A Recurring Theme

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This has been less than a stellar year for business: Toyota made cars that would not stop, financial companies exploded, and BP had an explosion that created an oil leak that would not stop.

While these are three different types of disaster, there is a recurring theme in each case. To be specific, it was found that the regulators were sometimes just a bit too cozy with the folks they were supposed to regulate. While such coziness is hardly shocking, it was a bit surprising to learn that some of the  financial foxes guarding the other financial foxes (to keep them from running wild in the economic hen house) were viewing naked foxes online. In the latest disaster, the BP oil spill, the regulatory agency folks seem to have been cozy with the drilling companies and some were also apparently viewing porn. A new twist is that at least one regulator admits to using Meth. God only knows what will be next.

The coziness problem seems to stem from the usual suspects: the laws and the people.

One problem in these cases is that there seems to be a lack of effective control over how cozy the regulators can get with the regulated. This aspect of the problem can be addressed with revised regulations (and enforcement of existing laws). Some obvious fixes include outlawing gifts, having regular “inspections” of regulators to determine what they are doing (or not doing), and checking for conflicts of interest (such as close relations to the folks in the industry to be regulated). Other fixes including having stronger regulations that are harder to bypass or work around. After all, weak points in the laws make it easier for corruption to grab hold. Of course, these weak points are not the fault of the regulators-they are created by politicians by accident or by design. In the case of designed weak points and loop holes, these serve to undermine good regulatory practices by building in ways for companies to get around regulations. Typically companies have to use their influence to take advantages of weak points, which is how corruption can get started.

Of course, regulations can only be as good as the people who enforce them (or fail to do so). A country could have very good laws, but the folks who are supposed to implement them could lack the will or the desire to do so. This could be due to moral weakness on the part of the enforcers or some other factors (such as a lack of support on the part of the law makers). The solution to this problem involves getting ethical and competent people into such positions and taking steps to ensure that they do not succumb to corruption or frustration.

As a final point, I want to discuss the drugs and the porn. My rough hypothesis is that the cozy relationships played a causal role. One possibility is that corruption breeds corruption. In other words, when a person has a moral weakness in one area, it makes it easier for other moral weakness to take hold. So, a person who is willing to be unduly influenced by companies might find that this vice enables other vices to grow in relative strength. This can also lead to an overall culture of corruption in the workplace, leading to a general decay.

A second possibility is that one corruption did not contribute to another, but that both are the effects of bad character. That is, a person who is not morally upstanding would tend to engage in a range of morally questionable behavior, ranging from accepting corporate gifts to using illegal drugs.

A third possibility is that the cozy relation between industry and the regulators  has left the regulators with little real work to do. As the saying goes, idle hands do the devil’s work (that is, clicking links to porn or using drugs).

In any case, moral flaws seem to be among the causal factors of the recent disasters.

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23 Comments.

  1. michael reidy

    Nevertheless I think it is meritorious that America should have taken on the role of policing the world and spreading the boons of the American way.

  2. I fear a culture that puts too much faith in absolutes. I fear the culture that believes that the free market is self regulating. I fear those that believe that a self-regulating free market need not be examined, let alone regulated. I fear a corporate culture where so much of this magical thinking proliferates. I fear that too many regulators have been infected by such thinking to the extent that they see their roles as superfluous, leaving them to while away their time with Internet diversions.

    At the very least, the process or independent evaluation needs to be strengthened. And, the warnings should not be so easily sloughed off by that culture of magical thinking.

    Too may people of power and close to power sat idly by when things began to go awry, because they believed that they need not pay it any attention–that things would magically work themselves out.

    Our regulators need to believe in their role as independent observers, and they need to feel empowered to the extent that warnings will be acknowledged and investigated–not pushed aside as just another nuisance in the news.

    Ultimately, I admit that there is such a thing as too much regulation, and I would not call for any kind of micro-management of corporations. However, that is no excuse to go to the opposite extreme and shut down all critical thinking.

    And, I fear that it will be some time before atrophied skills of critical thinking in our economic culture are re-established.

