"The greatness and the genuine trait of your thought and writings lie on the fact that you positively and interestingly make use of philosophical thoughts and thoughtfulness in order to deeply and concretely cogitate about America's social issues. . . . This does not mean that your thought is reducible to your era: your thought, being inspired by issues characterizing your era . . . , overcomes your era and will still likely be up to date even after your era, for future generations." Bruno Valentin

Saturday, March 18, 2017

A Religious Stockholder-Test for Wells Fargo: Confronting Mediocre Accountability

Orienting executive compensation to accountability is easier said than done. For example, it might be supposed that the cause of accountability was aptly served by John Stumpf’s forfeit of $41 million in unvested stock when he resigned under pressure as Wells Fargo’s CEO because of the bank’s systemic overzealousness in signing customers up for unwanted services. Unfortunately, he “realized pretax earnings of more than $83 million by exercising vested stock options, amassed over his 34 years at the bank, and receiving payouts on certain stock awards.”[1] In other words, the man who presided over unethical business practices at the expense of customers received double that which he was forfeiting. How can accountability have any meaning against $83 million? This figure connotes reward rather than punishment. Tim Sloan, who succeeded Stumpf as the bank’s CEO, received compensation in 2016 of $13, up from the $11 million in 2015. Interestingly, it may have been religion to the rescue.
 Where accountability is so lapsed concerning even such a sordid organizational culture as that of Wells Fargo, it is interesting that the Sisters of St. Francis of Philadelphia were taking an active role as stockholder activists. The sisters wanted the bankers to commit to “real, systemic change in culture, ethics, values, and financial sustainability,” according to Sister Nora Nash, who is the order’s director of corporate social responsibility.[2] With the secular business ethicists presumably on the sideline, an order of nuns had come out swinging. The nuns even had a proposal to be voted on at the 2017 shareholder meeting demanding a full accounting on the root causes of the bank’s fraudulent activity, and the steps being taken to prevent taking advantage of customers in the future. Given the bank’s own lack of accountability with respect to executive compensation, I’m not sure that an internal investigation even by the bank’s board could be trusted. To be sure, the bank had fired four senior executives—including the former chief risk officer of the bank’s retail banking division and two regional presidents—who had been accused of wrongdoing. Even so, changing a company’s culture—especially one as cut-throat as Wells Fargo’s—is difficult at best.
Perhaps what the bankers really needed were regular visits from the nuns volunteering their time to see that the bank’s wealth is rightly used. A manager from another major bank said at the time of the scandal that it was well-known in the industry that "when you go to work for Wells Fargo, you know you are selling your soul to the devil." Perhaps it is no accident that the stockholder activists would be nuns, for they doubtless have prayerful radar for that sort of thing. Getting the lost back to right use of wealth would be a step in the right direction, for right use is two degrees of separation from using wealth in ways that harm other people.
When profit-seeking and wealth began to be accepted by theologians in the context of the commercial revolution, the legitimacy was conditional on right use.[3] Aquinas’ allowance of moderate profit on trade, for instance, was predicated on the assumption that the profit would not be subsequently used to hurt people. Such a use would violate Jesus’ notion of self-giving neighbor love. Similarly, the theologians during the Italian Renaissance stressed the virtues of liberality and munificence in the use of wealth, as opposed to self-serving uses or even hoarding. From this standpoint, $83 million is difficult to justify.
So the nuns could have added a second proposal—one that would reduce executive compensation. Lest it be supposed that talent would flee or avoid the bank, consider what sort of “talent” $83 million had bought. Turning an organization based on the sin of usury—which is based on the taking advantage of others instead of helping them (the original purpose of lending!)—to right use would be right and proper religious activity for the sisters, as secular ethicists look on from the sidelines.





