Tuesday, September 27, 2005

The morality of corporate compliance

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Western corporations operating in the third world often face a conflict of values in carrying out business. Examples include the following:

  1. Congo: Anvil Mining complies with a government request to transport troops, despite the dubious morality of the action.
  2. Myanmar: Some French companies have sought to explore for oil in Myanmar despite the military junta in power violating the rights of its people.
  3. China: Yahoo and Microsoft have censored words like "democracy" and "Dalai Lama" from the Chinese version of their blogging software.

There is no argument that in these countries that the freedoms that we take for granted in the west only partially exist or don't exist at all. The question is - Are corporate executives obliged to act by western moral or legal standards in foreign markets? The answer is - No! Even where there is no threat to life. It would be understandable if executives complied with the existing government directives if company life or property was threatened. But in the case of Anvil, it provided vehicles which allowed the government to apprehend suspects. If a government is so reprehensible, then the western government should prohibit western companies from dealing in these markets in a way that benefits that nation's interests.

What are the practical benefits of sanctions?

Western governments have been applying sanctions for years with dubious results. Sanctions applied to Myanmar have denied local people of prosperity and forced those countries into the illegal drug trade. Part of the problem is that these sanctions are applied at a time when these countries have no money to buy foreign goods. Also its pointless to apply western standards of morality when they are not supported by the citizens of the country. Part of the reason that statist regimes exist is that the population has no better idea than government. Tyranny is part of their way of life, and they are just as prone to support the efforts of one tyrant to replace the encumbent. By preventing trade with these countries we are likely denying the local population the opportunity to develop their own defense:

  1. Commerce allows the flow of ideas, evolution of higher standards or expectations by way of comparison with the westerners they interact with, and thus facilitating personal growth. The Burmese nationals need to get their understanding from westerners because they will not get it from their government.
  2. Commerce can finance government,

What if the proceeds of commerce are expropriated by statist governments? The reality is that western governments similar expropriate wealth from their citizens, so there is nothing new about that. Its not valid that cutting off their source of tax revenues will actually help Burmese nationals, or move the country towards democracy. On the contrary, a statist regime lacking external finance will be inclined to be more repressive, and seek to finance itself in more desperate ways. It can only increase the extent of repression.

The reason that western governments don't want to support tyrannies is that prospect that they might pose a greater danger by virtue of gaining more power. This can occur because:

  1. They develop or acquire nuclear weapons
  2. They resort to drug cultivation to finance their administration
  3. They engage in mass murder of citizens

Statist regimes pose other problems as well:

  1. Politicians feel compelled to do something about the callous deaths of people in these countries
  2. Politicians are reluctant to engage in military action unless there is a clear defence or commercial benefit
  3. Politicians are more likely to take action if there is a refugee displacement issue, eg. Refugees washing up on their shores.
  4. Politicians are more likely to take action if there is a local ethnic community in the western nation fighting for the welfare of their fellow citizens

The reality is that no country becomes a democracy overnight. It took the West 400 years to achieve their current values - and they are far from perfect. It is a little precious to expect the third world to embrace democracy overnight when it tries to force democracy upon them. You cannot expect to establish a stable democracy if there is no respect for rule of law. Respected or feared leaders are a precursor therefore to democracy.

Its compelling for the west to support 'liberty' campaigners, but the values of these zeolots do not embody the values of the general populous. Opposition needs to be repressed before it can be encouraged to grow. As long as the people's expectations are higher than those of government, it will factionalise the population. Repression tempers demands.

Western democracies tend to hold democracy on a pedestal - but democracy is not necessarily a value. It is itself still collectivist - in the sense that it makes little difference if your government has a 25% or 75% popularity if they are acting immorally. Reason is ultimately the standard that needs to apply, and whilst it cannot be forced, it needs to be encouraged. Nothing grows without first creating the right environment. Its noteworthy that it was British (and other imperialists like Germany & France) that established the tradition of repression and authoritarian government in these countries. These imperialists repressed local opposition for the sake of securing their colonial trade and military interests. The Burmese junta has done the same. Unlike Britain - they are holding no political contradiction, but they are holding a more fundamental contradiction - the belief that there is any efficacy in repressing personal liberty.

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Reason is the standard for debate.
- Andrew Sheldon www.sheldonthinks.com
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