“Morality lessons from the VW diesel emission scandal,” The Colorado Springs Business Journal, April 7-13, 2017, p. 18.

Morality Lessons from the VW Diesel Emission Scandal

When you were a child, your parents told you it’s not nice to tell lies. And if you were caught cheating, you were duly punished.

They followed one of three mainstream moral theories, all of which condemn cheating. The Consequentialist (or Utilitarian) argues that the results of cheating are usually bad, and therefore cheating should be condemned. The Deontological (or Kantian) argues that permitting the cheating of one allows everyone else to cheat, and before long no one can believe anyone. The third theory, Virtue Ethics (Aristotle), suggests that virtuous people don’t cheat; when they do, it’s a character flaw that should be excised.

How is this applied in the business world? Given the consensus among traditional moral frameworks, is cheating condemned and punished? Every School of Business worth its salt has at least one mandatory requirement of a Business Ethics course.

Legally speaking, the impact of these theories is apparent. Fraud is punishable by law. If you aren’t sure how far the arm of the law extends, take note of reports that about $251 billion in fines was paid by fraudulent banks alone since the Great Recession (Forbes 8/29/14). Deliberate or manipulative, those “too big to fail” had a hand in bringing about the financial crisis and they were found guilty in courts of law or settled out of court (without admitting guilt) for billions of dollars.

Cynics may say that this was the banks’ “cost of doing business,” while less sanguine response is that they were found to have cheated their customers, their mortgage clients, and all the regulatory boards that were supposed to police their activities.

As we are witnessing lately the attack on the independent media (mainstream, extreme, print, television, and Internet), questions of “lying” or “fake news” have been front and center in claiming that media outlets have become the “oppositional party.”

Cheating, lying, and the standards by which they should be judged have been political fodder for any pundit invited to a talk show (“left” and “right”). Was there deliberate lying or “mere” choice of selective data? Is it “simply” a question of perspective? Media control is a classic fascist trope.   

Presumably in the business world the stakes are different compared to those associated with “Lying Crooked Hillary” or “Cheating Ted Cruz.” Political mud-slinging is as old as our republic, but is the same true of business? Is capitalism based on cheating?

Unlike our judgment about businesspeople, we are quick to agree that we can never trust a politician, and therefore only outsiders (like Donald Trump) deserve our votes. Professional politicians say whatever they are paid to say, and they will change their minds regardless of promises made to constituents. This sentiment brought to power our 45^th President.

So, why aren’t we using the same moral outrage when it gets to the business world? Is it because we (cynically or realistically) know that the only purpose of a firm is to make a profit no matter what (moral or practical) corners it cuts, as VW has done in manipulating its diesel emission controls?

William Boston reports that “Sales of the VW brand . . . rose 2.8% world-wide to 5.9 million vehicles, driven by 14% growth in new car sales in China and nearly 7% growth in Central and Eastern Europe.” He continues, “Volkswagen shares were up 3.8%.” And all of this after the “diesel scandal” (Market Watch, 1/9/17).

Where is the inner moralist in each of us that is willing to punish all cheaters, even put them out of business? Brittney Cooper, in an alarming headline, argues that “The Powerless Get Punished for Cheating, and the Powerful Benefit” (New York Times, 9/29/15) Shocking? Perhaps we subconsciously admire their clever engineers.

VW is obviously “powerful” and its financial reach extends the entire globe. Paying some $19 billion in fines is similar to the banks’ “cost of doing business” in this country, a fee or fine worth paying if caught by snoopy regulators.

Morally speaking, there is an equivalence in all moral violations regardless if they occur in the political or economic domains. Cheating remains cheating no matter who commits the act (and against whom), and bad behavior should be punished no matter how rich or powerful the villain.

Are the same people who punished Hillary Clinton not willing to punish VW? Is it because psychologically it’s easier to vilify a person than a corporation? But if the Supreme Court decision in Citizens United (2010) claimed freedom of speech rights to corporation as persons, why not apply the same logic?

On a good day morality and legality are based on logical arguments, and emotional outburst are best left outside of reasonable judgments.

