Carbon-Dioxide Emissions: A Species’ Death-Wish?

Global emissions of carbon dioxide from fossil-fuel burning rose 5.9 percent in 2010, the largest amount on record, according to an analysis released in early December, 2011 by the Global Carbon Project. According to the analysis as reported by the New York Times, “the increase, a half-billion extra tons of carbon pumped into the air, was almost certainly the largest absolute jump in any year since the Industrial Revolution, and the largest percentage increase since 2003.” 

The researchers did not expect the extraordinary growth to persist, but did "expect emissions to return to something closer to the 3 percent yearly growth of the [2000-2009] decade, still a worrisome figure that signifies little progress in limiting greenhouse gases. The growth rate in the 1990s was closer to 1 percent yearly.” In other words, the trend has been the opposite of that which one might have expected years after Al Gore’s documentary on global warmth. Increasing knowledge of global warming did not result in a reduction in contributing to global warming; rather, more carbon dioxide has ensued. To be sure, the negative correlation is not causal in nature; knowing more about global warming has not caused people to decide to pollute more. That would really be bizarre. Even so, it does appear that mankind is not sufficiently interested in protecting the specie’s own long-term viability at the expense of more immediate interests. Put another way, governments have enabled their respective businesses to produce more (or cheaper) even while knowing that the earth is warming.

According to the New York Times, “Scientists say the rapid growth of emissions is warming the Earth, threatening the ecology and putting human welfare at long-term risk. But their increasingly urgent pleas that society find a way to limit emissions have met sharp political resistance in many countries, including the United States, because doing so would entail higher energy costs.” Short-term costs are more important than long-term survival. This, in short, is why our species does not deserve to survive. We have produced this sad verdict ourselves. “Each year that emissions go up, there’s another year of negotiations, another year of indecision,” said Glen P. Peters, a researcher at the Center for International Climate and Environmental Research in Oslo and a leader of the group that produced the new analysis. “There’s no evidence that this trajectory we’ve been following the last 10 years is going to change.” This was borne out in the “deal” reached for a “New Emissions Treaty” at the U.N. climate talks ending in December 2011.

According to the New York Times, “The European Union had pushed hard for what it called a ‘road map’ to a new, legally binding treaty against fierce resistance from China and India, whose delegates argued passionately against it.” Developing countries, including China and India, had surpassed the developed countries in their overall greenhouse emissions. In 2010, for example, the combustion of fossil fuels and the production of cement sent more than nine billion tons of carbon into the atmosphere, the new analysis found, with 57 percent of that coming from developing countries. Even so, emissions per person were still sharply higher in the wealthy countries, which had been emitting greenhouse gases far longer and thus they account for the bulk of the excess gases in the atmosphere. The level of carbon dioxide, the main such gas, had increased 40 percent since the Industrial Revolution. A long-term cost was being incurred simply in debating year after year without actionable results in lower emissions. For developing countries, it would seem that having an equal opportunity to pollute was worth risking the planet, at least as far as human habitation is concerned. “Am I to write a blank check and sign away the livelihoods and sustainability of 1.2 billion Indians, without even knowing what the E.U. ‘road map’ contains?” asked India’s environment minister, Jayanthi Natarajan. “Please do not hold us hostage.” This way of thinking—or decision to use hyperbole—also qualifies mankind as not deserving to survive.

Even as carbon-dioxide emissions were “alive and well,” the “deal” reached in December 2011 would continue the Kyoto agreement, to which neither the United States nor developing countries such as China and India are parties, until  2017 or 2020. The terms of any agreement that replaces it would be negotiated at future sessions of the governing body, the United Nations Framework Convention on Climate Change. The basic mentality behind such a wan or pallid “deal” amid knowledge that global warming is indeed proceeding is transparent in this passage from the New York Times: “Scientists say the rapid growth of emissions is warming the Earth, threatening the ecology and putting human welfare at long-term risk. But their increasingly urgent pleas that society find a way to limit emissions have met sharp political resistance in many countries, including the United States, because doing so would entail higher energy costs.” That “increasingly urgent pleas” are being essentially ignored may itself point to a “hard-wired” weakness in the species that can be characterized as “self-defeating.”

