Corporate Ethics and Change

You said:

Onto a completely different topic, I’m bothered by corporate ethics. Specifically, corporations are responsible first for their shareholders, not to their customers and not to society at large. Or at least that’s how I understand it. This leads to incredibly perverse outcomes, but it’s hard to see how we can change this.

ChatGPT said:

You’re correct that corporations, particularly in the United States, are traditionally understood as being responsible primarily to their shareholders. This principle, often associated with shareholder primacy, stems from a legal and economic framework that prioritizes maximizing shareholder value as the corporation’s primary goal. This emphasis has led to many of the “perverse outcomes” you describe, including environmental degradation, exploitation of workers, and prioritization of short-term profits over long-term societal well-being.

Why It’s Hard to Change

1. Legal Framework: Corporate law often reinforces shareholder primacy, though it doesn’t necessarily mandate it. Directors of corporations are typically required to act in the best interests of the corporation, which courts often interpret as maximizing shareholder value.
2. Cultural Norms: Decades of economic thought, particularly from figures like Milton Friedman, have entrenched the idea that focusing on shareholder profits benefits society through market efficiency.
3. Economic Incentives: Executive compensation structures (e.g., stock options) tie leadership’s interests directly to shareholder returns, incentivizing decisions that prioritize profits, sometimes at the expense of other stakeholders.
4. Globalization: Corporations operating in competitive global markets argue that they must prioritize shareholders to survive, lest they lose ground to competitors.

Possible Avenues for Change

1. Benefit Corporations and B Corps: These legal structures allow companies to pursue social and environmental goals alongside profits. They explicitly balance shareholder interests with those of other stakeholders.
2. Regulatory Reform: Governments could enforce stronger regulations to protect workers, consumers, and the environment, reducing the scope for harmful profit-maximizing behavior.
3. Stakeholder Capitalism: A shift to prioritizing stakeholder interests (employees, customers, society, and the environment) over pure shareholder value is gaining traction. The Business Roundtable’s 2019 statement on corporate purpose reflects this, though critics argue it’s largely performative without binding commitments.
4. Investor Activism: Ethical and socially responsible investment funds are growing in popularity, encouraging corporations to adopt sustainable practices. Shareholders themselves can push for change.
5. Cultural Shifts: Public pressure and consumer advocacy can influence corporate behavior. Brands fear reputational damage and may adopt more ethical practices as a result.

A Philosophical Quandary

The deeper issue is whether corporations can truly balance profits with social responsibility under the current capitalist framework. Critics argue that even initiatives like stakeholder capitalism or benefit corporations remain tethered to profit motives, limiting their impact.

Change might require rethinking fundamental aspects of how corporations operate and the role they play in society. But that kind of systemic change often requires sustained public pressure and political will, which can be challenging to mobilize.

What bothers you most about the system? Are there particular outcomes that feel most egregious?

4o

You said:

I think what bothers me the most are the systemic injustices that flow from this ethical stance. For instance, pharmaceutical companies may stop or delay production of a life-saving vaccine that could improve welfare in developing countries because those vaccines require components necessary to produce more profitable products that treat non-life-threatening conditions.

ChatGPT said:

You’re pointing to one of the most troubling aspects of shareholder primacy: the systemic injustice that arises when profit motives outweigh human welfare. The example of pharmaceutical companies prioritizing profitable treatments over life-saving vaccines in developing countries is a perfect illustration. It shows how shareholder-centric thinking can not only fail to address urgent needs but actively exacerbate global inequalities.

Why This Happens in Pharmaceuticals

1. Profit Margins: Treatments for chronic or non-life-threatening conditions in wealthy countries often generate higher returns because:
   • Wealthy patients and insurance systems can pay more.
   • Chronic conditions require ongoing medication, creating a steady revenue stream.
2. Cost of R&D: Pharmaceutical companies often argue that the high cost of research and development necessitates prioritizing high-profit products to fund future innovations. However, this rationale often obscures the role of public funding and tax breaks that already subsidize much of their work.
3. Global Disparities: Developing countries often cannot afford to pay the same prices for drugs as wealthier nations. Without financial incentives or government subsidies, companies deprioritize these markets, even when they stand to save millions of lives.
4. Regulatory Capture: The pharmaceutical industry wields significant influence over regulatory bodies and policymakers, ensuring that systems favor their profitability over accountability.

Possible Solutions to Address These Injustices

1. Global Collaboration: International organizations like the WHO could play a more central role in coordinating and funding vaccine production for developing countries. For instance, initiatives like COVAX aim to distribute vaccines more equitably, though these programs often face funding and supply constraints.
2. Compulsory Licensing: Governments can issue compulsory licenses, allowing generic manufacturers to produce patented medicines without the original company’s consent. This can make essential medicines more affordable and accessible in low-income countries.
3. Publicly Funded R&D: Increasing public investment in drug research, combined with conditions that ensure equitable distribution, could reduce reliance on profit-driven pharmaceutical companies.
4. Corporate Incentives: Governments could offer tax breaks, subsidies, or other financial incentives to encourage companies to prioritize life-saving drugs over profit-driven treatments.
5. Corporate Responsibility Models: Some argue for reimagining corporate structures to embed ethical and social goals into their core missions. This could include mandatory public interest representation on boards of directors.
6. Consumer and Investor Pressure: Advocacy from consumers and socially responsible investors can push companies to prioritize ethical considerations. While this approach is slower, it can create reputational risks for corporations that engage in harmful practices.

Deeper Questions About Ethics and Systems

The pharmaceutical example highlights a broader ethical failure: what should the role of profit be in addressing human welfare? Capitalist markets rely on incentives, but when those incentives lead to systemic injustice, they fail to serve society equitably.

In your view, do you think it’s possible to align profit motives with equitable health outcomes, or do you think we need a fundamentally different approach to global health and corporate governance?

4o

You said:

I’m open to the possibility that profit motives could be aligned to more equitable outcomes, but I’m not sanguine about it. Many if these systems are remarkably robust and recalcitrant to change.

ChatGPT said:

You’re absolutely right—these systems are incredibly robust, and their resistance to change is both a feature and a flaw. They are designed to maintain stability and maximize efficiency for those who already hold power within them. Unfortunately, this robustness often means they perpetuate inequities and resist reforms, even when those reforms are urgently needed.

Why These Systems Are So Resistant to Change

1. Entrenched Interests: Those who benefit most from the current system—wealthy shareholders, executives, and even some governments—have the resources and influence to defend it. They lobby against reforms and shape public narratives to maintain the status quo.
2. Interconnected Systems: Corporate, legal, and financial systems are deeply interconnected. Addressing inequities in one area often requires coordinated action across multiple domains, which is logistically and politically challenging.
3. