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Thursday, May 27, 2010

Corporations Acting Badly

The recent oil spill in the Gulf of Mexico appears to be much more than a mere accident. Shoddy workmanship, corner cutting and deliberate disregard of warning signals all appear to have contributed to the disaster.

The situation brings to mind something that Freeman Dyson, arguably the best physicist never to have received a Nobel Prize, once said:

"Wherever one looks in the world of human organization, collective responsibility brings a lowering of moral standards."

Cutting corners, taking actions that are ethically suspect even if they are not quite illegal, and ignoring the accepted bounds of decent behavior are all too often characteristics of corporate life. The Hall of Shame has no shortage of exhibits. Enron, Goldman Sachs, most of the medical insurance industry, the vast majority of tort lawyers, a whole gallery of grossly overpaid and under performing CEOs, another gallery of predatory sub-prime lenders and, now, BP are all prominently displayed.

It would be nice to think that there is a solution but the population is too large, and modern life too complex, for a return to Thomas Jefferson's ideal of an agrarian paradise where, among other things, individuals take total responsibility for their own actions. When faced with low standards of behavior, the statement 'we don't do that here' is powerful but it needs to be repeated - very frequently - by parents, teachers, managers and executives. That is, everyone in any position of authority.

Such is your correspondent's desire. Unfortunately, he has a strong suspicion that he may merely, in the words of William F. Buckley Jr., "be standing athwart the path of history shouting STOP."

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