Wealthy people were more likely to steal candy from children

This is great!

http://www.marketplace.org/topics/economy/are-wealthy-less-ethical

Kei Hiruta on Japan's Political Philosophy Boom

We are pleased to publish below a guest post by Carnegie-Uehiro Fellow Kei Hiruta.

Observers of Japanese society may be surprised to see an emerging interest in political philosophy in Japan. Mainstream newspapers and popular magazines have been busy interviewing philosophy professors; and bookstores across the country are holding or planning to hold philosophy book fairs. Why is this happening and what is the likely outcome?

The cause of this boom is thanks to Harvard professor Michael Sandel. His renowned lectures at Harvard were recently broadcast on NHK (Japan Broadcasting Corporation) and turned out to be enormously popular. The Japanese translation of his book, Justice: What's the Right Thing to Do? has sold about 400,000 copies since its publication in May 2010, and his visit to Japan in late August was enthusiastically welcomed. Yet the boom is more than a Sandel boom; he may be an academic superstar, but he isn't the only actor in the drama.

The kind of political philosophy Sandel exemplifies is indeed new to most of the populace. The relevant distinction here is not so much between Japanese and Western philosophy but between Continental and Anglophone. Because of the strong and persistent German influence over the humanities and social science in Japan, joined by the popularity of postmodern theoretical literature in the last three decades, the analytical and normatively-oriented mode of philosophizing—so familiar to those based at Harvard, Oxford, St. Andrews, or Australian National University—strikes the Japanese audience as refreshingly down-to-earth. In his lecture at the University of Tokyo, Sandel asked whether it is fair that the Major League Baseball player Ichiro Suzuki should be paid 42 times more than the President of the United States or 400 times more than the average Japanese school teacher. This surprised and excited those who had thought that political philosophers would always ask fanciful and impractical questions such as, "What does Karl Marx mean by commodity fetishism?"

The political philosophy boom, like all booms, promises too much. In a recent special issue of the popular magazine Weekly Toyo Keizai, the discipline is reported to offer guidance on tackling various problems, including Japan's continuously high suicide rate and the uncertain future of capitalism. Yet psychologists are better qualified to address the first problem, and political philosophers are as clueless as economists about the second one.

Does this mean that the boom will be followed by disillusionment? Perhaps. A boom brings opportunities to make money, and bad philosophy is already piling up in the market to drive good ones out. If this trend continues, the boom will turn into a bubble.

That would be an unfortunate end of the story because the Japanese have a wide range of social and political issues that can be illuminated by philosophical reflection. Should we abolish the death penalty? Should we accept more immigrants? How should a country deal with historical injustices? Does gender equality require a legal right for a married couple to have different surnames? How should we control pornography without unduly restricting the freedom of expression? These are but a few samples of the issues that have long been on the Japanese political agenda and yet are still in want of reasoned argument. This, without exaggeration, is what political philosophy is able to offer.

What the current boom shows is that ideas are in demand in Japan to assist people to consider, both individually and collectively, how to live in a society where the "second lost decade" seems like it will be followed by a third one. We have every reason to hope that the demand will be met and the boom will turn into something more enduring. Whether the hope will come true is yet to be seen.

Kei Hiruta is Carnegie-Uehiro fellow at the Carnegie Council for Ethics in International Affairs and a research associate in the Uehiro Centre for Practical Ethics at Oxford University.

The World Cannot Be Saved Without Business

I am debating former Ford Foundation director Michael Edwards this evening about his provocative book Small Change: Why Business Won't Save the World. His book is an important, first-hand perspective on the current state of philanthropy. I have never had the privilege of giving someone else's money away in the form of a grant, for example. But for the past several years I have worked with foundations, companies, and governments to raise funding for the various projects I have directed. So my perspective comes from the other side of the equation.

Mike asks, can business methods help save the world? More specifically, can market-based approaches to solving social problems do more good than harm, and what are the possible implications of such an approach? Mike's main point is that a focus on profits or income generation is incompatible with real social change since a focus on profit, price, and metrics tends to drive energy toward short-term thinking rather than deeper, longer-term causes of social change. The business approaches fail to support things like love, community, and compassion that have intrinsic, aesthetic value, which is unquantifiable but nonetheless important especially for long-term, transformational philanthropy, as Andrew Carnegie called it.

Mike's view had to be said, and I applaud him for having the courage to say it. His argument was the inevitable backlash after a decade of exuberance about businessy approaches to philanthropy. In my career observing foreign policy trends, I noticed a pattern in the common wisdom, and it is usually aided by the character of media as entertainment. A new trend can start out as great, then it is bad, but eventually the common wisdom settles somewhere in between. Like everything else, it's complicated. The truth is dialectical.

We see Mike's backlash view already percolating into foundation strategies. I was just in Washington a few weeks ago meeting with the head of grant-making at a well known institution. He admitted that referring to funding as "seed money," developing business plans for nonprofits to make money, and demanding strict methods for quantifying success (an outcomes mantra) have become unfashionable. Demanding metrics can lead to metrics inflation, the pursuit of the wrong short-term goals, and a waste of a nonprofit's time in the burden of reporting. This donor said we shouldn't have to work ourselves into contortions just to show metrics, but some kind of notion of success does need to be defined. A fair question remains in the grant-making world: How will we know if your project succeeds? How do you define success? And as a consultant friend of mine recently said: that question is a business question. And as Mike admits in his book, nonprofits depend on good business acumen for the management of financial assets.

My main point here is that the relationship between business and civil society is synthetic and symbiotic. Mike's venerable effort has definitely created some much needed debate. But without business, there would be no civil society and vice versa. Ethical business emerged out of a positive interaction between business and civil society. And without wealth generation, entrepreneurship, and innovation, there would be no support for civil society. And I agree with Mike that to create a better world, business needs to become more like civil society. One challenge is how can you do that while remaining globally competitive. Fortunately, the US and UK have been blessed with a relatively robust civil society and giving culture relative to the rest of the world.

The subtitle of Mike's book ("Why Business Won't Save the World") is misleading, and I don't blame him for that. But to take it literally, I would counter: The world cannot be saved--whether it be in addressing climate change, relieving hunger, or getting financial resources to the poor--without involving business. The way to get businesses to act more like civil society will be through business instruments like pricing, incentives, and training, as well as through civil society instruments like transparency, citizen pressure, and reporting, and through government action like regulation, rule of law, and taxes.

As Mike puts it (on pages 60-61), "...the best results in raising economic growth rates while simultaneously reducing poverty and inequality come when markets are subordinated to the public interest as expressed through government and civil society." We saw this in the Asian tigers in the 1960s as well as in the US in the 1800s as described by Pietra Rivoli in her classic The Travels of a T-shirt in the Global Economy. The way I would put it is that this civil society-industry-government relationship is needed to civilize the behavior and effects of business otherwise it will run loose like a wild animal. Animal spirits must be guided by ethics. Without these civilizing effects, you actually get a breakdown in the market as trust, fairness, pricing, transparency, and accountability, which make the market function, are at stake. Corruption is one example of market breakdown; and it leads to poor quality, dangerous products, a squandering of resources, and often violence and thuggery.