[1] Stacy Cowley, “Wells Fargo Leaders Reaped Lavish Pay Even as Account Scandal Unfolded,” The New York Times, March 16, 2017.
[2] Ibid.
[3] Skip Worden, God’s Gold (Seattle, WA: Amazon, 2016)

Friday, March 3, 2017

Uber Tricking Law Enforcement: An Unethical Corporate Culture Externalized

A company with a culture in which in-fighting andheavy-handed treatment of subordinates are not only tolerated, but also constitute the norm can have good financials. With operations in more than 70 countries and a valuation of close to $70 billion in 2017, Uber could be said to be a tough, but successful company. Yet the psychological boundary-problems that lie behind such an organizational culture can easily be projected externally to infect bilateral relations with stakeholders. In the case of Uber, those stakeholders include municipal law enforcement. Even more than as manifested within the company, the external foray demonstrates just how presumptuous “boundary issues” are. Such presumption can blind even upper-level managers to just how much their company has overstep. In reading this essay on Uber’s program to evade law enforcement, you may be struck by the sheer denial in the company.

“Uber has long flouted laws and regulations to gain an edge against entrenched transportation providers.”[1] This statement alone suggests a rather sordid mentality—a sense of entitlement. The evasion included “a worldwide program to deceive authorities in markets where its low-cost ride-hailing service was being resisted by law enforcement, or in some instances, had been outright banned.”[2] In particular, the company began using its Greyball (think “blackball”) app as early as 2014 as part of a broader program called VTOS “to identify and sidestep authorities in places where regulators said the company was breaking the law goes further in skirting ethical lines—and potentially legal ones, too.”[3] One method involved drawing a digital perimeter around city officials’ offices on a digital map of the city that Uber monitored. “The company watched which people frequently opened and closed the app . . . around that location, which signified that the user might be associated with city agencies.”[4] Another technique involved looking at the user’s credit card information and whether that card was tied directly to an institution such as a police credit-union. Uber would also search social media profiles. Once a user was tagged, fake digital cars would show up on the app used to hail a car.

In a statement, Uber states, “This program denies ride requests to users who are violating our terms of service—whether that’s people aiming to physically harm drivers, competitors looking to disrupt our operations, or opponents who collude with officials on secret ‘stings’ meant to entrap drivers.”[5] The stings were not meant to entrap drivers; instead, the aim was to catch Uber breaking the law. The company’s emphasis on “opponents” reflects the contentious atmosphere within the company rather than any actual collusion externally. In actuality, Uber’s program was designed to evade law enforcement. To an overreaching mentality, such enforcement is bound to be dismissed rather than accepted.

Put another way, a company that views local law enforcement in such terms (i.e., in collusion with opponents) and goes to such lengths in investigating and tricking city officials is not going to be very tolerant of employees who claim that using the Greyball app “to identify and sidestep authorities in places where regulators said the company was breaking the law” skirts “ethical lines—and potentially legal ones, too.”[6] In other words, the aggressive internal culture not only mirrors, but also protects the external ethical over-reaches. “Inside Uber, some [employees] who knew about the VTOS program and how the Greyball tool was being used were troubled by it.”[7] Yet they feared retaliation. The culture in which in-fighting and the heavy use of power have been the norm could not have been irrelevant in this regard. It is not surprising that some of those employees provided documents to The New York Times rather than trying to navigate through the sordid organizational culture. Hence we have a glimpse of how an unethical organizational culture characterized by aggression can be associated with the unethical treatment of stakeholders, which in turn can not bode well in terms of long-term financial performance.





[1] Mike Isaac, “How Uber Used Secret Greyball Tool to Deceive Authorities Worldwide,” The New York Times, March 3, 2017.
[2] Ibid.
[3] Ibid.
[4] Ibid.
[5] Ibid.
[6] Ibid.
[7] Ibid.

Tuesday, February 28, 2017

Biblically-Based Investment Funds: A Matter of Priorities

Is it biblical to say a Christian can serve both God and money? In the Gospels, Jesus speaks to this point directly; it is not possible. In early 2017, Inspire Investing established two new exchange-traded funds having a “biblically responsible” approach to investing—meaning that they would avoid buying shares in companies that have “any degree of participation in activities that do not align with biblical values.”[1] That such activities include even tolerance for gay employees raises the question of just how practical an evangelical investment strategy is after the U.S. Supreme Court made gay marriage legal in all of the 50 republics making up the U.S.

