AI Facial-Recognition Software in China: Ethical Implications beyond Political Economy

By the 2020s, the Chinese government had made significant advances in applying computer technology to garden-variety surveillance. To do so, that government relied to a significant extent on Chinese companies, and this in turn encouraged innovation at those companies even for non-governmental applications. I contend that treating this as a case study in business and government, without bringing in the ethical and political implications is a mistake. The ostensive “objectivity” of empirical social science may seem like an objective for scholars, but I submit that bringing in political and ethical theory renders the analysis superior to that which political economy alone can provide.

David Yang, who teaches economics at Harvard, spoke on a panel on China on October 11, 2024 on why some Chinese companies were developing AI technology even though generally technological development tends to go on in democracies rather than dictatorships. The reason for the exception, he said, is that the Chinese government had been buying facial-recognition software from companies in order to improve surveillance of the Chinese. Ignoring the unsavory ethical implications of a more totalitarian surveillance, Yang characterized the relationship between the businesses and the government as a win-win. The purchases by the government gives the companies the financial incentive and wherewithal to innovate AI for other, purely commercial purposes, and the government can more easily “restore order locally from social unrest.” Characterizing political protests as unrest can be said to be taken from an autocrat’s handbook, which unfairly casts a negative glow on what in a democracy is seen as healthy. Omitting the ethical implications from relations between business and government generally is thus partial both with respect to wholeness or completeness and in the sense of being biased. Even though Yang tried to present the relationship between the Chinese companies working on facial-recognition and the Chinese government buying the finished products objectively, his omission of the ethical dimension resulted in an incomplete explanation and a pro-autocratic bias. Even though such a bias could be said to be in sync with Harvard’s police-state, the hegemony of social order as the top value in political theory is problematic.

To be sure, social value could come with a government’s use of facial-recognition AI technology. Dave Davies, an American journalist who ventured inside China’s “surveillance state,” has argued that the Chinese Communist Party was “trying to internalize control. . . . Once you believe its true, it’s like you don’t even need the policeman at the corner anymore, because you’re becoming your own policeman.”[1] Once we shift from political protests to criminal activity, it is easier for even a democrat to see the value in prompting people to police themselves so a visible police-state apparatus in public would not be as likely. This is the antithesis of the “invisible man” question: What would you do that is illegal were you invisible so no one would see you and you wouldn’t get caught?  Instead, we can ask: What wouldn’t you do that you otherwise would do if you thought odds were high that you would get caught by police using facial-recognition AI technology?

But even with this internalization of control within an individual, which admittedly does not reach the individual not wanting to steal or injure someone in some way, the loss of privacy in public can be reckoned as an ethical (i.e., undeserved) harm that outweighs the ethical benefit of internalized control. Ben Franklin, one of the founding fathers of the United States, famously said that people who would trade privacy for more security deserve neither liberty nor safety. Of course, liberty is severely repressed in a dictatorship, and such a government can freely reduce people’s privacy with impunity in getting carried away with adding security measures. Ironically, such action by a pseudo-government can be observed at major universities in the States, including at Yale and Harvard, whose police departments do not have democratic legitimacy because the U.S. Constitution gives the police power to the state and federal governments rather than to even very wealthy private (“non-profit”) organizations.  

Whether in the United States or China, a republic (of republics) or an autocracy (or dictatorship), the human instinctual urge for still more control can manifest so easily in a sliding slope towards an excessively visible (and invisible), and thus impinging, police-state. The mind’s judgment concerning whether it has gone too far in this regard is susceptible to distorting itself or even suspending itself due to the allure of the pleasure of increasing control in a geographical area (or organization). In short, control is not easily internalized in people in whose discretion security measures lie. It is ironic that the internalization of control is easier when applied to individuals being controlled. An external check on the minds of the controllers is thus strongly advisable, lest we do not all wake up one day in a world in which we are surrounded by manifestations of passive-aggression and even unaccountable police brutality by people drunk with power from having the legal right to use lethal weapons. Cameras in public places are certainly superior to an overwhelming visible police presence in public places (and universities whose atmospheres are at least in principle academic in nature), but even with the ethical and practical value of internalized control, the unethical costs in terms of invasion of privacy should not be minimized or ignored outright. Achieving a policy that is balanced may not be easy, but I suspect it is best.

