Making Business Better

1 August 2014

CSR is an acronym for “corporate social responsibility.” It’s the way a business entity regulates itself in areas such as health, environment, human rights and other externals to its primary mission.

BP is a big oil company, and not an acronym for anything. Founded in 1909 as the Anglo-Persian Oil Co., it changed its name to the Anglo-Iranian Oil Co. in 1935, to British Petroleum in 1954 and to BP in 2001. In 1999 Christine Bader ’93 went to work for this nonagenarian corporation, and by her own admission, she fell in love.

The Evolution of a Corporate Idealist is the story of that romance, and it’s not exactly happily-ever-after.

The honeymoon was sweet. Bader (below) went to Indonesia, where BP was overseeing extraction of natural gas from the Tangguh gas field, one of those risky energy sources that high prices have made potentially profitable. BP knew the risks included environmental damage, political unrest and local economic disruption.

Christine Bader ’93

By most accounts, including her own, Bader and BP did well with their social responsibility in Tangguh. She moved on to China, where BP was collaborating with a Chinese company; that work seemed more frustrating.

Back at corporate headquarters in London, BP paid Bader to work part-time as an adviser to the United Nations special representative for business and human rights. Bader is justifiably proud of the results of this work, the “Ruggie Principles,” which protect and respect human rights in business. She started full-time at the UN in 2008, yet her heart belonged to BP.

If this is a love story, then in 2010 Bader found her lover in bed with the babysitter.

In the Gulf of Mexico, BP’s Deepwater Horizon oil rig explodes. Workers die. Crude oil leaks. BP backpedals. At a 2010 hearing Rep. Henry Waxman (D-Calif.) summed up how bad BP looked: “There is a complete contradiction between BP’s words and deeds.”

Bader can’t disagree and suffers a crisis of confidence. After a chat with a friend—also a Corporate Idealist, one of the sad ones “so marginalized that they don’t even know” they have no power in the corporation, Bader asks a probing self-critical question:

“Am I that deluded as well? Do I sound just as ridiculous, talking about the great things BP has done on human rights on a few projects in far-flung corners of the world, when the company’s behavior much closer to home appears to have been the opposite of exemplary? … Perhaps.”

This is brave writing, because this reader can only reply, “Well, yes. You sound like a lover betrayed, but trying to believe.”

Now a visiting scholar and lecturer at Columbia, Bader believes Corporate Idealists can “nudge our companies toward a vision of a better future.” Nudge is also the title of an important 2008 book that argued for a “libertarian paternalism” to offset the false assumption that most people make choices that are in their best interests. Perhaps this is also true for corporations—which are, after all, our fellow citizens, for better or worse.

Bader extends her metaphor this way: “The honeymoon is over. … It is time to settle in for the long haul, recognizing that my partner isn’t perfect and loving him all the more for it. Despite the failings of big business, I find myself still optimistic about its ability to make a positive difference in the world.”

It’s cause for some optimism that Bader and others like her are working to maintain the conscience of companies like BP. It’s not enough to make me trust the company, but it helps.

Corporate Idealist is no chronicle of natural selection. Bader was not a young person passionate about oil drilling who evolved an ideal view of the industry; she went in as an idealist to make business more responsible.

That’s the paradox of the Corporate Idealist. Milton Friedman wrote that, within the law, the only social responsibility of business is “to use its resources and engage in activities designed to increase its profits.” The Corporate Idealist is no more engaged in those activities than the army chaplain is in fighting the war. What’s the difference between a Corporate Idealist and a Military Chaplain? In the daily battles of business, there are no believers in the foxholes.

Mom, Romney, Mammon: Some Doubts about the Debt

15 October 2012

When I graduated from Amherst College in 1978, I was $3,000 in debt, and deeper than that in despair about it.

The $3,000 seems laughable now. But in our family–poor New Hampshire farm stock, abandoned by our father and hounded by his creditors–debt was a moral issue. My mother and older brother, who had not gone to college, expressed a great deal of pride and hope in me, and encouraged the student loan. But our guilt and shame at “going into debt” was nothing to laugh at.

Our Puritan attitudes made even all-American activities like buying a house or financing a new car problematic. Our moral estimation of debt’s evils was typical. Laban Todd, the farmer I worked for (a dollar fifty an hour, cash) used to joke, if we had to wait for three cars to pass before we crossed the road with a load of hay, “It wouldn’t be so crowded if people could only drive cars that were paid for.”

The moral equivalence of debt with sin goes way back. In our little white church, we asked Our Father to “forgive us our debts, as we forgive our debtors” No weaseling about “those who have trespassed against us” for us. We asked for a cash payback: a marvelous idea, but even a child knew, unlikely. Debt, like sin, would be always with us, unfortunately.

We were misled. No doubt, debt remains ubiquitous, but it seems less like a sin these days. Debt is the lifeblood of the economy–or, if you prefer a moral echo in your metaphor, its daily bread.  Debt feeds the global economic system of the 21st Century and sustains it. Debt is, in fact, what creates money, according to Philip Coggan, the author of Paper Promises: Debt, Money and the New World Order (2012). Money is debt.

