Posted on 01/26/2007 8:34:38 PM PST by george76
Not necessarily from a neutral perspective. Sure if you take a position that X is better than Y then the path closer to X is better than ones further away from it.
It's real easy to understand why anyone would believe that doing business with China has a long term benefit. A - 1 BILLION prospective customers, that's a lot of freaking cash, B - the Cold War ended without the major showdown which shows that this supposedly "inevitable" war with China isn't actually inevitable, and finally C - look back to A and realize that even if the war is inevitable depending on how long it takes to happen (after all people were saying war with China was inevitable while we were still deciding the Cold War with the USSR) there could be a lot of money to be made before it starts.
Actually McDonalds made a lot of money in the USSR, and a lot of money just on the rep of being able to do business in the USSR, and they didn't get screwed over at all when the USSR fell. And early on in the dealings with Nazi Germany companies made serious bank too, some companies got a little hosed in the first wave of nationalization, but most were fine.
Or maybe the trouble is that you don't understand that if it doesn't show up on the balance sheet it is not a part of a BUSINESS decision. And the truth of business is exactly the opposite, not only do you not have to trust the people you do business with, you should NEVER trust the people you do business. They're in it for their money, you're in it for your money, you're only in it together for as long as it's profitable for both of you. The second a better partnership shows up you should take it, because they will.
Maybe we don't agree on the definition of trust. Invest millions in a country that can take it all on a whim and you are trusting them.
When you invest in something as evil as human slavery, the repercussions can come back long afterward and bite you in the butt. Even today corporations are faced with liability for doing business with slavers in the Civil War and in WWII. Ford and GM were investigated for their support of the Nazi regime. How do you put that bad PR on the balance sheet? You can't say that it doesn't hurt.
You talk about a billion potential customers in China but in the future they might turn into a billion potential plaintiffs against you firm if you violate their human rights. That's a lot of cash.
And how did US firms profit from investment in Germany after just about everything was bombed into oblivion?
Or maybe the trouble is that you don't understand that if it doesn't show up on the balance sheet it is not a part of a BUSINESS decision.
But since the morality of assisting dictators does show up on the balance sheet, as Google has confessed here, you have to admit that morality has to be part of the business decision. "On a business level, that decision to censor was a net negative," Brin said.
That's not trust, that's assumed risk. And really with various environmental laws and eminent domain decisions a company's real properties and associated assets aren't that much safer in America than they are in China.
Ford got a lot more bad press from the Pinto than it did for WWII activities. Most people just aren't that concerned with what happened way over there way back when.
Even in today's wierd suit happy world it's highly unlikely that complying with the regional government, which is theoretically supposed to be the voice of the people, would result in suits. But even if it did if the cost of the suits still has to be balanced against the revenue, a piece of math companies deal with all the time.
They made a lot of money before it was bombed out, then after the peace was signed they already had their foot in the door to make money on the rebuilding.
Google is saying that some headlines are costing them some money. No the morality is not part of the business decision, the PR is part of the business decision. And eventually the bad PR will blow over, heck it's already 90% blown over, this was the first story on Google in China in a while, by the end of this year it will be yesterday's news and Google will still be making money in China on the decision, two or three years from now whatever hits they've taken due to the PR will have been made up and the initiative will be in the black.
Then what is trust? When you hire someone don't you do a background check so you know you can trust him?
Why wouldn't you do a similar "background check" on a regime where you do business?
Or do you say, "Oh, this regime murdered 20 million people but we will assume the risk that won't bleed us dry".
I don't think selling hamburgers in Moscow is essentially an evil undertaking but helping tyrants build manufacturing facilities that will eventually be used for waging war against free people is something that should not be done.
Since there seems to be a certain percentage of people in the corporate world who have moral compasses that point only to the dollar sign perhaps that is where we have to apply the pain -- on the bottom line.
Trust is about confidence of future performance. One should never trust a government, government's have far too long a history of stealing property. Assumed risk is understanding that you can't actually have trust in something but hoping things will break your way anyway.
