Business ethics and the applied moral philosophy relevant to it employ normative language, using words such as "imperative,""obligation,""duties,""virtue," and "wisdom." In the use and justification of these concepts in our classrooms, we hope that our students in the Master of Business Administration (MBA) program will at least think twice about getting entangled in workplace-related malpractices, such as conflicts of interest, insider trading, bribery, theft, and discrimination. Now these are largely relevant to a personal ethics, by using normative language that is instructive for individual decision-making.
However, as Antonette Palma-Angeles pointed out in a workshop on teaching business ethics held in Ateneo de Manila University a few years ago,1 to teach business ethics in Asia is to face the challenge of developing in our students a sensitivity to the "abstract common good." She proposed that teachers employ cases that move progressively from individual dilemmas, to organizational problems, then to systemic concerns. Consistent with this challenge, this paper attempts to articulate briefly the systemic dimension of ethical thinking as well as present some of its implications to the idea of corporate social responsibility (CSR), in general, and to just wages, in particular.
Suppose there were a transnational mining corporation here in the Philippines that employs hundreds of mine workers. The workers are poor, earn minimum wage, work long hours, are hardly equipped with safety gear, and will likely remain destitute because they will continue to earn minimum wage for a long time. Income is distributed in a complex manner. The substantial bulk of profits goes to the transnational shareholders (via salaries and bonuses), its local partners (also via salaries and bonuses), the state (via taxes and World Bank2 funding incentives), and the local political elite (via bribes to local government units or LGUs), while a disproportionately small amount goes to the labor force3. In this stereotypical example, the worker is farthest from getting a just wage4. On the surface, one may easily point a finger at the transnational corporation as well as its local partners, and attribute the cause of severe income inequality to them. That is not a mistake, but the accounting of the causes would not have been adequate. In the last few decades more and more evidence5 point to a manifold of causal factors for the severe income inequality that we described. There are global and domestic as well as transnational economic relations that constitute an order that has been designed to maximally benefit shareholders and policy makers to the detriment of those at the bottom of the income bracket. Put simply, there is a complex order (constituted by global, domestic, and local individuals and institutions in a myriad of economic and political relations) that accounts for the severe income inequality.
This complex order that accounts for the severe income inequality takes place because of relations of power and the manner that it is deployed in the various economic and political relations. Let us consider two levels. Globally, rich nations and transnational corporations that enter trade negotiations and cross-border investments will naturally bargain for an arrangement that benefits them, with little or no regard for other stakeholders; while poor nations have little or no bargaining power against the economic and political clout that the rich nations bring to bear on the negotiations. Thus it happens often that "free trade" means "special treatment" for the products of a developed nation that are sold in a developing country6. Locally, the political and economic elite of a country will interact with their domestic inferiors in a manner that maintains their economic and political privileges; while poor citizens have little or no influence on the policies and the asymmetrical implementation of these policies to protect themselves from exploitation (e.g., labor contractualization and unjust wages). The result: a complex global and domestic order that deprives workers like the ones depicted above from getting just wages. And so the admonition arises, "It's not just the corporation, silly!"7
That depiction of the global political and economic order that deprives the poor is hardly considered a controversial claim nowadays. What could be contentious, however, is the claim concerning accountability in this particular depiction of the global order. For one to be accountable presupposes that one is the cause. In cases of individual moral dilemmas, the answer to the question—who can be held accountable for what?— is often clear and straightforward, but it is not so in the face of a complex global order that has been designed by a manifold of agents (both individual and institutional) across many generations. 8
Let us clarify the nature of accountability. In 1971, a moral philosopher described a thought experiment that captured the imagination of a generation of scholars on the topic of poverty and humanitarian aid9. Here is the thought experiment: "if I am walking past a shallow pond and see a child drowning in it, I ought to wade in and pull the child out. This will mean getting my clothes muddy, but this is insignificant, while the death of the child would presumably be a very bad thing." Peter Singer hence argues for the need to revise the manner of thinking about (voluntary) humanitarian aid, and concludes by designating the act of donating to famine relief as a moral duty. He argued quite soundly for elevating humanitarian aid as a moral obligation. This is a level above the claim that it is indeed "good" to contribute to famine relief but not necessarily "bad" to refrain from doing so.10
However, in the face of the global order that we described above, this development is contentious because it fails to depict accurately the relationship of the child with the "helper." The "helper" has not caused the dire circumstances of the drowning child; he helps the child out of a duty to be beneficent. CSR, in this mindset, is nothing more than a dole-out. In our depiction of the complex global order, however, the order itself is the cause of the destitution of the mine worker. For the myriad of power relations has designed the complex global order that deprives the poor and powerless.