Behind the increased emissions alone, moreover, is the failure of the species to self-regulate its own size. On October 31, 2011, the global population (of human beings) was estimated to have hit 7 billion. It had passed the 6 billion mark in 1999. The 10 billion mark is expected by the end of the twenty-first century. At a basic, biological level, organisms must consume resources and expel waste products: the more people, the more consumed and expelled. It is ironic that humanity places so much reliance on its technological abilities to mitigate this basic fact even as the species seems incapable of simply acting on the basis of the extant knowledge on climate change to make emissions reduction “actionable.”

In An Essay on the Principle of Population, Malthus pointed to disease, famine and conflict (war) as nature’s trove of solutions to arrest a maximizing species from piercing a broader ecosystem, which is inherently at an equilibrium (i.e., homeostatic). Perhaps we could add a fourth solution—namely, a shift to a climatic equilibrium inconsistent with human habitation. Perhaps this is nature’s way of handling the arrogance of man, or perhaps it is our way of judging ourselves as a species. Perhaps unconsciously, the sordid species, which presumes itself to be “made in God’s image,” has a death wish—a humble sensibility underneath “just saying no” to the overweening superciliousness of the arrogance that seems almost hard-wired in the species. That is to say, the “result” of the global climate talks “attained” in December 2011 can perhaps be read as the expression of an unconscious collective will—a tacit verdict of a species on itself by procrastinating in the context of “urgent pleas.” In the context of a maximizing trajectory in terms of population, which seems to suggest dominance or victory on this planet, the species’ own verdict is certainty ironic. From the 2010 figures alone, my initial gut reaction was that the species had failed the “test” in a way that shows human nature to us as it is. Accordingly, I have no doubt that the verdict will be fully implemented in a few generations—our days being limited as a species.  

Sources:

John M. Broder, “U.N. Climate Talks End With Deal for New Emissions Treaty,” The New York Times, December 11, 2011. 

Justin Gillis, “Carbon Emissions Show Biggest Jump Ever Recorded,” The New York Times, December 4, 2011. 

A Nietzschean Critique of Customer Service (Oh, Yeah!)

In classical literature, an apology can mean a defense, such as Plato’s Apology. In modern parlance, an apology is known as an expression of genuine sorrow and an acceptance of responsibility for having caused harm to another person. According to Business Ethics for Dummies, corporate apologies should be sincere, as soon as possible, and be coupled with a correction to the problem.[1] Consumers should be on guard lest a company use the semblance of an apology for marketing purposes, and, more generally, to manipulate, which in itself belies the “apology.” Robert Bacal advises that an apology be used as a strategy to use “along with other techniques.”[2] An apology as a technique in a strategy is a means, and thus as such it harbors ulterior motives. This invites “perfunctory or insincere apologies,” which are “worse than saying nothing at all.”[3] Even a sincere apology as a means to get something suffers from ulterior motives. For example, Bacal advises that a “sincere apology can help calm a customer, particularly when you or your company has made an error. You can apologize on behalf of your company.”[4]  A sincere apology is mutually exclusive with an ulterior motive, especially one that is self-beneficial in some way; the orientation must be to the error.  The manager who wants to give the impression of an apology in order to disarm the aggrieved customer therefore falls short, for such manipulation eclipses genuine sorrow.

Likewise, a willingness to take responsibility in terms of making things right is associated with a sincere apology. In fact, a refusal to “make things right,” such as by compensating an aggrieved customer, eviscerates the sincerity itself and thus rides the apology of its content. Nevertheless, Bacal advises, “Keep in mind that tendering an apology doesn’t necessarily mean that you’re admitting responsibility.”[5] Responsibility, however, goes with the recognition of having committed an error. Bacal seems to want to have his cake and eat it too!

