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.

Goodwill Dismisses a Solid Societal Norm: A Mentality beyond Unethical Conduct

When managers of a business or non-profit interact with a societal norm by openly rejecting any obligation to act in accord with the norm, the reaction from stakeholders can be utter disbelief. The refusal to act in accordance with the norm as it impacts the organization can be beyond bad management and even unethical conduct. The refusal to acknowledge a societal norm even as its impact on the business and stakeholders has been arranged by the business is beyond, though it can include, unethical conduct. Norms are not in themselves ethical, for as David Hume wrote, you can’t get an ought from an is; rational justification by ethical principles must be added before we can get to, “You ought to do X” from “X is the practice.” Yet ethical principles can be in norms, in which case we can say, “You ought to act in accordance with the norm because it is ethical.” In some cases, the norm-business relationship (i.e., Business and Society) can be more salient than an ethical principle in the norm itself. A managerial practice at Goodwill, a non-profit retailer based on donations for the poor, serves as a case in point.

Goodwill stores have tags of several colors on the merchandise. During yellow tag week, merchandise with a yellow tag is half off. Every other Saturday, all of the colors are half off. By the time the doors open, customers have likely formed a long line out in front. Such lines can cover most of the front length of a store. On one such morning at one store, I saw a customer stand by the front doors opposite of the line just five minutes before the opening. I saw the store manager let that customer in second, even though it was obvious that she was not in line. Curious, I entered the store to interview that manager. He told me that his responsibility is only to open the doors, not to determine that some people can come in and others cannot. His lapse would have been easily fixed not by telling the woman, who did not evidently think that store lines applied to her, that she could not enter the store, but, rather, that she would have to go to the back of the line. I asked the manager whether he believed that the line did not pertain to his store. “It is not on our property,” he answered. “We can’t say what people can do out there.” Observing my facial expression, he said he would make sure that customers come in first who are in line, and he even made an announcement lightly chastising “the individuals” who had not waited in line.

Nevertheless, later the same day, I returned to the store to interview two of the associate store managers, both of whom also touted the property point. “So if I come here just before 9am in two weeks, I don’t have to stand in line; I could go second or third?” I asked. “Yes,” one of the associate managers said, even as her hesitation in answering came, I suspect, from a recognition that her answer violates the ethical principle of fairness. This recognition should have given her the sense that something was wrong with the policy she was supporting.

Even though the violation of justice as fairness—it is just that people enter a building in order hence via making a line—is salient in this case, the fact that managers of a store disassociated it from the line to get into the store, hence pertaining directly to the store, is even more bizarre and thus significant. The societal norm here is that customers forming a line outside a store before doors open are to be let in first. For a manager to open a store door and assume that the norm does not apply to his store, and thus does not form an obligation on his part to see that the customers in line go in first, removes him, in effect, from the society or environment in which the store functions.

Even the narrow property-limits rationale is bizarre, for Goodwill leased rather than bought the land and building, and the line of customers pertained to the store even though it did not extend to the sidewalk in front between the building and the parking lot. That the line pertained exclusively to getting into the store overrides the question of property in terms of the incurrence of an obligation because the customers in line had the societal expectation of being able to enter the store in order whether or not the sidewalk was owned by Goodwill. The managers with whom I spoke dismissed the customer’s expectation, whose legitimacy is societal (a societal norm) rather than company-based. The sheer dismissiveness is rude, not to mention bad customer service. Even though the ethical principle of fairness is in the societal norm, the bad attitude toward the customers, the lazy approach to opening the store’s front door, and the decision that the societal norm does not apply to that store are not necessarily unethical (or at least an ethical argument would need to be made).

Narrow self-interest, which business managers tend to adopt, is not in itself unethical. For one thing, the business and financial systems have infrastructures and norms that virtually necessitate it at the firm level. Even so, if stakeholders (or others) are harmed as a consequence, then the narrowness is culpable ethically. In this case study, the harm to the customers in line from one person entering second from opposite the line is small. Few of the customers in line could even see the interloper, and none of the customers—in line or afterward—would have guessed that the store manager’s initial position (and those of two of his associate managers) regarding the store’s responsibility to let the people in line in first.

