May 22, 2013

Calling for a People's Terms of Service on the Internet

Evan Selinger co-writes this excellent thought-provoking analysis on boilerplate contracts and internet privacy today in the Nation. Here's a highlight:

The impact of boilerplate is especially acute for minors. Teenagers contract with online companies without understanding the vulnerabilities created upon clicking “I agree.”
Today, the law protects these arrangements by assuming they were fairly negotiated, and thus reflect a “meeting of the minds” by equal parties. That is weird. 
After all, these contracts are usually created through user confusion and one-sided demands.  How can citizens even bargain with a standard, take-it-or-leave-it form?
Thanks to a doctrine called the Objective Theory of Contracts, the courts treat a contract as valid when people give the impression they accept or reject it, even if they were actually ignorant, or just confused. Bizarre as this legal logic might seem, it is deeply entrenched in the judicial system. It isn’t changing anytime soon.  ....
The very idea of a People’s Terms of Service agreement might initially seem strange. Right now, contract terms aren’t negotiable. You can’t ask Facebook to exempt you from Graph search. You could ask Instagram to waive its mandatory arbitration clause, in case you ever want to defend your rights before a jury, but they would say no. You forfeit those options just by using the services.
But why not try to collectively negotiate a contract that reflects some common consumer priorities? We think the best tack here is for interested users and consumer advocates to publicly debate their consensus priorities and draft them into a model contract.
There are two potential benefits: The result could be pressed on existing Internet companies, and also provide a model for new companies that want compete for users who demand respect for their freedom, choice and privacy.
To be effective, the contract would use plain English, not legal jargon.  It should be short enough so people can read it. (That’s a contrast to Facebook, which offers a contract almost as long as the US Constitution.) Beyond terminology itself, we propose five values worth considering for a model agreement: security, confidentiality, transparency, permanency and respect for intellectual property.   
Perhaps The main ethical problem here from a business perspective is that of conflict of interest. For the monetization of Facebook creates a disincentive against a people's terms of service as it is via the sharing of consumer data with other firms that the company stands to profit the most. Thus this seems to be an argument that, carried to it logical conclusion, is also a criticism of the vision of the internet promulgated by Facebook (and Google) of a virtual environment of near constant social networking married to marketing.

May 8, 2013

Fair Trade Apparel Labeling Arrives!

Fair Trade USA, the American fair trade labeling firm, is extending its reach to the apparel sector.

 I was expecting this to happen eventually. It has taken this long to get started because apparel has a more diffuse supply chain than foodstuffs. So there is a significant liability hurdle to overcome. For unlike fair trade coffee growers, who are usually worker-owned cooperatives, textiles are generally manufactured in sweatshops that aren't owned and operated by the employees. As such, there is much more of a risk that a company certified as fair trade might be using a rogue sweatshop that is not actually holding itself to basic labor standards. This is one of the reasons why the FLA, which already audits sweatshops for companies such as Nike and Apple, doesn't have its own label. I know this because I was personally involved in discussions a few years ago between Nike and the FLA while Nike was vying for the CU-Boulder sports apparel contract.

So it will be interesting to see how this evolves going forward. I expect there will have to be some kind of legal disclaimer on the new fair trade labels to protect brand name apparel companies from potential rule-breaking sweatshops that may fall through the audit cracks. This is how Nike got into legal trouble back in 2003, boasting about the labor standards of its own sweatshops without having adequate proof to back up its claims. As a result of the suit, it is now certified by the FLA.

It now looks like Fair Trade USA may begin to compete with the FLA. For if a company like Nike can get increased sales via a label that attracts socially-conscious consumers, this may pressure the FLA to develop its own label or risk losing clients to Fair Trade USA.

What's attractive about Fair Trade USA's approach is that it covers the entire supply chain including the farmers who grow the cotton, whereas farmers are not addressed in the FLA certification.

So this is a very exciting development. It will be interesting to see what companies join in. The program is still in pilot stage, with PrAna as first client.

October 17, 2012

Nike Finally Drops Armstrong

At last, it's good to see that Nike no longer tacitly supports cheating by continuing to endorse him. May his other sponsors follow in turn. That just might give other athletes pause when considering doping themselves.

August 27, 2012


Lance Armstrong's sponsors, including Nike, Oakley, Anheuser-Busch InBev, and FRS energy drinks, have decided to continue to back him. This shows an embarrassing lack of business-ethical leadership across the board.

