Category: Commentary

Just recently, I commented on Apple CEO Tim Cook challenging the business model of Mark Zuckerberg at Facebook in giving users a free service in return for their supplying Facebook with valuable information to sell to advertisers, thus turning “customers” into “suppliers.”

Cook announced that Apple would provide a filter so that users could gain control over the use of their personal information.

Facebook has now bowed to the morality of Apple’s concern for its customers by inserting a prompt in its app to educate users about the use of their personal information. The new Facebook screen will ask users for permission to use data collected from third-party websites and apps.

Thus, competition from Apple has forced Facebook to give its “suppliers” more respect, as persons with dignity.

Just recently, I raised a question about the application of stakeholder theory to social media, pointing out that a social media business model which relies on selling advertising converts users into suppliers to be squeezed and privileges advertisers as customers.

Tim Cook, CEO of Apple, in a public talk, made a similar point on Data Privacy Day. (Linked here and embedded above).

Two years previously, he had spoken, with real concern, of the “emergence of a data-industrial complex.”

Cook said this year: “The fact is that an interconnected ecosystem of companies and data brokers, of purveyors of fake news and peddlers of division, of trackers and hucksters just looking to make a quick buck, is more present in our lives than it has ever been. And it has never been so clear how it degrades our fundamental right to privacy first and our social fabric by consequence.”

“As I’ve said before, “if we accept as normal and unavoidable that everything in our lives can be aggregated and sold, then we lose so much more than data. We lose the freedom to be human.”

“Together, we must send a universal, humanistic response to those who claim a right to users’ private information about what should not and will not be tolerated.”

Cook then announced that Apple is introducing a product which will give users of social media the power to limit their exploitation as suppliers of personal data. The new product to be introduced this quarter is called App Tracking Transparency or ATT. Cook said: “At its foundation, ATT is about returning control to users — about giving them a say over how their data is handled.”

He then noted that the apps “we use every day contain an average of six trackers. This code often exists to surveil and identify users across apps, watching and recording their behavior…. Right now, users may not know whether the apps they use to pass the time, to check in with their friends or to find a place to eat, may in fact be passing on information about the photos they’ve taken, the people in their contact list or location data that reflects where they eat, sleep or pray.”

He continued: “Technology does not need vast troves of personal data, stitched together across dozens of websites and apps, in order to succeed. Advertising existed and thrived for decades without it. And we’re here today because the path of least resistance is rarely the path of wisdom.”

“If a business is built on misleading users, on data exploitation, on choices that are no choices at all, then it does not deserve our praise. It deserves reform.”

“Call us naive. But we still believe that technology made by people, for people and with people’s well-being in mind, is too valuable a tool to abandon. We still believe that the best measure of technology is the lives it improves.”

In response to Cook, Facebook CEO Mark Zuckerberg said on Wednesday that “Apple has every incentive to use their dominant platform position to interfere with how our apps and other apps work.”

To put his complaint in other words, Zuckerberg confirmed that competition provides a public good in restraining the rapaciousness of monopoly niche players like Facebook.

ATT restrictions, if taken up by users, will put users in charge of their relationship with Facebook.

Apple’s ATT fence protecting personal data will cause revenue losses to Facebook in its core business, experts say, as it becomes harder for the company to gather personal data and use it to prove to advertisers that advertising on Facebook increases sales for whatever is so advertised. The flow of data Facebook currently extracts from apps allows it to build profiles of app users. Those profiles are valuable to advertisers in educating them on the conversion rate of their ads into purchases.

Who is more on the side of a moral capitalism – Cook or Zuckerberg?

Our colleague, Mary Gentile, sent me this comment of hers on a kind of “mindfulness” which seems most needed just now in our world.

She took Isaiah Berlin’s noted distinction between hedgehogs, who know one big thing and foxes, who know many smaller things and juxtaposes their respective contributions to wisdom.

Mary has provided distinctive leadership in making ethics streetwise and effective in her work on “giving voice to values.” She now has a program at the University of Virginia’s Darden School of Business which you can visit here.