Toward fostering this positive interaction between business and civil society, we launched the Workshops for Ethics in Business at Carnegie Council about four years ago. The concept behind our series is that business and civil society can support one another, learn from one another, and act as agents for positive change for one another. Businesses need external champions to push for positive change in corporations.

But getting to Mike's central argument. I would also point out that a business approach can be appropriate in some facets of philanthropy.

First, it can reduce corruption or nepotism between a funder and a grantee and a funder and another funder. At least in principle with a more "open market" approach, giving can be fairer and more democratic. Grants can go to the hardest working or most effective rather than "some guy I know."

Second, business approaches provide a yardstick for assessing success, as well as a broad strategy rooted in serving the public and any plans for development or expansion.

Third, I would argue that donors have an obligation to tie their philanthropy to the origin of their profit. Businesses should be giving to things that relate to their business impact. If a company is public (is owned by the public), then private use of its wealth can be seen as a form of corruption. Businesses should show how their giving helps remedy problems or externalities generated by their activities. It is a cliche but nonetheless true that a lot of giving goes to support the arts, which often have very little to do with a business's activities other than "the CEO's spouse likes opera." As most people know, a majority of giving comes from individual donors, and the societal sector that receives the most funding is religion. Religion is fine insomuch as it was the very origin of civil society in the West. But I would like to see giving go more toward solving business problems directly. As Andrew Carnegie advocated in his essay "The Gospel of Wealth," wealth must be circulated back into society for the good of society and not squandered.

Meanwhile, I would disagree with Mike that business activities never led to social change. Businesses roles in social change include: the positive impact Google has had in China and Twitter has had in Iran; or on the other hand the negative impact mining and weapons manufacturers have had from Angola to West Virginia. Worldwide, the communications revolution and interdependence through economic globalization are some of the most critical meta-forces in international affairs today. Another meta-force is the broad demand worldwide for self-determination, which has been partly fostered by a growing and empowered middle class in many countries, such as South Korea and Indonesia.

Finally and most fundamentally, we all should ask: How we define profit? Is it long-term or short-term? What are the benefits and what are the costs? I hope that Mike's book will help philanthropists as well as businesses think more broadly about these questions--for their sake and for the planet's.

Why Japan Doesn't Innovate in ICTs

I moderated an excellent panel last week at Japan Society on "Obama's Internet Initiative & Social Reform in the U.S. & Japan" (listen to the audio here) with Josh Fouts (Dancing Ink Productions), Kazuya Okada (NTT Data Agilenet), Kevin Werbach (Wharton business school), and Toshihiro Yoshihara (CSIS). If I had to sum up the conclusions of the panelists, it would be that "culture matters" in the spread, use, and impact of information and communications technologies in various societies.

Werbach, who has advised the Obama Administration on IT policy, emphasized the "C" in ICT--communication. Echoing senior officials in the administration such as Anne-Marie Slaughter, Werbach said that ICTs must allow people to communicate, connect, and collaborate toward achieving national ends. ICTs should allow people to connect to people, government to connect to its constituents, and the United States to connect to the rest of the world. I recalled the mantra of the administration: convene, connect, and catalyze. This sense of the United States as a credible and trustworthy convener has been a common theme I have seen in the Obama team's thinking.

Fouts similarly argued that constructive use of ICTs must be a sincere dialogue or an exchange. He reminded the audience that in reaching out to new audiences and cultures, cultural norms don't change on social networking websites. He also eased some potential worry about the Internet and social trends: The use of technology cannot replace human contact; online outreach and human contact is not a binary choice, it is a matter of integrating the two. Fouts contributed a future idea for the group--U.S.-Japan cultural exchanges through virtual worlds.

The two Japanese panelists seemed concerned about Japan's use of ICTs. As Okada put it, the reason Japan lacks innovation in ICTs is that there is a gap between its IT infrastructure and its IT literacy or attitudes. Japan is stuck in old traditions, not taking advantage of ITC's potential. For example, few people telecommute to work and few meetings are conducted virtually. In Japan, Okada said, people have a "farming attitude" in contrast to America's "hunting" mentality. The result is that Japanese people avoid disruptive change, work hard rather than work smart, and make only incremental improvements (kaizen). Okada's remarks reminded me of my graduate school thesis on U.S.-Japan negotiations; one theory that described Japanese negotiating style related to its rice farming culture. Perhaps more disturbing for Japanese innovation, Okada noted that in Japan, there is little incentive to take risks but huge disincentives to not fail. In other words, the punishments for failure outweigh the potential gains from success. Many people point to Japan's high-tech robots as areas of innovation. But Okada said Japan is automating, not innovating.

Yoshihara was slightly more optimistic but also criticized Japan's narrow use of ICT in policymaking. He said that while the U.S. approach toward establishing a broadband policy was open and inclusive, public comments through online surveys in Japan were limited. Reflecting a concern I have heard elsewhere, Yoshihara was also concerned about recent Japanese attitudes toward the Internet: In the United States, people feel the Internet is generally a healthy exchange of ideas he said while in Japan, a growing number of people feel that the Internet is a "dangerous" place, citing the vicious attacks on people in Internet forums such as 2channel. It was noted, however, that Japanese cultural "bads" present a low-hanging fruit for positive change.

To me this panel demonstrated that the Japan Society in New York City has a vital role to play in helping push for positive change in Japan--from the outside. I hope Japanese communities in New York City, a hub of innovation, will continue to exchange ideas at this historic institution and foster a stronger U.S.-Japan relationship through creativity and innovation.

In Copenhagen Poker Game, a Climate Ethic?

Last night I attended the Carnegie Council-sponsored Japan Society panel "Copenhagen & Beyond" on the upcoming climate change negotiations in December with experts Masayoshi Arai (METI), Elliot Diringer (Pew Center), Chinese Ambassador to the UN Zhenmin Liu, and Takao Shibata (the former chairman of the Kyoto Protocol working group).

As moderator, Jim Efstanthiou of Bloomberg began by noting that no binding climate change deal is expected in Copenhagen this December since rich countries seem to be holding back their cards in a game of climate poker. The panelists basically agreed that the most we can expect in December is a political agreement or declaration since governments simply are not ready to make a deal. Diringer predicted the low end outcome would be a political declaration with "some money on the table." A higher achievement in Copenhagen would spell out the legal and institutional architecture to pave the way for a binding agreement. He said that would represent a success. Even in the Bali meeting, the Dec. 2009 deadline for Copenhagen was seen as "too soon" for agreement on legal commitments. Shibata hoped that the world would avoid the mistake made in Kyoto--producing an agreement that is "unratifiable" in the U.S. Congress. Liu strongly stressed the importance of finding some agreement in Copenhagen; otherwise it would be "a tragedy" for humanity--politicians who said there will be progress will look like liars.

A major theme of the discussion was the ethical principles of the climate change negotiations. Shibata remarked that the Hatoyama Administration's 25 percent greenhouse gas reduction target is contingent upon having a fair and effective global framework for negotiation in place. (By the way, showing how dramatic that goal is, Arai said, Japan's 25 percent target would represent the equivalent of eliminating the greenhouse gases emitted from the entire transport, electricity, or industrial sector in Japan. I have also heard that the Hatoyama goal was sprung on industry and the bureaucracy without consultations and companies are now waiting to see any action taken.)