According to the New York Times at the end of February, 2017, 92% “of the Fortune 500 companies include ‘sexual orientation’ in their nondiscrimination policies and 82 percent include ‘gender identity.’”[2] Mark Synder of the Equality Federation pointed out that businesses “have been leading the fight for full equality over the last few years. L.G.B.T. people are part of the fabric of our nation.”[3] In short, the approach of the funds was “squarely at odds with that of nearly all of corporate America.”[4] Finding companies in which to invest in may not be so easy for the employees of the two funds. Put another way, the rate of return achieved may be compromised. Of course, an evangelical Christian would contend that compromise with sin is no virtue—certainly no Christian virtue.

Adding to the difficulties is the fact that not all evangelical Christians believe that discrimination is a biblical value, Snyder asserts. Of course, the very word discrimination is ideologically laden; it implies that the thing prohibited is salubrious rather than sordid in nature. Within evangelical Christianity, the tenet that sin explicitly listed in the Old Testament should not be supported or enabled is nothing short of an article of faith. Yet even here, that Jesus of the New Testament is silent on the matter of homosexuality may give even holders of that article some pause. At the very least, the question of priorities can be raised. Should not the funds avoid investing in companies that enable or contribute toward sins identified by Jesus? To put emphasis on a sin not mentioned by Jesus has the opportunity cost of the benefit foregone from focusing on sins that are important to Jesus in the Gospels.

In fact, that Jesus stood with the outcast might prompt an evangelical Christian to feel uncomfortable in taking on a marginalized group in society—especially the transsexuals. Yet Jesus tells the prostitute to sin no more, and gays today are not apt to view homosexuality as a sin and agree to abstain from sex. Gays would be on firmer ground in pointing out that Jesus preached love foremost—a sort of love not delimited to friends and family. Hence Jesus hangs out with the sinners, loving even the “unclean” rather than going after them or those who help them.

Hence the question: what would a biblical-oriented fund based on Jesus’s concept of love (i.e., agape) have as a metric? Companies in which people fight and insult each other, such as Uber, would presumably be off the list. So too would military contractors. But just as the traditional “sin” stocks involving tobacco, gambling, and alcohol would not necessarily be excluded, so too would the matter of a company’s HR policy on gays be of small import. In short, matching Jesus’s priorities in the Gospels would arguably be a sounder basis for a biblical-based Christian investment fund. In the end, the question is whether Christians truly understand Christ’s brand of love. I suspect that it is not as ideologically comfortable as the current practice indicates. I suspect that a truly Christian investment fund would not line up on one side of a general ideological division in society, for religion transcends ideology—otherwise faith reduces to self-idolatry.



[1] Liz Moyer, “Alongside Faith in Investing, Funds Offer Investment Rooted in Faith,” The New York Times, February 28, 2017.
[2] Ibid.
[3] Ibid.
[4] Ibid.