As profit-seeking machines, corporations are inherently oriented to their own interests (as are most people); hence getting something out of apologizing while obviating any cost—strangely even in admitting responsibility as if the emotions involved constitute a business cost—fits with the corporate apology. In keeping with a business’ nature, it can also be argued that because companies are economic entities, a corporate apology must involve compensation having a monetary value to be valid. In other words, unless a business gives something to the wronged consumer to make up for the error or mistake, no apology has taken place.

Bacal refers to a “bonus buy off” as “offering something of value to the customer as reimbursement for inconvenience or other problems.”[6] However, Bacal adds that the monetary value need not be significant, “since the point is to be perceived as making an effort.”[7] Here again, he equivocates, for being motivated to appear apologetic takes the focus off the original error. Also, the monetary value must at the very least equal the cumulative loss to the customer from the error to “make things right” again. Therefore, customers should insist on the corporate apology entailing adequate compensation in goods, services, or money; otherwise—especially if nothing is offered even when asked!—the customers should reject the apparent apology.

The vacuous statement, "We apologize for any inconvenience," can be taken as an example of utter fakeness designed to manipulate under a subterfuge that is in actuality nothing more than a script. A customer turning down a company’s easy apology can use the passive-aggressive corporate lingo too, saying something like, “Unfortunately (i.e., appearance of sorrow) I am unable (i.e., false rigidity) to accept the apology as it does not come an offer of adequate compensation.” If the customer “service” employee or even manager replies that the company “cannot” compensate for its own mistakes, defects, or lapses—not the least of which are rigidity and rudeness—the customer has the answer: no apology had been made after all. The customer should reply, “Unfortunately, your company’s apology cannot accepted” and cease doing business with the company. In short, such a customer will have tested the “company’s sincerity” and found the people wanting rather than genuine. Such pretense in place of sincerity is odious, ethically speaking.

Unfortunately, the massive herd of customer herd-animals in commercial society are too easily mollified by the easy corporate-speak.  To be sure, some company managements have grasped the apology-responsibility-compensation connection. As of this writing, Starbucks still sends free-drink coupons to customers who have registered a credible complaint against a store. “We’re sorry,” a customer service employee says, “I’m going to send you some coupons for drinks on us because of your bad experience in one of our stores.” Such a response is exceedingly more credible, and genuine, because there is financial cost in the mix, than a mere, “We apologize for any inconvenience.”

Starbucks is rather generous in giving four free drinks for one bad experience, though more than one drink is necessary to compensate for the bad drink and or experience plus the effort to make things right. In Business Ethics, it is noted that if the compensation is too low—such as McDonald’s offer of $800 to compensate a hospitalized customer scalded by the hot coffee—the offer can even be taken as an insult; the passive-aggression therein is real. Insult that is added to injury is really another injury. Such an “apology” extends the error and this of course adds to the compensation needed to make things right again. The point is to see through the efforts to present the appearance of sincerity and speak to employees in economic terms in order to separate “the men” from “the boys” on their own turf.

In Nietzschean terms, the skimpiness in the refusal to compensate an aggrieved customer points to underlying weakness, for the strong are by nature generous for their strength overflows. The strong say lightheartedly, what are these parasites to me. Giving up some money is not painful, for the strong are self-confidently oriented to their surfeit of strength. In contrast, the weak give up little, and at great pain, because they feel a lack (of strength) within. They are, in other words, over defensive. Some of the weak have an overwhelming instinctual urge to dominate nonetheless, as evinced in the pleasure in saying NO to even wronged customers. Even the passive aggression latent in, “We apologize for any inconvenience,” with a clear omission or refusal of compensation is of use to those “new birds of prey.”  Imagine how business would change if only this underbelly—this plethora of weakness instead of strength—were made transparent in society. Weakness evades the translucent light so as to dominate even the strong even though such a condition is “upside-down” and thus in some sense against the laws of nature. The question from a Nietzschean perspective is how strength can take hold in even a weak sector in society.