Fortunately, a fair framework is in place: The overarching global goal is to stabilize the concentration of greenhouse gases in the atmosphere to prevent dangerous anthropogenic interference. The intention in the Kyoto Protocol was to include commitments from developing countries but it proved impossible since the commitments from rich countries were incomplete.

In any case, toward achieving this goal, the basic principles from the Kyoto Protocol, which shouldn't be thrown away according to Liu include: 1. global cooperation; 2. common but differentiated responsibility; 3. all states have obligations. Liu advocated for specific quantitative commitments from Annex One (rich) countries while poorer countries should be simply required to "do more," including technology transfer, innovation, and government-to-government cooperation. In other words, Liu said that inter-governmental actions for mutual benefit need to be considered--not just market mechanisms. Efstathiou wondered if we were headed toward "carbon cap equivalents." This description below is from a Center for American Progress article:

With this carbon cap equivalents approach the better measure of what each country is doing is derived by adding up the full range of supplemental and complementary proposals to each country’s carbon cap and converting this into one comparable figure of what these emissions reductions would effectively amount to if they had been the result of a carbon cap alone. The modeling will be complex, but we should open up the language of the hoped-for Copenhagen treaty so that signatory nations can demonstrate their acceptance of the treaty goals through such equivalents—representing the full range of their policy profile to reduce greenhouse gas emissions—above and beyond their formal cap.

Diringer predicted that developing countries will be asked to describe their climate change policies consistent with their development goals but will not be asked to impose economy-wide caps. The framework for developing countries will be flexible but binding so that there will be a stronger collective impact through mutual commitments. As Liu said, it would be unfair to ask developing countries to forgo the benefits of industrialization. Coincidentally, a couple of people questioned the very meaning of the Annexes since economic growth is concentrated in emerging economies.

For rich countries like the United States, the risk is not in adopting climate change mitigation mechanisms or their impact on industrial competitiveness. The idea that climate change mitigation is inconsistent with industrial competitiveness is outdated. Instead, Diringer said, the risk is that the United States will fail to create the incentives to adopt future technologies, like China is trying to do.

The gorilla in the room was enforcement. Fortunately, the final question from the audience was direct: How will states' commitments be enforced? The panel agreed that enforcement mechanisms can't be punitive but rather should be facilitative. Commitments must be clear but not onerous. In that way, countries that fail to meet their commitments will be "named and shamed."

America Shouldn't Blow an Opportunity for Green Diplomacy

Among all the talk about soft power and smart power something big and obvious has been missing: wind power. By not being a global leader on climate change over the past decade America has blown a major opportunity to engage in Green Diplomacy—the strategic use of clean energy projects to boost development and security in poor countries. Going forward, the Obama Administration should articulate and carry out a plan to align several of our national priorities: innovation, emissions reduction, development, diplomacy, and security.

When it comes to linking climate change and security it is common practice to trot out the specter of mass hordes of climate refugees inundating rich countries as their own coastal homelands disappear into the ocean. Likely this fear suffers from a case of xenophobic exaggeration. But an already-porous migration policy does motivate the United States to focus on the development of climate-resilient countries in its own hemisphere first. Fortunately a demonstration project exists in the region: Costa Rica, where reforestation and renewable energy combine in a national commitment to becoming carbon neutral.

One can envision the United States helping clean energy best practices radiate out from there, facilitated by domestic and international regulation. Thus it is heartening to see funding and institutional priorities coalescing around these goals in Sen. John Kerry's recently submitted Clean Energy Jobs and American Power Act [PDF]. The bill calls for establishment of a Strategic Interagency Board on International Climate Investment, to be composed of the secretaries of State, Energy, Treasury, Commerce, and Agriculture, the administrators of USAID and the Environmental Protection Agency, and any other relevant officials the president sees fit.

The SIBICI's task would be "to provide United States assistance to developing countries to develop, implement and improve nationally appropriate greenhouse gas mitigation policies," including preparation for participation in "markets for international offset credits for reduced emissions from deforestation." The bill also calls for the State Department to establish an International Clean Energy Deployment Program that would distribute funding either as bilateral assistance, to multilateral funds or institutions formed pursuant to the UNFCCC, or some combination of both. Similar funding would also be distributed under the International Climate Change Adaptation and Global Security Program to "provide assistance to the most vulnerable developing countries... in a way that protects and promotes interests of the United States."

The bill goes on to specify the details for emissions allowances and international offset credits, but much is also left open-ended to ensure that the executive branch has enough latitude to create and carry out these new programs. This bodes well for putting Green Diplomacy in the American power toolbox.

[Photo credit: Volcan Arenal, by Arturo Sotillo (CC).]

Climate Change Fairness Questions Loom

Countries that buy Chinese exports (hint, hint, America and Japan) should be held responsible for the carbon emissions it took to manufacture those goods in climate change negotiations, according to a Chinese government statement this week. And the debate over what is fair in climate change talks heats up. Shinsuke Sugiyama of Japan's Ministry of Foreign Affairs said 2009 will be a "make or break" year in achieving progress on a new global deal. Some scientists have even said we have passed that point.

Last month, when I traveled to Tokyo, I met with one of Toyota's senior executives in charge of climate change issues. He seemed comfortable speaking to the ethical concerns many in Japan have over climate change negotiations, suggesting that the very moral underpinnings of climate change negotiations are in debate.

He questioned the fairness of the Clean Development Mechanism (CDM). In the Kyoto Protocol, Japan has a target of reducing emissions by 6%, and Japan's industries have a "Voluntary Action Plan on the Environment." But Nippon Steel, a highly efficient company in steel production, still has to buy CDMs from less developed countries. Meanwhile, Mittal is the world's largest steel company but doesn't have to buy CDMs even though they bought European steel companies with weaker standards than Nippon Steel. This just goes to show that developing countries, under this scheme, can sell both steel and credits, he said.

Emission trading is a flexible mechanism to get to a target, so we can avoid free riders. In Japan, there are no free riders thanks to business association Keidanren, he said. He argued that Japan is different; it is a country that has other mechanisms to avoid free riding, using pressure through organizations, especially Keidanren. "It's more of a culture than a requirement," he said.

Japan, which sees itself as a nation of seafaring traders, generally questions the ethics of trading the right to emit CO2. This point has come up in multiple interviews, including with METI and Japan's New Energy Development Organization (NEDO). The Toyota official called CO2 a "fragile commodity. We don't like it. It's subprime. CO2 has no value, so any agreements are artificial, so we're doubtful."

A better alternative is proper regulations and harmonization of standards, he said. Toyota takes the "top runner approach" based on vehicle weight. For example, in 1998, JAMA started top runner and set a target, and top runner was the biggest program impact.

Can Japan's approach be used in China? Maybe not, the Toyota official said. The Chinese have no Keidanren and no democracy. Japan started regulations 1500 years ago, but China is always about "great men," not regulations. Also, Japan has a culture of avoiding waste (mottainai).

Many in Japan have questioned the fairness of expectations on Japan to reduce emissions when its industry has already become so efficient. It's not fair to Japan because Japan has already achieved efficiency, he said. Japan's Kyoto Protocol commitment—a 6 percent reduction in greenhouse gas emissions below the 1990 level by 2012—has been described by Japanese officials as akin to trying to wring water out of a dry towel.