Actually that's pretty much what you say, "we can't really trust this government to not screw us over at some point, but the potential profit level if they don't screw us is high enough we're willing to take that risk".
Doing business is doing business is doing business. There were a lot of potential lessons the USSR could have learned from McDs about efficient food distribution, lessons that could have been applied to supplying their military (remember, armies move on their stomach). Not to mention some pretty kick ass equipment they could have seized and reverse engineered.
Everybody in the corporate world that belongs at the decision making level has a moral compass that, at least while they're on the clock, points only to the dollar sign. That is the job of business, that is the only job of business, that has always been the only job of business, and if you apply pain there you're taking a step towards communism.
I wonder how much risk American corporations would be willing to take in China if their investments were not guaranteed by government loans. I have a feeling that they would be a little bit more risk-averse if we were to get rid of these subsidies. But if we got rid of these socialist practices, would that take us closer to communism? Would seem kind of ironic.
Does McDonalds actually take profits out of Russia? Folks there are kind of cash-strapped and the Ruble isn't worth all that much. The last I heard they were having to barter rubles for slabs of beef and paying for the shipping back to the US.
Everybody in the corporate world that belongs at the decision making level has a moral compass that, at least while they're on the clock, points only to the dollar sign.
Oh, I wouldn't smear all of them with that brush. I think some of them are decent, honest businessmen. Without going into the bizarre concept of having two different moral compasses, one for work and one for church, wouldn't it be just a little bit hard to live with yourself knowing that you were profiting from slavery? I think I would.
But tell me exactly where it says that the corporate world is only required to make money and has no requirement to avoid immoral transactions. Because, if you listen to them, you get the reverse impression. Google's motto is "Do No Evil". They at least try to give the public impression that they are not in bed with the Prince of Darkness. So if the public wants to invest in moral corporations wouldn't that mean corporations have a responsibility to do so if they advertise themselves that way?
One of the primary reasons for investment in China, besides the potential huge local market, is over regulation in America. If you bought two parcells of land, one in America and one in China, on the same day with the intent of building identical factories your Chinese factory will be up and running at least two years before your American factory. Because your American factory has to clear a bunch of environmental impact studies, plus whatever suits enviro groups are going to bring against you, then once you pass all that you have to deal with the vandalism enviro groups love to do to construction equipment. Where as in China you'll be able to break ground the next day. If you want to inspire businesses to build in America start right there, make it so building in America isn't a nightmare of legal wranglings and vandalism.
The Russian economy has been growing rather rapidly. I'm sure shortly after the end of communism McD was having some issues with regional revenue. But they sure made a fat pile of cash when they first opened in Moscow while it was still the USSR.
It's not a smear, it's a reality. There's nothing non-profitable about being honest, in fact if you look at what happened with Enron and Tyco and the rest honest is actually more profitable just in its own right. It's not a bizarre concept, it's reality. Humans are highly skilled at compartmentalizing. We all profit from slavery in some form or another, a lot of western civilization was built on slavery in some form or another. Between Roman slavery, European feudalism, American slavery, and indentured servitude in the early days of industrialization, the very building blocks of everything you profit from every day were built by slaves.
Where it says that is the minute you take any form of external investment. At that point your job is to give a positive ROI to the investors, period. Motos are nice, but they're also meaningless. They're something somebody put together to sound nice. You'll have to prove the investors invested in them because of their supposed "morality", most investors are looking for money, if you want to spend money to feel good that's what charity is for, companies exist to make money.
I would say that Western Civilization has profited much more from freedom than from slavery. Slavery inhibited the development of labor-saving machinery because wealthy slave traders and others with an entrenched interest in slavery saw the economic competition posed by industrialization. Freedom allowed the machines to compete.
One of the primary reasons for investment in China, besides the potential huge local market, is over regulation in America.
And here again you see companies with twisted moral compasses like Archer Daniels Midland who take advantage of the environmental madness. They are profiting from gasohol regulations and are essentially profiting from the burning of food crops. If these companies wanted to improve the regulatory climate they would do more to support true conservative candidates.