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1. Norman Bowie and Meg Schneider, Business Ethics for Dummies (Hoboken, NJ: Wiley, 2011), 239.

2. Robert Bacal, Perfect Phrases for Customer Service, 2^nd Edition (New York: McGraw Hill, 2011), 19. Italics added.

3. Robert Bacal, Perfect Phrases for Customer Service, 2^nd Edition (New York: McGraw Hill, 2011), 19.

4. Robert Bacal, Perfect Phrases for Customer Service, 2^nd Edition (New York: McGraw Hill, 2011), 19.

5. Robert Bacal, Perfect Phrases for Customer Service, 2^nd Edition (New York: McGraw Hill, 2011), 19.

6. Robert Bacal, Perfect Phrases for Customer Service, 2^nd Edition (New York: McGraw Hill, 2011), 22.

7. Robert Bacal, Perfect Phrases for Customer Service, 2^nd Edition (New York: McGraw Hill, 2011), 22. Italics added.

On the Arrogance of False Entitlement: A Nietzschean Critique of Business Ethics and Management

Nietzsche is perhaps most stunning in his eviscerating critiques of modern morality and, relatedly, Christianity. His pessimistic attitude toward modern management is less flashy, but no less radical, for the business world would look very different were it populated by Nietzschean strength rather than so much weakness that in spite of which—and because of which, seeks to dominate even and especially people who are stronger. Accordingly, this book provides formidably severe critiques of both business ethics and management and sketches Nietzsche’s notion of strength as an alternative basis for both. Nietzsche’s notion of the ascetic priest as a bird of prey with an overwhelming urge to dominate eerily similar to both the business manager and the ethicist. Therefore, the last two chapters are on Nietzsche’s unique take on Christianity, and John D. Rockefeller, a devout Baptist ostensibly compatible even with being an acidic monopolist. 

On the Arrogance of False Entitlement: A Nietzschean Critique of Business Ethics and Management is available in print and as an ebook at Amazon. 

The Regensburg Domspatzen: Systemic Abuse of Kids in an Established Religious Institution

The utility from beautiful music for many does not justify the physical and sexual abuse of a relative few. Even though utilitarianism goes by the motto, the greatest pleasure (and least pain) for the greatest number, the severity of the pain to a few can, I submit, outweigh a more widespread, yet relatively superficial, pleasure for others. Surely the intensity of pleasure and pain must enter into the ethical calculus. I have in mind here the Regensburg Domspatzen, a Roman Catholic boys choir, in the E.U. state of Germany. This case points to the default power of established institutions and a religious psychology.

The full essay is at "The Regensburg Domspatzen."

E.S.G. in the Boardroom: A Recipe for Confusion

What would business do without its faddish buzzwords? Is the bottom-line really so boring? Transformational leadership was once in vague, with little actual attention to raising subordinates’ moral compasses. Decades later, everything was about drivers—a power-aggrandized version of cause. Then consultants, dreaming perhaps of their kids’ little league, turned the profession into an analogy and suddenly became coaches. One difference is of course that most actual coaches have been players in their respective sports, whereas how many leadership coaches have been business executives or sat on a board? “Leadership assistant” is better, if in-house, otherwise "leadership adviser," assuming sufficient study or experience in leadership. Then amidst global warming and activist stockholders, “E.S.G.” could suddenly be heard in boardrooms with the frequency of a trope.[1] Must business be led by a herd-mentality? Such leadership is internally inconsistent, for leaders are by definition ahead of the crowd, leading it rather than squawking like lemmings. In the case of E.S.G., which stands for “environmental, social, and governance,” the chatter eclipses recognition of the befuddled condition of the combo. With such different things in the mix, it is no wonder that a study attempting to quantify E.S.G. came up with mixed results. So the metric and purportedly related financial performance may not be very useful, after all.

