"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

Monday, October 16, 2017

An Ethical Dilemma for Cell-Phone Companies? Drivers Who Text & Talk

Long before cellphones became ubiquitous, industry pioneers were aware of the risks of multitasking behind the wheel. Their hunches have been validated by many scientific studies showing the dangers of talking while driving and, in 2009, of texting. Despite the mounting evidence, the industry built itself into a $150 billion business in the United States largely by winning over a crucial customer: the driver. For years, it marketed the virtues of cellphones to drivers. Indeed, the industry originally called them car phones and extolled them as useful status symbols in ads, like one from 1984 showing an executive behind the wheel that asked: Can your secretary take dictation at 55 MPH? “That was the business,” said Kevin Roe, a telecommunications industry analyst since 1993. Wireless companies “designed everything to keep people talking in their cars.” The CTIA, the industry’s trade group, supported legislation banning texting while driving. It has also changed its stance on legislation to ban talking on phones while driving — for years, it opposed such laws; then it became neutral. “This was never something we anticipated,” Mr. Largent, head of the CTIA, said in 2009.  However, Bob Lucky, an executive director at Bell Labs from 1982-92, said he knew that drivers talking on cellphones were not focused fully on the road. But he did not think much about it or discuss it and supposed others did not, either, given the industry’s booming fortunes. “If you’re an engineer, you don’t want to outlaw the great technology you’ve been working on,” said Mr. Lucky, now 73. “If you’re a marketing person, you don’t want to outlaw the thing you’ve been trying to sell. If you’re a C.E.O., you don’t want to outlaw the thing that’s been making a lot of money.” One researcher who spoke up about his concerns was quickly shut down. In 1990, David Strayer, a junior researcher at GTE, which later became part of Verizon, noticed more drivers who seemed to be distracted by their phones, and it scared him. He asked a supervisor if the company should research the risks. “Why would we want to know that?” Mr. Strayer recalled being told. He said the message was clear: “Learning about distraction would not be very helpful to the overall business model.” So why did the industry lobby turn to neutral in 2009, when it had for years resisted any governmental regulation on cell phones? 

It is important to remember the rationale of the “overall business model” so we don’t project some sort of fuzzy corporate social responsibility motive.   The industry’s shift to neutral matches a trend in its bottom line:  in the 1980s and early ’90s, wireless companies got 75 percent or more of their revenue from drivers, a figure that fell below 50 percent by the mid-’90s and is by 2009 below 25 percent.  The negative publicity on cellphones from distracted drivers killing people could cost the industry more (in dollars and cents) than what it could otherwise make by selling phones to more drivers.     Public affairs offices and industry lobby groups are simply reflections of the financial interest of the “business model.”   We ought not be fooled, as if an industry suddenly sees the light and does what is right.  Of course, it is in the financial interest of an industry to have us view it as such, but this is of course just more of the same.   Remember that the cell phone industry had reason to know of the problem of distracted drivers but ignored it in following a single-minded profit trajectory.

Source: http://www.nytimes.com/2009/12/07/technology/07distracted.html?ref=business

Saturday, October 14, 2017

Google’s Philanthropy: $1 Billion to Tech-Train America’s Unemployed

In October 2017, Sundar Pichai, CEO of Google, announced that the company would give $1 billion over the next five years to nonprofit organizations that help people “adjust to the changing nature of work.”[1] The digital skills philanthropic venture would essentially help otherwise unemployed Americans get jobs that require high-tech skills. This would also enable more people to use the internet, and thus the company’s products. So a reporter at USA Today can be said to gild the lily a bit in claiming that the initiative “is a tacit acknowledgement from one of the world’s most valuable companies that it bears some responsibility for rapid advances in technology that are radically reshaping industries and eliminating jobs in the U.S. and around the world.”[2] I submit that it is highly unlikely that such an acknowledgement ever took place at Google, given the more likely scenario wherein the company’s management saw an opportunity to enlarge (and hopefully enrich) its labor pool and customer base.
In making the announcement from Pittsburgh, Pichai observed, “One-third of jobs in 2020 will require skills that aren’t common [in 2017]. It’s a big problem.”[3] Indeed. He may in fact have been understating it. Giving $10 million to Goodwill’s Digital Career Accelerator so it could “provide 1 million people with access to digital skills and career opportunities” does not necessarily mean that 1 million people would become proficient at such skills, which after all are not easy to master. There is also the matter of attitude, which can function as a wedge between digital skills and realized and sustained career opportunities. Chronic unemployment itself can test and even twist a person’s attitude, which can also be a factor in a person’s unemployment in the first place.
Generally speaking, funneling a society’s extant labor force and the unemployed through a skills-filter, in this case, digital skills, ignores the innate diversity that exists within any societal labor pool (and society itself). The heterogeneous nature of people vocationally is happily in line with the fact that a diversified economy is more stable than one that privileges a certain sector or even its skill-set.



[1] Jessica Lynn, “Google to Give $1 Billion to Nonprofits and Help Americans Get Jobs in the New Economy,” The New York Times, October 12, 2017.
[2] Ibid.
[3] Ibid.

Saturday, October 7, 2017

Investment Bank Dinners with Corporate Executives and Hedge Fund Managers: The General Public Not Admitted

The Case Study:

“One day in early March [2011], the phone lines of hedge-fund traders around London and New York suddenly lit up. A stock that many of them had placed hefty bets on—Pride International Inc., an energy company in the process of being sold to a rival—was falling. The traders had no idea why. They soon figured it out: J.P. Morgan Chase & Co. had hosted a meeting that day between a handful of hedge-fund traders and executives from a company that was considered a prime candidate to start a bidding war for Pride. One of those executives had indicated they weren't likely to make a bid.”

“The prospect of a bidding war had lifted Pride's shares above where they likely would have traded in the absence of a potential interloper. . . . At the March 8 lunch, though, as the traders munched on scallops and fish, Seadrill vice president and board member Tor Olav Trøim splashed cold water on the idea of a bid. He recalls telling traders that the company's Feb. 24 statement was ‘not normally what you would say if you were interested in bidding yourself. His intended message, according to one person familiar with the matter, is that Seadrill was "very unlikely’ to launch a competing offer for Pride. The information was market-moving, traders say. In the hours after the lunch, some traders wagered that the odds of a bidding war had declined. Seadrill's shares rose more than 1% as it was viewed as less likely to pursue a costly acquisition. Pride's shares fell by about 0.5% in the minutes before markets closed.”