Motos are nice, but they're also meaningless. They're something somebody put together to sound nice.
Why would they want to sound "nice" if that isn't what investors are looking for? I think different investors have different ideas about the moral responsibilities of business.
Let's take, for example, one of the most successful investors, Warren Buffett. He thinks we need more morality in business. "I want employees to ask themselves whether they are willing to have any contemplated act appear on the front page of their local paper the next day, be read by their spouses, children, and friends ... If they follow this test, they will not fear my other message to them: Lose money for my firm and I will be understanding; lose a shred of reputation for the firm, and I will be ruthless."
So, at least to Warren Buffett, reputation is more important than money.
Except of course those labor-saving machines initially just caused a new type of slavery. Massive work hours under crappy and often dangerous conditions for next to no pay, plus child labor, and of course America kept some slave labor until long after the industrial revolution. While we probably have profited more from freedom the foundation that freedom built on top of was provided by slavery.
Some companies will always find a way to profit from the over regulation of other semi-related industries. That doesn't change the fact that America has a legal climate that is inherrently unfriendly to most heavy and light manufacturing.
They want to sound nice for a lot of reasons. It's good PR, not only does it bring in some investors it also brings in customers. There's lots of guilt ridden capitalists in this world that feel the need to "feel good" about who they do business with. But in the end it's just another marketing ploy.
Now you're diving into reputation. Notice how far off from the original discussion you've gone. Originally this was about Google doing business with China, then you got into companies building assets in China (which Google probably won't be doing much of), then all the morality stuff, and now you've slid the slope down to "reputation". Of course it all closes back up because "reputation" is nothing more than PR, and bad PR is... well bad, tend to cost on the bottomline like Google has found with the China deal. So not wanting companies you deal with to get bad PR isn't really looking beyond money. The question is always how much will it cost on the bottomline and will the initiative eventually bring enough revenue to counter that lost to bad PR.
In the Mideast and Africa slavery is tolerated. If slavery is the wonderful engine that built civilization why is it that these places where slavery still exists are so uncivilized?
I'll tell you why. It is because people who have no moral qualms about enslaving a man - stealing his life - have no qualms about mistreating other people. They may love their children but they treat their wives like cattle. They may respect their tribe and they go to war against other tribes, other religions and even other sects of their own religion. They can't trust each other.
And trust is important to business. You need to have confidence that you won't be cheated, robbed, or enslaved. That's why it says "In God We Trust" on our currency. We have to be able to trust that our employees and our business partners will do the right thing. We have to trust they are working for the company and not themselves. We have to trust they won't create "bad PR" by cutting ethical corners.
Lack of trust creates enormous inefficiencies in a business, an economy or a country. It costs money to hire extra help to watch the people you can't trust. It costs money to hire the lawyers to deal with the problems they create. In Russia, no one trusts anyone so they have people watching people at every turn. In China they have political officers stationed at every firm because they don't trust people.
That's why reputation (or "PR") is important. If a man has been dishonest or brutal to others he will likely treat you the same way. It is a measure of his morality.
We banned slavery for the same reason that we don't allow children to torture small farm animals, not for the sake of the animal but because we don't want people in society who enjoy torture.
We banned slavery not for the sake of the slaves but for the sake of civilization. We can't allow the enrichment of immoral people. If we allowed that we would be just like the Middle East or Africa.
You think you can trust the Chinese because they have few regulations but you don't see the long-term. In the short term they say that you should be patient before you see profits. And they watch you drool as they point to a billion potential customers.
The balance sheet can't predict the future. You can't trust the Chinese government but if you have investments there you are at their mercy. How smart is it to put yourself at the mercy of people you can't trust?
You've got to think about the potential downside. Maybe GM and Ford got away with creating the infrastructure that helped kill American GIs but times can change. If your Chinese firm is used to create cruise missiles for a future war, the American people may not be so charitable. Some things are more important than money - like your life.