E.S.G. “refers to the three main ways to measure a company’s commitments to ecological sustainability, to its community and to corporate governance.”[2] Large institutional investors, including BlackRock, the world’s largest asset manager, “have publicly declared . . . environmental, social and governance issues to be key metrics of their investment decisions.”[3] Although politically correct, this mantra has some rather severe drawbacks.

Firstly, what exactly is social? Good interpersonal relations inside a company?  Stable bilateral relations with key stakeholders (which sounds hardly social in nature)? Good relations with the towns and cities in which a company has a physical presence? Work on behalf of world peace? The term community is inherently such a vague notion, and it be applied to very different scales, from inside a factory to the world, that the social part of E.S.G. is problematic, especially when misplaced efforts to quantify “community” are involved. What may seem social could actually be economic, especially in stakeholder management. Also, having or being part of “community” is different than a corporate social responsibility program geared to alleviating a problem affecting employees, stakeholders, a city, or the world. This last point also applies to ecological sustainability—does this refer to a company’s own carbon footprint, or can a company get away with making financial contributions to Green Peace?

The second major problem is how different social and even ecological matters are from good corporate governance. A company’s board could improve accountability on management by severing the CEO from also chairing the board, but this does not mean that the same board has an ecological bent or wants to create a social responsibility program or give employees a sense of community (conditional, of course, given the power to fire). In short, E.S.G. combines apples with oranges. Not unexpectedly, they can relate differently with respect to financial results. Improving accountability structures and processes on management are more tightly connected to medium- and long-term financial performance than is working on a city’s problem, for instance. Improving stakeholder relations goes to the bottom line more than working for peace in the world. To be sure, the value of working on societal or global issues is real, and investors so motivated need not be thwarted by a loose relation to financial profits. The problem lies in combing E., S., and G. into a single measure and related it to financial performance.

A study by quantitative strategists at Bank of America—that bank that showed questionable smarts in buying Merrill Lynch—found mixed results in relating E.S.G. companies and profits. On the one hand, companies high in E.S.G. tend to have less volatile stocks, yet whether those companies outperform low E.S.G. companies, the answer depends on the industry. In health-care, technology, and consumer staples, the low companies actually outperformed the high ones from 2005 to 2015. In fact, the results generally were “very similar to the performance of large versus small companies.”[4] A mere look at the grab-bag of indicators demonstrates just how meaningless an overall E.S.G. number is. The study relied on a scoring system devised by Thomson Reuters, “which graded companies based on emissions and resource reductions, human rights, community engagement, work force diversity, training and development plans, board structure and compensation policy, and shareholder rights, among other things.”[5] Imagine quantifying human rights and board structure into one number!  It is as if the folks at Thomson Reuters were trying to come up with the general equation that so eluded Einstein relating the general theory of relativity to quantum mechanics! 

I submit that E.S.G. is an unstable molecule that would better serve business and society by being broken up into its component parts—its elements, each of which could be assessed, whether qualitatively or quantitatively. Some investors may want to invest in companies with a strong human rights record, while other investors may put a lot of emphasis on qualitative strength in corporate governance. Even within the social category, institutional investors could have very different things in mind—from workforce diversity to global warming. To be sure, investors could look for companies with diverse workplaces, no corporate social programs, and good corporate governance, or good relations with cities and good governance but no CSR programs to speak of—or all three. In short, the supposed positive correlations in E.S.G. do not hold in actuality even if it can be said that environment, social, and governance all have ideals. This is perhaps the underlying problem: the fallacy that says that just because x, y, and z have top values, the three variables are positively correlated. The other fallacy involved insists that everything in or affecting business can be readily or accurately quantified as if life itself were a spreadsheet. If investors really want companies to come out of their shells, it is vital to think beyond well-hooved business metrics and fads.