The Toyota official asked: How can less developed countries be supported in conjunction with developed countries' targets? We have clean development mechanisms but some negotiators say rich countries should pay for everything, but that's not fair. Less developed countries always ask for money from developed countries, but developed countries can't afford it. We should substantially decrease emissions on our own and contribute to less developed countries. Most Japanese don't know these mechanism, so the government needs to explain it: how much of the target is their own effort or by their taxes? National costs borne by individual countries are hidden.

Finally, there is an intellectual property rights question about climate change mitigation technology. He said China may claim that these technologies are analogous to AIDS vaccines (they should be shared on behalf of the global public good) but watering down the property rights of this privately-developed technology could reduce incentives to innovate.

Photo: "stuffed japanese shop in Nagasaki chinese quarter" by colodio

The Robot Revolution Is Now

The robot revolution in war is upon us, according to PW Singer, who recently came to speak at the Carnegie Council's Public Affairs program in New York City.



Some ethical points that Singer raised concerning the use of robots in war:

1. As the human cost of war falls, will there be more war?
2. Will terrorism become easier with robots?
3. Does the use of robots mean war is further commercialized?

4. With the resulting first-person videos from robots in war, are we going to get a Hollywood-esque YouTube-ization of war?
5. Human failings and the fog of war still abound despite the use of robots.
6. Is the use of technology scary or just cowardly?
7. What is the message users of robots send to their "enemies"? Does it glorify the courageous people who are fighting an imperial robot army, like Star Wars?

Photo by leodirac.

Should America "Buy American"? Remember the Golden Rule

Today, joining European leaders and U.S. President Obama, Japanese prime minister Taro Aso weighed in on the ethics of the "Buy American" clause (championed by the U.S. steel industry) in the stimulus bill passed by the U.S. House of Representatives last week. From Bloomberg:

"'Buy American' is definitely wrong," Aso said today in parliament. "It's clearly against the spirit of the World Trade Organization to say you must use American steel to make bridges."

From a strictly utilitarian perspective, more American companies use steel than produce it. Protecting a few U.S. steel jobs at the expense of larger U.S. companies bears scrutiny. As economist Douglas Irwin put it in the New York Times: "General Electric and Caterpillar have opposed the Buy American provision because they fear it will hurt their ability to win contracts abroad."

But it is worth remembering another, perhaps more universal ethical principle--the Golden Rule--in making policy.

In this Christian Science Monitor editorial, the Golden Rule is invoked:

If "Buy American" is not expunged from the recovery package, President Obama will cede his moral authority to lead the world away from mutually destructive trade policies – triggered by a crisis for which the US shares much blame.

To recover, America will have to export more, not less. "Every man for himself" won't accomplish this; only the golden rule will.

Economist Douglas Irwin also calls on the Golden Rule in the New York Times op-ed:

Remember the golden rule, or the consequences could be severe. When the United States imposed the Smoot-Hawley Tariff in 1930, it helped set off a worldwide movement toward higher tariffs. When everyone tried to restrict imports, the combined effect was a deeper global economic slump. It took decades to undo the accumulated trade restrictions of that period. Let’s not make the same mistake again.

Similarly, Nayan Chanda warns against "beggar thy neighbor policies" in the Straits Times:

The legal challenge aside, one unavoidable consequence of any “Buy American” provisions in the stimulus package would be retaliation from China, Europe and other countries now in the process of allocating government funds to boost their sagging economies. Concerned about the wider ramifications of this retaliation, US business groups — including major companies such as Boeing, Caterpillar and General Electric — have called on Congress to resist such protectionist measures.

Despite the lessons of history, the dangers posed by protectionism are often seen as a problem for tomorrow while saving jobs is a fiercely urgent task. The world now needs leaders who can stay calm in the face of the raging storm and work together to stimulate their own economies without triggering a new wave of protectionism.

"Buy American" provisions may temporarily provide job security for some Americans, but the contagion of protectionism will stunt global trade and bring misery to Americans and the rest of the world.

Advancing Corporate Citizenship in the Media: Working Group

The media certainly have a great deal of influence over public opinion and discourse. During my recent trip to Brussels, I even heard one finance expert blame the media for the worsening of the financial crisis, saying that the media sector is stoking fear beyond reason.

Can a sense of social responsibility or ethics be instilled in the American media sector? At the Carnegie Council, we convened a small working group of media professionals called "Advancing Corporate Citizenship in the Media." Based on our first meeting, the following are some of the big issues that the group might explore:

balancing media coverage vs delivering a socially responsible message;

whether good behavior can be recognized without the use of certification;

distinguishing opinion from fact;

balancing the need to be entertaining and profitable with the company's role of informing societal debate.

Media CSR Forum has identified issues in three categories: those that are common to all sectors (such as the environment); those that have implications for the media (such as intellectual property); and those that are specific to the media (such as media literacy).

In this final category, the Forum has identified media literacy as a common concern and workable issue for its stakeholders. Its campaign asks, for example: Are you a receptacle for the unacceptable?

Trust in the media has been increasing in several countries, according to the Forum's research. It was surmised that public engagement, such as conferences, and transparency in the media sector could be given partial credit for this improvement.

How to create incentives for better behavior? I asked the group whether non-bottom line and non-shareholder issues could influence behavior. What about moral suasion? Can the interaction of peers and competitors at working groups facilitate better behavior? What about certification, reputation risk, association in a working group? Can these things build trust among competitors? One practitioner suggested that we attempt to shape popular culture to create moral suasion, tying brand, culture, and CSR.

There appeared to be traction in this area since "self-regulation is preferable to government regulation." One way could be to share information on each company's internal code of conduct toward improving the sector's conduct and embedding good behavior in corporate culture. One code of conduct for the sector as a whole is a possibility especially if stakeholders demand it.

Nevertheless, it will be challenging to create a universal code since there are so many types of media (music, new media, print, etc.). I asked if we could use the Equator Principles as a model. It was noted that those Principles worked because they were targeted specifically to project finance, suggesting that the more focused, the better. One practitioner wondered how we would know when a CSR ethic was embedded in the company? Is it already there? How do you embed it?On media literacy, one practitioner wondered whether the focus might be better placed on examining infotainment. In other words, which comes first: creating a better product or teaching people how to use it? The cart or the horse?

A code of media ethics should be connected to how media companies relate to their readers and stakeholders. Indeed, a business case for ethical practices will be made if readers demand it. Shareholders will get the message. One of the companies in NYC is trying to engage its readers directly with its editorials and by making its style guides available. Advances have been made in distinguishing fact from opinion in print by using different font treatment. One practitioner agreed that demands from clients can also change ethical practices dramatically. What if large newspapers demanded green policies from clients wishing to run green ads?

It was noted that CSR is coming back because there is now a struggle to define CSR, and this struggle is creating opportunity. One observer said that while CSR is on the minds of media executives in the big cities, it has not yet reached the heartland, yet this market could have a big effect if tapped, suggesting another opportunity.

Overall, CSR can be seen as a business opportunity and a way to reduce risk. This is the lens through which a task force can make a case.Another approach toward introducing CSR in the media is for the media to critically assess corporate behavior and then report on it. Corporations can engage the media for more critical self-assessment.

