I taught Business Ethics for many years at both the undergraduate and the graduate levels. In doing my research I discovered that, from a moral perspective, there are fundamental differences between publicly owned and privately owned companies. The former must answer to the stock holders and tend, on the whole, to be unprincipled in their treatment of the people they deal with and unconcerned about the world we all live in. The latter are much friendlier not only to the environment but also to their employees and those they serve.
An example of an excellent private company was Malden Mills in Lawrence, Massachusetts which made Polartec and Polarfleece. It was owned by Aaron Fererstein when it burned to the ground in 1995. The man decided to keep the mill in that town as he knew how much the relatively small town depended upon its presence. He also continued to pay his unemployed workers until they could find other employment, at a cost of $25 million. The factory was rebuilt and rehired many of its former employees, but fell on hard times and eventually had to file for bankruptcy. It was a sad ending to a wonderful story. One hopes it was not symptomatic as such stories are rare in the world of business — and virtually absent in the world of publicly owned companies. Indeed, it has become a textbook case of a “poor business decision.”
What is more typical in the world of publicly owned companies is the story in the current issue of Sierra Club magazine about the coal mining companies in West Virginia, such as Massey Energy, that are tearing away the mountains one at a time. The process releases particulates into the air that result in a variety of illnesses in nearby towns, including a cancer rate double that of more distant towns. In the midst of the destruction at the top of one mountain sits a small cemetery consisting of 37 marked graves that has been around since the 1800s and which has so far been spared. But it is marked, along with a number of other cemeteries in the region, to be moved and “consolidated” elsewhere — away from the coal. The moves are being resisted by the descendants of those buried on the cemetery plots, of course, as the human remains cannot be moved, only the markers. But we have learned how those stories end. They do not end in bankruptcy, they end in misery and unhappiness for many in the name of profits for the stockholders.
When I proposed the course in business ethics to the faculty at my university years ago one of the faculty wags stood up and said there couldn’t be such a course because “business ethics” is a contradiction in terms. We laughed, and passed the course. But there is some truth in what the man said in that meeting: business has done more to raise the standard of living for more people than any other human endeavor, I dare to say. But at the same time, it has raised the specter of uncaring, ruthless, exploitation and has managed to trample on a great many human lives, not to mention the environment, while raising to outrageous heights the standard of living for a diminishing number of others — the now-famous 1% who control so much of the wealth in this country. And as I have mentioned in previous blogs, it has also altered the way we live in the world, substituting the notion of “life-style” for living a good life.
When we talk about “business,” however, we must be careful to specify whether we are talking about small businesses or large ones — private companies like Malden Mills that treat its employees well and do the right thing, at considerable risk to the bottom line, or the large, publicly owned companies that care about nothing else but the bottom line. It’s the latter that give business a bad name. And in most cases, if not all, it is well deserved.