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GP 24 May 2006: The Real Right Stuff

General Batiste’s Aggressive Retreat.  “On June 19, the day before the change-of command ceremony, he filled out a retirement form on his computer and faxed it to his four-star commander in Germany….  The next day, Gen. Batiste, speaking at the ceremony, began his protest…”  See “The Two-Star Rebel,” Wall Street Journal, May 13-14, 2006, pp. A1-A5, where you can read a long and arresting account of how John Batiste, a general on the way to the top, turned down his next star and the 2d most important Army post in Iraq, to follow his conscience.  Unlike other protesting generals who have howled about Donald Rumsfeld’s misdeeds from the comfort of their easy chairs in retirement, this soldier gave up the career chase because he could no longer bear Rummy’s gross mismanagement of the war.  Again and again, men and women of superior talent and keen intelligence are facing the same dilemma—how does one act with honor and conviction when caught up in a world that’s lost its head. 

The Bard William Shakespeake touched on this very question in several of his later works, but in none more tellingly than Troilus and Cressida.  There, at Troy, we slither through a war where nobody—Hector, Ajax, Achilles, Troilus, Cressida—emerges heroic, and to quote a famous line, “all the argument is a whore and a cuckold.”  All become but buffoons, and the times make a mockery of love, honor, and loyalty. 

The World out of Sorts.  Well, why is our world a mess now?  Didn’t we win the Cold War?  Isn’t everybody telling us we are the most powerful nation on earth?  Aren’t the numbers telling us our economy is on a hot streak?  Whatever we are told, we know differently. 

It’s anybody’s guess why we are in a pickle, but it sort of comes down to the fact that nobody really knew what to do after the Cold War was over (it more or less had occupied us since World War II).  Certainly the last two and perhaps the last three administrations have made a hash of affairs.  They have wasted, in one way or another, much national treasure, neglected to rebuild and redesign our national infrastructure, lost all the leverage afforded by the decline of the Soviets, and worst of all, totally mismanaged global economic competition, which has hollowed out all our businesses and led companies to sell  products and services without the beef while resorting to practices that do not redound to their honor. 

End of Pragmatism.  In part bad policy has been the result of bad thinking.  America’s great and extremely original contribution to philosophy is pragmatism, which really got cooked up at the turn of the century—the 20th, not the 21st.  It’s outdated now.  It taught us to take on the universe piecemeal, to conquer problems one at a time.  Needless to say, we are now too gargantuan and too tangled up in very complex systems.  Patchwork fixes won’t do much anymore.  If we are going to set government, or academia, or business right, we have to work through the whole thing, from top to bottom.  As we implied in “Fire and Darkness,” we need a global point of view or philosophy to rebake our world.  Our leaders, however, are still acting on the old philosophical assumptions. 

Greening of America.  You cannot turn a corner without finding something amiss.  The morning talk shows natter on about the defects of almost every product.  We can have a conversation with physicians who carefully follow the state of healthcare and find out they know that literally one-third of the medical treatments rendered in America are simply useless.  We can talk with an appliance technician who knows that the very dishwasher or air conditioner he is installing is made to wear out in 2 to 3 years and find out that he’s going into another trade, partially out of disgust.  The other day in the produce section of the supermarket we encountered a retired forensics expert who is thinking of starting a small computer business.  But, as he wondered out loud, “How can I possibly survive and do things honestly when all about me people are shaving corners?” 

Things are decidedly messy, and it’s hard to do it right.  But, we should add, corporations are beginning to get greener.  Some 41 companies have joined with the Pew Center on Global Climate Change on its environmental initiatives.  Over-maligned Wal-Mart (i.e., there are many worse companies out there) devotes 2/3 of its 2006 Annual Report to its initiatives for the community, the environment, and its employees.  It’s not clear that these companies are acting wholeheartedly or that all their initiatives are for real.  Be that as it may, they are getting the message that the business environment is changing and that they had better get on the bandwagon.  In this, they are much ahead of the pols on either side of the aisle. 

Keeping One’s Skirts Clean.  Once upon a time, one could think oneself ethical if one kept one’s skirts clean.  That meant following the rules.  That’s about how Congress thinks of ethics, even though we notice that neither House has been willing to put its house in order, each thumbing its nose at us when it comes to policing itself with decent rules of conduct.  But the pols have legislated expensive rules for the rest of us, such that the accounting and legal professions are thriving from the flotsam that oozes their way from our plethora of bad laws.  Essentially, in this kind of atmosphere, ethical conduct is defined by what you don’t do. 

The trouble is that our institutions and systems are so muddled that this is not good enough.  We all know about Congress.  But we could talk as well about Harvard, which has largely become a large, very rich bank that has recently tossed out its president because he was guilty of free speech and because he was trampling on the encrusted prerogatives of his somewhat overpaid and under-worked faculty.  Or, look at our churches, businesses, newspapers, and sundry other institutions.  It’s incumbent to act positively in a world so bent out of shape. 