Now here is the unqualified and thus potentially controversial claim: Insofar as one (an individual or institution or business enterprise) supports and/or benefits from this complex global order11 that causes severe income inequality, one is complicit and therefore accountable for the destitution of the poor and powerless worker. Despite its ambiguity, there is an answer to the question, who can be held accountable for what? It is simply: whoever supports and/or benefits from the complex global order. In contrast to the drowning child example, there is a radical shift from the language of humanitarian aid (that is hardly binding) to the language of remedy and compensation (that are obligatory)12. This presents a strong case for the "obligatoriness," or what moral philosophers call the "binding force," of an authentic corporate social responsibility. This is the kind of CSR that deliberately responds to the situation that corporations support and/or benefit from—a complex global order that harms the poor—and not one that portrays oneself quite inaccurately as a benevolent savior (for the "media mileage" that such a portrayal earns).
Admittedly, this assessment of the global order and the rhetoric on compensation-not-aid are not new. But it is time that we, as business ethics teachers, bring it to the mainstream of corporate consciousness. We can do this by explicitly integrating systemic thinking in our syllabi and, consistent with the challenge of developing in our students a sensitivity to the "abstract common good," by presenting the implications of systemic thinking: that one supports and/or benefits from a global order that deprives the poor and powerless. They constitute, after all, the workforce (that directly produces the goods and services) that our MBA students are or will be responsible for as managers of and policy-makers for their corporations. Perhaps, by developing systemic thinking in our students, we can point out to them that the abstract common good is not so "abstract" after all.
I believe that the task of finding an adequate solution to this complex problem is beyond the scope of a business ethics class, though doing so briefly might be interesting to discuss with the students. However, an adequate and realistic depiction of the enormity and complexity of the problem is itself a vital step towards its solution. For an effective normative solution to this problem can be figured out by first providing descriptive adequacy in the social sciences (economics and political theory) and applied moral philosophy. I presume that there will come a time, perhaps within the next few years, when the narrative of compensation-not-aid enters the mainstream consciousness, just as the environmental crisis and the issue of climate change have recently pre-occupied the minds of people. But first we must sustain the kinds of research and advocacy that promote this narrative.
1 Antonette Palma-Angeles, "The Asian Dimension of Teaching International Business Ethics: Teaching Methods and Tools," (paper presented at The Asian Dimension of Teaching International Business Ethics Workshop at Ateneo de Manila University, Philippines, August 19-20, 2011).
2 Cathal Doyle, Clive Wicks and Frank Nally, Mining in the Philippines: Concerns and Conflicts (West Midlands, UK: Columban Fathers, 2007), iv. The authors assert, "The World Bank is implicated in the expansion of mining in the Philippines. Despite historical problems with mining and a legacy of 800 abandoned mines, the Bank was one of the major actors influencing the liberalized Mining Act of 1995 [...] it has played a crucial role in sponsoring and promoting the adoption of the National Minerals Policy, the Mineral Action Plan and the revitalization of the mining industry. In failing to address the negative impacts of mining plans on the poor and marginal, the Bank is failing in its duty both to assist with the country's steps to sustainable development and is failing to abide by obligations to its own mandate and obligations under international human rights law."
