Tension between Wall Street and Main Street: A Case beyond the Reach of Corporate Social Responsibility

In October 2011, Gerald Seib wrote that political and economic pressures in the wake of the financial crisis were “pushing business leaders into the public cross hairs.”[1] I submit that the very existence of the largest American banks was becoming an issue. In such a case in which a gulf between business and society is so fundamental or deep, corporate social responsibility programs do not suffice and may even backfire. While it is normal for the norms and values of a business sector to differ from those of the wider whole (i.e., society), it is uncommon for a rupture to be so deep that corporate marketing and CSR are not sufficient business responses. I submit that in such cases and where corporations have a lot of power over government officials, CEOs extend their toolset to government to fill in the trench. The "Occupy Wall Street" protests is a case in point. 

From the corporate standpoint, the time was ripe for the field of business and society, whose topics include corporate social responsibility, corporate citizenship, and stakeholder management. The fundamental matter to be “managed,” or assuaged, in that field of business concerns divergent norms as well as values between the individual corporations or the business sector and the wider society. Tension is not always or invariably present, but the fact that a corporation and even the business sector is a part of a wider whole (i.e., a society) suggests that the respective interests, perspectives, norms, and values are likely to differ. Generally speaking, the interests of a part are not identical to the interests of the whole of which the part is a subunit or part. An externality such as from dumping chemicals in a river or polluting the air means that a company's interest, norms, and values can differ from those of a society. 

Self-interest can obviously affect norms and values. A powerful corporation's executives and board may believe that the company's power over members of the U.S. Congress is normal and right because such dominance is in the corporation's financial interest. Meanwhile, voters may feel that such a distended dominance by the moneyed interest harms democracy and is thus a norm that should not exist. 

According to Seib, societal populists and corporate executives were not on the same page in 2011. In as much as the executives were utilizing corporate social responsibility to create the impression that the corporate norms and values being espoused were in line with societal norms and values, the field of business and society may not have been equipped to deal with divergent talking points that are grounded in antipodal, or antithetical, social realities. In short, corporate social responsibility as marketing or "window-dressing" can be detected as fake, thereby increasing the rift rather than reducing it. Indeed, it can be said that the topic began as an ideal  to bridge the gap between corporations and societies only to end up in marketing.[2] Foisting the illusion of convergent corporate and societal values can backfire by illuminating boardrooms as places where only a narrow perspective of short-term profit pervades.

In the context of the “Occupy Wall Street” protests spreading across the U.S. during the Fall of 2011, Seib pointed to the existence of “a radical disconnect between the picture populist critics paint from the outside, and the one business leaders describe from inside.”[3] This disconnect had gone back to September 2008, when bankers viewed the collapse of the housing market (and those of related financial products, such as CDOs) as a result of over-reaching, dishonest and languid mortgage borrowers. 

Meanwhile, the wider society saw greedy and fraudulent mortgage originators and investment bankers behind the adjustable-arm steep mortgages and the "crap" bonds that were based on those risky mortgages. This disconnect infuriated the general public, especially because contrition would not come from Wall Street. Greed refuses any constraint, including even acknowledging even some responsibility. Banks would engage in mass foreclosures without a hint of guilt for having misled people into going for oversized houses. The mortgage producers at Countrywide and other companies conveniently made the bad assumption that a few years of mortgage payments would enable the mortgage borrowers to shift from step-wise increasing-rate to fixed 20-year mortgages so as to avoid the higher interest payments. This flawed assumption was no doubt helped out by the fact that more mortgages would be sold, and thus higher bonues received. The interest of the economy, not to mention society as a whole, was of lesser concern. Hence the clash in norms and values between the part and the whole. 

In the populist protests, the crowd also saw American companies with enough profit and cash to create jobs domestically yet without the will to do so. In the first decade of the twenty-first century, American corporations had cut their work forces in the U.S. by nearly 3 million, while increasing employment abroad by almost 2.5 million. In the fall of 2011, Standard & Poor predicted corporate earnings growth of 13.5% for the third quarter, which, according to Seib, suggested “to Wall Street protesters that companies were hoarding profits without creating work.”[3] Saving money by moving factories "off shore" fits the business value of efficiency, and even the maxim in trade that goods should be produced where doing so is cheapest (e.g., where the goods are most plentiful). The cost of such a norm of and value on going abroad is externalized to the host country, which is left with the impaired social contract between a large corporation and the society. 

Generally speaking, a government says, in effect, to a company: We'll let you incorporate and even expand into multinational corporations but we expect you to provide jobs in addition to benefiting your customers with goods and services. This version of the social contract that includes the obligation to provide as many jobs as possible (i.e., while still allowing for a reasonable profit, and thus dividends) is controversial, however, because CEOs could retort that providing goods and services that reduce suffering and increase happiness is sufficient. From a utilitarian standpoint, therefore, such CEO's could even claim an ethical justification. Such a justification would likely merely be marketing to craw back some of the lost reputational capital, a long-term intangible asset. 

According to Seib, business leaders cited more practical factors that more easily fit into the traditional business calculus. From the business perspective, third-quarter expectations were less than expected. The managers pointed to the benefits of an artificially weak dollar that had already strengthened at the expense of exports. More broadly, businesses were looking at weak consumer demand and increasing costs with government regulations, which make augmenting the domestic work force more costly. Seib juxtaposes this business view of a hostile business environment with the societal view that looked angrily at unpatriotic and greedy corporate chieftains. 

I submit that when a divide is so gaping, depating the factors in the business environment doesn't fit. Corporate social responsibility programs, such as having employees volunteer at soup kitchens, are not restorative. Firstly, the benefit from such programs would not come close to the original costs borne by society from the reckless and even fraudulent banking practices. Secondly, the people hurt from those practices are not necessarily helped by a program. This is especially true if the "restorative" program in oriented to another society problem, such a disease. Thirdly, corporations benefit from the good public relations from a CSR program. An angry populist is not likely to be pleased that one of the selfish, reckless banks is actually benefiting as it makes contrition. Fourthly, the gap between the business sector (or an industry, but not likely an individual company) and a society can be so deep enough that capitalism itself is severely questioned at large. Filling in such a deep trench goes beyond what CSR can do; a bulldozer rather than some shovels are needed in such cases. I contend that the "Occupy Wall Street" protests that took place three years after the financial crisis deepened or perhaps only exposed such a trench. I suspect this is why the U.S. Government, which was refusing to hold mortgage producers and investment bankers criminally accountable for the fraud--protecting the powerful financial sector--took an active role in stopping the protests. To have the very legitimacy of corporate America, or even just the banking sector, even questioned in such a public way was likely too much for a government whose elected officials could receive unlimited campaign contributions. 

1. Gerald F. Seib, “Populist Anger Over Economy Carries Risks for Big Business,” The Wall Street Journal, October 11, 2011. More generally, see Skip Worden, Essays on the Financial Crisis.

2. William C. Frederick, my doctoral professor in the field of Business & Society, came to this conclusion, as did I. When upon retirement from teaching he turned to the application of the natural sciences to economizing and power-aggrandizement in relation to societal "ecologizing" forces, and then to management, I truly became one of his students (for twenty years). I gave a conference paper, for example, on how a company could be run on ecologizing rather than profit-maximizing principles. The field of Business & Society is indeed wider and more abstract than the CSR topic. 

3. Seib, “Populist Anger Over Economy Carries Risks for Big Business.”

Commercial Breaks on TV: Antiquated or Here to Stay?

By the end of the first decade of the twenty-first century, the impact of computer technology on television was already promising to be nothing short of revolutionary. Yet people seemed only able to grasp the contours of an upcoming basic shift both in how television would come to be delivered and how programming would be financed and presented. Young adults were on the leading crest of the wave. Even by 2012, they typically watched television programming from laptops and even ipads rather than television sets. Meanwhile, an older demographic was learning how to integrate television screens with the internet such that movies could be downloaded on a laptop and shown on a larger screen, completely bypassing commercial television even stored on “tibo” from interlarding the home.