Several participants noted that American top tier media companies have a responsibility to make the case for climate change mitigation. Future meetings might take emulate the Media CSR Forum's model and bring in experts from media and civil society to speak.

Message from Brussels: Yes We Can!

It is amazing how much positive impact the election of a moral American president can have on world attitudes. I just returned from Brussels, attending a conference on ethics in business, ethical leadership, and the financial crisis, held at the European Parliament with the International Association for Human Values. For the first time in years, I was able to travel abroad without having to defend or argue about U.S. foreign policy. I imagine that my experience was similar to an American traveling abroad during the Kennedy years.

The themes I heard in Brussels were: the need for trust and ethical leadership; the financial crisis is an ethical crisis; the need for a global economy that is fairer and benefits more people; and "Yes We Can!" In fact, Barack Obama's phrase "yes we can" was uttered several times during the conference, much like "amen" might be uttered in a church.

Before I get into some of the things said during the panels, I want to mention the presentation made by the CCS World Youth Forum, a select group of young leaders that attended a training course on ethical leadership before the conference.


The young leaders (pictured above) made speeches, showed a film they made on the financial crisis, and sang a song. Here is an excerpt of the lyrics (the music was reminiscent of "Day by Day" or "Bless the Lord" in the musical "Godspell"):

Ideas to action not into words
Aim for the stars, have a dream
Change the world - you are free
We are the change the moment is now

Yes we can! Yes we can! Yes we can!

Keep your heart burning.
Be the change you want to see in the world... let's keep it real

Together we can!

Some other themes from the conference:

Ludo Bammens of Coca Cola's EU Group made a speech that prompted one audience member to ask him how he got to be so inspirational. Bammens said that there are two types of trust: the unconditional trust he feels with his child and the "transactional trust" between companies and stakeholders. Transactional trust is built on the following formula, he said:

Trust = Performance - Expectations

Where expectations are placed on how a company impacts "my community, my well-being, and the global environment." The rewards and punishments (teeth) by stakeholders include:

Do I buy your product? Do I buy your stock? Do I want to be employed by you? Will the government regulate you? And does the public believe you (your information)?

Performance is the ability to inspire and make a difference. And this factor is multiplied by time.


One person from the audience asked where do profits fit in the formula. Bammens answered that Coke was established more than 100 years ago when profits were everything. That is not the case anymore. A company needs to do more and offer more value to society to survive.

Rabbi Awraham Soetendorp also gave one of the most memorable speeches. He said the figure Abraham of the Hebrew Scriptures was tested by God to show if Abraham knew himself (or "Know Thyself," as famously written on the Temple of Apollo at Delphi, along with "Nothing to Excess"). Similarly, the financial crisis is testing the world to determine whether humanity can reach its potential. The emergence of a million NGOs is in the same spirit of 1948, the development of international systems in accordance with human values, dignity, and brotherhood.

A relevant phrase that was conjured by one of the speakers was: "A falling tree makes more noise than a growing forest."

Is the crisis "Made in America"? Sure, we have seen some commentary to this effect. But I was encouraged that the speakers and conversations were mostly non-ideological.


I (seated in foreground) was wondering if an anti-American view (see comments on earlier post in this blog) would come up during my trip to Brussels last week. Fortunately, it did not. During my speech on the future of capitalism, I asked the audience if anyone could identify the precise origin of the crisis, and not one person raised their hand. To the comment on American capitalism, I would just offer a couple of comments: One is that this crisis is global; no major economy--no matter its variation of governance--is invulnerable. Yes, the crisis had much of its origins in the United States, but the causes and impacts are global.

Second, the global economy has created more wealth and has raised more people out of poverty than could have been imagined 20 years ago. Finally, American capitalism has morphed many times over the past century. I might suggest we rediscover some of the first principles of capitalism: real, broader profit and real, long term prudence. I would agree that consumerism should be reexamined but, ironically, we will need fiscal and monetary stimuli to get out of the crisis. As Paul Krugman recently noted, any fiscal stimulus less than monumental will be insufficient.

The global debate so far to the crisis has been mostly non-ideological. This is promising: the world needs to cooperate and stay open.

Financial Crisis: Typology of Issues

Stephen Jordan of the U.S. Chamber of Commerce's Business Civic Leadership Center sent out a helpful email to friends and colleagues today. He wrote that groups have shown a lot of determination not to cave into the distress of the current financial crisis. Instead, many in the corporate citizenship community are trying to accelerate recovery, minimize damage, and be constructive.

Stephen offered a typology of the issues that the CSR community might address in the coming weeks in response to the financial crisis:

I. How to Build Trust (Ethics)

o How to increase confidence in “Wall Street” (financial capital)?

o How to increase confidence in senior business management?

o How to address social concerns about business in a recession or times of hardship?

o How to sort through the responsibilities of various stakeholders to the system?

II. How to Minimize Harm (Public Policy)

o How to mitigate the impact of the crisis on the poor (or on social services)?

o How to avoid class warfare on the one hand and systemic, entrenched inequality on the other, and other “us versus them” effects

o How to avoid damaging “Main Street” (small and medium-sized businesses, local communities, etc.)

III. How to Accelerate the Future (Operations)

o How to promote enlightened capitalism (i.e. maximize benefits over a 20 year period, as opposed to next quarter)

o How to expand the benefits of capitalism for the bottom of the pyramid

o How to develop non-traditional “blended value” social and economic institutions and public-private partnerships to address social goals and reduce poverty

IV. How to Proceed (Goal identification and Strategy)

o How to make business part of the solution

o How to distinguish between normative (morally good to do), operational, and legal imperatives and obligations for investors, boards, senior managers, regulators, customers, and other interested parties

o How to distinguish between “good” and “bad” capitalism

o How to define the roles and responsibilities of the public and private sectors better in order to maximize public welfare

o Who should do what?

Moral Common Ground in China

This summer, China hosted the 2008 Olympics without a major incident, but barely a month after the Olympic curtains fell, Beijing was scrambling to contain one of the worst cases of milk contamination in recent history. These two events mirror the gap between two images of China. On one side is China as a confident power, rapidly opening not just to foreign trade and investment, but also to ideas, values, and norms from the outside world. On the other side is the developing, more uncertain China, driven by a growing capitalist culture that is filling a moral vacuum created by the Cultural Revolution.

A recent Carnegie Council delegation to Beijing days after the Olympics found that the Chinese want to bridge this gap, and ethics is high on the agenda.

The delegation traveled to Beijing from Sept. 21 to 26, 2008, to lay the groundwork for China-Japan-U.S. dialogues on ethics, energy, climate change, and faculty development. The group included Joshua Eisenman, Asia Studies Fellow at the American Foreign Policy Council and Ph.D. candidate at UCLA; Jonathan Gage, a Carnegie Council Trustee and Principal of Booz & Company, where he also publishes its magazine strategy+business; Harry Harding, University Professor of International Affairs at the George Washington University; Devin Stewart, Director, Global Policy Innovations, Carnegie Council; and Alex Westlake, Managing Director of ClearWorld Energy in Beijing.