Thursday, December 8, 2016

The Golden Age of Innovation Refuted


“By all appearances, we’re in a golden age of innovation. Every month sees new advances in artificial intelligence, gene therapy, robotics, and software apps. Research and development as a share of gross domestic product [of the U.S.] is near an all-time high. There are more scientists and engineers in the U.S. than ever before. None of this has translated into meaningful advances in Americans’ standard of living.”[1] The question I address here is why.
For one thing, a lag follows big ideas before which they translate into increases in productivity related to labor and capital. Breakthroughs in electricity, aviation, and antibiotics did not reach their maximum impact until the 1950s, when “total factor productivity” stood at 3.4% a year.[2] In contrast, the figure for the first half of the 2010s was a paltry 0.5% a year. “Outside of personal technology, improvements in everyday life” were “incremental, not revolutionary,” during this period.[3] Houses, appliances, and cars looked much the same as they did twenty years earlier. Airplanes flew no faster than in the 1960s. This “innovation slump” is, according to the Wall Street Journal, “a key reason the American standards of living have stagnated since 2000.”[4] What had been revolutionary breakthroughs in the last century were still carrying the day into the next by means of incremental change based on product improvements. It could take a few decades before the fruitful research in AI, gene therapy, robotics, and software apps reach marketability and thus can impact productivity and radically alter daily life.
To be sure, the computer-tech revolution had altered daily life even by 2010—the smart-phone is a case in point. Yet personal computers go back to the 1970s so even in this respect the marketable innovations by Steve Jobs and Bill Gates can be viewed as incremental rather than revolutionary in nature. Software apps are themselves responsible for incremental changes based on the smartphone, which in turn is based on the personal computer. Even amid all the high-tech glitter, the developed world in 2016 stood as if a surfer waiting between two giant waves for the next one to hit.
Artificial intelligence, gene therapy, robotics, and software apps were poised to give rise to the next wave—first one of revolutionary change and then, after a lag, another wave—one of raised living standards. Unfortunately, revolutionary innovation “comes through trial and error, but society has grown less tolerant of risk.”[5] Furthermore, regulations “have raised the bar for commercializing new ideas.”[6] Lastly, “a trend toward industry concentration may have made it harder for upstart innovators to gain a toehold.”[7] In other words, the concentration of private capital may forestall the switch from continued incrementalism to revolutionary change. Breaking up oligopolies as a matter of public policy thus has more to it than merely preventing monopoly.
To be sure, companies and entrepreneurs in 2016 were “making high-risk bets on cars, space travel, and drones.”[8] Add in advances in AI and medical research—which could make death no longer inevitable for human beings—and some serious changes in daily life and productivity can be predicted. Yet, as potentially momentous as these efforts at innovation are, decades could separate the inventions and impacts on daily life and productivity. I suspect the world in 2016 was truly between two waves—the first of electricity, the telephone, sound recording, the automobile, the computer, and the airplane—and the second of space/astronomy, medical research, and AI/computer technology. Colonizing Mars, rendering death not inevitable, and combining AI, robotics, and software apps could result in wave that would dwarf the one of the previous century. The advent of smartphones, having all the glitter of a revolutionary product yet being an adaptation of the personal computer, whets appetites to look for the “big one” coming up on the horizon. Indeed, we have little time to waste; that wave could bring with it technology capable of arresting and even reversing the accumulations of CO2 and methane in the Earth’s atmosphere. The interesting dynamic of being able to save this planet just as we are able to colonize another is like the related one of making death something less than inevitable—due to stem-cell research on organ replacement, genetic therapy, and advances on curing diseases—just as we make the Earth habitable for our species for the indefinite future. Meanwhile, we are like children who have outgrown their clothes, still playing with adaptations of twentieth-century toys.



[1] Greg Ip, “Economic Drag: Few Big Ideas,” The Wall Street Journal, December 7, 2016.
[2] Ibid.
[3] Ibid.
[4] Ibid.
[5] Ibid.
[6] Ibid.
[7] Ibid.
[8] Ibid.

Wednesday, November 9, 2016

Societal Norms Understating Unethical Corporate Cultures: The Case of Wells Fargo

The case of Wells Fargo suggests that even when a massive scandal is revealed to the general public, the moral depravity of a company’s culture is skirted rather than fully perceived. Wells Fargo was fined a total of $185 million by regulatory agencies including the Consumer Financial Protection Bureau, which had accused the bank of creating as many as 1.5 million deposit accounts and 565,000 credit-card accounts that for which consumers never asked. The bank fired 5,300 employees over the course of about five years after it was revealed those employees had opened the accounts and credit cards.[1] Wells Fargo's CEO at the time, John Stumpf, "opted" for a cushy early retirement after an abysmal performance before a U.S. Senate committee; he walked away from the bank with around $130 million[2], and none of the other members of senior management were fired, or "retired," obliterating any hope societally that any of the senior managers would be held accountable. This result is particularly troubling, given the true extent to which that management had turned the bank into an ethically compromised organization.