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1. Dave Davies, “Facial Recognition and Beyond: Journalist Ventures Inside China’s ‘Surveillance State’,” NPR.org, January 5, 2021.

Beyond Climate Change: Starbucks Awash in Cash

While it may be tempting to go after companies for hypocrisy on corporate social responsibility, even deeper criticism may be closer to the bottom line, financially. Even though social media castigated Starbucks for its impact on carbon emissions in agreeing to fly its Southern Californian CEO Brian Niccol to Seattle on a company plane each week, I submit that the amount of spending entailed raises questions about cost-containment and even cast some doubt on whether the company’s price increases in 2024 were wholly justified, and thus even on whether the industry was competitive or an oligarchy.

Before Niccol was to assume his role as CEO on September 9, 2024, Starbucks announced that he would “not be required to relocate to the company’s headquarters” during his employment with the company.[1] Because he would be expected to work at the Seattle office at least three days a week to comply with the company’s policy on hybrid working, he would be flying a distance greater than that which is between Berlin and Rome on a company plane weekly. Why could he not fly commercial (business class) and thereby save the company a lot of money? Is a CEO really above such flying?

I suspect that in the E.U. the answer would be more down-to-earth, or realistic, than in the U.S., where CEO’s are more likely to be reckon as akin to divine emperors. Whereas in Europe, an aristocracy exists that can put the moneyed caste in its proper place, American CEOs reside at the top of the societal pyramid. Being consumed with thoughts of money is valued rather than presumed low. This is not to say that inherited wealth is value-free and thus exempt from a different criticism. Rather, my point is that CEO’s of American companies can get away with being treated like royalty on account of the relatively pro-business (or business-leaning) societal culture.

Rather than criticizing Starbucks for spending too much money on its CEO’s transportation, users of social media expressed anger over the company’s preachments on sustainability while the CEO is to be flown on a private plane weekly, burning thousands of liters of fuel in the atmosphere. On its website, the company claimed that it had “a bold aspiration to be a resource positive company.”[2] The CEO of Conservation International stated that the company was backing up its “commitments with immediate actions to reduce [its] footprint and invest in nature.”[3] The hypocrisy could have been easily obviated by having the CEO fly business in a commercial airline.

It is not as if Niccol would not be able to afford the flights, as his annual salary was announced as $1.6 million, not including a possible performance-related bonus of up to $7.2 million and up to $23 million a year in company stock.[4] Of course, the company would no doubt cover the cost of its CEO’s commute, whether commercial or on a company plane, and such money, together with his compensation-level, suggests that Starbucks had money to burn in 2024 even as it was increasing the prices of its drink products.

In 2023, the CEO-to-worker pay ratio in the United States had increased to 251:1, which was up 26% from 2022. Back in 1965, CEOs were paid on average just 21 times more than the medium worker. In 2021, Chipotle, where Niccol had worked prior to becoming CEO of Starbucks, was at 2,998:1, which was the fifth highest in the United States. I suspect that he had rather high expectations in negotiating with Starbucks. That the company relented even as it felt the need to increase drink prices (presumably to keep afloat financially) is a point that the carbon-emission critics missed.

Considering the rise in prices at restaurants and grocery stores since the pandemic of 2020, it is worthy of note societally that a company raising prices would have enough cash on hand to fly one person weekly on a company plane instead of having him fly commercial (and on his own dime!). That is to say, one might wonder how legitimate the rising prices of food (and drink) were even after the pandemic. In competitive markets, new entrants can offer more competitive prices and thus bring down prices generally in an industry, such that the companies cannot afford to be extravagant in spending. Starbucks may simply have been raising prices because it could get away with it, and could thus afford to fly its CEO on a company plane weekly not only to the company’s headquarters, but on visits to company stores and brewing facilities on a regular basis.