Her book, Giving Voice to Values, can be found here.

For some time now, I have been asking myself how social media – Facebook, Twitter, TikTok, etc. – might align with the principles of moral capitalism. One dimension to analyze is abuse of market power. Another is to use stakeholder analysis of the business model used by these firms – are the users of social media customers or suppliers? Social media is a free good for its users, so the companies make their money by selling the data provided by users to advertisers. Thus, the users are suppliers of a valuable product to the companies. Thirdly, issues of free speech or censorship by platforms. Fourth, there are issues of impact – is the service provided by social media morally good, bad or indifferent?

When we consider impacts, either as private goods or bads or as public goods or bads, we look to consequences. Generally, the provision of private or public bads is said to be market failure and so regulation is justified. With social media, there is accumulating evidence of its negative impact on many users – depression and lower self-esteem, emotional distress, facilitating narrow-mindedness and loss of empathic capacity. We have seen in the U.S. in recent years the effect of social media in deepening cultural, intellectual and political divisions within the society, accelerating political instability, a culture of recrimination and censorious shaming and factionalism.

In a recent column in the Wall Street Journal, U.S. Representative Chip Roy wrote of his turning his back on social media. His personal story raises concern over the moral quality of social media. Here is what he wrote:

“I’m suspending indefinitely my use of Twitter, Facebook and other social media. I’m doing so not to make a political statement, but in the hope that America can return to kitchen tables, churches, taverns, coffee shops, dance halls (it’s a Texas thing) — whatever it takes to look others in the eye and rebuild our communities and humanity.

As a husband and father, I also want to stop spending so much time looking at a screen and reacting in ways that are inconsistent with who I am and — most important — who I strive to be as a Christian.

While social media has proved a useful vehicle for sharing information quickly, I have concluded that it does more harm than good to individuals and society alike.

It tempts us to be reactive and feeds the worst of our human tendency to respond in anger rather than to stop and think before communicating. The result is more verbal combat and less deliberative thought — all with language we often wouldn’t use while looking someone in the eye. I have been guilty of this recently and I haven’t always been proud of my language.

It reduces the value of communication to statements graded by “likes” or being “ratioed” and other mechanisms that don’t reflect real human response or quality of thought.

It makes it difficult to ascertain the truth about the many difficult topics with which we all wrestle. We have replaced earnest truth-seeking with trial by retweet. Meanwhile, those who make consequential decisions such as issues involving impeachment, Covid and election fraud, often do so based on assertions that are difficult to confirm or deny.

It has politicized communication to an unhealthy level, widened divisions rather than bridge them and fed the temptation to call for censorship of views we find disagreeable.

Eighteen months ago, my wife and I joined with friends to establish a weekly Sunday Night Supper and to do our best to reduce or eliminate the use of screens on Sundays by setting rules that any screen use had to involve the whole family such as watching the Masters Tournament or a family movie.

Of all God’s earthly creations, man is the only one with rational speech, but we used to have a better way to communicate with each other. Let us dine together. Let us look each other in the eye. Let us sit down and talk again.

Then, let us unite again as Americans.”

A short article in a major paper I saw a few days ago brought to mind the interrelationship of finance to the rest of capitalism. Is it the tail which wags the dog or just a tail under the dog’s control?

The particular story presented an interconnection between finance and racial inequality of wealth. American stock markets grew in value by some $2 trillion in the third quarter. Now, households composed of those with European ancestry own almost 90% of corporate equities and mutual funds. Their wealth rose to $98.6 trillion or 84.6% of total wealth, the highest percentage in three years. These families comprise 76.4% of the total population.

The portion of overall wealth held by African American families fell to 3.8%, down from 4.4% two years earlier. African Americans are 13.4% of the total population.

Families with Hispanic ancestry held 2.1% of the wealth.

Now, presumably, access to stock market assets is not random. Investing is a choice and the marginal cost of investing varies with disposable income and the amount of accumulated financial assets.