  3. michael reidy

    “I’m a class of a regulathor” said Marlon Brando in his part as an Irish assassin in Missouri Breaks. Jack Nicholson was also implicated. Marlon was working for landed interests, having fun not learning his lines and making up speeches particularly one to his horse unless we suppose that the horse could be trained to urinate by a signal. Plus ca change as John Wayne used to say.

  4. Chris Allsobrook

    So corruption can be fixed if we have the right laws and people with the right ethical character?
    But law and ethics do not subsist in a bubble.

    The porn is irrelevant.
    Political pressure is crucial!

    Where people generally are happy for elites to live it up and control their affairs, wealth will continue to flow in one direction.

    Where an ever-increasing divide between rich and poor is tolerated, and symbols of such privilege are admired, not shamed, corruption will breed no matter what laws we have in place.

  5. Michael,
    I agree in some ways. The United States does play the role of world police to a degree. For example, we bear a large part of the cost of patrolling the oceans and so on. I also think that American values (at least the ones we talk about on July 4th-life, liberty and so on) are generally good. However, we have a bad habit of bringing the boon to folks who might not want to be so booned (like being boned, only with an extra “o”).

  6. Absolutes are absolutely wrong. :)

  7. Chris,

    I’d say that if we had the right laws and the right people, then corruption would be significantly reduced. In fact, just having the right people would go a long way. For example, a person who would not accept bribes and was motivated primarily by a desire to serve the public good would be hard to corrupt.

    True, the porn is not a cause of the corruption. I included that as a point of interest-namely that it struck me as interesting that when there are cases of political corruption, porn is so often present. Of course, maybe it is always present. I suspect that might be the case.

  8. “Absolutes are absolutely wrong. :)”

    Mike, you’re absolutely right!

  9. Keep in mind that for every investigation the browsing and email habits will be dug up and examine as a matter of standard practice, using the browsing and email data that is now all over the place.

    Mentioning such things as porn, gambling, or other common Internet addictions, will become way too common, leaving most of us very bored with such news.

    Perhaps, some here are hoping that blogging about Philosophy just won’t be tantalizing enough to be worthy of mention.

  10. michael reidy

    Mike Lab:
    I note that in Texas in 1839-44 there was gang got up to put down a bunch of regulators. They called themselves The Moderators. This was in Shelby and Harrison counties East Texas. Regulators do get out of hand particularly when they are in cahoots with the big money, spec’laters and sich. They are drawn from the same cadre. What are you going to do, annoy the people that dine at the same club as you or that you hope to join at the trough. It’s the same in every country, Ireland was no exception. Someone once asked:
    – Do you have trouble with insider trading in Ireland?
    – No, there isn’t any other kind.

  11. TesserID,

    Thus, I am absolutely wrong. :)

  12. Michael,

    That is a challenge of regulating. In the case of industry, one major challenge is that the people who know the industry best are the people in the industry. So, for example, the people who would know enough about well technology to effectively inspect and regulate would generally get that knowledge from working in the industry.

    If people completely outside the industry are brought in, the challenge is to ensure that they actually have the skills and knowledge needed to do the job. That can be difficult-after all, how many people who have no connection with the oil industry know the technical aspects of drilling and so forth? Of course, there are academics who teach this (my undergrad institution has a petroleum engineering major).

  13. Maybe if the regulators were paid enough that “[industry] regulator” wasn’t just a resume line required to land a well paid job with [industry] . . .

  14. Mark,

    “Paid enough” is a concept that comes up often enough for politicians. I think it would be quite telling to consider what we pay the law makers in contrast to that which is paid to the lobbyists. And, I think that if taxpayers were to try complete with those that pay the lobbyists, we could find that we will simply end up handing all of our money to the law makers and starve to death.

    So, I think that pay alone just won’t get it–there must be punishment for those that act in bad faith. As some think that there needs to be stronger policy for improper lobbying practices, perhaps there needs to be stronger policy for dealing with those that attempt to corrupt the regulators.

  15. Mark,
    Intuitively, better pay should lower the chance of corruption. After all, a person who is well paid would be less in need of money and it would presumably cost more to bribe such a person. Of course, good pay is not proof against this-a person who is drawn to a job to make money would probably be tempted by the offer of more money (witness the corruption among well-paid politicians).

  16. Chris Allsobrook

    Mike, I too long for the good cowboy to ride into town and sort out the baddies.

    He’d be hard to corrupt.

    Where is that guy?

    Ethical principles are usually adjusted to fit one’s environment: friends, family, rivals, authorities, social institutions, structures and incentives.

    The good guy in the bad place turned into the bad guy.

    We may as well tidy up the living room while we wait for the arrival of the messiah.

  17. Chris,

    While the bad guys tend to be the ones to make the news, there are some quiet good people. They do get on the news once in a while-as a filler piece or on a feel good segment. I think that most people do try to be decent. But I could be wrong.

  18. Mike,
    I have to say, I think you’re treading on extremely thin ice. You’re making a very questionable assumption: that the consumption of pornography indicates a weak moral character. And I would even venture that it’s questionable that the consumption of “illicit drugs” is indicative of a corruptible character.

    Every argument needs unfounded premises. But I have a strong feeling this is not the case here. If we were having this argument in some Victorian setting anno 1848, I’d perhaps node my head and accept it without much ado. But in today’s society, pornography and morality is such a thorny issue that you can’t use “pornography” synonymously with “not morally upstanding”.

    I understand that one of the proposed theories is that some small moral weakness breeds greater moral weakness. It’s akin to the argument that the consumption of marijuana is a gateway to heroin. But if you see the consumption of pornography (across the board) as a sign of not being morally upstanding, you must have some extremely rigid, nay Victorian criteria for being ethical!

    There’s a huge variety of pornography, ranging (in my view) from the perfectly acceptable to the absolutely reprehensible. So your premise (from my perspective) begs the question: what pornography were these corrupt public officials and corporate officers consuming? The perfectly acceptable or the somewhat less acceptable? And, as you yourself hint at in a comment, I’d certainly be interested in how many “uncorrupted” people consume pornography before accepting that pornography has anything at all to do with moral rectitude in other arenas (outside of sexual conduct).

    It’s not even about causality. Are the amounts of pornography and the level of corruption correlates at all? You yourself, in a subsequent comment to your own blog entry, suspect it’s not. Even taking into account that this is a casual forum for first science, I really think it was careless philosophizing not to address this question of correlates in the blog entry itself.

  19. Andreas,
    Having grown up near a pond in Maine, I have a talent for treading on thin ice. :) I would agree that the claim that porn consumption is a mark of weak moral character is problematic. I also agree that it is reasonable to challenge this on numerous grounds. When it comes to porn itself, I am rather divided. On one hand, it can be argued that viewing “mainstream porn” is not a sign of any moral weakness but merely the natural result of the fact that people often find sex and nudeness interesting. On the other hand, as feminists, religious folks and others have argued, porn can be a corrupting factor because of its very nature. For example, porn is often taken to degrade women and thus influence the views of men who view it in regards to women.

    As you mention, the discussion of porn could get into much more nuance about the various types. For example, I would be inclined to say that looking at 1960s style Playboy pictures would hardly be a mark of moral corruption. However, watching child pornography would be a clear sign of moral problems.

    Fortunately, my point (which I should have been much clearer about) is that the employees in question were viewing porn at work and perhaps under the influence of drugs while at work. Laying aside the ethics of porn and drugs, the fact that the employees were doing such things at work would indicate a moral flaw. Specifically, that they were not doing their jobs and instead engaged in such activities. Also, viewing porn and using drugs both seem to be worse than merely wasting time on the job in other ways (such as watching YouTube videos or playing video games).

    Thank you for your excellent commentary.