"There is a serious problem with senior management at Wells Fargo," U.S. Senator Elizabeth Warren told CNBC in September, 2016.[3] "You can't have a scandal of this size and not have some senior management who are personally responsible," she said.[5] With so many sham accounts and fake credit-card applications, the problem must have gone beyond particular executives giving orders. As a former bank employee told me, “When we went to work there, we knew we were selling our souls to the devil.” To be sure, being willing to be hired anyway is a choice worthy of blame. We can be struck nonetheless at the unexpected banality of bank. It is truly remarkable both that a well-established institution could have such a sordid culture out of public view, and that senior managers could be fine with such “shared understandings” within the bank.

Besides the over-charged customers, aggrieved Wells Fargo workers--"people who say they were fired or demoted for staying honest and falling short of sales goals they say were unrealistic"--bore the brunt of the unethical senior and middle management[5]. For example, Yesenia Guitron, "a former banker, sued Wells Fargo in 2010--three years earlier than the bank has admitted it knew about the sham accounts . . . Intense sales pressure and unrealistic quotas drove employees to falsify documents and game the system to meet their sales goals, she wrote in her legal filing.” She “said she did everything the company had taught employees to do to report such misconduct internally. She told her manager about her concerns. She called Wells Fargo’s ethics hotline. When those steps yielded no results, she went up the chain, contacting a human resources representative and the bank’s regional manager. Wells Fargo’s response? After months of what Ms. Guitron described as retaliatory harassment, she was called into a meeting and told she was being fired for insubordination.”[6] Clearly, she had not gotten the memo on the requirement of selling her soul to the devil.

A memo to the rest of us could inform us that our designated watchdogs in the media do not go far enough in uncovering for us just how bad things are in companies run by unethical people. The extent of their moral depravity, and thus of the organizational culture, is not reaching us. As a result, we cannot push our elected representatives enough—the corporate lobbying notwithstanding—to enact legislation that is sufficient to meet such challenging cases. We suppose, for instance, that the replacement of a CEO can be sufficient to usher in restorative measures at the company level in spite of the extent of depravity.



1. Jon Marino, “Bove: Wells Fargo Will Make Retail Banks ‘Rethink’ Compensation,” CNBC.com, September 14, 2016.
2.Matt Egan, “Wells Fargo CEO Walks with $130 Million,” CNN Money, October 13, 2016.
3.John Marino, “Elizabeth Warren.”
4.Marino, “Elizabeth Warren.”
5. Stacy Cowley, “Wells Fargo Workers Claim Retaliation for Playing by the Rules,” The New York Times, September 26, 2016.
6. Cowley, “Wells Fargo Workers.”


Saturday, October 29, 2016

An Anti-Obesity, Anti-Poverty Philanthropist Joins PepsiCo.’s Board: A Case of Reform from Within

In October 2016, Darren Walker, president of the Ford Foundation, became the newest member of PepsiCo’s board of directors. Whereas Walker worked at the time for a more just and equitable society, Pepsi was making the bulk of its money by selling sugary drinks and fatty snacks and there being a well-established link between obesity and economic inequality. Would he be working at cross-purposes? “There’s a risk that he will be viewed as inconsistent,” said Michael Edwards, a former Ford Foundation executive at the time.[1] The company itself could also be viewed as being inconsistent—lobbying against anti-obesity public-health legislation while putting Walker on the board of directors.

To be sure, the Ford Foundation had not funded organizations working to combat obesity or diabetes, so there does not seem to be a direct conflict of interest for Walker.[2] Yet he did acknowledge, “I know that my own credibility and the credibility of the Ford Foundation is tied to this decision. Those of us in philanthropy have to be discerning about the corporate boards we join, and be discriminating to ensure that our service on a board is aligned with our values.”[3]

So rather than there being a conflict of interest, the issue for Walker was whether he could act as a reformer from within. Even though he planned bring the perspective of a social-justice organization and his own perspective “as someone who is deeply concerned about the welfare of people in poor and vulnerable communities,” he would still bear responsibility should PepsiCo’s board go in another direction.[4] He would not, in other words, be chairman of the board. That the company had just pledged to further reduce the amount of sugar, fat, and salt in its products by 2025, however, suggests an appetite for accommodation with Walker’s perspective. Additionally, Walker would not be responsible for the company’s past unethical lobbying against anti-obesity legislation, use of unethical suppliers of palm oil, and deceptive marketing, and the company had since taken steps to remedy these ethical problems.[5]