The doping case against Armstrong is overwhelming, including numerous prominent eye-witnesses and even blood samples, though technically beyond the date of expiration. Courts of law take eye-witness testimony into account so there is nothing unreasonable about doing so here. Indeed, given how easily a champion can manipulate the drug tests, it is often the only way the rules can be enforced.

I suspect that when Tyler Hamilton's damning book comes out next month "The Secret Race: Inside the Hidden World of the Tour de France: Doping, Cover-ups and Winning at All Costs", it will deepen the debate in this country and begin to embarrass Armstrong's sponsors to an intolerable extent. It's only normal for the initial American reaction to be one of denial given how hard Armstrong has fought these charges for so many years, along with being not only cycling's greatest champion but also a major force against cancer.

Still, this gloss must wear off eventually.

Indeed, his own fight with cancer becomes tarnished by the possibility that his doping was a causal factor in his contracting the disease to begin with.

When such high-profile sponsors as these double down on denial, it allows the rest of his supporters and other athletes to continue living a lie. It turns blind eye to the damage doping does to athletes already under intense physical and psychological pressure. As Hamilton's book will describe in chilling detail, this atmosphere pushes many to substance abuse, depression and even suicide.

Corporations that ultimately depend on these athletes have a responsibility to do whatever they can to protect them from the pressure to dope. The least they can do to encourage cyclists not to engage in that practice is to drop their sponsorship of anyone found guilty. To continue supporting Armstrong at this point may feel like loyalty. But soon, that loyalty will begin to feel more like craven disregard for the integrity of the sport and the wellbeing of its athletes. For this is not about cancer funding. If these corporations want to fund that, they can do it without retaining Armstrong as a poster boy for their athletic products.

I strongly suggest these corporations get out from under this ethical albatross as soon as possible. Their corporate resonsibility is at stake and ultimately so may be their revenue as this story unravels. Imagine what will happen as Tyler Hamilton begins doing Oprah and Jon Stewart as part of his book tour. Smart companies will get off the Liestrong train if they know what is good for them, the sport, and the culture itself.

Here's a related piece of commentary by Evan Selinger, also a philosophy professor.

April 9, 2012

What Knowledge Can Philosophy Bring?

The NYT just published an article I wrote in defense of philosophical or conceptual knowledge as opposed to purely scientific or empirical knowledge. Here are the excerpts most relevant to business ethics: 

"Logically fallacious arguments can be rather sophisticated and persuasive. But they are nevertheless invalid and always will be. Exposing such errors is part of philosophy’s stock and trade. Thus as Socrates pointed out long ago, much of the knowledge gained by doing philosophy consists in realizing what is not the case. One such example is Thrasymachus’ claim that justice is best defined as the advantage of the stronger, namely, that which is in the competitive interest of the powerful. Socrates reduces this view to absurdity by showing that the wise need not compete with anyone."                   

Here is a relatively timeless philosophical truth.

"This is also why jurisprudence qualifies as an objective body of knowledge without needing to change its name to “judicial science,” as some universities now describe it. Though it is informed by empirical research into human nature and the general workings of society, it relies principally on the cogency of arguments from learned experts as measured by their logical validity and the truth value of their premises. If both of these criteria are present, then the arguments are sound. Hence, Supreme Court justices are not so much scientific as philosophical experts on the nature of justice. And that is not to say their expertise does not count as genuine knowledge. In the best cases, it rises to the loftier level of wisdom — the central objective of philosophy.

Though philosophy does sometimes employ thought experiments, these aren’t actually scientific, for they are conducted entirely in the imagination. For example, judges have imagined what might happen if, say, insider trading were made legal. And they have concluded that while it would lower regulatory costs and promote a degree of investor freedom, legalization would imperil the free market itself by undermining honest securities markets and eroding investor confidence. While this might appear to be an empirical question, it cannot be settled empirically without conducting the experiment, which is naturally beyond the reach of jurisprudence. Only legislatures could conduct the experiment by legalizing insider trading. And even then, one could not conduct it completely scientifically without a separate control-group society in which insider trading remained illegal for comparison. Regardless, judges would likely again forbid legalization essentially on compelling philosophical grounds.

Similarly in ethics, science cannot necessarily tell us what to value. Science has made significant progress in helping to understand human nature. Such research, if accurate, provides very real constraints to philosophical constructs on the nature of the good. Still, evidence of how most people happen to be does not necessarily tell us everything about how we should aspire to be. For how we should aspire to be is a conceptual question, namely, of how we ought to act, as opposed to an empirical question of how we do act. We might administer scientific polls to determine the degree to which people take themselves to be happy and what causes they might attribute to their own levels happiness. But it’s difficult to know if these self-reports are authoritative since many may not have coherent, consistent or accurate conceptions of happiness to begin with. We might even ask them if they find such and such ethical arguments convincing, namely, if happiness ought to be their only aim in life. But we don’t and shouldn’t take those results as sufficient to determine, say, the ethics standards of the American Medical Association, as those require philosophical analysis.

