Is the collapse of capitalism upon us? Are we facing a moral Armageddon in the marketplace? Is every scandal-driven headline another sign of impending apocalypse in the world of business? You could be forgiven for thinking so, if you read enough editorials.
Just look at the opinion pieces carried by major news outlets over the last month. Eduardo Porter editorialized in the New York Times about “The Spreading Scourge of Corporate Corruption.” The Atlantic carried a piece called “The Libor Scandal and Capitalism’s Moral Decay,” by Pulitzer Prize-winner David Rohde. Even business school professors are down with the effort to convince you the end is nigh: Bloomberg just recently featured a piece by Professor Luigi Zingales, who went to the apparent heart of the matter by asking, “Do business schools incubate criminals?“
But do editorials of that sort really bring to bear any solid evidence that things in the world of business are getting worse? Not as far as I can see.
I’ve argued before that the evidence for a real moral crisis in business is pretty scarce. Headlines don’t count as evidence. And pointing to the fact that people don’t trust business is putting the cart before the horse. People have been wringing their hands about moral decay and longing for the good ol’ days at least since the time of the ancient Greeks. So as far as I can see, things may not be all that bad. I’ve even argued that we are currently enjoying a sort of golden age of business ethics. Business today is, in many ways, more accountable and better behaved than ever before in history.
But I could be wrong about that. Really, who’s to say whether things are getting better or worse? It really depends an enormous amount on what you count as improvement, and how you measure it. So let’s call it a draw, and focus on what’s really important. The question isn’t whether moral standards in business are higher or lower than they were at some point in the past. The point is whether they’re currently high enough, and assuming the answer is “no,” what to do about it.
And there’s plenty of work to do. To begin, we need to keep working to find the right balance of regulatory carrots and sticks to encourage good corporate behaviour. And we need to figure out the right corporate governance policies and structures to foster good behaviour within corporations as well. And to the extent that bad behaviour in the corporate arena—as in every other area of life—is unavoidable, we need to think hard about the appropriate mechanisms to mitigate and remediate the effects of such behaviour. All of this requires a good deal of humility, of course, and a willingness to tolerate, even foster, a degree of creative experimentation.
But one thing is certain. Rather than wasting time worrying about whether the world is coming to an end, our energy would be better spent figuring out how to make it better.