess. The subprime mortgage meltdown that’s wreaking havoc across the globe is a marvelous example of what happens when the urge to make money runs amok. While the laws that prohibit fraud didn’t prevent the crisis, under those laws there will be trials, convictions, and civil suits that result in damages being paid to innocent, injured people. Without those laws, we’d see a lot more of the same.

I grow increasingly frustrated with the “the market is God” thinking that drives so many business theorists today. It would be lovely if everyone who worked in business was honest, honorable, and committed to making a profit while doing no harm. Until that day arrives, government definitely has a role to play in keeping business from doing permanent damage in the name of short-term profits.

Lauren

Your points are certainly valid.

I guess in writing this post, I adopted a normative viewpoint, and considered what should happen in an ideal world.

In an ideal world, governments, as representatives of the people, could be trusted to reward ethical behavior in a fair and reasonable manner. Unfortunately, however, we live in the real world, where the process of favoritism and reward based upon ethical behavior easily becomes corrupted, and industries with considerable political muscle tend to benefit from such processes at the expense of those with less political muscle.

So, I certainly see your point about the dangers of favoring any companies or industries in the real world.

I do see the point both of you make about governments setting standards for ethical behavior when many governments around the world fail to adopt ethical practices themselves, and this underscores the importance of ethical conduct from govenments.

I do believe that governments can set broad frameworks for ethical behavior. Governments should not be overly prescriptive in defining ethical behavior, but setting broad frameworks like the UN Social Charter at least gives busisness a map or guideline in setting their own ethical policies.

Cheers

Andrew

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