When you focus on differential access to investable liquidity, as Marx did, you rather quickly become less enamored with the outcomes of capitalism. As Marx insisted in his Theses on Feuerbach, “Philosophers have hitherto only interpreted the world in various ways; the point is to change it.”

The starting point for change is common sense discovery of causes creating the status quo.

Late last week, I sent to our network a copy of our Principles for Government. The fundamental principle recommended is that public office is a public trust.

Since then, the leading news story out of Washington, D.C. has been efforts to impeach Donald Trump as President and remove him from office.

The constitutional framework for this action is the very same concept which grounds the principles – an office is a trust. Therefore, holders of office will be held accountable for breaches of trust.

The statement of this principle in the article of impeachment proposed to be tabled in the U.S. House of Representatives with respect to Donald Trump’s conduct in office reads:

In all of this, President Trump gravely endangered the security of the United States and its institutions of government. He threatened the integrity of the democratic system, interfered with the peaceful transition of power and imperiled a coordinate branch of government. He thereby betrayed his trust as President, to the manifest injury of the people of the United States.

Dear Friends and Colleagues:

Given the momentous and historic lawless disruption of the U.S. Congress this past Wednesday, serious and necessary questions are being asked: what is happening in America? I would like to provide some background from my personal perspective on the course of history now unfolding in this country.

Metaphorically, the Rubicon has just been crossed in the American cold civil war. The American republic is on the edge of a death spiral. Civility between the contending parties has been abandoned. Uncivil disobedience, even violent lawlessness, is taking its place. There will be no going back to more halcyon days. Our leaders are crying “havoc” to their followers and are letting slip “the dogs of war.”

The 2020 presidential election started that ripping up of our domestic political compact, a rupture ironically nearly 400 years to the day after the first compact, the 1620 Mayflower Compact, which framed our experiment in self-government.

There is now and never will be closure on the legitimacy of Joe Biden’s victory. Tens of millions of Americans are more than disconcerted by “innovations” introduced into the presidential election process last November.

For example, many commentators have complained that, in the months prior to the election in the key states which tipped the election to Biden, Democratic Party activists arranged for the sending of mail ballots to everyone, unprecedented numbers of Americans voting by mail and not in person, waiving voter ID requirements for those afraid of Covid, making available insecure mobile ballot boxes, election officials “curing” and not discarding faulty ballots and not purging voter registration lists of those not eligible to vote. Then, one billionaire donated $350 million to finance election clerks, judges and vote counters and open more poll locations in Democratic voter strongholds.

Jonathan Turley, Professor at George Washington University Law School and noted commentator, has pointed out that these actions were recommended by David Plouffe, John Podesta, David Axelrod and Stacey Adams, all leading Democratic strategists.

The day after the election, such arrangements immediately raised suspicions among Trump supporters, who were already unforgiving of his political enemies. And due to court rules on civil procedure, there has been no trial on the merits of the accusations. Responsible officials just denied the charges and did not produce any evidence that would substantiate their denials. Doubts as to their integrity were not put to rest. Whether the election was fairly conducted in 6 or 7 key states is and will remain a question of “He said, she said.”

In today’s post-truth culture, tastes vary from individual to individual and cannot be questioned to another’s discomfort. Personal narratives prevail over facts and reasoned argument. “All is vanity,” we read in Ecclesiastes. The text continues: “All things are full of weariness; a man cannot utter it; the eye is not satisfied with seeing, nor the ear filled with hearing.”

Tinder for a bonfire of political vanities is all around us now. Some of it was lit by the November presidential election. More by Wednesday’s lawless ransacking of the Capitol in Washington. Even more tinder will likely be set on fire in the months to come.

The failure of the presidential election to establish its legitimacy is the crossing of a political frontier similar to the crossing of the Rubicon River by Julius Caesar with his personal army on January 10, 49 BCE, when he challenged the legitimacy of the Roman Republic.