In fact, that the associate manager who answered affirmatively that I would not need to stand in line (because Goodwill is only concerned, by right, with what goes on inside the stores) had come to such a nonsensical conclusion (and stood behind it) is not in itself unethical. She was not lying, for instance; she really believed herself. Moreover, that a person could believe anything so nonsensical (including the property argument) is also not unethical. Perhaps in the field of business and society, psychology figures in more than does even ethics. Of course, the norms-based field of business and society is (or ought to be!) distinct from business ethics even though the two relate, such as in there being an ethical principle (e.g., fairness) in a societal norm that is not in itself ethical because it merely is.

A Lack of Good Will at Goodwill

Redefining words to suit a business’s financial interest is misleading, even if the herd animals who serve as customers look the other way, or, even worse, do not notice the fact that the words have been redefined! At a Goodwill store in Phoenix, Arizona,  I bought a black suit for singing in a choir. Before I paid, I asked a manager whether I could return the suit as long as I do so within a week. “Yes, you can get a refund,” he replied. Three days later, I returned to the store to return the suit. I approached an available cashier, but she told me that I had to go to the other cashier if I had a return. That cashier was not even at his register, and even when he returned I had to wait at least five minutes for one customer. Only the head cashier can process refunds, whereas any cashier can accept money—an interesting, meaning convenient, asymmetry. Money comes in easier than it goes out.

When the head cashier processed my refund, he handed me an in-store credit card. I asked the assistant store manager why a return was instead being treated as an exchange. “In the Goodwill network,” he replied, “returns are exchanges.” I was stunned. “But the two are not the same thing; returns result in refunds, which are not store credits,” I retorted. “Not at Goodwill,” the manager said in a definitive tone.

Having essentially redefined a return for a refund contrary to the word’s meaning and common usage, the ploy can be said to be misleading. Given customers’ legitimate assumption that a return results in a refund, which is not a store credit, the redefinition effectively involves false pretenses. No good will comes with such a nefarious, deliberate misuse of language. Indeed, the very name of the organization, Goodwill, connotes a lie if the good will under the roofs is lacking. 

See "It's Only Fair."

Does Refusing Rolling Stone Magazine's Use of a Criminal's Picture For Marketing Purposes Violate Corporate Social Responsibility?

In 2013, the editors at Rolling Stone must have been kicking themselves after several retail chains announced that they would not be selling the issue that displays Dzhokhar Tsarnaev as a young hottie. Criminal charges had been made against him for the Boston marathon bombing that took place in April of that year. Selling a magazine by playing off the good looks of a terrorist was more than several—but not all—retailers could stand. Were the offended retailers being socially responsible, or is the matter of CSR not as clear-cut as has typically been assumed.

This picture of Dzhokhar Tsarnaev was on the cover of an issue of the Rolling Stone. From a marketing perspective, why might the editors have selected this particular photo? To which market segment might the choice be oriented? Image Source: hdwallpaperfresh.com  