Being somewhat slow, to say the least, in picking up on computer technology, I was afforded a hint in 2012 of what the new technology portended for television as my viewership dwindled down to PBS, movies on dvds, and television news from abroad available on the internet.  Even after just a few years of this new commercial-less habit, I found the occasional television movie with commercials on TNT and TBS to be rather unpalatable on account of all the commercial breaks. Just a few years earlier, I would have thought nothing of the interruptions. They were as though blinks to eyes. The human brain has an amazing ability to “ignore” the banal if it is taken as a given rather than contingent. It is the shift from “necessary” to “contingent” that the advent of computer technology had already by the second decade of the twenty-first century begun to “awaken” in human consciousness regarding television commercial-breaks. That a perceptual change, if shared by many, could impact society so tremendously in terms of changed mores is the real story here.

In my own experience, watching episodes of Downton Abbey on PBS uninterrupted by commercials for up to two hours at a time afforded me a new viewing experience regarding a television serial beginning in 2010. By the last few episodes of the third season, it had dawned on me that by being so ensconced for an uninterrupted hour or even two in the audio-visual story-world of Downton,  I could really get into that world of the story precisely because my perception of it was sustained. This experience, as well as that of Game of Thrones, gave me a new sense of how full the experience of story-telling can be. That is, being absorbed in a story world a lot and especially without interruption can enable a viewer to really "get into" that world as an assumed context for the narrative. From such a basis, the viewer can more fully appreciate the depth of characterization such as the case in Downton Abbey, whether it be Mr. Carson’s struggles with early twentieth-century “modernity” or granny’s Machiavellian nature, which is not so dark because it is for the good of the family. Moreover, a sustained experience of a fine manner of speaking and of manners can make an impression on a viewer’s own manner. Abstractly put, a more complete and richer experience of story-telling is afforded by the viewer being in the story-world as per a sustained perceptual experience. Returning from such an experience to a “chopped up” movie shown on commercial television, one is apt to find a new impatience with the commercial breaks. Were there really this many before? They are ruining the movie.  The flight away from commercial television has undoubtedly been facilitated as a result. In effect, the new experience had already made the old one obsolete even if the networks had not yet reached this insight.

If my experience of shifting from commercial to non-commercial television and dvds is any indication, the further decline in viewership could make commercial television networks even more desperate for quick-cash programming, such as the low-class American “talk shows” and “reality shows” that make such excellent fodder for weight-loss commercials (yes, “ouch”). The perpetuation of this strategy would only facilitate the flight of the more discerning viewers to less unseemly programming that is available at alternatives to commercial television and even the television set. As commercial-television viewership continues to decline, more pressure to add even more commercials for the networks to break even would mean even more “cheap” programming and more “chopping up” of shows and movies with commercial breaks. More people would be just fine passing on cable or satellite altogether and leaving the television set “unconnected.”

As a result, the role of the television set in the typical house or apartment would change fundamentally, including even how it is perceived. The device would go from something that is always on to something that is only used occasionally and for certain purposes, such as to play a dvd or serve as a larger computer screen for internet or movies. There was a time when I would have freaked out had my television set not been able to receive any channels. I remember the sense of panic when a storm would knock out cable. I’m cut off from the outside world! Even as early as 2013, however, I had become just fine with the “box” being left unconnected. I didn’t even bother hooking up my digital box. I had come to perceive the televsion as something that is to be used with my dvd player. I watched Downton Abbey simply by clicking “watch online” at PBS on my laptop. I felt no desire to watch anything on commercial television. Why go through the motions to be connected? Maybe keeping the home a little less connected is not such a bad thing after all.

Viewing the television set as a device to be occasionally used to play a downloaded movie or dvd would mean no longer seeing the set as something that is to be almost always on or even necessarily hooked up to receive broadcast channels. The addiction to constancy can thus perhaps be broken, if only in terms of television. In a sense, the transformation dimly anticipated even as early as 2013 would be one of increasing quiet, and thus privacy in the home as the outside world that is admitted is more closely narrowed to particular story-worlds of interest, absent exogenous “messages” and even programming.