Oh I see the connection fine, the connection is that you're circling areas near the issue desperately looking for some form of validation of your position that while noble is simply not valid in the world of business.
I never said slavery was wonderful. I said that we all profit in some way from slavery, this was because you said anybody profiting from slavery should feel guilt, fully applying your position means every member of western civilization should feel guilt every day.
Trust does not exist in business, it might have once but it hasn't for a long time. That's why there are contracts defining all business partnerships, contracts that include deliverables, penalties for failure and out causes. You don't need contracts if you're ruled by trust, contracts exist to codify what trust would assume. "In God we Trust" is on our currency because that is our national motto. We don't trust our employees either, that's why we have HR departments, timed badges, and in house spyware on corporate computers.
In America no one trusts anyone, which is why we have security cameras all over the place and every business aliegance is defined by complex contracts.
PR is a measure of marketability.
Actually in America we banned slavery because it was starting to cost us business. A lot of European countries were starting to take a moralistic stance to American slavery. It should also be noted that American slavery was a lot more brutal than previous renditions of slavery in western civilization, with a lot more violence aimed at the slaves, a much lower second class concept of slaves, and no defined path to full citizenship. This visciousness in American slavery was very bad for our PR, Europeans probably would have been accepting of a more genteel Roman style of slavery (slaves were actually a higher class of citizen than wives in much of Roman history). Of course it should also be noted that it was kind of hypocritical of Europe to be aghast at American slavery, most of Europes navies were just as brutal, they got a pass because it was supposedly necessary to keep a tight ship and sailors were periodically paid.
Nope, never said anything about trusting the Chinese, in fact quite the opposite. Companies working with the Chinese are generally assuming that at some point they're going to get screwed, they're just hoping to make enough money on the project before getting screwed that it still manages to pay for itself. Every business decision at some point puts you at the mercy of people you can't trust, because you can't trust anybody. Between incompitence, malace, and random occurances (like disasters) there's always an opportunity to get screwed, smart business people plan around it and use contracts to protect themselves as much as possible.
If it comes to the point of GMs factories in China being retools to make missiles shot at America the American people are going to be a little busy to be yelling at GM.
But since we all profit from slavery, and most of that slavery is in the past and there's nothing we can do about it, there's no point in feeling guilt over it. It would just be a dark cloud hanging over our lives that might inspire us to do something stupid like approve some form of reperations.
I think it was more Europe's superiority complex, Europe's view of America tends towards considering us an upstart younger brother that should spend more time listening to them, also it allowed them to ignore the fact that their own navies were powered by "the yardarm and buggery". A lot of international holier than thou behavior is primarily driven by an unwillingness to look within.
Type B isn't trust, type B is force, trust can never involve force. Which is exactly why contracts prove a lack of trust. Actually most contracts don't even include a trust of the government. Going to court is the last stage of a breakdown of a contractual relationship. Most of those breakdowns never get near a court because the company in primary violation of the contract is smart enough to know they blew it and protracting things out isn't going to get them anything.
Wow, all of a sudden the moral absolutist is trying to apply gradiations to trust. One should never trust a government ever, goverments are inherrently the most corrupt of all human endeavors and the most abusive incarnation of a societies will. Government compensations for eminent domain seizures tend to be ridiculously under valued, there's a reason governments are fond of condemning a building before seizing the property, a piece of land with a condemned building on it is inherrently less valuable than even an empty piece of land, thus allowing the government to declare a "fair market value" which isn't. And who in America actually wins a suit against drastically increased taxes?
The Amish are a tiny highly self regulated community, hardly a worthy example of the larger world of business. You seem to love red herring extreme exceptions. A small community which pretty much all knows each other, and can expell each other, really has social transactions that involve money more than they have business transactions. In pure business transactions you just can't have trust, it's a much larger community that are basically strangers to each other and can't kick each other out. There are probably more people involved in a transaction my company just finished with a major MFP company than in most Amish towns, you just can't operate under Amish rules out here in mutli-timezone deal land.