Tedeschi Foods, a grocery-store chain based in New England, issued a rather emotional statement for a company: “Tedeschi Food Shops supports the need to share the news with everyone, but cannot support actions that serve to glorify the evil actions of anyone. With that being said, we will not be carrying this issue of Rolling Stone. Music and terrorism don’t mix!”[1] Had Rolling Stone’s editors sought to glorify the evil actions of an alleged bomber, or had the intent been to profit from them? If the latter, couldn’t the news companies that splashed pictures of Tsarnaev on the television screen (while not showing commercials) be accused of the very same thing? Music and terrorism may not mix, but selling news and showcasing bombers apparently do. Is the Rolling Stones in the business of news or music?
Rite Aid issued a statement that it too would not be selling the paper, “Out of respect for those affected by the Boston Marathon Bombing.” CVS issued a similar statement. “As a company with deep roots in New England and a strong presence in Boston, we believe this is the right decision out of respect for the victims of the attack and their loved ones.”[2] Did the CVS executives really want to respect the victims, or did the underlying rationale have more to do with the positive PR impact on CVS’s image from “showing” compassion and respect in line with societal norms? The phrases “deep roots in New England” and “strong presence in Boston” can be read as advertisements using pathos, or emotion, to persuade New Englanders and Bostonians to identify with, and thus buy from, the “hometown” company.
Walgreens simply stated that it would not be selling the issue. K-Mart had a similar statement, according to the Huffington Post. Ironically, those two retailers might have been more principled in the decision, as they were less oriented to profiting from their respective announcements.
Bucking this collective push away from the controversial cover, the 7-Eleven convenience-store chain announced that it would be selling the issue. This decision raises the question of whether companies should have identical social policies, given that the relevant societal norm does not differ.[3] Did the 7-Eleven executives make the wrong decision, given the relevant societal norm? Or does that norm conflict with another—namely, that consumers should be the ones to make the decision through their purchasing decisions. The other retailers preempted the consumers from “voting with their wallets.” In other words, the societal norm against popularizing people who did bad things, allegedly or not, conflicts with the value of economic liberty in a market economy. Which is more in line with societal values in the U.S.:  compassion for victims or economic freedom? It depends on which value is or ought to be prioritized. In advocating a fit with societal norms and values, corporate social responsibility cannot say which norm or value should be prioritized—only that the company should closely fit itself with whichever societal norm or value is “picked.” To privilege particular societal norms or values over others as if the emphasis were mandated or implied in being socially responsible makes corporate social responsibility dogmatic in the sense of being arbitrary. That is, it makes CSR ideologically prescriptive rather than a theory explaining why only some companies survive in the long run and a tool being used by managers to steer their companies through choppy waters.
In terms of the Rolling Stone cover, it may indeed be arbitrary for retail chains to boycott the issue after television news networks made so much money off the story by showing the bomber’s picture. In other words, the double-standard may point to the arbitrariness in the corporate social responsibility movement. On the other hand, the retailers (excepting 7-Eleven) may have drawn the line at the magazine cover because the particular head shot together with the Rolling Stone context may have been designed to sell the bomber as a sexy guy—something the television coverage did not do. Whereas profiting by showing various pictures strains a societal norm but does not break it, profiting by sexualizing a young terrorist may indeed cross the line.
At any rate, this case study demonstrates that corporations do indeed differ with respect to how or whether to be socially responsible. That is to say, social responsibility is a judgment call on which people can and do differ.

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1. “Rolling Stone’s ‘The Bomber’ Issue Banned By CVS, Walgreens, Rite Aid And Kmart,” The Huffington Post, June 17, 2013.

2. “Rolling Stone’s ‘The Bomber’ Issue Banned By CVS, Walgreens, Rite Aid And Kmart,” The Huffington Post, June 17, 2013.
3. This assumption does not apply to the environment of international business, as different societies have differing societal norms on a given topic.

Steve Jobs: A Unique Societal and Organizational Visionary

Typically as a company transitions from an enterprising, creative new venture to a large organization to be managed, a staid CEO replaces a visionary founder. In the case of Steve Jobs at Apple, the very nature of the man’s vision was not only inherently at odds with the status-quo underpinning of a large organization with a budget, but also essential to the company’s business model. Hence, the company, including its shareholders, paid a price for years for jettisoning Jobs. The film, Jobs (2013), is centered on the distinctiveness of Jobs’ vision. Although the film also hints at why this distinctiveness is such that the company would (and did) lose as a large organization after making the typical founder-to-CEO transition.

The full essay is at "Jobs."

