An Interesting Sunday Read -- International Business Ethics

Do go read it all -- but the mention of Merck, in a Salon listing of topics on Africa, caught my eye:

. . . .With their studious inoffensiveness, business ethics often fade into the average MBA program. Two second-year students from Penn's Wharton contend that the required first-year ethics unit is the first they dumped when other homework piled up. Harvard, known for teaching only through narrative "cases," weaves ethics into leadership and strategy. Retired investment banker Rick Shreve runs abbreviated ethics modules at Yale and Dartmouth, surveying philosophers from Aristotle to Carol Gilligan. And Northwestern's Kellogg, reports a second-year student, forbids required ethics courses because their inclusion would suggest that MBAs lack ethics to begin with. None of these programs approaches the ethical relationship between business and the global economy at a moment when international business is radically changing its dealings with developing countries.

In the old days, corporations propped up sham governments -- the so-called "banana republics" -- where they found, exploited and exported a surfeit of natural resources. The incoming investors brought management with their money. Most business school case studies that treat the ethics of these forays suggest that self-serving humanitarianism makes everyone better off. A big drug company like Merck, by investing in unprofitable cures for river blindness in Africa, guaranteed itself long-term loyal customers in a marketplace bound for dramatic growth. The ethical lesson in this case and others like it says that vigorous capitalism honors American corporate law in regions where, because of despotism or chaos, one could get away with meaner deeds.

Now, global capitalism and instant information raise new problems of restraint, commitment and unintended effects. Instead of passively receiving jobs and infrastructure from agricultural exploiters, poor and densely populated countries like Indonesia and Thailand must attract foreign capital by proving their own cleverness and efficiency. So they establish research labs, retain bright young professionals and build airports to connect them to the developed world and its ample resources. (As the first world economies have boomed, more investors have felt the need to find more places to grow their money.) But the capital for new projects is startlingly fluid. When countries look promising, investors pour in. When they start to look dicey, investors run away. Although this is the same logic that informs the pricing of U.S. stocks, the trouble for business students arises when investment decisions in developing countries affect millions of people whose poverty worsens dramatically when investors withdraw. Such consequences invite revised ethical thinking -- even if that thinking leads to established conclusions. Economic theory says markets stabilize where "social welfare" is as big as it possibly can get. But a manager investing in unstable markets faces ethical questions that bastardize theories of economics and justice: Should he take any precautions before selling a big block of currency, knowing that a reigning despot will commit crimes when national debt balloons? Should he worry about teaching low-wage laborers to save and invest? On ethical questions like these, business school profs don't have much more material to draw on than their students do. . . .

Of course, the size of Merck's donation to the goal of ending river blindness is approaching $4 billion. Well worth pondering, indeed.