The change being advanced can be viewed as rather positive in nature. Ironically, removing from the television set its constant airing of programming could return the home to its pre-television quietude. Moreover, the addiction to constancy—such as in constantly smoking or constantly having the television on—may come to be viewed as a distinctly twentieth-century cultural phenomenon. Put another way, activities that in other eras would have been indulged in occasionally may in the context of the twentieth century have fed an addiction to constancy—an almost-obsessive desire to keep doing something notwithstanding the decline in its marginal utility. Often the activity or product constant in use is rather insignificant, and thus easily hackneyed into daily use. Rather than viewing a drink or cigarette as indulged in occasionally for social occasions, “cocktail hour” and “a cigarette with coffee in the morning” (and, indeed, having a coffee every morning) were allowed to become part of the popular culture in the twentieth century, at least in America. The resulting dire health impacts should have given people a hint that items geared by their nature to occasional use at best were part of a compulsive desire for constancy. The regular or even constant use of such banal items overstates their significance.

Although not having the health downside of nicotine or caffeine, television too had come by the 1970s to a constancy not justified by the underlying significance of the programming. “Being connected” meant always having the TV on in one’s house, even if this meant giving up too much control over what enters one’s home (e.g., commercials). The “being connected” to the outside world we allowed to become a constancy. Silence eclipsing the “white noise” was as though tantamount to succumbing unconditionally to a void of existential emptiness. How strange this fear would have sounded to a person living in the Victorian world before even phonographs and telephones, not to mention radios and televisions.

If one had looked to the future from 2012 or even further back in 2010, the question might have been whether computers would come to be sucked into the illusion of constancy-as-fullness, essentially replacing the television set as hegemon in the house. Already by 2013, smartphones and ipods had become the new means for constant connectivity (especially for young adults). Is this sort of constant communication really a deterrent to the sort of boredom that comes with an empty sense of being? Ironically, might there be more fullness of being were stillness or quiet to return as the default in the home? Perhaps a hypertrophic desire to constantly be connected externally undercuts one’s connectivity to oneself and one’s family. Severing the television cable permits an opportunity. The question is perhaps whether we moderns have the stamina to tolerate the resulting sense of void in our homes without instinctively filling it with another means of constant connectivity. Put another way, might the twentieth century household be remembered as an aberration rather than as the beginning of the modern world come into our living rooms? At the very least, the eclipse of commercial television means more control for the viewer in terms of what is admitted into the home.

Management: Helping vs. Controlling

I submit that subordinates typically view managers as having control issues—by which I mean that managers tend to be obsessed with maintaining control. The pathology because really bad when the manager would rather have a project fail than give up control. Lest it be thought that management as control is intrinsic to managerial capitalism, an alternative approach proffers a way out.

The full essay has been incorporated into, On the Arrogance of False Entitlement: A Nietzschean Critique of Business Ethics and Management, available in print and as an ebook at Amazon.

The Mega-sized Shopping Mall: A 20th-Century Artifact?

Between 1956 and 2005, fifteen-hundred (indoor) shopping malls popped up across America. Then through 2013 at least, none had been built since 2006. The interstate highway system helped usher in the mammoth malls like Mall of America in Minnesota and Woodfield Mall in Illinois; the cold climes made the indoor expanses of warm air particularly alluring during the long winters. The two landmarks among malls would likely fare better than most in staving off even their own respective stores’ cannibalistic online-sales charms at least for a while, absent an upward-revision on global warming forecasts flashing relentlessly on smartphones, tablets, and laptops. The leap from the pedestrian innovations at Selfridge’s department store in early twentieth-century London to Amazon’s Cyber Monday during the 2010s, a silver century later, would seem to be  all about the computer revolution digitizing distance that had once been viewed in terms of social class and then gradually succumbing to closer physical distance, as in Selfridge’s accommodating store.[1]

Even as housewives on a budget joyfully discovered that bargains could be found even in a service-oriented department store without being thrown out just for browsing, aristocratic women returned to the store to purchase fine gloves or perfume astutely advised by a polite, attentive clerk—an antiquated idyllic image of “shopping” a century later in a world saturated by Walmart’s “warehouse” (or barn) mega-department/grocery stores.[2] Indeed, the king himself requested a private showing of Selfridge’s out of curiosity regarding the new thing known as “shopping” and to show himself to be a man of the people (of various social classes). Few people a century later would pause to ask whether the foray of online purchases would make the term shopping obsolete.[3]

Moreover, the sliding eclipse of the hackneyed American mall harkens back to the truism hardly remembered amid all the technological distractions that the world of yesterday is not nearly as everlasting as implicitly promised in its hay-day.