3 This is adapted from the Siera Pelada goldmine in Brazil example of Rainer Forst, "Justice, Morality and Power in the Global Context," in Real World Justice: Grounds, Principles, Human Rights, and Social Institutions, eds. Andreas Follesdal and Thomas Pogge (Dordrecht: Springer, 2005).
4 It is important to show the distinction between a "minimum wage" and a "just wage." A minimum wage that does not increase in proportion to the length of service of a worker is given by a legalistic corporation, while a just wage responds sufficiently not only to biological but to human developmental needs as well. For the former, salary is considered merely as an expense that should be kept to a minimum to maximize profit margins. For the latter, salary is considered an investment in "human resources."
5 For some examples, see Alvaro de Vita, "Inequality and Poverty in Global Perspective," in Freedom from Poverty as a Human Right: Who Owes What to the Very Poor? ed. Thomas Pogge (Oxford: Oxford University Press, 2007); Ingrid Robeyns, "Assessing Global Poverty and Inequality: Income, Resources, and Capabilities," in Global Institutions and Responsibilities: Achieving Global Justice, eds. Christian Barry and Thomas Pogge (Oxford: Blackwell Publishing, 2005); and Brian Barry, "Humanity and Justice in Global Perspective," in Darrel Moellendorf, Global Justice: Seminal Essays, ed. Thomas Pogge (St. Paul, MN: Paragon House, 2008).
6 See, for example, Darrel Moellendorf, "WTO and Egalitarian Justice" in Global Institutions and Responsibilities.
7 This is adapted from the title of Alessandro Pinzani, "It's the Power, Stupid! On the Unmentioned Precondition of Social Justice," in Real World Justice.
8 Some analysts hold that it began with the era of enslavement and colonialism. See, for example, Thomas Pogge, Politics as Usual: What Lies Behind the Pro-Poor Rhetoric (Cambridge, UK: Polity Press, 2010), 32.
9 Peter Singer, "Famine, Affluence and Morality," Philosophy and Public Affairs 1, no..1 (1972): 229-243.
10 This is akin to Kantian "imperfect duties," which are considered morally binding, but the failure to fulfill them does not constitute blameworthiness, while their fulfillment is praiseworthy.
11 I offer here a rough classification of accountability:
- Policy Makers in various layers of the institutional order who directly exploit
- Active Supporters of policies who directly benefit from the exploitation
- Passive Beneficiaries, who are insulated by the complex global order
Each of these three has a corresponding degree of accountability. We need to provide and refine a method for quantifying such accountability.
12 Forst articulates the argument clearly: "It is not just that the poor people lack necessary means of subsistence, it is that they are deprived of such means in situations of multiple domination. In a complex network of powers several agencies influence the actions of others so that a number of them profit, whereas others—collectives or persons—profit very little or not at all." Forst, "Justice, Morality and Power in the Global Context," 33.
REFERENCES
Doyle, Cathal, Clive Wicks and Frank Nally. Mining in the Philippines: Concerns and Conflicts. West Midlands, UK: Columban Fathers, 2007.
Forst, Rainer. "Justice, Morality and Power in the Global Context." In Real World Justice: Grounds, Principles, Human Rights, and Social Institutions, edited by Andreas Follesdal and Thomas Pogge, 27-36. Dordrecht: Springer, 2005.
Palma-Angeles, Antonette. "The Asian Dimension of Teaching International Business Ethics: Teaching Methods and Tools." Paper presented at The Asian Dimension of Teashing International Business Ethics Workshop at Ateneo de Manila University, Philippines, August 19-20, 2011.
Singer, Peter. "Famine, Affluence and Morality." Philosophy and Public Affairs 1, no. 1 (1972): 229-243
Oscar Bulaong, professor of philosophy at Ateneo de Manila, is a Global Jesuit Network Visiting Scholar at the Markkula Center for Applied Ethics. This work has already been published in the book, Business Ethics in Asia (Ateneo de Manila Press, 2014).