Type B isn't trust, type B is force, trust can never involve force.
Depends on how you define the word. You said it was "confidence in future performance". That says nothing about threat of force. Yes, force is seldom used; that's because it is credible deterrent. Like spanking a child, you usually only need to do it once to establish credibility.
If people believe that government will enforce the contract fairly if it comes to that then they have confidence in their business partners.
So you are trusting government when you write a contract. In many places in the world governments are much more corrupt, and contracts don't have the weight. In places with corrupt governments, the economy is diminished as a result.
Wow, all of a sudden the moral absolutist is trying to apply gradiations to trust.
I don't see moral absolutism as denying that some evils are greater than others or that some people are more trustworthy than others. I see it as an opposition to moral relativism: the notion that what is good for one is an evil to another and that no greater good exists.
Like you say, the Amish trust each other partly because they all know each other and yet they manage to prosper by trading with the outside world. But isn't the world getting to the point where we can know each other? The Internet allows access to so much information that it is a simple matter to research the reputation of a potential employee or business partner. If we can vet people with good reputations whom can trust then we eliminate a lot of assumed risk and it will improve the bottom line.
And like you pointed out, the world once valued trust more than it does today. In most institutions, in universities, in law, in business associations and medical associations it was the practice to expel members for very slight moral infractions. I remember during the Monica scandal someone had dug up the fact that there was a judge who had been impeached in the 19th century simply because he had insulted someone's wife.
Once we were more like the Amish but today, many of these institutions no longer exist and the ones that do have no such standards.
But guilt about profiting from slavery will cause people to support reperations, because we're all profiting from that slavery.
It doesn't depend on anything, force and trust are mutually exclusive concepts. For one thing you can't really trust anyone you're forcing to comply to your wishes because chances are one of their top goals in life is to reverse the balance of power in your relationship. For another trust has to be mutual, if your relationship with someone is built on your forcing their compliance they shouldn't trust you and probably don't, you've already proven yourself to be an abuser of power, not someone that should be trusted.
No, if people believe the goverment is going to get involved in their contract then they already have no confidence in their business partner. The only time the goverment will step in is if things have turned legal, at that point the contract has already been breached by one or both parties, if you're assuming the government will get involved then you're assuming the contract is going to be breached, that's not confidence.
No the world is getting to the point where we don't have time to know each other. The deal I mentioned involved representatives of 6 different parent or child companies in 5 different countries, to the best of my knowledge at no point did representatives of all the companies ever get together in the same room at the same time. Researching someone isn't knowing them, meeting people and spending time with them is knowing them.
I don't think it's a matter of the value of trust dropping, I think it's the usefulness of expulsion that's dropped. Back then we weren't a mobile society, if you alienated people in your community you were in bad shape, cross country moves were arduous and dangerous. Now you can get a new job in a different state, pay somebody to move your crap and fly to your new home. Because of law suits nobody dares give a bad reference to a former employee so even the basics of background checking an prospective employee have become useless. The Amish can function that way because they're geographically isolated and not terribly mobile, it just doesn't work in a cross country move society.
Yes, if you use threats to enforce trust that person will wish to enforce the relationship. I'm sure a lot of Saddam's minions felt that way. But he ensured that the risk of disloyalty was high enough that he didn't need to worry about it.
I don't see why trust has to be mutual. In fact a lot of times it isn't. I trust my doctor but he doesn't need to trust me. Some people trust cops but cops don't have to trust them. My banker doesn't need to trust my me as much as I need to trust him.
When you trust that the government will enforce a contract you are not assuming that it will be breached. You assume that the threat of government enforcement will, in most cases, ensure that they other party will abide by it. So you have confidence. But if the government were inclined to be bribed, you wouldn't have confidence. It's like our nuclear MAD policy regarding the Soviets. We had nuclear weapons but we were confident we wouldn't need them because the Soviets knew we would use them if they used theirs.
Researching someone isn't knowing them, meeting people and spending time with them is knowing them.