Facebook: A Distrustful Company Projecting Distrust

Cambridge Analytica, political data firm founded by Stephen Bannon and Robert Mercer, and with ties to U.S. President Trump’s 2016 campaign, “was able to harvest private information from more than 50 million Facebook profiles without the social network’s alerting users.”[1] The firm had purchased the data from a developer (a psychology professor at Cambridge University in the E.U.) who had developed a personality test that Facebook users could take, and whose purpose was supposedly academic. The developer violated Facebook’s policy on how user data could be used by third parties. The data firm “used the Facebook data to develop methods that [the firm] claimed could identify the personalities of individual American voters and influence their behavior.”[2] In other words, Cambridge Analytica used the purchased data to manipulate users to vote for Donald Trump for U.S. president in 2016 by sending pro-Trump messages. Although Facebook had not known of the sale of the data to Cambridge Analytica at the time, the social network, upon learning Cambridge Analytica’s political use of the data in 2015, failed to notify its users whose data had been compromised. Although 270,000 Facebook users took the developer’s personality test, “the data of some 50 million  users . . . was harvested without their explicit consent via their friend networks.”[3] It bears noting here that those of the 50 million users who had not taken the personality test should definitely have been informed. At the very least, Facebook’s management could not be trusted to not only  keep users informed, but also protect users in the first place by adequately enforcing the third-party-use policy. So it is ironic that Facebook’s untrustworthy management could be unduly distrustful of ordinary users.

The psychological-political mixture in Cambridge Analytica’s use of the data is downright creepy. Tapping into a psychology professor’s methodology for inferring personality from data on a social network platform so to be able to send politically manipulative advertising to certain Facebook users  is highly invasive, even for the users who voluntarily took the professor’s personality test online. Regardless of party affiliation, a reaction of disapprobation to such an over-reach could be expected; hence the operation was stealth—which is why Facebook’s management erred so in failing to inform the 50 million users. Facebook’s stock deserved to fall when the story finally did break in March, 2018.

It is odd that Facebook’s management even permitted the developer, the psychology professor who went on to sell the data to Cambridge Analytica, to obtain the data in the first place to develop personality constructs for academic purposes. It is also odd that Facebook’s management had been so naïve concerning a political data firm, and yet so demanding of individual users who displayed no cause for suspicion. Facebook suspended an account I set up because I had sent a link to one of my academic articles to some scholars I knew. I deleted the account. A few years later, I tried again. That time, Facebook demanded that I upload a clear facial picture of myself so I could be identified. Apparently my phone number and email address were not sufficient, even though I had not yet even used the account and thus could not have violated any of the company’s use-policies. I deleted that account rather than supply a picture of myself because I was concerned how the facial recognition software would be used, especially when combined with other basic information I had included in the profile. It turns out I had reason to be concerned, for even if my personality had not been construed and I had not been subject to political manipulation psychologically, the fact that Facebook let a political firm in the door means that other harvesting could have been going on. Furthermore, even if Facebook discovered other extractions, I could not trust that the company would have informed me.

It is telling, in short, that a company so distrustful demanded that I upload a picture of my face so I could be identified—as if I were distrustful. I suspect that the managers and their employees were projecting their own distrustfulness onto innocent users, while giving firms like Cambridge Analytica a free hand. In other words, the folks at Facebook were very bad at determining who is trustworthy. The lesson here is that Facebook was not worthy of its users’ trust, and yet strangely the users did not bolt en mass. It could be that people in modern society had become so used to being distrusted by people working in organizations and to interacting with distrustful companies that the Facebook revelation was a mere blimp on the radar screen.

The philosopher Kant reasoned that promise-making is only valid in a context in which promises tend to be kept; otherwise, promises would simply be dismissed as worthless dribble. If large companies only keep their promises when doing so is convenient to them, such a context could recalibrate just how much worth promise-making justifiably deserves. If so, the business world itself could contribute to a society in which distrust rather than trust is the norm. When I lived in Tucson, Arizona, I experienced such a society. I could feel not only the angst in the air, but also the passive aggression in the distrust itself. Besides the police-state being “beyond the pale” even on the local university’s campus, the guarded watchfulness that was (and surely is still) practiced between strangers on the city streets (as well as between bus drivers and riders) included an inherent aggressiveness. Likewise, Facebook’s refusal to notify users of the “harvesting” and Facebook’s demand that I furnish a photo of my face involved passive aggression—which is inherent in unjustified disrespect. Are companies like Facebook unwittingly turning modern society into Tucsons? If so, the link between distrust and aggression should be made transparent so people can at least be aware of the change.