As in politics, the matter for Walker and the other board-members concerning would be whether together they could wield compromises taking into account both Walker’s vantage-point and the legal and ethical fiduciary duty to act as faithful stewards of the stockholders’ capital. Reform from “the inside,” moreover, can be more productive than merely staying in the philanthropic sphere. In terms of American politics, the analogue would be moving from the Green Party, for instance, to the Democratic Party so as to work toward reform that could actually manifest in legislation. Admittedly, idealism is tested in such a strategy, but consequentialism tells us that even 50% of 10 is more than 0% of 10.


1. David Gelles, “An Activist for the Poor Joins Pepsi’s Board. Is That Ethical?,” The New York Times, October 28, 2016.
2. Ibid.
3. Ibid.
4. Ibid.
5. Ibid.

Tuesday, September 27, 2016

Facebook’s Zuckerberg Donates $3 billion to Medical Science: Some Major Implications

Facebook’s CEO, Mark Zuckerberg, and his wife, Priscilla Chan, announced in September, 2016, that they would invest more than $3 billion during the next decade to build tools that can facilitate medical research on diseases. The first outlay of funds ($600 million) would create a research lab of engineers and scientists from the area’s major research universities.[1] “This focus on building on tools suggests a road map for how we might go about curing, preventing and managing all diseases this century,” Zuckerberg said at the announcement.[2] Moreover, the couple had previously announced a year before that they would give away 99% of their wealth over their lifetimes through the Chan-Zuckerberg Initiative in the areas of education and healthcare. I would like to point out a few implications that may not be readily apparent.

Firstly, such funds going to preventing and curing disease could bring the day nearer when—along with advances in anti-aging and stem-cell research—death is no longer inevitable for a human being. Even before the Zuckerberg-Chan announcements, some scientists were openly predicting that that day might come as early as the 2050s. To be sure, being able to grow replacement organs, apply an anti-aging treatment to the body’s cells, and prevent major diseases (I suspect the common cold will still be around, just to keep us humble) does not guarantee that death will be put off; running into a train or bus, or jumping off a high building could still mean death. Nevertheless, the notion that death can be put off indefinitely dwarfs the combined impact from all the twentieth-century’s technological progress put together.

Considering the costs involved, access to rendering death no longer inevitable would doubtlessly raise ethical issues in terms of the distribution. Moreover, ethical questions would suddenly arise concerning the species’ increasing population and reproduction-rights. Secondary issues such as climate change could become even more pressing. It could be, for example, that a drastically increasing human population outstrips the planet’s food-capacity as well as the capacity of the atmosphere to absorb the species’ waste, including greenhouse gases. It would be highly ironic were the feat in removing the threat of death a major contributor to the extinction of the species. In short, the story could go as follows: we maximize our species’ size—which means success genetically—only for the increased numbers to cause extinction because the climate is no longer hospitable to human habitation or the lack of food causes wars ending in nuclear war. The first alternative would be particularly likely.

Secondly, that the couple could give up 99% of their wealth over their lifetimes may imply that they will have earned too much money, if being able to use it is at all relevant. Put another way, being able to give away almost all of their total earnings may suggest that they (namely Zuckerberg) earned too much. Does it even make sense for someone to get money that is beyond the capacity to be spent even through inheritance?

One implication is the question of whether Zuckerberg’s employees at Facebook should get a significant amount of what Zuckerberg earns, whether in salary or stock. Why such a huge difference in compensation? To be sure, ownership does have its privileges, but is there no limit? The fact that Zuckerberg, Bill Gates, and Warren Buffet could give vast sums of money to charity raises the question of whether founders and CEOs shouldn’t face some limit in terms of wealth, with a progressive tax system kicking in for multi-billionaires. Were elected representatives to decide how such vast sums should be spent, the legitimacy of the power behind such a decision would be greater.


1. Deepa Seetharaman, “Zuckerberg Fund to Invest #3 Billion,” The Wall Street Journal, September 22, 2016.
2. Ibid.