Let’s applaud the good news first!  Some people seem endlessly creative in their work.  They are capable of nearly continuous positive innovation.  They see things in ways that most of us cannot see.  They bring us new and better products, processes, and understandings.  Some other people show flashes of very valuable inventiveness from time to time.  Others less imaginative in their work still muster the willpower to learn best practices and apply them.  I tip my hat to all those builders of a better world and hope they will make a lot of money from their contributions to our lives.  You are included in that group, of course.

However, those individuals constitute a small percentage of our workforce.  They are far outnumbered and are often ignored by people who are willing to make more money in a less enlightened and more destructive way.

Some years ago, I spoke at a training conference in Budapest for education advisers from many countries in the region.  They operated information centers in their countries for students who were considering study in the United States.  Most people don’t know that the recruitment of international students is highly competitive worldwide.  Foreign student enrollments are very important to universities and to receiving nations for reasons of revenue, cross-cultural education, and future national security.  The education advising centers were related to the State Department, and the advisers were accustomed to funding from the United States government.  Recently, however, the advisers had been told they would need to raise some of their operating funds themselves.   In general, the advisers were not born business types, and the requirement to somehow raise their own money was daunting to many of them.

I knew they could make some money because they were providing a valuable service and because they probably could generate income from many businesses that wanted to sell goods and services to prospective international students.   However, in doing so, the advisers could encounter some hazardous ethical situations.  Whereas their advising centers were educational and cared first about the students’ welfare, the businesses were for profit and cared first about the students’ money.  The prospect of less experienced education advisers working with experienced predatory businesses was fraught with potential harm to students.  For example, an advising center might sell student personal information and even refer students to unscrupulous recruiting agents.  My job at the conference and at similar conferences elsewhere in the world was to alert advisers to some ethical risks and present some strategies to manage them.

I began the speech by sympathizing with the advisers’ financial plight.  Then I announced the good news that plans had already been made for them to raise the money they would need for the coming months or even years.  If they would do as I instructed them during the coming weekend of the conference, they could fly back to their countries on Monday with lots of money.  First, the physically attractive advisers would become prostitutes for the weekend in venues I had already arranged for them.  Other advisers who were quick would rob jewelry stores that I had already cased for them.  Others who were strong would work in the parks mugging people, and I had already mapped the best locations and escape routes.  The advisers who were artistic would make disguises for the thieves, and I had bought the supplies.  Others would play supportive roles such as look-outs and drivers.  I would provide alibis for everyone as participants at this State Department conference.  On Monday they would fly back to their countries with their loot while the local police were still writing reports.  The audience was, shall we say, surprised by this plan.

Then I confessed that the plan wasn’t real and made my point to them, and now to you.  It is easy to make money.  All you have to do is lower your standards.  (At the conference we then discussed how to make money ethically.)

A few recent news stories may illustrate the point of lowering standards for short-term gain.  Apple deliberately slowed down its older iPhones to generate new phone business.  Volkswagen programmed its vehicles to turn on their full emission controls only during emission testing.  Wells Fargo used its customers’ personal information to create fake accounts that generated millions of dollars in fees.  This list could go on and on.  Every day in the news you can read about standards lowered for the sake of short-term profit.  Most Americans seem unaware or unconcerned about such business behavior.  They seem to accept it with the same dismissive attitude as the old “boys will be boys”.  Corporations will be corporations.

Businesses move their production to countries with lower standards of environmental protection, pay, working conditions, and taxation.  Promoters broadcast blatantly misleading advertisements.  Manufacturers produce and retailers sell unreliable products with an option for us to buy insurance in case their shoddy products fail.  A company that makes an inferior product buys the rights to a respected brand name so it can sell its cheap product under that quality label.  A business takes more profits rather than modernize its physical plant and production processes.  Businesses that should be competitors find ways to collude and gouge customers while avoiding prosecution under anti-trust laws.  This list could go on and on.  I once asked a dean of a business college at a large, supposedly-Christian university about the ethical training of the students in his college.  He chuckled and said, “We don’t use the E word.”

The lowering of standards for financial gain is not limited to the business world.  Universities lower their admission requirements.  Religious leaders preach self-serving messages that their congregations want to hear.  Politicians do the bidding of their financial backers.  Health care providers recommend unnecessary and ineffectual services.  The news media replace critically important but expensive investigative reporting with inexpensive entertainment stories.