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1. Andrew Sorkin, “Can Good Corporate Citizenship Be Measured,” The New York Times, June 26, 2017.

2. Ibid.

3. Ibid.

4. Ibid.

5. Ibid.

Stockholders Retain Wells Fargo’s Board: A Low Bar for Corporate Governance

Corporate governance is supposed to hold management accountable. Slack in the mechanism enables not only a lack of managerial competence or ethics, but also an ineffectual board. Unfortunately, whether by proxies or connections—or just sheer power—a board’s chair and other directors can remain in place in spite of having failed to hold a management accountable. Put another way, it is not necessarily enough that an incompetent or unethical management (and other employees) is removed; replacing the derelict board may be more crucial and yet even more difficult.

 On April 25, 2017, the stockholders of Wells Fargo voted to retain the board that had oversight-responsibility while the management created millions of fake accounts. Even though 5,300 employees and the CEO, John Stumpf, lost their jobs due to the systemic fraud, 56% of the stockholder vote went in favor of retaining Stephen Sanger, the board’s chairman. Even though press referred to that as “a stinging rebuke for his failure as lead director,” the fact that he won re-election would hardly be felt by him as a rebuke.[1] That the perception would be otherwise signals just how low the bar had dropped on corporate governance. That the entire board survived intact is more important than that five of its directors failed to clear “the 70 percent threshold that typically denotes a serious protest vote.”[2] Clearly a “protest vote” is not worth much if the entire membership of such a negligent board is retained.

On account of the collusion that can occur between a management and the board tasked with overseeing that management, combined with the existing low bar in corporate governance generally, the system can ill-afford the proxy mechanism; the system is too tilted in favor of even sordid managements and board directors. Additionally, corporate social responsibility could be widened to include stockholder voting. At the Wells Fargo vote, Warren Buffett’s Berkshire Hathaway voted its 10 percent stake in favor of retaining the entire board. Even if retaining it was in Buffett’s company’s best financial interest going forward, there would be value societally and even in terms of fortifying corporate governance, which I submit would be good for business, were investors such as Warren Buffett willing to vote in favor of cleaning a sordid or ineffectual slate even if its members promise to do better. In other words, stockholders would strengthen corporate governance itself, as well as the particular companies even financially—and thus the stockholders themselves!—were they to vote to hold derelict boards accountable for bad oversight even if said boards convince stockholders of better financials ahead. Resisting such a narrow impetus can be said to be within the realm of corporate social responsibility because it is in the public interest and in line with societal norms that corporate boards actively hold their respective managements accountable even for past behavior or performance. Giving boards a pass is just as bad as a board giving its management a pass. If a narrow pursuit of financial gain comes at the expense of fortifying governance systems, then such gain is likely to be short-lived anyway because defective systems enable bad management with ineffective oversight. Fiduciary duty suffers. So, ironically, it is a matter of social responsibility that managements are held accountable, as are their respective boards themselves. Hence public policy toward reducing the power of board-management collusion is in the public interest, and corporate social responsibility should be expanded to include stockholder activism with an eye toward reforming corporate governance itself.   

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[1] Antony Currie, “Wells Fargo Should Listen to Investors and Step Down,” The New York Times, April 26, 2017.

[2] Ibid.

Company Police-States: United Airlines Attacks a Passenger

A manager of United Airlines boarded on the ground in Chicago to have three security employees of the Chicago Department of Aviation bloody and drag a physician off the plane to make room for an employee not on the flight’s crew. Although the airline was technically within its rights to forcibly remove the man for refusing to give up his seat, which he had paid for, removing paid passengers at the last minute to make room for additional, non-essential staff showed a lack of judgment. Accordingly, the police-power of the company is problematic and should be dialed back.  In fact, the power of the industry, including its companies, may need to be reduced.

 A passenger--a physician--being dragged from his paid, reserved seat as a United manager looks on. (Source: Tyler Bridges)

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