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1. “Anger Boils Up over Starbucks CEO 1600km ‘Super Commute’ on Private Jet,” Euronews, August 23, 2024.
2. Ibid.
3. Ibid.
4. Ibid.

On the Ethics of AI

In June, 2024 at the international political meeting of the G7, a group of seven industrial nations, the head of the Roman Catholic Church, Pope Francis, spoke on the ethical dimension of artificial intelligence, or machine-learning. Regarding what the Pope called the “techno-human condition,” machines capable of AI are yet another manifestation of human propensity, which our species has had since its inception, to use tools to mediate with the environment. Although tools can be thought of as an extension of our arms ad legs, it is important to distinguish the human from the machine, even as we posit human characteristics onto some advanced machines, such as computers. In the film, 2001, the computer Hal sounds human, and may even seem to have human motivations, but any such attributions come to an abrupt end when Hal is shut down. To say that Hal dies is to commit a basic category mistake. It would be absurd, for example, to claim that Hal has an after-life. So too, I submit, is there a category mistake in taking the Pope’s talk on the ethics of AI as being religious in nature. Just as it is easy to imprint the human mind on a machine-learning computer, it can be tempting to superimpose the religious domain onto another. The Pope overreached in arbitrarily bringing in religious garb on what is actually an ethical matter in the “techno-human” world.

The full essay is at "The Pope on AI."

When Hollywood Gets Political: Partisan Profits

Entertainment celebrities and businesses alike risk losing customers and thus revenue by taking positions publicly on political issues. Fearing a surge from political parties on the far-right, some large businesses in the E.U. took the unusual step of coming out against those parties, labeling them as “extremist,” prior to the E.U. election in June, 2024. Typically, businesses there limit their political stances to particular issues that bear on core functions. This is a prudent policy, for human beings, being of bounded rationality, can easily translate ideological disagreement into switching brands. Even universities can get bruised by becoming embroiled in a domestic or international matter that is controversial. Hence after the contentious spring semester of pro-Palestine protests at Harvard (and other many other universities), the university’s administration enacted a policy not to take positions on issues in which the core functions of the university are only indirectly touched or are not affected at all. In creating a “marketplace” for academic freedom, universities themselves are best positioned by staying neutral. Although it is tempting for anyone (for oneself or one’s institution) who has access to media to sway public opinion on a political issue, I contend that the immediate self-gratification is usually outweighed by lost revenue and the reputation of being partisan. Applying strict scrutiny to one’s foray into controversial issues is harder to do if some vocal customers are demanding that a position be publicly taken. The silence of other customers, who would “vote with their purse or wallet” were an opposing position to be taken, should not be overlooked.  The singer Taylor Swift and the actor Robert De Niro provide us with two illustrations. Stepping out of their respective domains comes at a cost in those domains, and thus should, I submit, be done prudently and seldom.

As Israel was bombing Rafah in Gaza in 2024, contravening two rulings of the International Court of Justice (i.e., the UN’s court), a significant number of “Swifties,” that is, fans of the singer Taylor Swift, pleaded on social media for the international celebrity to take a position against Israel’s aggression. One fan wrote, “Taylor, please say something. Your silence is hurting us. We need you to stand with Palestine and condemn the Israeli occupation and aggression.”[1] I submit that the alleged hurt was exaggerated by the teenager. I sincerely doubt that Taylor’s silence kept many Swifties from buying Swift’s recently released album. Had the singer taken a stand, on the other hand, her fans on the other side might do more than block Swift on social media. That is to say, Swift’s financial bottom-line would be more impacted, and negatively so. It seems very improbably that increased purchases by Swifties in favor of Palestine would surpass the loss of revenue from Swifties on the other side of the issue “voting with their purses and wallets.” The lack of symmetry here is behind my advice to celebrities not to take a position on a controversial political issue, or to do so knowing that a financial cost will come with the exercise of political influence.