In the last quarter of the twentieth century, the display of Christmas decorations before Thanksgiving, earlier and earlier each year, attested to change in progress. The relative insignificance of this fixation would come to hide the "macro" or "meta" change concerning the mall itself in the first two decades of the next century. 

While the little mall marketers scamper about, scrambling to do the twentieth-century department store one better in terms of a “one stop experience” by highlighting entertainment on top of the “same old, same old” heterogeneous product types being under one roof, no one hardly bothers to imagine the mall itself (not to mention the acutely structured department store) as being of another era—a world already gone—a bygone time somehow vicariously still with us—as if the artifice were a squashed bug mistaking its flinching movements for still being alive. The temporal illusion lies in the extremely slow “squashing” noise of register-less electronic sales. As the niggardly management of Target can attest, the silent killers can be the most devastating, even if the extent of the cyber fingerprints are only fully visible in retrospect.

Amid the wrecking balls eating up memories left and right, the twenty-first century stood wide open for the technological imagination to form. Amid all the excitement, it is no wonder that people who came of age at the mall will look around one day, as if suddenly awakened by nothing in particular, to find that the ‘70s show has indeed gone off air due to low ratings.

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[1] Rejecting the “premium” vs. “cost leadership” business strategies, Selfridge used sales-items to draw in business from cost-conscious consumers (not “guests,” as in the artful lie played out on Target’s stage by functionaries whose superiority over the dictionary gives their stores a rather odious odor). Unlike the managers at Walmart and Target a century later, Selfridge did not view the continued presence of refined yet simple sales clerks as mutually exclusive with extending the product-lines “down” to lower priced items (supplemented by relatively broad sales).

[2] While at a Walmart store to buy underwear, I noticed a few plastic bags containing product had been open. An employee was then passing by me so I asked if she knew about it. “How else are customers going to be able to try them on unless they open the bags?” she replied. The sales associate had no doubt concerning her “knowledge” of retail. Had I pointed out trying on underwear violates OHSA regulations, the employee would in all likelihood have dismissed my “opinion” in favor of her own “knowledge.” Doubtless a European aristocrat would not return to such a store again.

[3] To the extent that “shopping” includes browsing, being able to “google search” a product may mean that searching is already replacing shopping; by implication, going to a “brick and mortar” store to purchase or merely pick up the product does not involve shopping. Yet how hard old ghosts fall; it is as people use terms generally without bothering to verify that the respective meanings still apply. In other words, we may speak without thinking more often than we suppose. In fact, some of the herd animals may succumb in weakness to their urge to “push” their meaning as a weapon of sorts. A young assistant store manager at Target once corrected me in demanding I acknowledge that I’m a guest rather than a customer. The cocktail of ignorance, arrogance, and the primal urge to dominate is as toxic and dangerous as it is ubiquitous in American business of the 2010s (not to mention American society). 

On Television’s Sunset: Thinking outside the Box

Sometimes I think the human mind is like a train in being limited to the tracks that have already been laid. We are habituated to think it sufficient that we can turn off the main line on to another at the next signal. We think this is change because it involves turning onto a different track, but is it really change if the train is still on track?

A while back, someone thinking outside the box suggested  to me that because many watches and clocks were already computerized as of 2012, we could have sunrise pegged at 7am and sunset at 7pm every day of the year. The number of seconds in a minute would be adjusted accordingly. During the winter, a minute during daylight would have less than sixty seconds and a minute at night would have more. During summer, it would be the reverse. The inventive mind behind this idea was trying to obviate the problems involved with when to go on and off daylight savings time. As it stood in 2012 in the United States, the two dates were not symmetrical with regard to the amount of daylight (going on daylight savings time during the second week in February would match the first week of November). Of course, there is nothing magical about 7, except perhaps in Judaism. Under the inventive scheme, the time of sunset could be extended even to 10pm during the summer (each minute during daylight would have less than sixty seconds), going back to 7pm during the fall, winter and early spring.