“The moves may seem small, but they were significant for ‘merger arbitrage’ traders, who make short-term bets on deal stocks. In the case of the Ensco-Pride deal, the movements translated into a sudden 64% spike in the deal's ‘spread.’ That arcane measure reflects the difference between a target company's stock price and the per-share value of the acquirer's offer. The spread is closely watched by hedge funds that focus on merger arbitrage, which stand to gain or lose large sums based on the spread's movement. As the shares moved, anxious investors bombarded Seadrill's investor-relations office with phone calls, trying to figure out whether the company had issued new guidance about its appetite for bidding on Pride, according to a person familiar with the matter. Company officials responded that they hadn't released any new information. . . . Trøim says Seadrill executives regularly meet with large and small investors and that it is appropriate to help them understand the company's strategy. ‘We cannot see that we in any way have crossed any lines for giving privileged information,’ he says.”

The Issues:

“Hedge funds are a big business for banks. U.S. and European hedge funds last year shelled out a total of about $3.7 billion in brokerage commissions to banks for equity trades, according to research firm Greenwich Associates. . . . Investment banks vie for business from elite hedge funds by offering traders at those funds special access to senior deal makers and corporate executives at dinners and other gatherings. The traders sometimes pick up valuable nuggets of information that aren't available to other investors, according to people who have attended such gatherings.”

“Representatives of the banks say their investment bankers aren't permitted to discuss material nonpublic information, and that the meetings serve a legitimate business purpose. In addition to helping the banks win trading business, the get-togethers allow the bankers and corporate executives to cultivate relationships with the hedge funds, the banks say. The funds often are major shareholders in multiple companies and frequently help determine the outcome of key corporate events that are subject to shareholder approval, such as mergers and acquisitions.”

“Amid intensified scrutiny of insider trading, the U.S. Securities and Exchange Commission recently warned some banks that they need to be careful that such meetings don't result in the improper exchange of privileged information, according to people familiar with the matter.”

“Under insider-trading laws, it is generally illegal to buy or sell securities based on ‘material,’ or significant, information that isn't publicly available. Securities lawyers say the appropriateness of the meetings banks set up with hedge-fund traders depends on whether such information changes hands and is subsequently traded upon.”

“It is unclear how often useful trading information is disseminated in the meetings. The meetings appear to have made some banks nervous. . . . ‘It made me congenitally nervous,’ said a banker who until recently worked at a top Wall Street investment bank. ‘It certainly should be on [regulators'] radar.’ . . . Goldman Sachs Group Inc.'s compliance department [in 2010] barred its brokers from arranging dinner meetings between Goldman's bankers and outside hedge-fund traders, say people familiar with the matter. Bank of America's investment-banking arm, Bank of America Merrill Lynch, [in 2011] cut down on the gatherings after the SEC expressed concern, although it still allows them in some circumstances, according to people familiar with the matter. Many banks nevertheless continue to hold closed-door meetings with hedge funds on a regular basis, according to traders, bankers and other industry officials. Banks try to differentiate themselves from rivals by dangling access to key players—coveted by hedge funds, for which incremental bits of information can be extremely valuable. The banks also set up lunches and other ‘corporate access’ meetings that give the traders the chance to grill top corporate executives about pending deals and other matters. Such opportunities are rarely available to individuals and other small investors.”

Analysis:

To keep participants within the world of business from speaking with each other in closer terms than are available to the general public strikes me as utterly fanciful and doomed to failure—especially if a profit relationship is involved. Intimating a company’s strategy alone can proffer hints of information not available to the public and yet useful for trading. Are the courts to become embroiled in interpreting every nuance at every meeting in which investment bankers bring together corporations and hedge funds so they may behave as though in public? Policing such meetings is at best an uphill battle, and more realistically like trying to keep the rising tide back from one’s sand castles. It is the castles that are artificial, not the water presumably to be held back by them.

In terms of prohibiting insider-trading more generally, what is really being reputiated or denied is the concentric nature of the respective circles of family, friendships and finally the general public identified by Cicero in his theory of justice wherein caritas naturalis (natural love) is limited to the circle of amicitia (friendship). It is just by nature that friends share a love that does not hold in the wider public. This theory of justice is more restricted than the caritas universalis (universal love)—extending even to strangers—preached by Augustine. That loving strangers is difficult while loving one's friends is easy attests to the qualitiative differences between the concentric circles that inform Cicero's theory of justice, which insider-trading laws contravene.

In any social context, friends are not going to behave as though all they know of each other is what the general public knows. Just as it is natural that people closer will exchange more information than people in the wider public, it is also natural for the latter to envy those who are closer except when they themselves are in close relation with their own friends and colleagues. Enforcing publically-available information on business practitioners having mutual dealings is to conflate the widest circle with narrower circles. It is to pretend that caritas naturalis seu amicitia simply does not exist—that everything is universal rather than natural love being of friendship.

Fueling resentment of insider-trading may be our natural distaste for exclusion. As a student at Yale, I felt exclusion when my political party in the Yale Political Union invited me and the other new members to a Friday night party in a room in the clock tower. The chairman told me that we would all be initiated into the party’s secret society because the party owned it; we were members of the party, after all. In actuality, only a few members—those who had new leadership positions in the party—were tapped by the older leadership; the rest of us were invited so there would be an excluded element heightening the feeling of inclusion. My resentment was a function of my illusion (facilitated by the chairman) that an inner circle would treat a wider circle as equivalent.

As much as I detest the “insider/outsider” diremption, I must admit that it is a part of the human social condition. As social animals, we naturally find ourselves in relations wherein some people are closer to us than others. We fool ourselves if we presume that people who are closer will somehow open their relations up to a wider circle as if there were no narrower circle. Some of us, however, relish exacerbating the natural distances by excluding others solely for the pleasure of being cruel. For example, I grew up in a family that broke up into two camps, both of which relished excluding a family member. Even though the betrayal in such exclusion was unnatural, I must admit that narrower and wider circles naturally develop as human beings interact.

To pretend that there is only a general public is to deny the human condition in its social setting. Insider-trading law may be predicated by a denial of relationships that go beyond the general public.
Furthermore, the “harm” from insider trading is largely one of opportunity cost, as the benefits obtained by insiders are not shared by the general public. In contrast, the harm from fraud is felt by the victims, who are outsiders. In a wider sense, the systemic risk of the failure of a financial system is shared by the general public. Legislation and enforcement ought to take into account the difference between an opportunity cost and direct harm.

Therefore, for the SEC to put resources into insider-trading at the expense of going after banks and other companies that evince systemic risk is something more than misplaced priorities. In terms of punishment, to treat a business practitioner who benefits financially from information overheard from a CEO as though he or she committed fraud by lying to investors or murdered someone is to conflate categories of different degrees of harm.