To be sure, exercising political influence on a societal and even world stage is tempting. As one Swiftie wrote on social media of Swift’s latent power, “if she can rally all of us to vote, she had the power to speak up about injustice.”[2] More bluntly stated, Taylor Swift had the power to significantly influence elections. The ideological benefit to her in doing so is not trivial; my point is that in accruing such a benefit, she should know that it comes with a financial cost in terms of her core function. By 2024, she had made so much money that not earning as much as she otherwise could by taking a position on Israel and Palestine could have made rational sense to her. Yet possible hits to her reputational capital could go beyond merely losing some customers of her music.

As Israel was bombing Gaza, former U.S. president Don Trump was on trial for criminal fraud in order to commit a political crime. Robert De Niro, a movie star, went to the courthouse and castigated Trump, calling him a monster.[3] As a result, the National Association of Broadcasters rescinded its Service to America Award, which the actor was to accept in just days. A spokesperson for the organization explained that it “is proudly bipartisan, uniting those from across the political spectrum to celebrate the impactful work of local broadcasters and our partners.”[4] De Niro would be a “distraction.”[5] Hence he was disinvited from even attending the event. De Niro took the high road and wished the organization well. For him, the loss of the award and even any loss at the box office if Trump supporters would then “vote with their purses and wallets” was worth it. Like Swift, De Niro had plenty of money, no doubt, and great star-power; he could take some of it out for a spin—like taking a new car out for a fast drive—without fear that he would end up in the poor house. Even so, the question of whether the hit to his personal “brand” was worth the financial and reputational cost is worth asking. Perhaps the answer is yes only if his public condemnation of Trump would end up making a difference in the election that was still half a year away. To De Niro, the answer could have been yes even if not because of the psychological reward that he felt from standing up for something important to him. Even so, rationally it would still be wise to keep an eye on the brand.

In short, it is human, all too human, to want to have political influence on a societal or even a global scale, and to enjoy the psychological pleasure that goes with the expenditure even though it could mean fewer sales than would otherwise be the case and a hit to one’s reputational capital, or brand. Generally speaking, though, such immediate gratification may not usually be worth the long-term costs, both tangible and intangible. Balancing the immediate with the long-term is not something that we humans are particularly good at, and natural selection in the process of evolution is to blame. The time-value of money, an economic concept, stems from the human preference for instant gratification. It is for this reason that I contend that celebrities should as a rule stick to their core functions—stick to the knitting in the words of the business book, In Search of Excellence—and only branch out to “cash in” to influence a political matter only rarely if at all. Taylor’s silence wasn’t actually hurting anyone; she was being an astute businesswoman and thus acting in her best interest.

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1. David Mouriquand, “#SwiftiesForPalestine: Taylor Swift Urged to Speak Up on Gaza Conflict,” Euronews.com, May 29, 2024 (accessed June 3, 2024).
2. Ibid.
3. Dylan Donnelly, “Robert De Niro Has Award Withdrawn after Calling Donald Trump ‘Monster’ Outside Trial,” Sky News, June 2, 2024 (accessed June 3, 2024).
4. Ibid.
5. Ibid.

American Airlines: Caring for People

What is the purpose of a business? According to Aristotle, there are different kinds of purposes. The final cause of a tree seed, for example, is a tree; the material cause is whatever biochemistry went into the seed. The final cause of a human sperm entering a human egg is an adult human being—hence the question of the ethics of abortion. A human embryo is potentially an adult human being. The material cause of an embryo lies in the biochemistry of the seed and the egg. But I digress. As regards a company, we can distinguish different kinds of purposes. Somewhat crudely, the real purpose can be distinguished from the ostensible purpose. The former has to do with what can be thought of as the bottom-line purpose: maximizing revenue or profit. Any ostensible purpose, such as feeding people or transporting them, is functional in nature, and can be viewed as a means of achieving the real purpose. A third kind of purpose can be labeled as a marketing purpose, the promotion of which is merely to serve the real purpose. In terms of Shankara’s Hindu metaphysical framework, the real purpose is in the real, the ostensible purpose is in the realm of appearance, and a marketing purpose is in that of illusion. I contend that business managers, especially in marketing, are accustomed to conflating these three types of purposes in being oriented to the real purpose. Not being transparent about the differences between these three purposes is, I submit, unethical in nature. I have an incident involving American Airlines in mind.

