Do Morals Matter? by Markham Ian S

Author:Markham, Ian S.
Language: eng
Format: epub
ISBN: 9781119143543
Publisher: John Wiley & Sons, Inc.
Published: 2018-10-29T00:00:00+00:00

Fukuyama is stressing the importance of the culture underpinning economic activity. And ideally a strong economy needs a culture of trust, underpinned by strong organizations and associations between the individual and the government (organizations such as churches or voluntary societies), which Edmund Burke called the ‘little platoons’. The argument of Fukuyama’s book is that ‘Japan, Germany, and the United States became the world’s leading industrial powers in large part because they had healthy endowments of social capital and spontaneous sociability’ (1995, p. 150). So then the point is that the prosperous parts of the world have a strong ethical framework in which to operate. Japan, for example, had centuries of Confucian ethical insights on which to build; and the United States had the combination of a strong tradition of non‐governmental association that made the creation of large corporations key to its success.

At this point, someone might object: what about Enron? Enron was a vast company that submitted fraudulent accounting records, which distorted the share price. When it all turned sour, the fall of the company was swift. Only the senior managers anticipated this decline and sold their Enron shares before the fall; those who were not privy to the details about the extent of the company’s problems (much of the workforce) not only lost their income but also their savings.

Enron was a major scandal. It was probably a significant factor in the US recession of 2002. However, it is worth noting the following. Its unethical practices were not, in the end, good business. Furthermore, the free press and the regulative system did, belatedly, catch up with Enron corruption. And finally, there is an entirely appropriate campaign to ensure that such corruption does not happen again. Even Enron illustrates the importance of, and need for, business ethics.

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