Lastly, human behavior is such that it cannot be totally regulated. Nor can human nature itself manifested socially be remade as though there were just a general public without caritas naturalis seu amicitia. Business practitioners cannot be held back from exchanging information that is not available to the general public. Like jelly in a hand, the harder you squeeze it the less of it you will have within your grip. The illusion of micro-managing regulation to every facet of business ignores this principle, which is based in human nature rather than artifice.



Source:

David Enrich and Dana Cimilluca, “Banks Woo Funds with Private Peeks,” The Wall Street Journal, May 16, 2011.





Wednesday, October 4, 2017

Capitalism and Caste: Artificial vs. Natural

Part I

Capitalism & Caste: Melting Untouchability in India

In what has become known as India, the caste system of Hinduism has for millennia served as the template for the socio-economic ordering of people into family-based groups. By the end of the first decade of the twenty-first century, the economic liberalization policy put in place in 1991 to replace the stagnant “import-substitution” domestic-favoring model of economic development had enabled some people in the lower castes to vault into social acceptability by virtue of what The New York Times calls “the newest god in the Indian pantheon: money.” Given the advent of the prosperity gospel in Christianity and the associated eclipse of the “camel getting through the eye of a needle” much-earlier-hegemonic association of wealth with greed, a similar statement could be made with regard to the Trinity (see “Godliness and Greed” and "God's Gold," both available at Amazon).
Gandhi is said to have remarked, “I used to think that truth was God. I have realized that God is truth.” This is a very profound statement, which must be unpacked to be understood and appreciated. “God” refers here to what in the Abrahamic religions (Judaism, Christianity and Islam) is called revelation (God revealing itself through scripture). In Hinduism, the basic scriptures are known as the Vedas—the commentary thereof is known as the Upanisads (which are quite rich in terms of religious philosophy). The Vedas contain directions for social practices, such as concern widows (e.g., Sati (throwing oneself on the burning funeral pire of one’s husband) or going into a widows home, which often involved prostitution) and Dalits, or “untouchables” (e.g., not permitted to worship in the temple, or use public drinking fountains—sound familiar?).
Gandhi was saying that he used to accept all that was in revelation—including social practices concerning widows and untouchables—as truth (i.e., as unquestionably valid, or sacred). Observing the suffering of widows and untouchables, he came to realize that to be valid, revelation must itself “pass the truth test.” Suffering of the innocent (Christians may recall the suffering servant motif) as a direct and sole result of a directive in scripture could not be of truth, Gandhi concluded. Truth, in other words, has a higher calling than does revelation. In other words, what humans record as their revelations of the divine should be subject to truth itself, rather than defining (i.e., limiting) it. Even if what the religions record as revelation is informed by a divine source or field, the “informing” must pass through the imperfect (i.e., distortive) atmosphere of the human instruments that do the writing and copying. Therefore, “God is truth” means that truth is rightfully a criterion to be applied to revelation.  That which doesn’t pass the “smell test” can rightfully be ignored (I would include a conflict-of-interest criterion to the “smell test”).
The constitution of modern India forbids the old, rather sordid institutional prejudice against widows and the Dalit (which as of this writing number about 200 million). For example, the practice of physical untouchability, which confined Dalits to low-status jobs and social exclusion, is outlawed. Except in some remote areas, Dalits can walk on the same streets as upper-caste Indians, look them in the eye, and drink from the same wells and water fountains.
Even so, as anyone who has stayed in a Motel 6 or Holiday Inn Express owned or operated by a Patel knows, vocational groupings continue to reflect family groupings, or castes. According to the New York Times, “(s)ocial and economic mobility are limited, a product of India’s layers of cultural legacies: the Hindu caste system, the feudal and sometimes racial hierarchies . . ., and the imperial bureaucracy imposed by Britain.” For many Indians still, you do what your father did. The Times reports that “(k)nowledge-based businesses like information technology have attracted large numbers of Brahmins, the traditional learned caste. The business castes tended to focus more on retail and wholesale trade than manufacturing. Messy industries like construction are closer to the traditional occupations of the lowest castes.” That the historical caste of scholars and priests (i.e., the Brahmins) has turned to information technology reflects the new “high priests” in terms of modern Indian values, yet I doubt that contemporary Brahmin scholars and priests view a computer programmer as being at all equivalent. The caste system itself has been truncated by a certain reductionism to business (i.e., oriented to business), given the societal hegemony of business in modern India.
As a brief digression, I want to translate the Hindu caste system into Western society. A learned caste exists in the West, even if that caste has been eclipsed in popular culture by the “professional” sub-caste in the business caste. Even so, scholars and priests in the West correspond to the Indian Brahmin caste. The political caste contains (in decreasing order) imperial, kingdom/state, province/region/county, and local offices. This is so in both India and the West. The business caste in the West contains its own hierarchy, from professionals (physicians, CPA’s and lawyers) to the people who work in the financial services and information technology, and on down to retail managers and finally manufacturers. The worker caste (foreign farm workers being at its bottom) is below the “managerial” sub-caste of the business caste, and the “welfare” or “homeless” caste is perhaps the Western equivalent of the untouchables in India. As in India, the business caste—in particular the professional and managerial sub-castes—has in practice vaulted to being the de facto highest caste in terms of contemporary values. That the Brahmin caste, in having scriptures or treatises as referents that contradict or relativize whatever happens to be the flavor of the month (e.g., “being a professional”), self-consciously transcends or repudiates “professional” values suggests that a basic learned—politics—business order of status (and even class) exists in spite of the apparent societal hegemony of the professionals (in which, not coincidentally, the next-lower business sub-caste, that of the business executive/manager, has claimed membership). Indeed, practically every working adult American who is not a student claims to be a professional (just look at the housing postings on Craigslist). In the U.S., everyone gets to classify oneself as being in the highest sub-caste of business, which in turn is presumed to be the highest caste in the entire system. It is not simply because physicians, public accountants and lawyers can be wealthy; “professional” now conveys a high-class sort of status. So, it would appear there are two new gods in the American pantheon.