Eight Black men were ordered to leave a flight in early 2024 because a flight attendant complained about the men’s body odor. They were not seated together, and did not know each other, at least altogether, and yet presumably they all smelled the same. As far as business ethics cases go, this one is a whopper. When one of the men exclaimed, “So this is discrimination,” a woman wearing a badge (and thus was presumably an airline employee) replied, “I agree, I agree.”[1] With no other flights to the destination that day, the company reboarded the eight passengers on the same plane. To be sure, I don’t know whether any other reasons for the airline’s action in deplaning the eight men existed and, if so, whether any of them were valid but were not known to the press. Were all of the men covering their faces with masks or talking loudly or using fowl language, for instance, the airline may have had sufficient cause to remove the men. It seems odd that a company manager would take the decision to remove the men based only on an employee’s claim of a bad odor, especially given that none of the men reported having been told of the odor before being asked to leave the plane. In other words, I suspect that there is more to this story.

In any case, the airline’s statements can themselves be analyzed in terms of the real, ostensible, and marketing purposes of the company. One such statement is the following: “We take all claims of discrimination very seriously and want our customers to have a positive experience when they choose to fly with us.”[2] This is a very good statement, as it disavows the legitimacy of racial discrimination and is straight forward in situating a positive experience as something that, while relevant to the company in terms of providing a product/service, is not the company’s purpose.

I contend that the real purpose of American Airlines, and virtually any private company, is to make money. The company’s ostensible purpose is to transport people (and cargo). Next to these two purposes, it can be readily seen that providing a positive experience to customers does not in itself rise to the stature of being a purpose. Rather, providing a positive experience is a means. So far, the response of the company is fine.

The problem lies in the further statement, “Our teams are currently investigating the matter, as the claims do not reflect our core values or our purpose of caring for people.”[3] The choice of the word, “teams,” is immediately suspect, as companies have employees rather than bad sport analogies. The whiff of a marketer can thus be detected. Although the lack of honesty on this point is tedious, it points to a mindset that plays with words for effect. Gilding the lily is one way of expressing the mentality. The real problem lies in the second part of the statement, wherein caring for people is said to be the company’s purpose. Upon reading this part of the statement, my initial reflex was to think, an airline is not a nursing home. The latter does have as its main purpose the caring of people. The function of an airline is otherwise, being in transporting people from one place to another. So we don’t even have to go to the real purpose—that of maximizing profit—to catch a lower good being portrayed as a higher one. Aristotle refers to this as misordered concupiscence, and it is not ethical in nature. Placing the good of one’s car above the good that is in God is an example of placing a lower good above a higher one.

In actuality, stating “caring for people” as the airline’s purpose serves marketing. As if trying to turn lemons into lemonade, the manager who came up with that statement was using the incident to promote the airline, which in turn is in line with revenue and profits. I contend that using an error for self-promotion is morally squalid in nature, for the self-aggrandizement does not take seriously enough the need to accept the error publicly. Especially if no other reasons exist for having ordered the men off the plane, the seriousness of the harm to the Black men warrants significant attention be taken publicly by the airline. Beyond an easy apology that wouldn’t cost the company anything, an explanation was called for, and thus due publicly to the men at the very least. The airline was on much firmer ground in affirming that the company’s employees do try to give customers a positive experience. That employees are only human, and thus can make even bad mistakes, is more easily digested if a company does not invent feel-good purposes that are actually embellishments or even outright lies. Ecclesiastes has it that for everything there is a season. The season for atonement does not include self-aggrandizement.