Today is the 2,070th anniversary of that dramatic challenge to the constitutional order of the Roman Republic.

Caesar’s jaunty quip that day was alea iacta est – “The die is cast.” Civil war was the result. He won the toss, but later paid for his victory with his life.

Trump is now having to pay personally for his hubris. Like Caesar before him, Trump rose thanks to a dynamic personality, but, also like Caesar, that same personality has twisted him into a loser.

Heraclitus said that ethos anthropos daimon – “Our character drives our destiny.” In this formula for success or failure in life, an unregulated character can lead to hubris. Hubris, then, necessarily brings on nemesis – downfall and destruction. This is true for nations, as well as for individuals.

British military advisor and strategist John Glubb asserted that no empire can survive much more than 10 generations or about 250 years. Our 250th anniversary will be upon us in 5 years.

Several years ago, Professor Francis Fukuyama had already written presciently on political “decay” as something Americans should now worry about. After Donald Trump was elected, I went to see him at Stanford to ask him how he thought we might reverse the rot eating away at our politics. He replied slowly: “I can’t think of anything.”

Now, four years later, a widely questioned presidential election would constitute a pretty significant undermining of our political well-being. That the Democrats “stole” a presidential election has now entered the mythology of American history. Too many people – tens of millions of them – believe that to be the fact and they will never change their minds. Nor will they submit to “re-education” sessions shoved down their throats by their social “betters.”

On the other side, even more Americans have locked themselves into a narrative that nothing went awry in the vote count. They are afraid to admit any failure of due process in the election. To so admit might precipitate an unraveling of their authority. It might even end up with their having to accept personal responsibility for the collapse of our republic.

The worst possible electoral outcome is now a reality – no truth, just bitterly conflicting partisan narratives. Having a clear victor and so also a clear loser would have been an outcome having the force of undeniable truth behind it. Those on the losing side would resentfully and angrily, but nevertheless genuinely, resign themselves to the outcome and get on with their lives.

I can imagine Karl Marx rather joyfully looking on from wherever he is as we Americans validate his thesis of dialectical materialism. Our culture war has now solidified into a class war. Each class has its separate relationship with our system of production. The ideology of each class, just as Marx insisted, so aligns with its economic self-interest that we might say each rival ideology is a rationalization programmed to legitimate a class interest.

Our new system of production is more sophisticated than the capitalism studied by Marx. Now, finance is not the most important form of capital. Over the last 30 years, we have, through public agencies, created massive amounts of liquidity – trillions and trillions of dollars in every major currency. The world is floating on a huge sea of currency and currency equivalents as never before in history. That is one reason why the price of money – interest rates – are so low. Supply is surging and the laws of economics are working just fine.

Our global post-industrial economy now runs on forms of capital which were once marginal, such as human capital, intellectual property, social capital such as celebrity, credentials, brand equity, customer goodwill, corporate culture and the asset implicit in controlling regulatory power. The old form of capital – liquidity – is now most easily appropriated by those who possess the new forms of capital.

Since nearly every sector of the economy is dominated by a few firms, corporations can extract rents over and above competitive market prices. Corporate officers are, more and more, part of the new ruling elite by virtue of their credentials and human capital which gives them preferential access to liquidity. Thus, we now have “woke” capitalism.

In our current form of capitalism, the middle and lower classes don’t have any of the new forms of capital. An old fashion work ethic can’t compete with credentials or social mediatized status. Mere labor, as always, isn’t much of a capital asset. So, those who have been called the “deplorables” have become the new proletariat. They are the social base for the Republican Party. Democrats who are also part of this class have become Republicans. Republicans who belong to the new capitalist class are becoming Democrats, voting for Joe Biden. The Democrats have become the party of the new American ruling class – those who are woke, well-credentialed and blessed with white collar employment in large institutions.

In the time of Julius Caesar, the opposing classes in the Roman Republic were, on top, the patricians, the “fathers” who gave direction (also called the optimates or the “best ones”) and on the bottom, the plebeians.