Meetings with senior academics, businesspeople, and think tank and government officials revealed that Chinese interest in ethics in international affairs is more cosmopolitan than many may assume. In particular, there is genuine interest in ethical business, in ethics relating to climate change and energy security, and in reconciling Western discourse with China’s traditions. Intellectuals believe that indeed, the tainted milk scandal, which hit a pitch while the delegation was in Beijing, has helped to increase the urgency for an ethical dialogue not only within the country but also between China and other countries, such as the United States. As one of the world’s most important political and economic players, many Chinese feel a growing sense of responsibility and are increasingly willing to talk with other global partners to carry out their global obligations.



As Harry Harding put it, China and the United States both justify their policies on moral grounds; they are ethical powers. China has a long ethical tradition, although the sense that China’s transition from a closed to an open economy and the quest for profits has led to “moral degradation” is widespread. Frustration is growing over the erosion of traditional values, and discussions in Beijing indicate a desire to use these values to create a new culture that can adopt from the outside and adapt to the globalized era, as Alex Westlake put it.



Yet there is also hesitation over what some see as a double standard and the West’s apparent lack of willingness to take into the account the point of view of developing nations. China and the United States, for example, share many values, although they place emphasis on different priorities, as Harding said. China’s involvement in Africa, a topic that Josh Eisenman is investigating, is a case in point. China’s association with the government of Sudan has made it the target of international criticism. Yet some have expressed doubt about American ethical commitments, such as those on climate change.

Many of the themes heard in Beijing indicate increased international engagement for China and increased world involvement in paving China’s next road to reform and a pluralist approach to ethics, based on consensus and compromise. The China Reform Forum is hosting a symposium on the next step to China’s reform next month. The topics include options for general reform as well as reforms in its market-oriented economy, society and government. All topics present opportunities to promote ethics in Chinese reforms.

Our discussions in Beijing illustrate two overarching ethical principles: the Golden Rule and the Golden Mean. Several sources, for example, suggested that China find the best elements from its historical traditions, from the outside world, and from socialist thought, implying a pluralistic mean between the three. The Golden Mean, a theme found both in the Confucian tradition as well as in Indian, Greek, and other philosophies, also could lay the foundation for equity or fairness in negotiations, ranging from trade to climate change. Moreover, a fairer negotiation process is likelier to bring about lasting solutions.

Finally, theses solutions should be based on reciprocity, respect, rights, and responsibility—captured nicely in the nearly universal concept of the Golden Rule. The Carnegie Council looks forward to helping further this dialogue.

(Photos: Carnegie Council delegates meet officials at the Chinese Academy of Social Sciences, top, at Renmin University School of International Studies, and at the Central Committee of the Communist Party of China)

This summary was prepared by Sheila Oviedo and Devin Stewart.

Policy Innovations on the Road

Policy Innovations staff is traveling this month on a couple projects related to climate change.

GPI Director Devin Stewart is leading a Carnegie Council delegation to Beijing to lay groundwork for China-Japan-U.S. dialogues on ethics, energy, climate change, and faculty development.

Devin will be accompanied by Joshua Eisenman, an Asia Studies Fellow at the American Foreign Policy Council and Ph.D. candidate at UCLA; Jonathan Gage, a Carnegie Council trustee and principal of Booz & Company, where he also publishes its magazine strategy+business; Harry Harding, University Professor of International Affairs at the George Washington University; and Alex Westlake, managing director of ClearWorld Energy (based in Beijing).

Stewart and Eisenman are coordinating the itinerary with the China Reform Forum in Beijing. Institutions to be visited include Peking University, Renmin University, Chinese Academy of Social Sciences, and the China Institutes of Contemporary International Relations. The trip was made possible by generous support from ClearWorld Energy.

Meanwhile, Policy Innovations Managing Editor Evan O'Neil is literally hitting the road. He's biking in a peloton of 120 riders from New York to D.C. to meet with Congressional staff to discuss transportation and climate policy. To learn more about the story behind Evan's Climate Ride, take a look at the sponsorship page our web designer Graham Slick put together for him, or at Evan's new blog Inside Climate.

[Beijing Bicycles photo by Keith Marshall (CC).]

"Whose Ethics?"

It is said that blogs emerged out of email conversations that were worth posting for a larger audience. When we talk about ethics in international affairs, as we do at the Carnegie Council, we are often asked: whose ethics? Whose ethics should we use when we apply them to foreign policy? Here is one such email conversation between a former Carnegie Council intern Sacha Tessier-Stall and me. Sacha had emailed to say hello, give me a nice comment about one of my recent articles, and drop a bomb: Is international ethics an oxymoron?

Devin Stewart: This is a complicated topic but in a nutshell, true ethics should be global; otherwise it is just parochial moralizing. Nevertheless, we should acknowledge that there are many ethical systems and ethical “minds” (toward loyalty, purity, fairness, the group, the individual, etc.) in the world. What we try to do at the Carnegie Council is start with the most pluralistic approach to include as many voices for ethics as possible and highlight universal values of human rights and fairness.

Sacha Tessier-Stall: I see your point, but while pretty much everyone seems to agree on broad principles, definitions of what constitutes a crime can be incompatible. Everyone agrees that murder is wrong, but in some countries killing a woman because she's sitting alone in a car with a man doesn't count as murder. Whose ethics should we globalize?

DS: Crime (the law) and ethics are not the same. Although laws try to draw upon societal ethics, what is legal in not necessarily ethical and vice versa. And the same goes for morals. I think of ethics as the globalizing of morals or the universalizing of right action. When people ask, "Whose ethics?" The best answer is "our ethics," as in humanity's ethics for humanity's sake or on humanity’s behalf. That is what separates what is ethical from what is moral, in my mind. The example you mentioned is a case in which an unethical law is drawn from a parochial understanding of morals.

STS: I agree that ethics and the law are not the same. But in essence, the law has two functions: to preserve the stability of the societies in which they are adopted, and to represent those societies' ethics (however imperfectly). In the example I gave, the law in question is considered both moral and ethical by those who take it upon themselves to have it respected.

While I personally agree with you on the idea of globalizing "humanity's ethics for humanity's sake", many people—perhaps a majority in the world—would disagree. You and I take our ethics from humanism, broadly defined; however, billions take theirs not from anything temporal or terrestrial, but from religious sources—many (though by no means all) of which oppose the idea of any global ethics but their own. To them, there is no distinction between ethics and morality, because they take their ethics from static and unalterable sources—anything that is not in line with the Bible, the Quran or the Torah cannot be moral.

So when we speak of globalizing "humanity's ethics," what we're really talking about is humanist ethics, which I subscribe to, but which I have to admit is but one of the many paradigms that are out there.

DS: Law is supposed to represent a society's ethics, true. But again they are different and often contradict. In some sense, peace is forward looking and justice is backward looking. They are difficult to balance. The law may administer justice but that is certainly not necessarily ethical.

On religion, sure. Those who understand religion as advocating for right action, compassion, and ethics (which is in most traditions), they are correct. I have no problem with people drawing on religious tradition for their ethical system. The problem with basing ethical codes on religion, however, is that it also has a cosmological and mythological component, which just plain makes other angry (which is both Dalai Lama's and Ignatieff's point). In any case, yes, people do have other ethical codes. And I am taking a stand here by saying a global sense of ethics (enlightened self-interest, "wholesomeness,") is an ethical system that I would like to encourage. Others may say that oppressing women is ethical, but I would simply argue that they are wrong. I am willing to take that position. When a group harms the rights of individuals, that individual needs a path to recourse.