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1. Marnie Hunter, “Black Passengers Sue American Airlines . . .,” CNN.com, May 29, 2024 (accessed June 2, 2024).
2. Ibid.
3. Ibid, italics added for emphasis.

On the Birth of Corporate Social Responsibilty in 1869

Referring to the speculation in gold that was engineered by Jay Gould and others in 1869 to enrich themselves and the Erie Railroad, Henry Adams (1838-1918), a grandson of John Quincy Adams and great grandson of John Adams, wrote at the time:

“For the first time since the creation of these enormous corporate bodies, one of them has shown its power for mischief, and has proved itself able to override and trample on law, custom, decency, and every restraint known to society, without scruple, and as yet without check. The belief is common in America that the day is at hand when corporations far greater than the Erie [Railroad] — swaying power such as has never in the world’s history been trusted in the hands of mere private citizens  . . . — will ultimately succeed in directing government itself. Under the American form of society, there is now no authority capable of effective resistance.” (1)

Gould had wanted the price of gold to rise not only because he had bought some to sell at a higher price, but also because as a stockholder of the Erie, he would benefit from the railroad transporting more wheat from the Midwest to the east coast for export. A higher price in gold meant a lower dollar. Wheat being based in dollars, a lower dollar meant more exports. The strategy was essentially to devalue the dollar, which Gould assured President Grant would be in the national interest economically. As the price of gold rose to $165 in 1869, Grant, fearing a bubble, pulled the plug by having the Treasury sell $4million in gold.  The collapse in the gold market triggered a drop in the stock-market. Even if it might have been in the short term interest of the speculators and railroads, the manufactured bubble was not in the national interest after all. Gould’s bribes of administration officials had been in vain.

Henry Adams saw the imprint of corporate power eviscerating both societal norms and democracy in the scandal.  In other words, the new-found corporate power eventuated in the birth of the need for corporate social responsibility amid capitalism eclipsing democracy. In academic terms, corporate social responsibility and (corporate) business & government, although discrete fields, were both first publicly recognized in 1869.

The corporate power occasioning Adam’s recognition was a novelty at the time, according to Brands, because the large corporation had only come into being as the railroads incorporated in the 1850s. Looking back after the Civil War, Henry Adams observed, "The last ten years had given to the great mechanical energies — coal, iron, steam — a distinct superiority in power over the old industrial elements -- agriculture, handwork, and learning." (2)  The power of steam in particular translated into large, publicly-held, corporations first in the railroad industry.

On account of their size and scope, and the associated equity capital requirements given the risk faced by lenders, the railroads were the first large American corporations to be publicly traded. The diffusion of ownership — a consequence of the large capital demands — led to a separation of ownership from control and to a new ownership interest: that of the short-term-oriented speculator. A short-seller, for example, seeks lower corporate earnings in the future, while a long-term investor hopes for higher dividends, and thus profits. Managers can exploit this difference in order to pursue their interests in the name of the corporation at the expense of societal norms and democratic governance.

Undergirding the managerial basis in skill, the railroads were the first companies to develop the methods of corporate administration. For example, there were supervisors over supervisors—in other words, multilayered organizational charts. Furthermore, dovetailing with the need for safety and efficiency (given the competition), the railroads developed precise management of their operations, including the development of standards for measuring performance. In short, the railroads were the first to develop a cadre of managers specialized in administration in the particular industry. (3)

Regarding the private power based on technique (i.e., managerial power), Henry Adams announced in 1869 that there was no authority, whether in society or government, capable of resisting it. The normative call for corporate social responsibility and the political call for a resurgence of democracy amid the encroaching capitalism were born. In other words, with great power came a recognition of a need for great responsibility. The corporate social responsibility movement began as precisely this recognition even as the modern large corporation was in its second decade.