In sum, philosophy is not science. For it employs the rational tools of logical analysis and conceptual clarification in lieu of empirical measurement. And this approach, when carefully carried out, can yield knowledge at times more reliable and enduring than science, strictly speaking. For scientific measurement is in principle always subject to at least some degree of readjustment based on future observation. Yet sound philosophical argument achieves a measure of immortality."

April 2, 2012

The Thankless Virtue of Expense Account Frugality

Here's a refreshingly lighter piece on ethics in the WSJ. It suggests that while being frugal with your expense account may generally be a mark of virtue, it usually goes under-appreciated. It can even mark you as an oddball. It could be that colleagues and superiors feel resentful for what they see as their own lack of frugality exposed in contrast. It could also be that when taken too far, this virtue may become a kind of excessive-compulsive behavior.

January 31, 2012

December 27, 2011

Why that 99% Meme is Catching On

"This chart shows real GDP in the U.S. and the level of total civilian employment from 2002-2011. The total output of the U.S. economy in Q3 of this year finally increased to a level above the output in the fourth quarter of 2007, when the recession started (blue line). In other words, the U.S. economy has now made a complete recovery from the 2007-2009 recession. But the labor market is still struggling to recover. We have 6.6 million fewer jobs today in the U.S. than in December 2007 when the recession started (red line in chart), along with a 8.6% unemployment rate, and thus another "jobless recovery." On the other hand, it's remarkable that the U.S. economy is now able to produce more output than in 2007, but is doing so with 6.6 million fewer workers, as a result of significant gains in productivity brought about by the severe recession. Therefore, the chart helps to tell the story of two different sides of an economy in recovery:

We've seen huge gains in productivity and a recovery in output, but at the same time we see a labor market struggling to recover, with the possibility that it will take many more years or even a decade to regain all of the millions of jobs lost during the recession." - Mark J. Perry, Ph.D., visiting fellow, American Enterprise Institute. From the Atlantic Monthly's Most Important Graphs of 2011.

This is arguably the most important national public policy issue of our time. A related question to ponder here is: To what extent is it also a business ethical problem? 

October 7, 2011

Occupying Wall Street: The Social Contract Party?

I just visited the designated occupation site in Zuccoti Park several blocks from Wall St. itself. This picture is one of a few I took with my cell phone this afternoon. Thousands of protesters are using political signs, art, and music to get their message across. My sense is that by and large, they are thoughtfully and peacefully protesting against what they perceive to be a lack of business ethics stemming essentially from a corporate breach of an implied social contract to provide the American middle classes with a basic level of economic security. A manifesto of their demands can be found here.

I struck up a refreshingly rational political, cultural, and economic discussion with a British man filming some of the activities with a digital camcorder. He lives in the U.S. and was obviously rather well informed. He was not a radical by any means. He even lauded the mainstream press, namely, CNBC's recent national economic news coverage. So the movement is attracting a great number of reasonable and well-informed people who are not in the least bit shrill or closed minded. This is a refreshing contrast with many self-described Tea Party members and is why I hesitate to call this movement a budding leftist Tea Party.

It remains to be seen if it will have any impact on either raising corporate consciousness or increasing government regulation to meet  any of its manifesto's goals. Much will likely depend on how many other groups come out to join them. Thus far, they have been enjoying increasing union support. Perhaps if a popular political rock group such as Radiohead or U2 decides to perform a concert there, this could provide a legitimizing imprint strong enough to launch a renewed leftist movement across the United States.

It has been somewhat surprising that while there is a rightist Tea Party, there is no current left-wing analog. So if these protests ultimately lead to one--complete with its own televised electoral debates--that would certainly be a worthwhile achievement. In this case, it would have to come up with a name. Perhaps the Social Contract Party?

In any case, for now Mayor Bloomberg has said that they can stay. And that's a start.

August 18, 2011

New Book on Humanistic Ethics in Business

Here is an exciting new volume in Palgrave-MacMillan's Humanism in Business series to which I have contributed a chapter. Below are a few key excerpts from my chapter, Wittgenstein and the Challenge of Global Ethics:

"Ideally, by applying rational thought to action, we form good habits. Thus, new positive behaviors gradually become second nature, while bad habits are gradually stamped out. Eventually, we no longer have to think very much at all in order to embody a deeper ethical consciousness. Instead, we naturally desire and do the right thing, experiencing little or no temptation to regress into old habits. This is the ultimate goal of virtue ethics, namely, to reach complete happiness through self-actualizing activities.