In modern India, the “Dalit problem” may reduce in a practical sense to the task of reducing a rather extreme economic inequality, which in itself is dangerous to a representative democracy. Thanks in part to an affirmative action program by the government, Dalits and tribal people have gained in getting an education and procuring government jobs. This is only part of the story, however. Although widening “the gulf between rich and poor,” the economic expansion brought about by the post-1991 liberalization policy allowing foreign direct investment and expanding trade has enabled some Dalits to become wealthy as business practitioners. As a result of both the affirmative action and liberalization policies, the wage gap between other castes and Dalits decreased from 36 percent in 1983 to 21 percent in 2011 (and the education gap has been halved). Twenty-one percent is less than the gap between Caucasian and Black men in the United States in 2011. The social status of Dalits has risen as well. “With their new wealth they have also won a measure of social acceptance,” according to the Times.
According to Chandra Bhan Prasad, a Dalit activist and proponent of capitalism for untouchables, “(b)ecause of the new market economy, material markers are replacing social markers.” This can be generalized to include the self-vaunting of the business caste to the head of the line from third in terms of popular understanding both in India and the West. Prasad implicitly likens India to the West, in fact, by making the following observation: “India is moving from a caste-based to a class-based society, where if you have all the goodies in life and your bank account is booming, you are acceptable.” What of the Brahmin priest or scholar of philosophy who sees through all the vanities in life and appreciates timeless gems that don’t necessary pay a monetary dividend? Is the modern professional society in actuality without class, yet still very hierarchical and unequal? It is indeed part of the role of the scholar and priest to hold this mirror up to the “professionals,” whose niggardly caste does not permit donations to such “lost” causes as that of truth. Am I understood?
As Nietzsche theorizes, the strong can be hoodwinked by the weak who seek to dominate beyond their native pith and ken (e.g., those with an undergraduate degree in Law or Medicine claiming nonetheless a false entitlement to the doctorate—the J.S.D. or D.Sci.M. rather than the LLB/JD or MD prerequisite degrees). Pith, or strength, and ken, or knowledge, may come down in the end to character, out of which real castes naturally form in human relations. What physician is going to party with a scholar who reminds him that his MD is actually an undergraduate degree in a Medical school?—the doctorate being a terminal (highest possible, so not a prerequisite for another degree in the same school/discipline) degree that includes comprehensive (not board) exams and a dissertation-length defended body of original research. What scholar is going to respect a lawyer who cannot be wrong about the LLB (the JD is just another name for that degree) being a doctorate because he or she also has a BA in English? It was student dissatisfaction at around 1900 with the “two B’s” (LLB and BA) that prompted the three lawyers who started new University of Chicago Law School to re-label the LLB program as “JD” (this “D” does not stand for doctorate). In typically American fashion, the marketing gimmick was inexorably taken for substance (because of the convenience) and the misnomer quite understandably became the default rather than recognized as a stubborn category mistake. Substantively, a year or two of basic survey courses and the same time in senior seminars (without even a major!) in the discipline of law does not a doctorate make. Yet this misnomer, and the related one in American medical schools, helped fuel the ascendancy of the “professional” sub-caste of business to the top of the heap, aided by the perennial non-virgin goddess of money.
I contend that the self-vaunting of the “professional” sub-caste in the West is just as squalid (and without foundation) as the historical discrimination against the Dalit in what is now India. Both trajectories violate the ethical principle of desert (i.e., what is deserved) which is related to the principle of fairness. Both “mis-casteings” involve the presumption of knowing more than is actually known in the assigning (and enforcement) of roles. In other words, both are dogmatic, or arbitrary, relative to nature. Rather than looking to capitalism or democracy here, the real lesson is in terms of nature relative to human contrivance. The ancient Greek marble pillars might have been majestic in service to Athena or Poseidon, but green vines would have the last say, as per the painting of the Romantics in the nineteenth century.
Whereas governmental preference and capitalism have enabled an increasing number of Dalits to “join the club” of social acceptance, business and government in the West reinforce the hegemony of the “doctored” professionals who in actuality typically have one (Europe) or two (America) undergraduate degrees. Indeed, kings (raj) and businessmen (as well as Brahmin priests!) in historical India played salient roles in keeping the Dalit in their place as (literally) outcastes. So the value of capitalism and a preferential policy of government should not be over-esteemed in themselves simply because they contributed the upward mobility of some (or many) in the Dalit caste. In the end, above particular economic and political systems as well as historical and even modern societal caste or class systems in which some benefit unduly at the expense of others, lies human character, out of which a rather different, distinctly invisible order of castes naturally unfolds without relying on human intention.


