The goal but not the journey
It is en vogue in the intellectual scene to speak up with clear words and good arguments against the current power distribution and market conditions. Few also offer new targets. Where this happens, for example with so popular present philosophers like Thomas Gabriel, Rutger Bergman, Richard David Precht or Yuval Noah Harari, hardly clear ways are offered to reach these goals.
The goal and a very hard way
Much more implementation-oriented are concepts of a cooperative market economy that are oriented toward the common good instead of profit maximization. There are some remarkable, very left-wing ideas out there that also offer a pathway for political implementation. One of the better-known representatives of the common good economy, with a strong social enthusiasm is Christian Felber. However, since they all require legal changes in national legislation and regional alliances and are also challenging in the international arena, they require a great deal of energy and time to implement. In the past, I too have often dropped out at this point. Giving the UN a new mandate, establishing a world tax and finance law that is oriented towards the common good, or getting the nations excited about an idea in which they no longer play a decisive role, is a very hairy and ambitious, long-term goal. I need an approach that seemed easier and more timely to realize. It took two additional impulses for my idea. First the impetus, then the idea.
Impulse 1: Collective Actions
As a lawyer and compliance officer for a corporation, I dealt with “Collective Actions”. These initiatives requires stakeholders to establish certain common compliance rules. In my case, it was competitors agreeing within the framework of an international industry association whether to invite spouses of customers to dinner, for example, or how much a meal at a business negotiation may cost per person, or how much entertainment a training session for customers may include, etc. All these questions are regulated differently in each country around the world and usually market pressure “forces” sales to go to the limit of what is permissible in each country. Yet – in contrast to a very common opinion about “the industry” – it is not at all in the interest of the players to move into the grey area of the law or even to finance as many invitations as possible. Following this logic, it was surprisingly easy to agree between competitors on a common denominator. Such rules need to be admissible in all jurisdictions and be simple as well as comprehensible. The decision was made voluntarily, without pressure and across company boundaries, to apply the strictest compliance rules from all areas internationally. In some places, competitors even went beyond the strictest of rules because it seemed easier to ban all gifts than to exempt those for customer anniversaries or promotions and then agree on value limits. The experience made a lasting impression on me.
Industrial associations are clubs. Within the framework of “Collective Actions”, they can, in addition to binding rules for their members, have audit rights granted to their members and establish mediation/arbitration centers for disputes. If they agree on rules that are at least as strict as those in the strictest countries, they are independent from national jurisdictions. To be compliant, all they have to do is to abide by the code agreed in the Collective Action. They are happy to let the association monitor such compliance. On the one hand this guarantees a “level playing field” and on the other hand the penalties in such association are usually “only” financial. No loss of reputation. No blacklisting. No prison. A way to continuously improve ethical behavior without being over proportionally punished for the misbehavior of individuals. There is a limit of course when you would have to get state law enforcement involved – but up to that limit, it is an reasonable way the act ever more ethical.
Coorperations are the incarnation of evil?
Do corporations “want” child labor, corruption, environmental pollution and tax havens? The answer is – with a few exceptions: No. They are motivated by the different national legislations in the marketplace to exploit advantages in order to offer customers the lowest possible prices. Condemning customers for not yet being willing to pay extra for fair trade products and conditions on a large scale does not help either. There is a desire in the industry, at least of all large international corporations, for clear and ethical rules in global competition. Through the – often overrated – lobbying of the corporations, they are usually just defending themselves against regional or national rules, which may make ethically sense – but also distort competition even more on an international level. Sometimes lobbying efforts are directed against liability for unforeseeable misconduct. I do not think any cooperation would lobby against globally applicalble and enforced ethical regulations. The idea, the product and the service should be the deciding factor in competition. The COMBAT Charter of the UN contains the essential requirements for worldwide fair play. Unfortunately, it is addressed to the nation states, which have a different set of interests. In the struggle for survival, corporations then tend to follow the financial incentives, such as for example low wages, which are favored by allowing child labor und pollution.
If that is so, why have the industry assciations not solved all challenges on earth through collective actions?