Or words to that effect, and still true.

V.I. Lenin

If you read about the way rubber was harvested in the Congo in the early 20th Century, at the cost of hundreds of thousands of lives and the imposition of brutal slavery, solely to get cheaper rubber for tires, and despite a certain degree of public outcry, you realize that there really is nothing that a competitive enterprise will not do for money. In China there are many other things that may even be worse. For example, non-Chinese firms use prison labor, and non-Chinese firms turn in their employees who are then forced to have abortions.

Businesses are not moral agents, and they will do whatever they can get away with.

When doing business in the US or Western Europe, a company can make hay with feel-good PR. On the flip side of the coin, they get badly hurt by an attentive public when they do something that the majority of the public deems immoral.

It makes sense for a company’s leadership to factor the appearance of morality into their planning.

Nine days in ten, nobody here in the States or Europe (a Western company’s shareholder community) is paying any attention to what is happening domestically in China. There is no reason to spend on PR nor is there usually any reason to avoid something that we might consider immoral. Nobody is watching.

On the other hand there are extremely good business reasons for investing in China. The folks here at home love it if the share price is boosted by inroads into that mighty untapped market.

I have no dount that other companies are doing things that would make us cringe to get in on the deal.

If Yahoo execs had balked at doing this, what would have happened? Say they quit: Their replacements would have been just as tempted to sin to win. Say they didn’t quit: They would have lost their foothold in China, someone else would have made the deal, Yahoo would have suffered, and they would have been fired. Not officially. Not specifically for that, but they would have been just as gone.

The great difference between whatever rules there were on business in the USSR versus China is that China is an engine of the world economy not a straw giant.

Yahoo couldn’t thumb their noses at the Chinese government. The truth is the U.S. government can only do so much thumbing either. Our two countries are locked in a suicide pact of currency reserves and uncontrolled debt. Even if some legislators get outraged, it won’t make it into law. If it does, we might rue the sword we have chosen to fall on.

The only hope, is that consumers get personally outraged and punish Yahoo personally. But the U.S. public just isn’t paying that much attention.

It makes me feel slimy to write this, but I think it’s the way things are for the time being. I’m not arguing for what should have happened or what people should have done, just mapping out whay it did happen and why it will happen again with another company.

Jon, I disagree with your essential point, which seems to be that corporations have to maximize profit so they cannot have moral culpability. Corporations are legal fictions composed of human beings. There are all kinds of things they cannot do that might maximize profit, usually where a law intervenes. Also, where someone sees wrongdoing going on they have no excuse to merely say “I was following orders” or “my shareholders expect me to do this”. I do think that public outrage will have only a small impact, however. But, better that than nothing.

Don, this is exactly the kind of thing I am worried about.

I wonder if anyone knows: What were the rules on this kind of trade with the USSR during the Cold War? Were any restrictions in place?

A corporation can’t act ethically. A corporation is not a person. The leaders of a corporation can only act as ethically as their stakeholders will let them. The inital response of any business leader is going to be to pursue profit. That’s what their stockholders pay them to do. And if they fail to do that, they are punished.

Other stakeholders are less directly involved in the corporations day-to-day behavior than the stockholders (through the market). But they can become involved.

As was hinted about above, public outrage could push the U.S. government to try to do something to modofy Yahoo’s behavior. China bashing is popular at the moment and it could happen. But the operative word would be try. A single government’s ability to control a multi-national acting in another country is quite limited.

More likely, but still unlikely, public outrage pushed Yahoo to modify it’s behavior for PR purposes. A little, maybe, somewhat. Don’t hold your breath.

I agree that what Yahoo is doing is wrong. But given the political climate and the rules of the market, its behavior is rational. That’s all the market demands. Like it or not.

Please do NOT confuse God with established religion, institutions that maximize profit through fraud.

-”I do not feel obliged to believe that the same God who has endowed us with sense, reason, and intellect has intended us to forgo their use.”
- Galileo Galilei (there is no historical dispute on how the Church treated GG when he threatened their power base).

As to God, I was quoting Bush, our president, as you can clearly see if you read what I wrote, but you chose, again, to ignore what I wrote and respond to a straw man. As to your theology, it has nothing to do with my post, so I won’t bother with it. I already know you are a militant athiest. Constantly making an issue of it when it is off-point is childish and annoying. As to me having to prove to you that anyone has been arrested by the Chinese government for exercising free speech in China, read the news, it is commonplace, it is business-as-usual over there. I cannot say for sure that Yahoo’s conduct has caused anyone to be arrested yet. I don’t think the Chinese police publish statistics on how they track down dissidents, or the marginal contribution of American tech firms’ products to the effectiveness of their tyranny. Perhaps Yahoo will publicized the number of political prisoners who were arrested using its equipment as an advertising point when it sells surveillance technology to other dictatorships in the future. As to why it is wrong to help the Chinese cops arrest people for exercising free speech, it is very simple. Free speech is a human right. Preventing someone from exercising it is morally wrong, evil. If you facilitate evil conduct, if you provide the means to carry out evil conduct, if you make evil conduct more pervasive and effective, if you make it worse, if you profit from it, you are complicit in it.

Anyway, I have no reason to think these private firms are cooperating in any serious way with the US government or its efforts to spy on China. That would be bad for business. Too risky.

If we are doing this, and I suspect and hope and pray that we are, we are building out their infrastructure of repression at the long run expense of their own regime.

Re the liberals silence on China: Didn’t Al Gore receive a lot of campaign finances from the Chinese? Or did this allegation turn out to be wrong or exaggerated?

” Our belief is that job creation and economic growth encourages the development of civil society. Therefore, we believe our investment is in the best interest of the people of China.”

In essence, ‘we want to do business, and whether things change for the better or not, this is where the money is!’

Some ethical investment!

Elambend, I’ll let it slide this time, but generally, way off-topic comments get deleted.

YALE CLUB of CHICAGO

First Dutch Lunch of the 2005-2006 Season

All luncheons will be held at 12:00 noon at the University Club

76 Monroe Street, Rooms A & B on the 8th Floor.

No RSVP necessary.

MONDAY October 3, 2005

Judge Richard A. Posner, Yale College 1959

‘The Judicial Confirmation Process & Judicial Philosophies’

Judge Posner will speak about both the local and national judicial system – including recent nominations of Supreme Court Justices.

Judge Posner was a scholar of the house at Yale, first in his class at Harvard Law School (1962) , and has been a professor of Law at the University of Chicago since 1969. He was Chief Judge of the United States Court of Appeals for the Seventh Circuit from 1993-2000. He is the author of numerous books, and articles on Law, Economics, Intelligence and the Problems of Jurisprudence. Judge Posner also is active in civic and legal association in Chicago and writes weekly commentaries on policy issues published in “The Becker-Posner Blog”

Future Dutch Luncheons will be held on the second Monday of each month November 2005 through May 2006.

Having read through Rconversation’s latest post, this much is clear: The Chinese government’s attempts at pervasive command and control are NOT solely aimed at news organizations and bloggers. The government is out to monitor and, where &#…