Perhaps the greatest force compelling persons to change their behavior on ethical grounds is the realization that their behavior is somehow causing, facilitating, or ignoring some significant harm.  We look into another’s suffering eyes and we, in a sense, see ourselves. This is compelling for it is immediately experienced via our basic nature as social beings. And this is what is truly at the heart of ethics for Wittgenstein. For as he says, at various occasions:

“What is essential for us is, after all, spontaneous agreement, spontaneous sympathy” (1967, §667).
“Instinct comes first, reasoning second” (1967, §689).
So perhaps the greatest part of being ethical is simply to become conscious of the interest of those around us. And this has always been, and will ever be so. But the particular challenge of globality is specific to our age. For how can one see into another’s suffering eyes when those who are made to suffer are potentially out of sight on the other side of the planet? Or perhaps they might be future generations (if not one’s own) in any of myriad possible worlds transformed by global ecological calamity resulting from unbridled resource depletion. When each person’s actions taken in isolation have no clear and measurable negative effect on anyone in particular, everyone is much less likely to take responsibility for the collective result that billions of other people’s actions taken together may cause.

Essentially, this is what I take to be the Wittgensteinian challenge of global ethics. While applied ethicists may at times succeed in making compelling philosophical arguments for increased personal and corporate responsibility and government regulation, these can often be rather abstract. Their theoretically-based arguments do not compel us the way, say, the sad eyes of a child do who is denied an education based on her race. Similarly, if one litters by carelessly discarding a plastic bag on the sidewalk, there is a clear and immediate negative consequence to that action, namely, to the beauty of the neighborhood. In such cases, negative impacts are clearly felt in concrete human terms. A mere modicum of self-reflection aided by a degree of social pressure can suffice to eventually bring even the most callous to effect a corrective behavioral change.

June 27, 2011

Google's in-house Philosopher calls for a Moral Operating System

This is a very refreshing TED talk. 15 must-see minutes on bridging technology and the humanities through ethics.

It's also great to know that google has hired a philosopher to head and hone its ethics and social responsibility practices. May other corporations follow its lead!

April 22, 2011

Internet Kids' Games as Junk Food Advertising

Myriad processed-food conglomerates including General Mills, Unilever (which also owns Ben & Jerry's Ice Cream), Post Foods, Kraft and Kellogg's, have pledged to stop or significantly limit their marketing of less healthy options to kids. But is seems that few if any of these companies are actually sticking to their word. As this excellent investigative report in the NYT reveals, it seems all (except for perhaps Kraft, which is not mentioned) are finding new ways to market junk food to kids: Free online video games.

I blogged on this issue once before. So instead of repeating myself, you can read that piece here.

This is a perfect example of a nefarious side effect of the nominally "free" internet. And it's hard to come up with a solution to the problem, as my previous blog argues. The causes of child obesity are systemic socioeconomic forces. Essentially, the poorer a child is nowadays in the U.S., the higher his or her chances are of being--and remaining--obese into adulthood. As the NYT article reports via an interview at a charter school on the highway between Los Angeles and Las Vegas that strives to give disadvantaged kids a good education:

"Administrators at the school say students face many challenges to maintaining good diets: busy, low-income families, and lots of marketing. “They’re home alone, with no one to give them direction. They’re very susceptible to this marketing,” said the principal, Chala Salisbury. “What we’re seeing is children who are lethargic, some really heavy, but most on the heavy side. Most of the reason is diet.” 
Even some critics of the food industry say parents have some responsibility to limit access to marketing and to simply say no to pleas for junk food. But they also say that the aggressive pitches wind up pitting parents against children and, at the least, putting them in a position of constantly saying no."

Ultimately, we need to foster a society in which large corporations do not prey on disadvantaged children, whose numbers are unfortunately continuing to grow as fewer and fewer good middle class jobs remain in this country. But achieving this vision means to have the courage to do what is necessary to make this country great once again. And that will require a serious commitment from not just business, but citizens and their elected representatives.

Indeed, citizens must absolutely shop more responsibly, and parents must absolutely parent more responsibly, while legislators and regulators valiantly uphold the peoples' interest over corporate interests. Without that kind of concerted collective effort, there is little hope corporations will generally uphold their end of the great moral responsibility our free-market social contract now cedes to them.