In a premonition of the mob violence which has unexpectedly broken out this year in America, first with Black Lives Matter and Antifa challenges to the establishment and now with Trump supporters storming the Capitol, the very successful 2019 movie Joker (grossing $335.5 million) told a story of the marginalized rising up in the streets to turn the tables of law and order on their betters. It made one think of the storming of the Bastille in 1789 and the barricades in Les Miserables.

So, America now has in more pestilential form than at any time since the election of 1860 perhaps, an irreconcilable antagonism between two social classes, each with its own culture of virtue and each with its own economic reality.

Bismarck’s famous remark that “God has a special providence for fools, drunkards and the United States of America” is about to be tested for its truth.

Sincerely yours,

Stephen B. Young
Global Executive Director
Caux Round Table for Moral Capitalism

From our first round table in 1986, the Caux Round Table for Moral Capitalism (CRT) has sought to transcend all parochialism, sectarianism, ethnocentricity and partisanship through dialogue and having what its founders called “honest conversations.” Such conversations demanding of participants hearing others and having empathy are not easy. In a way, they are a search for truth and many times, truth, about ourselves, is not what we want to hear.

In these conversations and perhaps whenever truth is present, there is judgment, the application of some outside standard to our actions and aspirations. Honest conversations are hard on narcissism and selfishness, on unkind ambition and resentments. But without judgment, what is the use of ethics, morality, law or values?

We can, of course, use our ethics, morality, values and the laws we want to enforce for our own ends to puff ourselves up or push others down. But what justifies such self-magnification, useful though it might seem?

In Washington, D.C. this past Wednesday, there was an assault on established institutions doing their duty in accepting the results of an election – a ransacking of the Capitol – unprecedented in the history of the U.S. Angry citizens, some prepared for violence, encouraged by an outgoing president, forced their way into the houses of Congress, climbing up walls, smashing windows and demolishing locked doors.

While the CRT is usually reticent in getting entangled in the internal travails of countries, though members of the network may have strong personal opinions for and against such actions or policies, it seems appropriate to bring to a wider awareness relevant standards with which to assess and judge events of significance for our times. Having a care for the common good carries a responsibility to engage in honest conversations.

The CRT, through our round table process, has proposed certain ethical principles for government and politics. The lawless and vengeful protest in Washington on Wednesday cannot be reconciled with such principles. Any use of force and violence to impose one’s will contradicts principles of right order.

The CRT Principles for Government are set forth below.

I direct your attention to the fundamental principle that public office is a public trust. Fiduciary duties of loyalty to the nation, the people and the laws are first and foremost. Political power is not for personal exploitation; it is not personal property to be used arbitrarily for selfish advantage. Secondly, fiduciary duties of due care as a trustee of power requires serving the best interests of others, even people we don’t like. In such service, we are to act after reasonable consideration of alternatives in a manner which uses the prudence and foresight which others would bring to the decision.

Next, in holding a position of public trust, we are to use discourse, not force, in making decisions as to the use of our powers. If we are upset, angry or feel the boot of injustice, we should respond with honest conversations until others leave us no option but intolerant confrontation on behalf of what is right.

To me, the standard of discourse was well expressed by President Abraham Lincoln when he said on the occasion of his second inauguration:

“With malice toward none with charity for all with firmness in the right as God gives us to see the right let … do all which may achieve and cherish a just and lasting peace among ourselves and with all nations.”

One of our fellows, Michael Hartoonian, sent me some thoughts on citizenship, the personal agency which drives free societies. As we begin 2021, after nearly a year of collective regimentation and personal, self-discipline to minimize the impact of a pernicious, but invisible menace, it might be time to focus once again on action by individuals for the common good through their personal commitments and taking of risk and finding courage.

With the U.K. out of the E.U. and with realignments in the Middle East, but populist nationalism comfortably entrenched in some nations, great and small, esteeming good citizenship seems quite relevant globally.

I hope you find Michael’s recollection of past virtues reassuring that they may not be irredeemably lost.