An individual caught up in today’s society is probably going to do lots of wrongs, whatever the rulebooks say.  We should not dwell on the small-time infractions a litigious society has created.  We suspect no ethical individual is obsessed by petty rules: rather he knows he has to do major right.  He has to help his neighbor through this vale of tears.  At every turn somebody worthwhile is stumbling and the task is to make things a little better.  Ethicality does not focus on sin; it’s about doing.  Fixing things when much is broken.  Curing dysfunctional organizations.  Making people healthier without spending a king’s ransom.  Insisting that durable products have a shelf life of 10 years since we are running out of resources.  Protecting corporations from ravenous raiders, both inside and outside the companies. 

The Ethical CEO.  Of the 400 or 500 chief executives our company has served over time, one rises to the surface when we think of honor.  Bill B. May founded and led ArgoSystems (now part of Boeing) through its halcyon years.  It was always a matter of some amusement to us that this straight shooter led a virtuous defense electronics company—the natural target of the politically correct.  In spirit and substance, he followed the rules in dealing with the U.S. government and foreign powers, and he simply treated his employees right.  His products were best of class. 

In the late 1980s, Argo put out a thought piece for its employees titled “Ethics and Character.”  There it said: “True enough, if we think about  it, ethics is irretrievably bound up with character....  It is the … person (with character) who not only knows right from wrong but has the strength to act with conviction even if temptation urges mediocre behavior.”  Clearly management understood that it’s people with heart who make things right—not rulemakers. 

What, we recently asked ourselves, does an ethical CEO—retired—do with his considerable energy?  When we last talked with him, he was active on 4 boards, all non-profits.  He is only involved with one profit-making activity: a fine ex-employee of his has founded a company, and  this one-time project manager needed help from his old boss.  So Bill has rolled up his shirtsleeves.  And, not to be left out of the virtual world, he has created a blog, NewsBalance.Com, where he rights all the wrongs he finds in the liberal press.  Retired, he is active, largely in behalf of others. 

No Exit.  Sometimes, of course, the man of affairs must suffer obloquy and worse in defense of principle.  There is no one who more comes to mind in this regard than St. Thomas More (1478-1535) who achieved high office  in the service of England.  Along the way, he was a master at dodging the situations which would generate conflict between the demands of state and the claims of his soul.  Finally, he became close friend and counselor to the mythic Henry VIII.  Here he flew much too close to the candle.  He could not abide Henry’s divorces and disregard of Church rules.  As a result, “More was found guilty of treason and was beheaded on July 6, 1535.  His final words on the scaffold were: ‘The King's good servant, but God’s First.’  More was beatified in 1886 and canonized by the Catholic Church as a saint by Pope Pius XI in 1935.” 

We wish it had not taken the Church so long to make him a saint.  But some institutions take 400 years to straighten out their thinking. 

P.S.  Incidentally, we are not passing on the scientific assumptions of the folks at Pew.  The science behind global warming is not at all rock solid, and scientists on both sides of the divide have behaved in an unseemly, even unethical, fashion in their attempts to discredit their opposition. 

P.P.S.  Our old friend John Shad, onetime Chairman of the SEC, gave Harvard Business School a wad of money in his latter years, since he was distressed at the parade of business school alumni who had been hauled before the SEC for infractions.  It will not surprise you to learn (a) that it’s had very little impact and (b) that ethics teaching has waxed and waned as fads change at the top business schools.  You can read about the misfortunes of business school ethics in “It’s a Heckuva Time to Be Dropping Business Ethics Courses.”  Ray Cotton shows that it is very difficult to make ethical thinking part of the tissue of any organization.  In our view, business schools, which are really nothing more than white-collar trade schools, are not forums where ethics really will flourish.  That’s equivalent to looking for quality goods at Wal-Mart. 

P.P.P.S.  We follow Wal-Mart, the world’s most important company, on Global Province.  Its adamant pursuit of low price above all else has undermined product quality and ethical behavior in the United States.  Manufacturers knowingly turn out lesser goods for the likes of Wal-Mart, Home Depot, and others.  But, in the face of stalled markets and citizen angst, it is changing strategy.  Who knows what it will become?  Big changes are underway as it tries to adjust to a marketplace that buys commodity products at Wal-Mart, but looks elsewhere for value-added merchandise.  Despite the company’s pervasive malaise, we should not fail to notice that Wal-Mart has brought better prices and better goods to the under classes who have typically been badly served by national chains and local merchants who overcharge customers living in the wrong zip code. 

P.P.P.P.S.  If we remember rightly, America’s highflying companies in the nineteenth century, particularly the railroads, spent huge sums bribing state legislators to obtain special privilege.  Eventually the bribery game became much too expensive, and the barons pushed for reform.  Even now, the costs of special interest government fueled by runaway campaign contributions are costing society too much—something that will eventually even get through to those with deep pockets.

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