Part II

Nature’s Caste System: Character-Based Clusters

Pushing good characters down for no good reason in a sort of “collective judgment” that applies to an entire group of people—as in the case of the untouchables in the caste system in India—and accepting the false entitlement of “professionals” to membership in the highest caste simply because they tend to be wealthy—as in the case of lawyers and physicians in America—violates the clusters that naturally cohere—like gases that form distinct planets having their own separated orbits—on the basis of character. Being “on one planet,” it is immediately obvious that someone else is on another. In this essay, I attempt to sketch some of the basic mechanisms by which nature’s caste system is sustained and articulate the nature of the differences that occasion there being appreciable distance between the clusters.
When a stranger is so rude or presumptuous that all you can do is turn and walk away in utter disbelief, for example, you have run into an alien from one of the outer planets. There are many such creatures communicating with us through Craigslist.
A quick read through the housing section (e.g., room shares, apartments for rent) and many “drama-free” private individuals—self-described “professionals”—can be found making demands right off the bat as they seek to attract (?) a future tenant. In actuality, such people are neither “drama-free” nor “professionals.” Both claims are immediately belied by the manner and content of the writing itself. Such people inhabit a sort of low-class society in which they presume themselves as the elite, or rulers. Astonishingly, the presumption is quite without any hint of second-guessing or shame. “YOU MUST . . . ” written in just this way as an advertisement points to the lack of control they have over their urge to dominate from weakness. Furthermore, they are convinced that they cannot be wrong. Some ask for age and others even bring up religion even though doing so is illegal. “No it’s not!” they would undoubtedly reply. They cannot be wrong. As if by sheer reflex, they must surely take any resistance to their presumption as an insult, even an attack, while they continue to hold themselves as blameless. How could they be otherwise? This rock-hard mentality naturally exists in its own “low class” caste in part because it is immune from being corrected or healed. The only thing a healthy person can do is keep reading—avoiding contact at any cost. This reaction is natural; it is thus one of the principal means by which nature enforces the clusters based on character.
Although I have met some really very nice people on twitter, that “universe” sometimes resembles a low-caste society of sorts that is populated, unfortunately, by creatures who seem dominated by an innate urge or proclivity to grant themselves the entitlement of being a self-certified expert. This seems particularly the case in religious or political topics. Opinions are routinely declared as if facts. “X is Y.” Seldom is it asked, “Perhaps X can be Y?” Although certainly not everyone who tweets on leadership does so, some of the so-called leadership “coaches” like to declare their opinions as if knowledge. It is like watching a little populist democracy of self-invented theory that presumes itself to be fully valid upon being tweeted!
I have in mind the “coaches” who declare as experts  that “Leadership is X” without even having bothered to read the academic (i.e. not “how to”) literature on the topic. In fact, these “coaches,” or cockroaches as they are otherwise known, even dismiss that literature, confusing their own self-informed (grade-wise?) declaration, “Leadership can’t be taught in a classroom!” (whereas leadership can be taught in a daylong “seminar” or “workshop” held in a hotel ballroom for a nice fee) with the fact that leadership can be understood. That was an actual tweet, by the way—by an “expert.” It does not matter that such “experts” are not scholars; they presume they know better what is possible in a classroom. Their presumption is thus of an encroaching nature, without any limit of restraint. Such creatures tend to presume on a regular basis that they 1) know what they actually do not know, and 2) cannot be wrong about it. They must be from a small, very rocky planet somewhere out past Neptune (a similar species populates my “small” hometown, including its little “professional” elite—an elite that is viewed as such only because a mere 21% of the adult population holds a college degree). Low caste, or class, it turns out, is not necessarily of a low socio-economic (or racial) demographic. This is where the historical Hindu caste system really got it wrong.
Worlds away from “low class” know-it-all attitude—which instantly (and naturally!) relegates a person to a low caste much more than does even the ignorance itself—are the more humble and genuine, flying at a much higher altitude. Such people are open to what they might not know and perhaps they are kind to strangers as a kind of natural default of politeness. If you have been fortunate to have been touched by such a person, you have been touched by a being from a planet closer to the sun. The rest of us do not deserve to be so touched, and we know this. Accordingly, as Nietzsche posits, there is a natural distance that arises between people who differ in terms of character-strength—what he calls noble strength. This is the power of a will that willingly takes on resistance, even and especially within—in self-overcoming.
In Nietzsche’s terms, having the will (and will-power!) to self-overcome one’s own most intransigent internal obstacle—a powerful instinct—proffers the most intense (or powerful) pleasure of power. Having the will and strength to perform such a task on a regular basis (i.e., self-overcoming) naturally builds character (noble strength). In so doing, it naturally separates one from people who take an easier path through life, whether through lack of will, or weakness. In other words, strength of character, an innate quality that I believe a person can strengthen or choose to compromise by will, differs among human beings (no doubt at least in part from upbringing). Such differences constitute the vacuums that inevitably exist between the natural castes that naturally form in the human condition. All other castes, or classes, are dogmatic in the sense that they are arbitrary to that condition.
In expunging the artificial sort such as the Hindu caste system, we should not ignore or dismiss the natural array of castes that we know on a daily basis by means of our natural sentiments of approbation and disapprobation. In fact, David Hume held that such sentiments constitute our recognition of “moral” and “immoral.” Perhaps these terms are but part of a more general sense we naturally have of the subjective distance that exists between natural, character-driven, castes or levels of being human, all too human. We moderns hate to think of humanity in such terms, yet I wager we know it on an all-too-daily basis, as we inexorably interact with others—realizing that some people are naturally closer while insisting that others acknowledge the distance that is—and must be—there.
Even a mere essay reflects and reinforces the natural affinities and distances that account for there being distinct clusters, or castes, in any given human social context. Nietzsche wrote in his Genealogy of Morals that it is not meant to be understood by everyone. Breaching the natural distance as if it were somehow “immoral” could sicken, or infect, the innately stronger. Many of the self-certified “coaches” (i.e., “experts” on leadership), for example, have already dismissed this essay in its entirety, mistaking disdain for disagreement (and ultimately weakness for strength). Sustaining that distance is not only the odious smell of arrogant ignorance; the cockroaches themselves fear being “outed” as phonies by a pest-control guy whom they sense can spray them with the disinfectant of (other-certified) knowledge. The arrogance of cockroaches does not permit them to scatter in the transparency of knowledge, so they tend to naturally keep their distance in the first place.
Far more interesting than the presumption of false entitlement by supercilious “professionals” and the ignorant opinion certifying itself as knowledge by the “coaches” is the notion that differences in the duration and timing of genes that trigger other genes can (along with environmental factors) eventuate in human interaction manifesting as distinct clusters based on something as intangible as character—and much of it without intention! We naturally cohere with some people as though in invisible stickiness were involved, and we just as naturally keep our distance from others as if doing so were simply by instinct. I must admit I have tended not to pay sufficient attention to natural distance and have wound up having to enforce what should have been natural. As imperfect as nature’s caste system is, the historical Hindu attempt to systematize it by group and presumably for all ages to come shows just how far ahead nature is to human intention. Try as we might, we cannot bottle it! For unlike the Hindu variety, natural law does not depend on religious, political and economic institutions for enforcement.


Sources:
Lydia Polgreen, “Scaling Caste Walls With Capitalism’s Ladders,” The New York Times, December 22, 2011. 

Friedrich Nietzsche, Genealogy of Morals, in Basic Writings of Nietzsche, Walter Kaufmann, trans. and ed. (New York: Modern Library, 2000).

Tuesday, August 8, 2017

Problems in American Executive Compensation: The Ethical Dimension

According to The New York Post, 66% of the income growth in the United States between 2001 and 2007 went to the top 1% of all Americans. In 1950, the ratio of the average executive’s paycheck to the average worker’s paycheck was about 30 to 1. By the year 2000, that ratio had exploded to between 300 to 500 to one. Because American executives tend to be paid more in total compensation than do their European colleagues, the ratios are lower in in the E.U. Hence one might ask what is behind the trajectory in the United States. 

Does a shift from manufacturing to knowledge-based industries occasion a widening economic gulf? Even as late as 2010, the United States still had the largest manufacturing sector in the world. I suspect that the change is not so much tied to the number or even proportion of factory workers as it is to changes in executive compensation. Specifically, in the 1990s stock options took off as a part of such compensation because boards wanted to tie executives' compensation to long term firm performance. Even if the alignment of incentives was strengthened, a side effect was an explosion in the overall level of a given executive's compensation. In other words, if an executive's company did well, so too did his or her total compensation package. This byproduct in turn raised the ethical issue of fairness.  Specifically, is a CEO's work really worth tens of millions in a given year to a firm or to society at large?  Is a CEO's effort really so much more than that of a mid-level manager or an employee in operations?  

To obviate any ethical violations of fairness, which human beings seem able to detect innately, boards could reduce the overall compensation packages of executive managers even as the proportion in stock options is increased.  Lest it be argued that the market demands the higher amounts, it could be argued that that market is an oligarchy rather than being competitive. If so, there might be a legitimate role for the U.S. Government as an umpire establishing and protecting competitive markets. Otherwise, an oligarchy can become a self-perpetuating club that functions primarily in the interest of its members, which occasions the ethical objection of fairness.

Source:

"So Long, Middle Class," New York Post, August 1, 2010.