For a business ethics critique of Facebook, see Taking the Face off Facebook

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1. Matthew Rosenberg and Sheera Frenkel, “Facebook Role In Data Misuse Sets Off Storm,” The New York Times, March 19, 2018.

2. Ibid.

3. “Cambridge Analytica: Facebook ‘being investigated by FTC,’” BBC News ( accessed March 20, 2018).

CEO Pay: American and European Values

To what extent do inequalities in wealth accrue based on structural elements, such as tax deductions that only wealthy people can use, as distinct from factors pertaining to individuals, such as talent, sacrifice, and effort? The two clusters can build on each other, as people who have become rich primarily by exercising a talent and working hard use some of their accrued power to “reform” the system to their advantage at the expense of the poor and middle class. Such structural reforms in turn can make it easier for wealthy people to become even richer. In the context of a society in progress, structural and idiosyncratic factors doubtlessly interact—the trend being of an increasing chasm between the rich and poor. 

 

 

For example, as the graph above indicates, CEO compensation in the U.S. increased at a higher percentage rate than did corporate profits and factory worker pay every year from 1990 to 2005. In 2010, CEO compensation increased 27% while workers saw their compensation increase just 2.1 percent. Meanwhile, the poverty rate increased from 12% to 14%. CEOs in the E.U. were making comparably less. Foreign Policy in Focus reports that in 2006, for example, “the 20 highest-paid European managers made an average of $12.5 million, only one third as much as the 20 highest-earning U.S. executives. The Europeans earned less, despite leading larger firms.” I suspect that societal values have a lot to do with the difference, though changes in the make-up of American executive compensation should not be ignored.

Specifically, the ratio of pay between an American CEO and factory worker has been increasing in part to the growing proportion of executive compensation in the form of stock options. However, it is also true that Americans are relatively accepting of very high incomes (and inequality). A European is more likely to say, Enough is enough once a CEO has made far more than he or she could ever use. Politically, this is reflected in the fact that the Green Party and the Party of the Left are more powerful (and represented) in Europe than in America. Although the American two-party system acts to cut off the “extremes,” I suspect that the proportion of Americans who would agree with a European far-left party is less than in the E.U.

According to Foreign Policy in Focus, “In the United States, only 32 percent of the public [in 2007 supported] an outright pay cap on executive earnings. But average Americans [appeared] to be every bit as outraged over CEO pay excess as average Europeans. Indeed, 77 percent of Americans [said that] corporate executives "earn too much.” This disconnect, which I submit does not exist in Europe, reflects the American value on economic freedom and the association of freedom with putting up with someone else’s objectionable views or conduct.

In Europe, during and after the recession of 2008, “the idea of raising taxes on high-income earners” gained currency. New E.U. and state taxes were proposed, including a tax on financial transactions (E.U.) and a one-time levy on high-income individuals. In the state of Britain, the tax rate on the highest segment was increased from 40% to 50%, and in the state of Italy the government was considering in 2011 an additional 5% tax on annual incomes above 90,000 euros and a 10% on incomes over 150,000 euros. Considering the increasing fiscal demands being put on the E.U. Government and the pressing debt situations in many states, the recessionary risk of increasing tax on the rich may well be worthwhile. Indeed, Liliane Bettencourt and fifteen other billionaires made an open plea for a special tax on the European rich. Recognizing that they had benefitted financially from the European “structure,” they wanted to help preserve it.