Forgive me, Mom: but debt is a Very Good Thing.

Forgive me also, Philip Coggan, for falling into the trap you laid, “of making blanket statements, along the lines of the comic history book 1066 and All That,” saying debt is Good Thing, thrift is a Bad Thing.

“History is what you remember” was the fundamental lesson of that delightful book. And what you remember, what you believe, what you trust matters, in matters of money. Coggan’s book is all about confidence, peopled as it with the Wizard of Oz, Peter Pan kept aloft by audience belief, and Confidence Fairies. I could sum up Paper Promises with a paraphrase from 1066:  “Money is what you believe it is.”

Governments and businesses, colleges and universities, hospitals and health insurers, auto manufacturers–any entity with any capital has figured out that debt can do a world of good. Some very smart people built an entire “financial services industry” on this knowledge, including the “private equity” business, where Mitt Romney grew rich.

“Mitt Romney has spent his career executing turnarounds in the private sector, the Olympics, and state government.” That’s his official position, as stated in his campaign literature. So’s this:

“While getting the federal debt under control will be a long and arduous task, the first step toward recovery is admitting we have a problem and refusing to allow any more irresponsible borrowing. We must live within our means, spend only what we take in…”

This isn’t logic, it’s a scolding: “The debt is immoral,” Romney said in debate, but  I can hear Mom’s voice. You’re spending more money than you have, and that’s a Bad Thing. Romney’s latest advertising features a Mom and a baby worrying about “Obama’s debt,” but not a word about where, say, they might want to invest it. like a school or a hospital.

This is an appeal to morality, not economics. Its advantage is that it avoids any specific plan.

But Romney knows better. Debt is not immoral, Mr. Romney, and you know it. You have made a lot of money in financial services:  I don’t pretend to understand finance–least of all, the complicated leverages and hedges practiced by private equity experts like Bain Capital.

But I know this much: private equity “executes turnarounds” by buying a business–with borrowed money–expecting that the company will increase in value. That’s no more immoral than my Mom  investing $3000 she didn’t have in my college education, hoping that I would increase in value. (I did.) And if you and Mom and l can borrow without moral turpitude, certainly the United States of America can.


The Proposed Reading Viaduct Park in Philadelphia

8 May 2012

Little noted in the excitement here about building “our own High Line:” The Reading Viaduct, unlike anything in Manhattan, will connect the parts of Philadelphia with the greatest densities of Black (orange)  and Asian (blue)  residents, and makes a turn toward the Hispanic (green), too.

A River Still Runs

8 May 2012

I grew up near the Piscataquog River in New Hampshire, and have been pleased to see it’s been well protected from development. This map shows how well.

1493: Uncovering the New World Columbus Created, by Charles C. Mann

13 March 2012

imageClose your eyes and picture this: You’re staring from the deck of a small ship at the land now known as Virginia. The year is 1607, and you are Capt. John Smith. What you see in your mind’s eye is probably something like the images that open Terrence Malick’s 2005 film The New World: a virgin forest of stately trees bathed in that certain slant of light. What you’re ignoring is the understory.

In the science of forestry, the understory is the mix of seedlings and saplings, shrubs and herbs and all the smaller trees that grow happily in the shade of the bigger trees or wait patiently for wind or fire to expose them to the sun.

In the discipline of history, “understory” doesn’t mean anything. I wish it did, because the word would elegantly describe Charles C. Mann’s 1493, which is about some of the people, animals and plants ignored by “world history.” Mann’s previous book, 1491, drew attention to Native American societies before the European conquest. (The reason that the English walked so easily through the Virginian understory was that it was anything but virgin: it had been worked for generations by the natives.) Now, in 1493, Mann lays out the ecological and economic interplay of the European and, importantly, African arrival in America; Mann’s epic ambition spans continents, themes and five centuries of history.

“Where the Skills Are:” But You Can’t See Them

23 September 2011

Richard Florida offered an interesting take on the importance of  “social skills” in Where the Skills Are – Magazine – The Atlantic.

The map that illustrates the article is merely that: an illustration. We have –and I mean, I have–the technological skills to create maps that can be used as tools. Whatever you call this particular hodgepodge, it fails as a map, as a chart, and frankly even as an illustration. It presents no visual information, no way to tease out any information, and yet, does offer shadows of an impossible early-morning sun.

“How Many Pennsylvanians Live Within 25 Miles of a State Park?”

19 May 2011

Maurice Goddard, the head of the Pennsylvania Department of Forests and Waters from 1955 until 1979, was the godfather of the State Parks system.In 1955, “Goddard took the position and set a goal of a state park within 25 miles of every resident of Pennsylvania. “We took a big map of Pennsylvania and drew circles around Philadelphia, Pittsburgh, the Wyoming Valley, and Harrisburg,” he said.”Today we can improve on Goddard’s primitive geographic information system. I created a series of maps for the Pennsylvania Parks and Forests Foundation on Goddard’s theme. The first two maps I produced, using data from the Pennsylvania Spatial Data Access (PASDA) website, concentrated on population. One showed the largest cites on Pennsylvania and its parks; the other the most populous year 2000 census tracts.

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