Efficiency, Corporate Social Responsibility and Full Employment: Squaring a Circle

The New York Times reported that President Obama urged American businesses on February 7, 2011 to “'get in the game' by letting loose trillions of dollars being held in reserves, saying that they can help create a 'virtuous cycle' of more sales, higher demand and greater profits that will put people back to work and turn around the sluggish economy.” Obama continued, “If there is a reason you don’t believe that this is the time to get off the sidelines — to hire and invest — I want to know about it. I want to fix it.” In the speech at the U.S. Chamber of Commerce, Mr. Obama said that companies have a responsibility to help the economy recover. The trouble is that responsibility is a rather vague term that can be variously applied. This is one reason why the corporate social responsibility concept could mean providing society with the products and services that are sought via the marketplace (e.g. Milton Friedman of the Chicago school) while meaning for others increasing corporate philanthropy to alleviate a society problem such as poverty. In other words, responsibility can be made concrete in various ways that can accommodate and indeed reflect the ideologies of those applying the term.
It could be predicted, therefore, that the President's application of responsibility might have differed from some of the business managers in the audience. Indeed, Obama’s suggestion that businesses could help the economy recover by spending their reserves was met, according to The New York Times, “with skepticism by some in the audience.” For example, Harold Jackson, a executive at Buffalo Supply Incorporated (a medical supply company), called the President's suggestion naive. “Any business person has to look at the demand to their company for their product and services, and make hiring decisions,” Jackson said. “I think it’s a little outside the bounds to suggest that if we hire people we don’t need, there will be more demand.” In effect, Jackson was defending Friedman's application of corporate social responsibility from that of the President's.
To President Obama's assumption that American businesses were still sitting on the sidelines, it can be asked, in what sense? The President was pointing to what he viewed as excessive retained earnings. Yet John Schoen of MSNBC reported the same day that the American manufacturing sector was “roaring back” after the recession. Schoen reports a sustained rise in factory orders in five of the last six months, which prompted manufacturers to boost hiring. The Commerce Department had reported a few days before Schoen's report on February 7, 2011 that the manufacturing sector had added 49,000 new jobs in January. Yet this is hardly a roaring comeback in terms of new jobs. Schoen reports that businesses have figured out how to make more widgets with the same number of workers, resulting in higher productivity and profits. Investing reserves in automation, for example, raises productivity by making products faster and better. According to Schoen, “Productivity is a pretty simple concept: It’s a measure of how much stuff a worker makes in a given number of hours. . . . Productivity has also risen as American manufacturers have moved to specialize in more valuable products, sending manufacturing of cheaper goods overseas where wages are lower. As the value of American-made products has risen, so too has the average level of output per worker when measured in dollar terms.” Schoen reports that according to the U.S. Labor Department, the level of output per hour worked rose by 2.6 percent in the last three months of 2010. Even if it is not in the interest of labor, such improvement is in line with the logic of business, given how business is designed and how a competitive marketplace works. Spending retained earnings beyond that which can be expected to raise productivity simply does not make sense to a business practitioner.
In general terms, the (nearly) “jobless recovery” can be seen as pointing to a major difference between the interests of business and society—the latter being represented by the President at the Chamber of Commerce. Given the nature of business enterprise in a competitive market, it is only natural for managers (and boards) to work toward (and reward) greater efficiency (i.e. productivity). Business managers thus understand or apply responsibility in this way. As per Harold Jackson's point, to hire labor beyond the optimal efficiency point in order to solve the wider societal problem of unemployment would run against a firm's telos, or goal. Ultimately, such over-hiring would compromise a company's continued viability (which could result in the loss of even more jobs).
One cannot blame a manager for thinking in line with his or her company's logic, or raison d'etre, any more than one can blame a shark for hunting for food and eating like a shark. A shark is a shark, and a business can also be viewed as a feeding machine. To posit or impose responsibilities onto a machine does not make sense either to the machine or to those who operate it (in their functioning as operators). To an operator, responsibility means operating well—which, by the way, is virtue in the ancient Greek sense. The President's use of responsibility extrinsic to a business calculus simply would not register. It would be like trying to get ought out of is. Even within business functionality, responsibility even as in fiduciary duty to the stockholders is simply translated into “try to get as much profit as possible, now or later.” In other words, ought does not compute in a business technical vocabulary. The term is extrinsic, like societal problems and goals. To come from a societal standpoint and impose “be responsible” to a business practitioner is like shouting at a deaf person. The business person is apt to simply look curiously at the person as if wondering why he is speaking in a foreign language while assuming he is being understood nevertheless. “How odd,” is perhaps the most honest response that one could give to such a display.
The difference between the President's application of responsibility and that of Jackson can also be understood as the difference between the interest of a subunit and the system as a whole. It is only natural for a part of a whole to operate in the interest of the part itself rather than necessarily the whole. The interests of the latter can thus fall through the cracks. Government regulation is an attempt to plug such cracks, but regulations, like firms, are particular. On the issue of unemployment, the societal question is whether even a fully-operational economic system can supply full employment. If not, it may be the government's responsibility to supply the surplus employment, directly or indirectly via subcontracting. Crucially, this supply must be designed such that it does not reduce the employment provided by the private sector. The surplus jobs must be functions that the private sector does not and would not address. The President's error in his speech to the Chamber of Commerce could be that he was assuming this surplus is the responsibilities of “parts” of the system (i.e. individual companies) rather than of the system itself (i.e. the government).
In sum, responsibility is a dubious concept to apply to business; the term is too vague to have much traction in discussing such vital matters as affect our economic livelihoods and the related viability of our economy. It seems to me that the priority ought to be that every able-bodied and minded adult has a job (or, otherwise, a means by which he or she can have sufficient economic wherewithal to survive in this interdependent society), whether through business, non-profits or government. Ideologies, including responsibility itself, ought to be relegated as luxuries with which we can play on the margins once full employment has become a fait accompli. That is to say, ideologies might contribute to improving full employment, rather than being depended on to reach it or allowed to keep us from it. Of course, it could be countered that ideologies are part and parcel of this entire discussion and thus cannot be dissected from it. That may well be. Even so, I submit that ideologies such as laissez faire and corporate social responsibility ought not be allowed to thwart us in how we constitute full employment as a societal fact. That is to say, we ought to direct full employment by whatever means necessary then work from there (once attained) to improve it. Simply put, for some reason, we don't treat full employment as necessary.; rather, we treat it as a goal.  "How odd," an alien from another galaxy might say (in its own language, of course), should one visit us and want to study us.

Sources:

Michael D. Shear, “In Speech to Chamber of Commerce, Obama Urges Businesses to ‘Get in the Game,’The New York Times, February 7, 2011.


John W. Schoen, “Factories Boom, but with Few New Workers,” February 7, 2011, NBCNews.com.

Does Opportunity Justify Economic Inequality?

