I don't think this should be a mystery. Let's consider the evidence, starting in the 1980s:
- The savings and loan crisis (Lincoln S&L, the Keating Five, Neal Bush, Whitewater, etc.)
- The collapse of Long Term Capital Management, and the near failure of several money-center banks that were major creditors of the hedge fund
- Enron (and WorldComm, Global Crossing, Adelphia, SBC, and a bunch more)
- The Spitzer investigations, bringing to light widespread Wall Street corruption and cronyism
- The collapse of Barings Bank due to unauthorized currency speculation
- A series of insider trading cases including Raj Rajuratnam
- The financial crisis of 2008 (Countrywide, WaMu, AIG, Bear Stearns, Lehman, Madoff, and more)
- Continuing fines levied on major banks for breaking rules on market manipulation, proprietary trading, and fiduciary responsibilities
Later in the article, the authors do acknowledge (citing Jeff Van Duzer) that "the dominant business paradigm needs to be turned on its head: instead of customers and employees being the means of serving shareholders, shareholders and their capital should serve customers and employees." It cites some bright spots, such as the commitments of companies like Patagonia and Chipotle, and the "B Corporation" movement.
But the article seems to be designed to convince ordinary Christians (and perhaps their pastors) that business is OK, and that these exceptional companies that they highlight are typical. Well, Enron was not typical either, but it turned out to be much closer to representing the current culture of American business than Patagonia can claim.
The article makes many excellent recommendations for how businesses should be run, and the attitudes that businesses should take to the responsibilities they have to various constituencies, including not only customers and employees, but the general public. What the authors do not do is give us an understanding of how the culture of American business can be changed. Having Christians read a few books, such as Van Duzer's, is a good thing. But what we need is a campaign to evangelize the business community, and that's not going to be easy.
2 comments:
See what you think of this analysis.
1) The business world's perception is that financing and selling goods and services is the activity that creates the greatest value to society. "Financing and selling" is different from creating / inventing, manufacturing, serving, etc. Since financing / selling is the most valuable activity, it should be compensated most highly. Creators / inventors, manufacturers, servers, etc. have sort of gone along with this for years, but are now getting tired of it. Especially since creator/inventor/manufacturer/server compensation has been stagnant while financing / business compensation has been steadily increasing.
2) Business people respond negatively to any challenge to the superior worth of financing / selling activities to other activities.
3) This is partly because a challenge to the pre-eminence of financing / selling is a challenge to the compensation structure, but also because in some sense it is seen as a challenge to the intrinsic worth of business and businesspeople. [There are some interesting articles out there on bankers wanting more money because they see it as personal validation - I get paid more because I'm a more worthy person. What that extra money will allow them to buy is a secondary consideration.]
4) A lot of our current business folks (including, I suspect, business professors) have lived most of their professional lives in an environment where business was seen as the "best" activity, and therefore businesspeople as the "best" people. Now that is changing. That can challenge their sense of worth, both the worth of their activities and their personal worth.
5) One thing I learned over 30+ years of working for a large company: businesses go up, and businesses go down. Today's glamour growth business is tomorrow's cash cow business. The "worth" of business is transitory. True personal worth comes only from being a follower of Jesus Christ.
A much-needed comment, one that sets this non-economist to thinking in two perhaps related directions. First, there's the irony that our society's distrust of business deepens even as its demand that governments function like businesses peaks. Add to those incongruous trends the nearly unchallenged national consensus that our schools and universities should operate on business principles as well, and you have a society ripe for demagoguery--one that stands in ever direr need of the corrective values the Judeo-Christian scriptures provide. But, to skip ahead to John's last point, the Church seems to have done a better job of recruiting the business community than it has of evangelizing it.
My second line of thought is to ask why, in spite of the deep distrust we vent to pollsters, business has become our society's master paradigm for success. One obvious reason is that business provides cheaply and efficiently the short-term pleasures we most want: entertainment, comfort, mobility, satiation, and fantasy. Strip away long-term goals and commitments, reduce education to methodology, religion to therapy, and critique to celebration, and what emerges is a society very much like what we see in contemporary America and the First World generally. Grimmer still, those short-term pleasures that business provides are also the medications we increasingly require to fend off the emptiness and ennui of our relationally and spiritually bankrupt lives--the only lives, incidentally, that employees in and administrators of a relentlessly competitive and univocally materialistic system are likely to have.
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