Raphael Sassower is professor of philosophy at UCCS. He can be reached at rsassower@gmail.com See previous articles at sassower.blogspot.com

“How do we determine the cost of fake news,” The Colorado Springs Business Journal, January 20-26, 2017, p. 25.

The Costs of Fake News

When local news outlets warn against a snow-storm, we pay attention. Some dash to the grocery store, some take a day off because schools might be closed. We trust the National Oceanic and Atmospheric Administration’s reports.

I still remember my terror listening to the news during winters. Will my restaurant staff show up to work? Will vendors deliver supplies? And most importantly, will customers stay home?
In the age of “fake news,” it does matter if what you hear is reliable. There are two parallels in our recent history worth recalling.

The first dates to World War II and the Cold War. The role of propaganda was immensely important both for domestic consumption and for demoralizing the enemy. 

By now, three kinds of propaganda are classified in terms of intent, the reliability of the source, and the reliability of the information. “White” propaganda comes from a reliable and identifiable source and the information is accurate, even when the delivery is supposed to influence those listening to it.

“Black” propaganda is deliberately attributed to unidentified or false sources, and it spreads lies about whatever is at issue, where missiles are located or how many troops are being deployed.

“Gray” propaganda is somewhere in between, so that sometimes the sources are correctly identified but the information is misrepresented, or when enough ambiguity of the content of the message makes it impossible to figure who said what to whom and why.

As in courts of law, when we try to get to the “truth, the whole truth, and nothing but the truth,” we always question the intent behind a news report from official sources, especially when sources seem to have an agenda or an axe to grind.

The second parallel dates to the debates over the tobacco industry’s claims that smoking does not cause cancer. In this case, and others such as asbestos, coal, drug abuse, and climate change, scientific testimony in courts of law by the “other side” has been discredited as “junk science.”

Junk science is any scientific study you disagree with. Admittedly, every collection of data is inevitably incomplete and deserves critical assessment. In this sense, every scientific theory can be challenged. But here, too, the question of intent is paramount.

We should check what is at stake when data are presented: can someone, a pharmaceutical spokesperson or political candidate, benefit from spreading this information? Once the answer is clear, we can proceed to examine the data themselves.

It’s obvious that a tobacco company will try and convince smokers that cigarettes don’t kill them. But when this claim is supposedly backed by science, a sinister element becomes apparent: profits trump truth. In most cases, judges and juries have to figure out if and when the evidence is indeed “junk science.”

We have business-related laws against false advertisement and there are penalties for misleading consumers, claiming, for example, that your diesel car is both energy efficient and pollutes less than the competition. In addition to reimbursing American car owners some $15 billion, VW agreed to pay $4.3 billion to settle criminal charges of deliberately violating EPA rules. 

Though our local VW dealer claims that the scandal hasn’t hurt sales, one wonders if it should have. Is it a question of punishment for past transgressions (less sales), or are we immune to all car advertisements (same sales)? Perhaps we don’t care enough to find the truth about what we buy, from cars to food.

But should we? Politicians are notoriously unreliable sources of information about themselves and the policies they will enact when elected. Are businesspeople any better? Should you trust your broker? Can you trust that the food you are served in fact was sourced from a local farm (as advertised)?

Journalistic codes of ethics have traditionally tried to make sure all data are verified so as not to mislead the public, With the expansion of media into the world-wide web, those codes have been stretched and tested more than ever before. Most websites don’t have the layers of editorial policing that established news outlets have, but this alone isn’t the reason to distrust them.

In an environment where so many news outlets vie for attention, when so much is at stake for financial survival and viability, there is no wonder that outrageous and unsubstantiated news are loudly spread. Digital exposure raises new challenges. Can we decipher what is true?

Truth is difficult to fully ascertain, but obvious fakes are easily detectable. If a business deal is too good to be true, it surely is. And if a snow-storm is announced, better be safe than sorry. But looking out the window may be a prudent policy as well.

Raphael Sassower is professor of philosophy at UCCS. He can be reached at rsassower@gmail.com See previous articles at sassower.blogspot.com