From 1993 to 2010, the incomes of the richest 1 percent of Americans grew 58 percent while the rest had a 6.4 percent increase.  In 2010, the first year of an economic recovery, the top 1 percent of Americans captured 93% of the income gains. Beyond the danger to the American republics in there being an economic elite so far removed from the vast majority of the population is the question of whether the trend is baleful, economically speaking. It is not clear that even such an income gain being snagged by so few registered in the minds of the general populous as a problem. The key to any concern would seem to be whether opportunity for the many is compromised as a result of extreme economic inequality.

In 2011, inequality was not exactly the top priority of American voters: only 17 percent thought it is extremely important for the government to try to reduce income and wealth inequality, according to a Gallup survey. That is about half the percent who said reigniting economic growth was crucial. However, 29 percent said it was extremely important for the government to increase equality of opportunity. More significant, 41 percent said that there was not much opportunity in America, up from 17 percent in 1998. The question is whether the concurrent increase in economic inequality was viewed as causing the decrease in opportunity. According to David Hume’s naturalist fallacy, a correlation does not itself mean a causal relationship exists. The fact that economic inequality was increasing as opportunity was decreasing does not in itself mean that the increasing inequality was reducing opportunity. There might be a causal relationship, but more is needed to support it than a correlation.

According to the New York Times, comparisons across countries “suggest a fairly strong, negative link between the level of inequality and the odds of advancement across the generations. The link makes sense: a big income gap is likely to open up other social breaches that make it tougher for those lower down the rungs to get ahead. And that is exactly what appears to be happening in the United States, where a narrow elite is peeling off from the rest of society by a chasm of wealth, power and experience.” Additionally, that elite can use its wealth as power to reserve the opportunities itself. For instance, donations to universities (and lobbying government officials) could be used to keep financial-aid-based admissions down to a certain level such that there are plenty of spots available for children of the well-off. Appeals seemingly in the interest of the masses can even be utilized, as in wanting to reduce subsidized student loan programs because students are suffering from too much debt.

In my view, the business-government dynamic is crucial to why increasing economic inequality is harmful both politically and economically. Minimizing the harm to reduced opportunity ignores the injustice that comes with the inequality itself. Wealth can easily be made into power, which in turn can be used in political, economic and societal realms in self-serving ways. The primacy of opportunity assumes that anyone can be rich if he or she just works hard enough. Both on account of the way the system is designed and the differences between people, not everyone will succeed even if given the opportunity.

Furthermore, conditioning one’s objection to economic inequality in society on whether one’s opportunity is affected can be viewed as self-centered as well as rather narrow because one is indifferent to the negative effects of the inequality on others apart from any decreased opportunity as long as one believes that one’s own opportunity is not adversely affected. Put another way, too many Americans are willing to look the other way on how the elite can unfairly use their advantage aside from restricting opportunity. The right of the elite to so much wealth is tacitly acknowledged as long as opportunity is still thought to exist.  As long as it does, society has no right to take from the rich even if they compromise the republics themselves. This is a very minimalist notion of social contract—one that the 1% benefit from. This is hardly an accident—political ideology established in society being in the interest of the relatively few beneficiaries of the vast majority of income gain.

Therefore, whether increasing economic inequality causes less opportunity for the masses is a question that can be relegated to the more important question of whether the inequality itself is inherently unfair and/or a threat to the republics, the economy, and even society. How the wealth has been and is gained as well as used are relevant to the ethical question of fairness, and thus to whether the concentration of wealth is legitimate. Crucially, a focus on opportunity misses this point. Besides its ethical dimension, absolute or relative economic inequality could be harmful in building up pressure of resentment and even revolution, as evinced in the Occupy Wall Street Movement (which has been safely marginalized—with its own complicity). As the interests of the elite and the masses diverge and the elite (e.g., Goldman Sachs) gains more and more power, the strangling of the lower and lower-middle classes may ensue—a development that could not be good for a society’s stability. A focus on opportunity recalibrated in terms of being promoted to manage a McDonalds’ restaurant misses this point. In short, we are missing the iceberg coming up in front of our ship because we are satisfied if we can still get a deck chair.

Source:
Eduardo Porter, “Inequality Undermines Democracy,” The New York Times, March 21, 2012. 

Christianity and “Social Capitalism”

The SEC charged Ephren Taylor with a fraudulent $11 million Ponzi scheme in April 2012. According to Reuters, “Taylor fraudulently sold $7 million of notes said to bear 12 percent to 20 percent annual interest rates, to fund small businesses such as laundries, juice bars and gas stations.” He “had conducted a multi-city ‘Building Wealth Tour’ in which he spoke to congregations” on the importance of “giving back.” He called himself a “social capitalist.” In actuality, he used the money on himself and his wife’s attempt to become a singer.

The congregants’ susceptibility to Taylor can be understand from grasping the larger historical trend within Christianity wherein the prosperity gospel—in which it is believed that God rewards “true believers” with material wealth—had replaced the anti-wealth view wherein being rich and saved is like a camel getting through the eye of a needle. In other words, the shift in historical Christian thought from a close coupling of wealth and greed to an outright rejection of such a linkage made it more likely that the lay Christians would view investing in “social capitalism” as sufficient to justify having wealth beyond subsistence living.

Secondly, Taylor’s assumed conflation or mixing of Christianity and social performance in business enabled the congregants to open their wallets presumably for religious purposes in line with a social conscience. It is worth pointing out that camel is not given a pass for using wealth in a socially responsible manner. In other words, if simply having wealth is indicative of underlying greed, how one uses the wealth is not sufficient to undo the linkage and justify having the wealth in the first place.

Moreover, fidelity to a social norm such as corporate social responsibility is not religious. Even though Unitarians maintain that certain social structures are the object of their faith, the religious domain contains a transcendent referent.  That is, faith in a religious sense is oriented to an object that lies beyond the limits of human cognition and perception.  Specific social structures do not qualify because they are in our human domain.

In fact, to advocate a particular social norm is not to justify ethically with ethical reasons.  That is to say, corporate social responsibility is not business ethics.  The difference can be explained by referring to David Hume’s naturalist fallacy, which holds that what “is” the case cannot justify what “should” be. In other words, you can’t get ought out of a melon. You need ethical reasons, such as “it is fair because x,” to justify what one should do. To advocate a social norm is not to provide an ethical reason; more would be needed to provide support for why a certain norm that can exist should exist.

Therefore, I question Taylor’s linking “social capitalism” to religion (and Christianity in particular). The application cannot even be justified under the rubric of religious ethics. In addition, the congregants were too gullible because they had applied or bent Christianity too far from its native turf.

See: God's Gold, available in print and as an ebook at Amazon.

Source:
Jonathan Stempel, “SEC Charges Ephren Taylor II ForAllegedly Bilking Churchgoers In $11 Million Ponzi Scheme,” The Huffington Post, April 12, 2012.