I recently hosted a Chinese delegation who tried to convince me that ethics should come from emotion and intuition. I got their point, but more importantly, humanity has a lot of work to do to come together.

STS: On the oppression of women being wrong: of course, I agree with you—but that's because you and I are starting from the same moral bases: 1) "all humans are equal and should be treated as such"; and 2) "equal treatment implies similar or identical treatment." I remember hearing Ahmadinejad say that Iran actually treats its women better than the West because it allows them to be "exempt from many responsibilities"—elevation through discrimination.

As long as people don't take their ethics from the same sources (e.g. a belief in the value of individual human lives vs. a determination to follow the precepts contained in one's scripture), we'll all agree that murder is bad without ever managing to agree on what murder actually is. This actually is quite reminiscent of current debates at the UN on the definition of terrorism. Everyone agrees on the equation "terrorism = bad," but for many, blowing up a kindergarten doesn't count as terrorism if it's done as part of a struggle for "national liberation."

So even with those religions that advocate for "right action, compassion, and ethics" (and which religion doesn't?), there's no guarantee that the ethical conclusions reached by their adherents will always be compatible with those of humanists, simply because the very logic of their moral thinking is different. After all, even adherents of the same religion can come to blows over different interpretations of the same texts or events - witness the Protestant-Catholic clashes in Northern Ireland and the Sunni-Shiite violence in Iraq (though of course religion is by no means the only reason for these problems).

Editor’s Postscript: Sacha and I acknowledged that this conversation could probably continue forever, but I suggested taking a look at Michael Ignatieff’s essay “Human Rights as Idolatry,” in which he argues that the best way to advance human rights is to empower the individual. Counter-intuitively, Ignatieff also shows how protecting the rights of individuals and empowering individuals to act prevents groups from abusing individual rights, making it less likely that human rights are advanced as a sort of cultural imperialism.

Do Ethics Pay?

Today’s Wall Street Journal reported on the large sums of money companies invest in social responsibility. (Policy Innovations ran a story last month about how CSR programs might fare during a recession.) The WSJ focuses on the extent to which consumers reward ethical behavior.

WSJ conducted a series of experiments in which three groups of consumers were shown the same products, but one group was told the products were made using high ethical standards while the other was told that low standards had been used. The control group got no information regarding the products.

In short:

Regardless of their expectations, consumers were willing to pay more for ethical goods than unethical ones, or ones about which they had no information. Likewise, negative information had a much bigger bearing on consumer response than positive information. People punished unethical goods with a bigger discount …than they rewarded ethical ones with premiums…

People with high expectations doled out bigger rewards and punishments than those with low expectations.

The Policy Innovations article notes that ethical products tend to experience smaller losses during an economic downturn than most goods because of ethical consumers’ commitment to concerns other than price.

WSJ suggests that ethical consumers should be targeted regardless of the state of the economy:

Companies should segment their market and make a particular effort to reach out to buyers with high ethical standards, because those are the customers who can deliver the biggest potential profits on ethically produced goods.

The Empathy Economy: CSR and Web 2.0

I just got back from participating in an innovative discussion this week in Orlando at SAP’s SAPPHIRE event. The workshop covered the intersection of corporate social responsibility (CSR) and web 2.0. I am posting my initial thoughts on Fairer Globalization and the Ethical Blogger because the topics are relevant to both blogs. Here are some of the points I made and heard:

From an ethics point of view, web 2.0 has the potential of dissolving the false divisions between people—whether it is between nations and communities, producers and consumers, or labor and capital. With more ownership—both in influence and voting power—of the global economy, these divisions can fall away.

I start with the premise that companies are full of people, individuals, each of whom has an ethical duty. Naturally, some of these people are bloggers and some are stockholders. Companies can find champions outside the corporate walls to force change within a company for the benefit of society beyond the simple bottom line.

An ethics of the web is needed. Without one, we could face more government regulation, creating an excuse for governments to control information and connectivity. Some of the ethics of the web are simple: link to others, log in frequently, and share content. They are the principles that speak to the scientific origins of the web. Other principles might focus on the integrity of the information on the web; those would be transparency, honesty, and disclosure.

In the case of CSR, companies should consider the principles of sincerity, innovation, and pluralism (as Mikkel Sorensen and Nicolai Peitersen have argued in “CSR 2.0”). Companies can draw on the infinite wisdom out there (in publics). They have this great list of principles for CSR 2.0:

1. Inclusiveness – involving stakeholders directly from beginning to end
2. Market driven – no longer expert driven
3. Innovation – smart companies turn market pressure into stakeholder led
innovation
4. Sincerity – you can no longer uphold an image that is not real
5. Co-ownership – a truly embedded value-based culture requires involvement
6. Dynamics – standards and annual audits replaced by 24/7 engagement
7. Quality - CSR as immersive business strategy
8. Personal - It’s about you, not your sector! What are your own ethics?
9. Pluralism – number and nature of CSR projects will expand dramatically
10. Proximity - local impact is global

Megacommunities or multistakeholder initiatives become a reality with web 2.0, producing more sustainable solutions. Not only are the solutions drawing on more information but they also get more buy-in from increased participation. Web 2.0 has empowered civil society to do its job: producing social values and fostering the positive dynamic between companies and civil society.

The convergence of web 2.0 and CSR also occurs in the need for public goods. The web is a public good much like the environment, public health, and human rights. In this way, web 2.0 and public goods can help one another. The revolution in the relationship between corporations and society is syncing up with the IT revolution in web 2.0, democratizing corporate governance (I suggest democratic wealth funds here).

Formal compliance is giving way to informal compliance measures, making ethics more important relative to strict law. As I put it, in this new business environment, what is increasingly important is empathy, not regulation. As one panelist put it, it is democracy without rules, challenging the way companies communicate. As Booz Allen has put it, companies are now “always on.”

Does the intersection of web 2.0 and CSR bring about mutual benefit? I think so. Transparency is fostered when companies are forced to listen to their stakeholders. And privacy can actually be strengthened through transparency. Some people track themselves online to preclude further surveillance, and more information availability can eliminate the need to investigate. I have suggested blogging our emails in order to deter people from writing things that are hurtful or libelous.

Making sure web 2.0 brings about a better world will be about fostering trust. Software that can facilitate trust will be a huge business opportunity in this realm. Finally, time is precious. I would assert that efficiency is ethical. Several people at the workshop dreamed of a day when our communications become more streamlined, eliminating the need of outdated methods like email. Remember when email was the future?

Channels for communication between the corporation and civil society were spelled out: blogs (topic specific); wikis (with a final goal); social networking such as Facebook (for awareness and promotion); crowdsourcing (to ask crowds to solve problems or prioritize goals); and the boycott and buycott.

Photo by linkerjpatrick.

Ethics in China Pioneer Sharon Hom

Our friend Sharon Hom, executive director of Human Rights in China, is named as one of the Wall Street Journal's 50 women to watch for 2007 published today:

Many companies already are consulting with her in private about how to forge ethical investment strategies and avoid scandals or even boycotts next year. She is involved in a continuing effort with technology companies--accused by critics of facilitating China's censorship regime--to tackle human-rights concerns.