  20. Yes, it can be argued that porn is corrupting by its very nature. Such arguments seem to me to imply that non-procreational sex is corrupting by its very nature. That is to say, not just the act of watching others have sex, but the act in itself. I doubt most feminists think pleasure sex in itself is bad. I understand classical feminism’s observations about how pornography has demeaned and objectified women. They are right. Pornography has. But so has the rest of society historically. Yes, I do believe pornography still has a predominantly (but not exclusively) male audience and that it therefore tends to very often be about satisfying male power fantasies. But even in the “male” fantasy land you will find fantasies of women dominating men (the so called Dominatrix genre). And, pardon that I get so explicit, men pleasuring women through cunnilingus. Sexuality, and therefore by extension pornography, is a very complex landscape molded by the need to satisfy oneself through the satisfaction of others. Tricky, tricky, tricky indeed. Which is why I reject the more simplistic exploitive models of pornography (espoused by some superficial expressions of classical feminism).

    Anyway, when taking into account that this pornography you mention was consumed during work hours, the discussion becomes much more interesting. The ice beneath you solidifies quite a bit. But I still have to ask: does pornography have anything to do with it at all? Is watching porn really worse than watching people doing stupid things on YouTube? The truth is that we all waste our time when, by some standards of good employment, we should be productive for the institution that employs us. I personally even reject such standards. Productivity should not be measured in the number of hours one spends involved in the activities of the organization. It should be measured in the value of the end result of one’s activities. If you’re a teacher, how many of your students graduated? If you’re a software engineer, how efficient and cost effective is your software at accomplishing the goals for which the system was created? If you’re a pro golfer, how many tournaments did you win? Nobody, unless they themselves want to be a good golfer, cares (or at least should care) whether Tiger Woods spends 1 hour or 40 hours a week practicing. I think those who switch their minds to something which is non-work related during the day are probably way more productive when they do actual organizational work. And their end product is probably qualitatively superior.

    What in my view would be wrong is spending organizational resources in ways that have not been sanctioned by the organization. YouTube has a zero cost (disregarding the amorphous “wasted time” argument and minimal bandwidth consumption). Pornography does as well as long as the organization isn’t paying for it. But here is where I think is the rub. I have never come across a company that (at least officially) stated it was OK to smoke some pot and watch some porn on company resources to boost your productivity. But I have been engaged with discussions of whether to spend resources on safely allowing social media during work hours. Few institutions are willing to admit indirect benefits with the former but some do agree the latter can have indirect benefits for the organization. Why? Simply because porn and drugs are still taboo subjects! Mix it with politics and we all become even more puritanical. Suggesting the consumption of porn can benefit productivity would be rejected not because it’s wrong. It cannot even be seriously discussed. Therefore such a claim does not have a chance to be properly rejected. It takes a very ballsy scientist to seek a grant for any type of research involving sex. Say the word pornography and benefit in the same sentence and the number of people willing to engage shrinks even further.

    The vice many people sense does not really seem to be about wasting company time. It really seems to be about consuming company time for viewing porn. It’s about any company but the freakiest of the freakiest being unwilling to enter the morass of human sexuality. Imagine if BP announced “given the calming effect of sex, we have decided to allow each employee to spend 100$ / month on their sexual well-being”. Would they be ridiculed and attacked because it’s ridiculous that consensual sex (for the pure purpose of pleasure) is an essential part of a well-balanced society? Or is it just that some very powerful and entrenched institutions of society would descend on them like rabid wolves, waving the flags of “morality” and “vice”?

  21. I think classifying watching porn as a vice is a little extreme, though watching it at work is a little unusual too.

    I think the regulators watched so much porn at work because they really had no work to do. They were dogs without fangs or claws. I think the regulators never had any real powers.

    And porn is always there everywhere. I do not how many people really watch at workplace but it is there. But it is something socially awkward and so when one wants demonstrate that someone is corrupt it is useful to mention he/she watches porn.

  22. I,

    I’d be willing to agree that watching “mainstream” porn is probably not much of a vice (unless it comes to dominate a person’s life or lead to bad behavior). I would agree that the regulators probably were able to spend so much time watching porn because they apparently had nothing to do in regards to their actual job.

    As the saying goes, idle hands soon click those links to porn.

  23. There is so much that can go wrong in the workplace. And when it comes to regulators, the impact can be very serious. Employees watch porn, they fall asleep, they engage in social chatter on the Internet, etc. Should cameras be put up in offices to monitor employee actions? Specifically for regulators, should they be monitored and regulated?

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