As valuable as closing budget-gaps by revenue and spending reforms at the state and E.U. levels is, the matter of addressing a cycle of increasing economic inequality remains unanswered. If a given societal structure acts as a multiplier effect on a given inequality—exacerbating it, in effect—then something more than a new tax may be needed. In other words, any bias in the system that increases the inequality can be neutralized by the addition of a countervailing structure. For example, placing a strict limit, such as $1 million, on what an individual can inherit—with the rest going back to society via the state—would act to counter the “snowball effect” of “old wealth.” At least as of 2011, a person can live comfortably on $1 million; the surplus, being essentially surfeit with respect to what  person is apt to consume, would be better used as a corrective of the tendency of wealth to further accumulate among the rich. In other words, just as banks with assets over $1 trillion are too big to fail, a billionaire getting richer may not be worth the “cost” to society in terms of the increased inequality—to say nothing of the probable compromise to a republic form of government (which can often be too easily bought).

In short, income and even accumulated wealth can reasonably be considered as applying generally to one’s life (and those of one’s kids and grandchildren) and more particularly to being used (i.e., spent). If one’s wealth vastly exceeds what can be spent on things one can consume, this might be an indication that the concentration has gotten out of hand, at the expense of society itself. In other words, if you have a bank account with a balance of $15 billion, do you really need $5 billion more?  Will you ever use it? There is an opportunity cost—part of which being contributing back to society and reducing the economic inequality. Even so, this way of thinking reflects a value on solidarity that is much more European than American, at least in terms of being valued. In other words, the typical American would be more likely to object to any limitation on economic freedom, even if the playing field is tilted in the direction of the wealthy being able to take disproportionate advantage of that freedom, irrespective of whether the additional wealth is usable.  

Sources:

David Gauthier-Villars, “Wealthy French Push for Extra Tax,” Wall Street Journal, August 24, 2011. 

Matt Krantz and Barbara Hansen, “CEO Pay Sours While Workers’ Pay Stalls,” USA Today, April 4, 2011. 

Sarah Anderson, “Executive Pay Debate Raging in Europe and the United States,” Foreign Policy in Focus, August 28, 2007. 

Advertisers Remove Ads on YouTube: Fair to YouTube and Video-Producers?

One day after Thanksgiving in 2017, “a fresh wave of advertisers suspended commercials on Youtube after their ads showed up next to videos that appeared to attract pedophile viewers.”[1] Youtube had removed ads from roughly 3 million videos, but the company’s use of human and AI checkers simply could not keep pace with the number of uploaded videos. Even so, Diageo, maker of Smirnoff and Johnnie Walker (alcohol drinks), announced it would hold off its ads until “appropriate safeguards are in place.”[2] Mars and Adidas took a similar line. The question is whether those advertisers were being fair to Youtube and even the producers of the videos.

After a similar revolt the previous March, YouTube and hired more human reviewers and furnished advertisers with new tools to control where their ads would appear. Did not those companies have some responsibility to keep tabs on their ads, especially given the incentive to do so.  “Advertisers don’t want their brands associated with objectionable content and as well can face criticism if their advertising money goes to support the videos’ creators.”[3] It would not have been prudent to leave it to YouTube to review the ads, especially if the advertisers knew that YouTube was short-staffed. Unlike the advertisers, YouTube’s management had little incentive; the pull-out of certain advertisers in March, 2017 had “little impact” on Alphabet’s (Google’s) overall business. In fact record profits were posted.

Of course, the ability and will to review ads, whether by the advertisers or YouTube, would not in itself have caught the cases in which the videos themselves were salubrious and yet received unsavory comments from viewers. An advertiser could hardly be blamed for placing an ad in such a video; neither would YouTube be culpable in having permitted the video in the first place. So even if sordid comments could be readily removed, the incentives would be lacking. To be sure, YouTube is responsible for removing such comments, and just because blame would not be justified concerning innocent videos does not necessarily mean that such blame would not be exacted anyway.

The nuances of responsibility suggest that the reaction of the advertisers was rather blunt and even impulsive, and not entirely fair to YouTube and the video-producers. Distinguishing between objectionable and proper videos, and then between the latter and disgusting comments would be part of a smarter, more refined approach.

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[1] Stu Woo and Sam Schehner, “YouTube Deals With Another Advertiser Backlash,” The Wall Street Journal, November 25-26, 2017.