"China is the most important market, that's true. But without greater transparency and openness, that market is not a stable or reliable one," says Ms. Hom.

Kite Runner Approach to Understanding Corruption

I spoke at NYU's Center for Global Affairs last week in the Woolworth Building on an anti-corruption panel. One big problem conceptually is that everyone has a different definition.

For example, at our recent workshop at the Carnegie Council on innovations for fighting corruption, AccountAbility's Steve Rochlin highlighted one of the difficulties surrounding discussions about corruption—defining the terms. The watchdog group Transparency International views corruption as a question of improper payments or bribery. The World Bank, the leading development agency, defines corruption as the privatization of public policy. This is a definition that makes many in the United States uncomfortable, Rochlin said, because it touches near the system of institutional lobbying that operates in American democracy. Representatives from Lockheed Martin, General Electric, and the World Bank also were on the Carnegie Council panel. You can read and listen to their comments on Policy Innovations here.

Essentially, corruption is a tax on bad governance or weak demand for good governance. As development progresses, demand for better governance tends to go up. But from the World Bank’s perspective, there is debate on the priority of economic development and anti-corruption measures, as the Bank’s mission is to promote development.

I offered what I called Kite Runner approach: All sins are a variation of theft, said the father in Khaled Hosseini's the book the Kite Runner. This is useful for a philosophical analysis as it makes it easier to grasp.

Ethicist Thomas Donaldson’s chapter “Moral Minimums for Multinationals” in Joel Rosenthal's Ethics and International Affairs reader argues that the power and weight companies have give them a responsibility to protect human rights. “Rights are the rock bottom of moral deliberation,” he writes. And the flip side of a right is a duty.

He looks at negative and positive rights and shows that the two are really not separate. Negative rights are that someone not do something—like the right to liberty. Positive rights require someone do something—like a right to sufficient food. The negative right of physical security requires positive actions such as maintenance of a police force, blurring the two. Donaldson gives us a powerful statement here:

“One’s freedom to speak freely is meaningless if one is weakened by hunger to the point of silence.”

For a company, the duty is not just to avoid depriving but also to help protect from deprivation. In the factory, a company’s duty to provide goggles is the classic example.

Looking at the ethics of lies, deception, or theft, it is clearly a bad result if these behaviors were universalized in the Kantian sense: "Act only on that maxim whereby you can at the same time will that it should be a universal law." In the context of protecting rights, it is reasonable to say that theft and deception are also inconsistent with protecting human rights, well being, and security.

Most of all, I simply don’t buy the cultural argument that corruption is acceptable. I do not know of one moral or philosophical tradition that condones lying or stealing. Human rights and moral codes against this behavior is in the most ancient of texts, including the Vedas, the Koran, Persia’s Cyrus cylinder, the Magna Carta, and the Confucian Analects.

Bryane Michael of Oxford University wrote an excellent piece in Policy Innovations called Suing Against Corruption. This is one type of stakeholder engagement.

Instead of pushing for criminalization (which creates a nation of criminals and reduces the incentive to report abuse), donors should support civil law remedies against corruption. These remedies, namely the ability to sue corrupt officials (and the government departments they represent), provide a powerful weapon against corruption. These provisions are, in the language of economics, "incentive compatible." At present, businesses have no incentive to denounce corruption because they gain little by blowing the whistle—and they lose a lot from the loss of favorable relations with government officials. But when businesses can win money from suing for damages from the solicitation of bribery, these businesses have an incentive to denounce corruption.

Branko Milanovic, a lead economist in the World Bank's research department, has written a provocative article on fighting corruption in the era of globalization here. A couple of excerpts:

Intensified trade and travel have enabled the rise of corrupt states that thrive on illegal businesses. Only by changing the rules of the same global trade that has allowed corrupt states to grow can one hope to remove this blot on globalization.

A different approach is necessary: legalize the currently illegal activities like prostitution and drug use and modify the often draconian US and European immigration laws that stimulate human trafficking. If prostitution and drugs indeed became like haircuts and candies, their production would obey the same rules: Countries that export beauty services and confectionary products are not notably more corrupt than others.

Technology to boost transparency also helps. Firms mention tracking and accounting software to reduce the distance between headquarters and far-flung operations and suppliers. And finally, blogging – bloggers in China, for example, are using the Internet to expose corrupt real estate schemes, bringing these violations to the mainstream media around the world. Carnegie, Brown, Oxford, and Demos have started a project called the Ethical Blogger Project and an accompanying blog to advance the positive contributions blogs can make.

I summarized the Carnegie Council panel discussion like this. Five important elements are necessary for fighting corruption:

Cultural questions surrounding the definition of corruption—ethical behavior is not contextual but rather universal;

Multistakeholder engagement to build accountability inside and outside the organization;

Metrics designed to measure the success of anticorruption initiatives, adding a level of transparency;

Creating awareness in far-flung operations of what is considered ethical;

Serving as exemplars of good behavior when operating in ethically challenging environments.

Can China Lead?

The National Interest has just published a piece Joshua Kulantzick and I wrote based on our research trip over the summer to six Asian nations. Our main question was: What is the impact of China's emergence on Asian regionalism? We interviewed more than 50 senior sources.

Our findings were surprising as they seemed to verify my hunch that Southeast Asian policymakers would be forced to be more honest, and less cyncial, about their interests in the face of dramatic political change in Asia. Here is an excerpt for our article titled "Hu's on First?":

In nations like Vietnam, political elites have even begun to analyze the “China model” of development, assessing whether China’s combination of moderate economic liberalization and no concurrent political reform could be duplicated in Hanoi.

But Beijing’s charm may be reaching its limits.

While China has pursued more sophisticated diplomacy in the region, its own political system has hardly become more transparent. Just the opposite: Though many foreign governments hoped for substantial political reform when Hu Jintao came to power, studies by groups like Human Rights Watch actually show Beijing has backslid on political and social freedoms under Hu, with crackdowns on local media and civil-society organizations like China Development Brief (CDB), a prominent Beijing- based website that monitored Chinese non-governmental organizations (NGOs).

This summer, with little warning, the Chinese government shut down CDB. At the same time, China clearly has been upgrading its military, boosting defense spending by some 20 percent last year alone and beginning to develop a blue-water navy, but failing to coherently explain to its neighbors the rationale behind its build-up.

Worse, even as wealthier Asian nations are beginning to embrace environmental stewardship, better labor rights and corporate social responsibility, China’s companies, now beginning to invest abroad, remain plagued by low environmental standards, poor governance and little accountability.

As Xiaobo Lu, a Columbia University professor, says, China needs institutions to establish the ethical “rules of the game.” “Right now, it is everything goes—precisely because, yes, everything goes—no good credit checking system, no well-placed fear of violating good norms, one can get away with cheating, et cetera”, Lu told The Wall Street Journal.

Indeed, to many Southeast Asian nations, there seems no way to hold Chinese firms accountable for disasters ranging from clear-cutting in northern Myanmar to exports of tainted products to significant problems with Chinese joint venture partners.