Unfortunately, the lowering of standards is not isolated to individual companies within an industry.  It spreads like a disease among similar businesses because they are in competition with each other. This contagion may be easier to understand at the level of local business.  Suppose a town has ten roofing contractors.  They bid on the same jobs.  One of them starts quoting lower bids because it has begun to hire illegal employees for less money.  What are its competitors to do: keep losing bids, or follow suit and hire cheaper employees?  Sometimes the cost-cutting comes from cheaper materials.  Sometimes it comes from cheaper processes.  Similar forces are at work among gigantic competitive businesses such as those cited in an earlier paragraph.  Managers who compete in the lowering of standards think they are doing what is necessary to get ahead or at least to keep even with their competition.  They don’t realize that actually they have joined a race to the bottom.

Meanwhile, most notably in Japan since World War II, many foreign corporations have embraced the principles and practices of Total Quality Management (TQM) to bring better products to market at lower prices.  Of course, with better products at lower prices, their industries such as electronics and most recently sedans have taken over the American marketplace.  American companies trapped in their archaic management mentality thought the key to success must be the lowering of prices based on cheaper labor; but after moving their production overseas for the cheaper labor, they found they were still losing.  Their handicap was not the higher cost of labor or materials.  Their handicap was their own outmoded management systems (and, I suspect, their arrogance).  The Americans were, and are, competing against the worldview of Quality Management, which fundamentally and essentially respects its employees and customers.  One very brief history of Managing for Quality is at https://www.qualitydigest.com/dec/juran-2.html

A few years ago, I attended graduation ceremonies at a prestigious law school.  A series of high-powered speakers offered their wisdom.  However, the only worthwhile idea that has stayed with me came from the graduating student speaker.  He said ambition is what you are willing to do to get ahead, and ethics is what you are not willing to do to get ahead.  While so many individuals and businesses are willing to do anything for their trip to the bottom, I’m happy there can be ways to prosper financially while behaving ethically.  Indeed, there are ways to make even more money because we behave ethically.  For example, the principles and practices of Quality Management based on respect for people have already been proven.  The question is whether enough Americans are psychologically capable of adopting them.

Dave

In the first post of this series, I explained the danger to democracy as financial mega-backers choose our political candidates for us and then influence our votes.  The usual source of their big money is big business.  Now this second post will explain why big business strives to gain ever more control of government.  In short, it’s just doing its job.

You may have heard the saying that the purpose of business is business.  That simple statement reflects the whole story.  Although business owners themselves might pursue other purposes in life, businesses have only one purpose, which is to make money.  The job of corporations is to return value, which normally means money, to their investors.  The corporate executives who achieve high financial returns for their shareholders are in turn highly rewarded.  Investors want not only financial gains: they want them soon.  If a business does not return enough value fast enough, investors move their money elsewhere.  The business that they leave behind may shrink or shut down causing layoffs, abandoned buildings, lost tax revenue, and other costs to the rest of us.  On a much larger scale, the economies of entire nations can be disrupted as investors move billions of dollars out of one country and into another.

You may have noticed that sometimes businesses do give, but they give in order to get.  If they were just giving away value without expected return, they would be robbing their shareholders.  Their giving is an investment.  For example, a business might offer a prize drawing in which a small number of contestants will win while the thousands of contestants who provided their contact information will become sales targets.  A business might create a foundation to support worthy causes and thereby gain valuable advertising, public relations, and tax benefits.  A business might contribute to a political candidate with the understanding that upon election the politician will address its concerns.  The same business might also donate to the opposing candidate to assure a return on its investment no matter who wins.  Giving in order to receive is just another way for a business to pursue profit.

Without government controls, businesses can maximize their short-term profits.  Without regulations, a business is not responsible to pay its employees a living wage.  Indeed, given its purpose, it should pay the lowest wages that will still generate sufficient worker output.  Business is also not responsible to provide a safe workplace beyond what is necessary to avoid lowered productivity from illnesses and injuries.  It is not responsible to protect our natural environment although it may want to conceal activities that could provoke sabotage or boycotts against it.  A business is not responsible to treat consumers fairly or to provide reliable products beyond what is necessary to maintain an optimally profitable customer base.  A business may misrepresent itself or pay bribes in order to win contracts.  Businesses will collude with each other and evolve into monopolies that can charge customers more money in the absence of competition.  In short, without government regulations, a business is not responsible to behave ethically if it can make more profits by immoral or amoral behavior.