[2] Ibid.

[3] Ibid.

Uber Tricking Law Enforcement: An Unethical Corporate Culture Externalized

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

The full essay is in Cases of Unethical Business, available in print and as an ebook at Amazon.com.  

Who Won the Kentucky Derby?

This might seem like a simple question. California Chrome won the race in 2014. That is to say, the horse by that name won. As the Derby is a race, a jockey would have played a decisive part in the win. The aptitude may well be in the horse, but the racing skill lies with the person perched on the animal. So the jockey, Victor Espinoza, won the race. If his role was essentially that of coaching or directing the horse, which unlike a racing car is a living creature with a brain to boot, then could the argument be made that the horse’s trainer—in this case Art Sherman—also won? Although Sherman quipped during a post-race interview that he had felt like he was on the horse for the last 75 years, surely a distinction can be drawn between a player and a coach. After all, Babe Ruth hit all those homeruns—not his coach. To win a race, the winner must presumably be in the race—and not vicariously. Least of all can it be said that the “horse’s owner”—an expression like “slave owner” in that a living being is “owned”—won the race. Otherwise, a person could simply wave money around in lieu of actually running to qualify for an Olympic context in track and field. To give wealth such power—coming at the expense of reason itself—would surely point to a rather distorted set of societal values. I contend that both NBC Sports’ post-race coverage and the Derby’s trophy ceremony reflect and in fact affirm the hegemony of business values in American society.

Just before interviewing the jockey, a NBC Sports journalist prefaced, “We interviewed the owner, then the trainer, and now the jockey.” Lest it be pointed out that the jockey had been busy, the trophy ceremony followed the same pattern. Kentucky’s head of state handed to trophy to Steve Coburn, who with the other owner, Perry Martin, were all too pleased to speak on their win. In fact, the governor made it quite explicit by announcing, “To the Martins, to the Coburns, our victor.” The horse and jockey were not even in the camera shot. Wealth had won the race without breaking a sweat. Next came the trainer’s turn, and then, last and apparently least, the jockey.

Imagine running a race, and winning it only to watch the metal being given to your sponsor. “To Coke, our victor.” In enabling a runner, horse, or jockey to train, a sponsor is not the winner (for otherwise the sponsor would be enabling itself). While it is understandable that wealth is highly esteemed in the business sector, the imposing of this “top dog” in society itself distorts non-business activities into the prism of commerce. In the context of managerial capitalism, particularly where managers style themselves as “coaches,” it is no accident that coaches and trainers in sports come to be treated  as ends rather than means—as the winners rather than as facilitators on the sideline. It is important to remember that Art Sherman was not on the horse that won the Derby in 2014.  

In short, the priorities evinced by NBC Sports and the Derby reflect those in the business world at the expense of the world of sports; overreach can thus be seen rather clearly. Put another way, the horse race provides us with a snapshot of just how much American society has formed around the ideological crucible of Wall Street. At least from the jockey’s standpoint, the over-reach both in terms of ownership and managerialism violates the ethical principle of fairness (i.e., the trophy should have gone to the jockey, as he is the person who actually raced). Sadly, the exaggeration or over-reach was already so engrained in American society even before the race that I bet few if any Americans even noticed how very odd the trophy sequence is.   

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). 

Bad Psychology and Political Violence: A Toxic Cocktail

Before the assassination attempt on Rep. Gabrielle Giffords in early 2011, it had been quite some time since there had been a major assassination attempt on American soil. The attempt on President Reagan had been almost thirty years earlier. During the intervening time, the naive view that American politics had outgrown such barbaric acts of political violence could grow and thrive. Then in July 2011, the world witnessed an anti-Muslim European go on a shooting spree in a delusional sense of being at war. In his mind, there was an actual war and his acts were justified. In fact, he viewed himself after the fact as a savior. Undoubtedly, there was no internal check in his mind for how far his sense of political reality could get from the “facts on the ground.”

The full essay is at "Bad Psychology and Political Violence."