Punctum Saliens, the large corporate type of commercial organization itself is inherently powerful relative to societal norms and even potential governmental or regulatory restraints. That is to say, the invention of the large corporation may have been inherently problematic, essentially involving systemic risk to the republic itself on account of the private power of the managements. To paraphrase Nietzsche, power cannot be but powerful. To unleash an inherently powerful feeding machine and expect it not to eat the grass is naive, if not patently irresponsible. To expect the managements of extremely wealthy corporations to be willingly socially responsible when their economizing and power-aggrandizing nature is to run through such non-constraints is simply ideological, if not fanciful. Fundamentally, the problem with corporate management is its inherent proclivity to bristle at any external constraint. It is the underlying maximizing egoism that is innately antithetical to the limiting natures of government regulation and corporate social responsibility.

Endnotes:

1. Henry Adams, “The New York Gold Conspiracy,” in Charles F. Adams, Jr. and Henry Adams, Chapters of Erie (Ithaca: Cornell University Press, 1956), pp. 135-36.

2. Henry Adams, The Education of Henry Adams (1907; Boston: Houghton Mifflin, 1961), p. 238.

3. H. W. Brands, American Colossus: The Triumph of Capitalism 1865-1900 (New York: Doubleday, 2010), pp. 22-23.

Time Magazine’s Person of the Year: Taylor Swift

Time magazine named the singer Taylor Swift as its person of the year for 2023. Such a force of nature were her stadium-filled concerts during that summer that they triggered economic booms in the respective host cities. In Pittsburgh, Pennsylvania, for example, hotel rooms went for as much as $2,500 downtown on the night of the concert. In terms of American culture, the analogy of gravity waves may fit. During an interview for television at her home (or one of her homes), Swift’s savvy business acumen was very evident; her marketing prowess was extraordinary. She even re-released her own songs, resulting in a huge financial windfall for what are really the same songs merely re-sung. It is not as if she had grown a new voice. Swift personifies American culture, whose “movers and shakers” seem “happy go lucky” on stage yet, behind the scenes, they tend to be lazar-focused on the business end. In short, considerable distance may exist between the societal image and the private business practitioner, and the ethical element can get lost in the shuffle and excitement.

To be sure, economics was evident in the “Swiftie” phenomenon during the summer of 2023. According to Time, Swift “achieved a kind of nuclear fusion: shooting art and commerce together to release an energy of historic force.”[1] Her Eras concert tour "brought in a whopping $1.04 billion with 4.35 million tickets sold across 60 tour dates."[2] Not just any singer can make such a haul and even trigger municipal economic booms and saturate the media’s attention worldwide simply by going on tour. Also, the magazine is clear that such a gargantuan amount of money brought in is not “something we often chalk up to the alignments of planets and fates,” for “giving too much credit to the stars ignores [Swift’s] skill and her power.”[3] In particular, her intense and sustained focus on every conceivable way, such as by re-recording existing songs and bundling them (admittedly with some songs from her vault) into albums in their own right, attending to merchandise and actively using the media for free publicity, to increase revenue leveraged, or made use of, her tremendous market power that was unrivaled; she dominated the airwaves during the summer of 2023. The “Taylor’s Version” albums provide us with an interesting case study wherein hype, money, and ethics are all in the mix.

According to Time, “Swift began releasing re-recordings of her back catalog in 2021 in an effort to reclaim her original music, after her initial label Big Machine Records sold her masters to Scooter Braun’s Ithaca Holdings in 2019. ‘Now Scooter has stripped me of my life’s work, that I wasn’t given an opportunity to buy,’ Swift wrote. . . . ‘Essentially, my musical legacy is about to lie in the hands of someone who tried to dismantle it.’”[4] I don’t doubt the authenticity of her emotive motivation here. In the vernacular, she was pissed.  Even so, if she had signed a contract with Big Machine Records giving it the unilateral right to sell the masters of her songs, and the purchaser has the legal right of use, then she had no legal or ethical claim to preempt the sale or be sold the masters outright. Of course, if labels write heavily unfair contracts essentially reflecting the commercial interests of the labels, taking advantage of the lack of bargaining power of new signers, ethical critique is fair game.