Saturday, August 5, 2017

A Professional Misnomer: Everyone Is a Self-Proclaimed Professional!

Certainly by the turn of (and well into) the twenty-first century, the term, "professional" had become such a cherished word in the American lexicon that every American had decided that he or she is one. Evincing the Lake Wobegon effect—the tendency of most people to describe themselves or their abilities as above average—nearly everyone is wont to say, “I am a professional.” On housing listings on Craigslist, for example, people routinely use the word to signify that they are not students. In fact, even some students characterize themselves as professionals (though not as professional students!). Such common usage belies the term's claim to having a specific meaning. Moreover, the tendency of non-professions to deem themselves as professions nonetheless may evince one of the downsides of democracy—namely, its proclivity to excess in terms of self-entitlement. This is particularly likely to ensue from a citizenry that is lacking in self-discipline, virtue and knowledge. 
I contend that the self-appellation of “professional” is in actuality an attempt at inclusion in what was hitherto known as “the professional class.” Nietzsche’s thesis is relevant regarding the instinct of certain herd animals to dominate as if they were strong—even though they are in fact weak. 
It is as though a manager at Walmart imagines a concept of egalitarianism wherein he is akin to a lawyer or surgeon—perhaps based on the fact that the manager distinguishes himself somehow from his subordinate “employees.”  Even in the midst of such self-vaunting, a knowledge of store policies and years of practice in dealing with customer complaints do not constitute an equivalent to the knowledge of law or medicine required of a lawyer and physician, respectively. Nor is there an obligation to the public such as in entailed in the practice of law or medicine.
Technically, the term "professional" applies to “the professions.”  This does not mean “any profession” in the sense of “any job category.” Because a professional relies on years of study, albeit undergraduate (meaning only one degree in a discipline/school of knowledge), in his or her practice, he or she must be allowed significant autonomy. Hence the partnership arrangement, wherein the self-discipline of peerage rather than a boss is relied on, is the typical business form for law firms, CPA firms, and medical offices. Managers in business are not professionals. This can be seen both from the standpoint of the relative salience of a responsibility to the client/customer and of judgment.
According to Relson (p. 750), “the basic social role of the physician . . . is to be an agent and trustee for the patient. Physicians are ethically bound to place the medical care needs of their patients before their own financial interests – an obligation that clearly sets the practice of medicine apart from business.” One could add a lawyer's ethical obligation to act in the interest of the client and the CPA's obligation to act in the interest of the public (people who rely on the financial statements). In business by contrast, "buyer beware" is often the default; a business practioner serves a customer for monetary gain.
Similarly, the judgment of a lawyer, physician or CPA is not easily second-guessed by people outside of the respective profession. Even in a hospital, a physician is not reviewed by a manager who is not also a physician. In contrast, non-managerial board directors commonly review the performance of managers.
Put another way, whereas one can manage a business without having attended business school, I do not think any of us would agree to be seen by a physician who had not graduated from a medical school. Nor would a defendant in a criminal case be likely to chance a conviction (and decades in prison) by hiring a lawyer who had not studied law. Creditors and investors would think twice about the unqualified opinion of a CPA firm whose auditors had not passed the CPA exam after years of study of accounting.  That a certified public accountant might also engage in consulting, however, does not mean that consultants are thereby also professionals. Even were consultants to devise a certifying exam, it would not be as substantive or relied on as the lawyer bar exam, medical boards, and the CPA exam.
According to John Boatright (2008), the "work of most financial services providers does not meet the standard criteria for a profession. Among the criteria for a profession which are lacking in financial services are a high degree of organization and self-regulation, a code of ethics, and a commitment to public service. These criteria are possibly met by financial planners and insurance underwriters, but not by brokers, bankers, traders . . ., who, in the strict sense of the term, are not professionals." Financial planners and insurance underwriters come up short, however, in terms of educational requirements. 
According to Boatright (1992), a professional’s stock in trade is a body of specialized knowledge that is the basis for making judgments. Not only is the reliance placed on a professional’s judgment relatively important; professionals are paid primarily for the value of their knowledge that is the basis for their judgments. Accordingly, it is difficult, if not impossible, anyone other than their peers to evaluate their practice.  In fact, Jean Van Houtte (p. 207) refers to professionals as “individuals who practice their occupation autonomously.” Even another surgeon is limited in being able to second-guess a colleague without being in the operating room at the time. The salient element of judgment includes discretion that is difficult for even colleagues to evaluate (though not impossible); obvious lapses, for example, can easily be discerned by a professional’s peers. 
In short, the term "professional" has a specific and limited meaning centered on the responsibility-autonomy that is entailed when specialized-knowledge-informed-judgment is salient in the practice of an occupation. The term does not apply to anyone who does something for a living (as opposed to being an avocation).  If it did, then even prostitutes and politicians would be professionals.  The term “professional politician” connotes ignorance, for which political office is not a job?  It is not like one can be governor of Alaska as a hobby. Also, neither "mature" nor "responsible” is interchangeable with “professional.” Nor does the term mean “acting impersonally or bureaucratically rather than emotionally.” It is no accident that people not in one of the professions use notably wide criteria.
Until the last few decades of the twentieth century, the term "professional" did not suffer from such lack of clarity. For example, Joe Flom, who was instrumental as a lawyer in the hostle take-over bubble that began in the 1970s, claimed that his parents wanted him to be a "professional." He wrote that for them, "being a professional was a great thing. . . . That meant either a doctor or a lawyer." This was the popular application: medicine or law--not a manager or sales person, or even a CEO. Then a sort of inflation set in, and the value associated with being a “professional” has diminished in proportion. The presumption that simply getting hired or being mature on the job makes a person a professional is odious and false. In fact, the over-reach itself evinces an underlying sordid character. Ironically, such a person is in need of more supervision, rather than warranting any sort of autonomy. 


Sources:

Jeff Madrick, Age of Greed: The Triumph of Finance and the Decline of America, 1970 to the Present (New York: Alfred A. Knoff, 2011).

John R. Boatright, “Conflict of Interest: An Agency Analysis.” Pp. 187-203 in Ethics and Agency Theory: An Introduction, Norman E. Bowie and R. Edward Freeman, eds. (Oxford: Oxford University Press, 1992).

John R. Boatright, Ethics in Finance (Oxford: Blackwell, 2008).

Arnold S. Relman, “Dealing with Conflicts of Interest,” New England Journal of Medicine 313 (1985): 749-51.

Jean Van Houtte, “Research Report: Conflicts of Interest in Law Firms in Belgium,” Legal Ethics 12 (part II): 207-28.

See also:

Skip Worden, On the Arrogance of False Entitlement: A Nietzschean Critique of Business Ethics and Management.