However, businesses are not left to operate on their own.  In America, for example, they are subject to government regulations on minimum wages, working conditions, environmental protection, product safety, marketplace competition, ingredient disclosures, and so forth.  Other laws allow employees to form unions.  Employees and customers can sue businesses for mistreatment or for harm from faulty products.  Anti-trust laws attempt to prevent collusion and monopolies.  In sum, although there may be great variation from one country to another, businesses regulated by government cannot legally do whatever they want.

Compliance with so many regulations costs businesses a lot of money, which decreases profits.  Therefore, they must strive to decrease problematic regulations and to arrange for regulations that will favor their profits.  They can control regulations by controlling the regulators, that is, by gaining control of the government.  Business has been pursuing the conquest of government for decades, or should I say for millennia.  Do you remember Ronald Reagan’s famous declaration that government is not the solution to problems but instead is itself the problem?  The problem for whom?

Governments complicate the pursuit of profit even more nowadays because business is international.  The material resources, employees, processes, physical plants, investors, and customers of businesses are networked all over the world.  However, that one world of business is divided into nearly two hundred sovereign countries.  Each country imposes its own version of regulations and ways of operating.  For example, one country may criminalize corporate bribes while another country may require them.  Although the variation among countries also creates opportunities for profit, dealing with the kaleidoscope of national differences is complex, burdensome, and expensive.

To gain control of regulations in America, as mentioned previously, business interests have to find and fund amenable political candidates and then persuade us to vote for them.  To that end, those business interests would like us to believe that what is good for their profits is also good for the rest of us. They are willing to deceive us if deceit would bring success.  For example, they tell us that our country is overregulated in hopes that we will support their deregulation.  Another fallacious business claim is that businesses and their executives are heroic “job creators” who should therefore be supported.  However, the obvious fact is that jobs are created when very large numbers of people have more money to spend.  Another fallacious business claim is that profits from business will “trickle down” to the rest of us.  Maybe those of us who sell goods and services to shareholders and executives will get some “trickle down” benefit, but a much larger proportion of us will continue to lose purchasing power as the rich gain more.  The “trickle down” argument seems especially arrogant by suggesting that we should be happy to get some sustenance dropped from the banquet tables of the rich.  Another fallacious business argument is that the gains for the rich will be only one facet of the overall gains that will accrue to everyone.  This argument hides the fact that the same business drive to maximize profits for its shareholders and executives will continue relentlessly to the detriment of the rest of us.  Given the same pattern, the rich will get richer while many millions of others will be left farther behind.  Unfortunately, such untenable, arrogant, and cynical business arguments cause many people to stand by idly while business takes over our government.

Here are some modern examples of the business profit motive in action.  I think the purist example comes from 1994 when the chief executives of seven major tobacco companies swore under oath to Congress that they believed nicotine is not addictive. (You can watch that travesty at https://www.youtube.com/watch?v=MJBaBJawnSYA.)  In other news, a giant chemical and seed company hired a consulting firm to develop a plan by which the company essentially could dominate the world’s food supply.  Pharmaceutical companies have increased the prices of life-saving drugs beyond the reach of many people who need them while reaping corporate profits averaging between fifteen and twenty percent per year.  Adding to those profits at our expense, our government has barred Medicare from negotiating for lower prices.  Before the environmental regulations that are now being rolled back, businesses dumped waste into rivers to the extent that in 1969 a major river, the Cuyahoga, caught fire (for the thirteenth time).  Before the Affordable Care Act, which is under attack, health insurance companies had the legal right to cancel the insurance of a paid customer if his or her health care became “too expensive”.  These days, the financial services industry has been fighting against legislation that would require financial advisers to put their clients’ financial welfare ahead of their own interests.  Leading up to the Great Recession of 2007, major lenders and investment banks adopted unsound business practices that took them and the world economy to the brink of collapse; and then they turned to us taxpayers to save them (and ourselves).  Corporations and their politicians are still denying the existence of global warming caused by humans and are fighting attempts to make changes that would hurt their profits.

That list could go on and on.  A business action that is planned and implemented by identifiable executives may harm millions of people, but no one goes to jail.  Eventually, an offending business may have to pay a fine, which it can absorb as a cost of doing business.  In the end, the net profit is still great.

Dave

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In early November, and again in two years, we will face profoundly important elections at every level of government.  I’m particularly concerned about the national elections, but I know those national candidates arise from state and local elections including primaries.  The financial mega-backers of today’s politicians understand the candidate supply line very well.  They know how it works.  They have been laying their candidates’ tracks for years.  It is an easy business plan to write.  While we are out mowing our lawns, people with a lot of money are deciding what our candidate options will be on election day.