By its very nature, a contract is a coming together of (at least) two interests, with consideration (money) given by one party to the other. A residential lease, for instance, should reflect both interests. It should not restrict use of premises to be narrowed down to reflect only how the property owner would use the space or would like the space to be used. A property owner might prefer a “no guest” policy, but such as “policy”—the very word being presumptuous—violates reasonable use of premises. Furthermore, the property owner’s personal religious or moral lifestyle, for instance, should not bind the counterparty as long as the property itself is not damaged. “I don’t believe in eating meat, so you are not allowed to use the kitchen of your apartment to cook meat,” for instance, is presumptuous and dogmatic. More to the point, such a clause would violate or nullify the fact that in receiving rent, the property owner is selling the use of the space (as long as the property is not damaged). The mantra, “It’s my house,” taken as an absolute, is circumscribed when use is being sold for consideration (i.e., rent). Having it both ways is selfish and childish.

Whether or not Taylor Swift originally signed a one-sided contract is beyond my ability to investigate, given the information that I have. Her fans did not know either, and so, because of her emotional claim and her “star power,” her ethical cause resonated. Even so, it can be asked whether it is ethical to have hyped “Taylor’s Version” albums to the extent that buyers were willing to pay the full price of an album even if they had most of the songs already. To be sure, the “Taylor’s Versions” included “vault tracks”—songs not on the original albums. She also updated some lyrics. Even so, it can be asked whether the additional work justifies a full price of a new album. It can also be asked whether customers having receipts for the original albums, such as Fearless, should have been able to buy Taylor’s version at a discount. I submit that such a discount would be reasonable, given both the amount of additional work on Taylor’s part and the substance of the product (i.e., the extent to which it differs from the originals). A few songs from the vault and some new lyrics do not render the albums commensurate with albums filled with previously unreleased songs.

If Swift’s motivation was indeed to gain control of her songs, she should have agreed to a discount. Fearless (Taylor’s Version) had the biggest debut for any album in 2021, with 722.7 million on-demand streams in the U.S. that year.[5] Surely at least some of those customers already possessed the original album. Of course, the irrational exuberance that would cause such a customer to buy the same songs again can also be criticized, but many of her customers were teenagers and thus easily taken in even by orchestrated hype of good feeling seemingly aloft from the earthly taint of business strategizing. My point is that it is no accident that Taylor Swift made a lot of money essentially recycling songs ready for re-singing. She was not merely trying to regain control over her work. I submit that she was acting as a business woman, and a darn good one at that.  Her true identity—her driving financial ambition—was practically hidden under the blinding glitter of the “nuclear fusion” that Time magazine describes. My point is that the resulting sonic boom was orchestrated to coordinate and max out both the hype and the revenue. Behind the moral cause, behind the curtains, Swift’s financial acumen could be said to be a subterranean force of nature.

Such a force tends to be obscured, obfuscated, or, more often, intentionally hidden in the American entertainment industry. Similarly, elected representatives in Congress or the White House keep both their fowl tongues and their raw desire for power far away from the reach of microphones and cameras. In short, the sheer difference between private personas, including agendas, motivations, and even personalities, and the public images on the societal stage is astounding. Especially in politics in a representative democracy, this differential is a real problem that goes beyond the financial harm to young “Swifties” who have been subtly manipulated into buying (mostly recycled) songs at full price.

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1. Jordan Valinsky, “Taylor Swift Named Time’s ‘Person of the Year,” CNN.com, December 6, 2023.
2. Maria Sherman, "Taylor Swift's Eras Tour Is the First Tour to Gross Over $1 Billion, Pollster Says," APNews.com, December 8, 2023.

3. Valinsky, “Taylor Swift Named Time’s ‘Person of the Year.”
4. Mariah Espada, “Taylor Swift Is Halfway Through Her Rerecording Project. It’s Paid Off Big Time,” Time, July 6, 2023.
5. Ibid.