Besides the fact that time itself does not change, at least as experienced by us, one problem with “fixing” the times of sunrise and sunset as envisioned by the inventive mind is, as one critic said, “the power of television.” We are habituated to TV Guide, and thus would not want to see 60 Minutes scheduled for fifty minutes one week in one season and seventy-five in another season. Being of a certain length of time, a given television show would be scheduled for different durations, as per the number of seconds in a minute. “Television would never stand for that,” so said one detractor. Absolving myself of responsibility, I replied, “It was all his idea, not mine.” Even though I thought of the idea as a thought experiment having value in stretching the human mind beyond the existing tracks, it occurred to me that the assumption that television has too much power is too narrow. The thought experiment can have value in getting us off the tracks (rather than off track) of our usual way of circumscribed thinking.

 Larry King, formerly of CNN, embraced online programming.      CNN

On March 12, 2012, Ora.tv was announced. Financed by Mexican billionaire Carlos Slim Helú and co-founded by Larry King of New York, the planned internet television network “will have a slate of television shows of varying lengths and will stream them via the Internet to computers, phones, and television sets . . . by bypassing traditional television distribution systems."[1] Viewable on laptops, ipods, ipads, and smartphones, “television” shows could bypass the overpriced cable systems.

Even without Ora.tv, TV Guide was being relegated by the existence of video on demand, available on a laptop, ipad, or phone. Beyond video on demand, Ora.tv could only have an “irregular” schedule, given the differing lengths of the various programs. Having programs taped at varying lengths, it would not matter how long they run in real time even if there is a schedule (i.e., were the number of seconds in a minute changed so sunset would occur at 7pm year-round). So much for the power of television.

As early as 2010, people had told me they had disconnected their cable and were using their television screens to watch movies on DVD from Netflix or an already-antiquated video store. Television programs, like that which Larry King had on CNN and was planning for Ora.tv in 2012, do not benefit from a big screen as much as does a film like Avatar or Titanic. Hence Larry decided to discontinue his series of specials at CNN so he could turn to the internet venture that he had co-founded. Regarding his decision to depart CNN, King said, “When the train gets to the last station, you know to get off.”

What if technological change itself can outstrip even going onto another existing track? What if we have reached the last station with tracks? Might the human mind be able to travel trackless? Absent a way to rid Earth of its tilt, we are stuck with changing lengths of daylight. I mention proposal as a thought experiment to show how unnecessarily limited our way of thinking typically is (e.g., “television would never allow it.”). The context or paradigm itself can be thought of as variable in nature, rather than static. The human mind can indeed think up changes within a paradigm while simultaneously shifting the paradigm itself. We need not think only in terms of whether to shift the track ahead. Remember the train in one of the Back to the Future films taking off from the track? The human mind can do likewise, if we do not hold ourselves back out of sheer habit. We have only ourselves to blame if we don’t start thinking outside the box, or over yonder from the rusty tracks. It might be that the twenty-first century will be known as the century when weeds started growing through the tracks. We have only ourselves holding us back from getting off track.

1. Brian Stelter, “New Internet TV Network to Feature Larry King,” The New York Times, March 12, 2012.

Conflicts of Interest and Paradigm-Shifts: The Case of Financial Regulation

It is perhaps all too easy to perceive a sea-change in perception when the reality of societal change is much more gradual. There is something to the argument that John D. Rockefeller’s reputation was salvaged in the 1930s not because the old man was passing out dimes, but, rather, simply because he had outlived his critics. Similarly, Thomas Kuhn, in his text on paradigm changes in scientific revolutions, bemoans that the advocates of a default theory must finally die off before their darling can finally be replaced by a new one. In other words, any given person is not apt to shift paradigms. The culprit, I suspect, is pride, which Augustine suggests in his writings is inherently self-idolatrous. I believe the human brain is capable of accepting inter-paradigmatic change, just as a person can be humble. That this is not the norm does not mean that we ought not raise our expectations to it.

The full essay is at Institutional Conflicts of Interest, available in print and as an ebook at Amazon.