Ethics in Business

I think the corporation is one of the most underrated innovations in the history of commerce. Perhaps, to a certain extent, in the whole of human civilization. For the first time in history, we have given an entity the ability to live and grow indefinitely. And being humans, we have defined the only basis for its growth as monetary profit. Just by defining the corporation in the way we have, we’ve set ourselves up for failure.

I was reading the list of ingredients on my hand soap, trying to figure out what makes it smell as good as it does and I realized that soap manufacturers are not required to list all the ingredients on their product if the ingredient constitutes less than 2% of the whole. Since they’re not required to, they don’t. Why should they? The fewer unpronounceable names of toxic chemicals I see on there, the happier I feel and the more likely I am to use it. A lot of people would say it’s sneaky. Or that it violates the spirit of the law. I think it’s to be expected.

If the only thing a company is responsible for is making money, why should it bother about doing the right thing. I’m not saying no company ever does the right thing or that it should not. I’m just saying there are no incentives for a company to do the right thing. Walmart’s the best example I can think of. If Walmart started to care about where it gets the stuff it sells, or how the people who help sell the stuff get by, they wouldn’t sell as much stuff anymore. The only thing that keeps Walmart going is the “everyday low prices”. The lower the prices, the more junk everyone buys, the more profit Walmart makes and the more customers it attracts even in the middle of a recession.

The more I think about this, the more I feel that regulation is not the solution to the problem. It’s time for companies to be evaluated on more than their stock price. It’s hypocritical to want a portfolio that would help me retire by 35 and still want companies to do the right thing so our own conscience doesn’t hurt. We can’t keep hoping that huge corporations will feel sorry for the little people and be nicer to them and the environment they’re trashing. It just won’t happen.

I’ve wondered many times if I’m a socialist. Given how I would like to see a cap on growth, fair distribution of wealth and labor rights and just a generally equal society. I know I’m an environmentalist (whatever that means) given I am all for sustainable growth, less consumption and generally less trash. But now I realize, I’m just an idealist. I keep hoping for a future that rational thinking tells me will never happen.

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