But that's the worst way to judge if they are trustworthy. There are a lot of congenial types in the world who are good actors but crooked nonetheless. The best way to judge them is to find out how they treat other people.
you can get a new job in a different state, pay somebody to move your crap and fly to your new home.
But your credit rating and criminal and civil record will follow you at the speed of light. And employers who won't give a bad reference will give a null reference which can be evidence of a bad work record.
Today, when you rent an apartment or get a job, employers rely more on credit or criminal records than job references anyway.
It wouldn't just be people taking advantage of the guilt. The problem with guilt is people feel a need to assuage it, when the guilt is based on something that happened 100 years ago that's tough to assuage.
The reason Saddam performed so many executions is that he was always worried about it. That's the problem with being a tyrant, every action you take to defend yourself makes more people that want to stick a knife in you. That's the reason people who rule by pure force are also paranoid, that's also why so few of them get to die peacefully and still in power, vast quantities of the population they rule are looking for that 10 second opening.
Because it's trust, trust that isn't mutual is misplaced. No your doctor has to trust you also, he has to trust that the symptooms you describe are genuine and that you'll actually follow his advice. Cops have to trust that the witnesses they talk to are at least trying to tell the truth. The FDIC makes it so you don't really have to trust your banker, with good reason much of the beginning of the 20th century was a fine demonstration in why you shouldn't trust your banker, which is why the FDIC was made, it's also why you get periodic detailed bank statements.
No, the reason you put punishement and out clauses in a contract is to provide the threat of failure to comply. Things only go to court when someone failed AND refuses the listed consequences. The contract itself provides the enforcement threat, the courts are a secondary layer. Actually we weren't confident the Soviets wouldn't use their at all, especially not in the early stages of the Cold War. That's one of the reasons all hot hostilities during the Cold War involved at least one side using proxies, both sides were desperately terrified of any situation where US and USSR troops would actually be shooting at each other, because neither side had any confidence that the other side would tolerate a loss in direct conflict without escalating. It really wasn't until both sides were willing to talk openly about nuclear disarmament that either was willing to consider that the other maybe didn't want to go nuclear.
It is and it isn't. Sure there are bullshit artists out there that can snow you, of course there are also bullshit artists that know how to leave a clean papertrail so research isn't going to get you anywhere. The benefit of a face-to-face is going to lunch, as you say how they treat people is the best way to judge, especially how they treat the help. It's long been the advice of dating experts to pay attention to how your date treats the waitstaff, well it applies just as much to a business deal, never go to bed (physically or metaphorically) with someone that treats the waiter like crap.
But if they leave a clean papertrail there's no real criminal or civil record or credit problem to follow them. And because of suit paranoia most HR departments by legal are under orders to do nothing more than confirm employment dates and titles, you're just as potentially liable if they can prove you said good things about others but wouldn't about them as if you said bad things about them. It's become so standard to do nothing but confirm the raw facts that most HR people don't even ask for anything else, they know they wouldn't be able to do anything else so they don't bother to see if the other guy will.
There's a reason they rely more on credit record and criminal rating, there the bad news is actually allowed to be distributed. But even then if the person knows how to toe the line nothing will show. The nastiest sleaziest person I ever met has never had a brush with the law (not even a traffic ticket) and spotless credit... but he's a complete jerk to waiters.
600 million screaming Chinese is why.
A lot of them get taken out in some way or another, Baby Doc Duvalier, the Shah of Iran (as bad as the current Iranian goverment is the Shah stunk), a lot of the banana republic tin potters.
The difference is type B is not trust. Trust gained through force isn't trust, it's POWER.
But notice Bill kept his papertrail pretty clean up until he became president. Sure there were associates willing to discuss his sleaziness once he became famous but that path is no good for your average non-famous scumsucker. But as far as papertrail was concerned the closest anybody had on him was Whitewater, and that mostly related to Hillary and even there the papertrail was at worst questionable. Skilled bad guys know that the most important thing is clean paper and put a lot of work into keeping that way.
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