The coming elections are not about the traditional Republican and Democratic parties.  Judged by their historic principles, neither of those parties still exists.  Nowadays, a critical mass of politicians in each of those nominal parties is bought by essentially the same fraternity of brokers.  Those candidates attain and keep their elected positions by accommodating the interests of their financial sponsors.  The politicians may claim that they are independent and that they hold the same political beliefs as their financial backers; but in simple terms of cause and effect, the money is in the driver’s seat. The politicians don’t tell the money what to do or else: the money tells the politicians what to do or else.  The brokers and their elected officials also know how to manipulate our voting behavior.  They know that scare tactics and disinformation work.

But what’s the big deal?  Are we not still able to buy more stuff and pursue our pleasurable activities?   I think the most profound risk is that while we busy ourselves with our personal lives, the United States may become a de facto authoritarian state.  That ancient, primitive form of government, the tool of kings and warlords, can take hold over time without anyone intentionally choosing it.  Authoritarian rule is the default system that lies at the bottom of the slippery slope of politics.  It is the lowest form of government, and huge masses of people have struggled for centuries to overcome it.  Authoritarianism is easy to understand.  Do as you’re told, or get hurt.

There are many small signs of our downward slide toward authoritarianism and a few large signs.  We voters are supposed to choose our representatives; but instead, gerrymandering enables the representatives to choose their voters.  Political operators find ways to deter large numbers of our citizens from voting.  Every day some of our politicians attack our free press, demean our system of justice, and try to politicize the courts.  Many of their fellow politicians become complicit by their silence.  We may think America is a model of democracy, but it is now ranked far down the list of democracies worldwide.

For the mega-brokers who are driven by profit rather than by political philosophy, authoritarian rule may be the most practical and predictable form of government for them to make the most money in the short term.  (And, by the way, I suspect they would enjoy having even more power over other people.)  At the same time, I think many Americans would prefer an authoritarian regime if it would impose their views on everyone else.  Since their beliefs cannot compete successfully in a democracy’s open marketplace of ideas, those people would prefer a powerful ruler who would force their ways upon the rest of us.

Authoritarianism is a very old human story, and history has repeatedly shown us the results.  One usual result is a sharply skewed distribution of wealth with a very small percentage of rich people and a huge percentage of poor people.  Another usual result is the persecution of people who in some way are not like the ruling group.  Another usual result of authoritarian government is the growing civil unrest that I think arises from an irrepressible human will to justice.

By comparison, democracy appears to be the surest path of human progress in the long run although that progress may be slow, erratic, and inefficient, especially if viewed from a business perspective.   I think democracies also tend to keep most authoritarian sociopaths in check.  The Framers of our Constitution launched a grand and ongoing experiment in democracy.  We have inherited that ongoing experiment, and, after more than two hundred years, it could collapse while in our care.  Failure requires only that we stop working at it.

This blog is part of my tiny personal effort to support democracy.  While I recognize that this blog and my renewed political efforts may prove useless, I’ve decided that they are my most appropriate response to our national situation.  Please consider that all we ever have for sure is our choice of our most appropriate response to a situation.  Family, friends, possessions, health, knowledge, life itself can be taken from each of us; but while we are yet aware, are yet human, we still have at every moment our choice of our most appropriate response to our situation.  What is your most appropriate response to our country’s current political situation?  Regardless of what you think of the rest of this blog, that is the ultimate take-away question.  What is your most appropriate response to this situation?

In future posts, I plan to write about some of the forces that are profoundly affecting us and future generations.  Although my personal values may show between the lines, the purpose of this blog is not to criticize or to pronounce judgments.  The purpose of this blog is to explain how things work.  When I want to add my recommendations on some topic, I’ll place them in a separate, labelled section of the post that can be easily found or ignored.

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In the next post, we will get down to business.  In the post after that one, I’ll explain how to make lots of money.  Later, we’ll confront some of the fallacious forms of argumentation that continually assault us online and in the news.  Other topics in the hopper are forms of government, health care, comparing people, what I call money suckers, and government regulations that some people love to hate.  Tune in for those and other topics amidst the political whirlwind that will descend upon us in the coming months.  Maybe you won’t find any new ideas in this blog, but maybe some old ideas will be presented in a new way.  Maybe we will recognize some comedy in our national life, but it is not humor that compels me to launch this blog.

Thanks for coming by.  You’re welcome to sign up for notifications or stop back whenever you like.

Dave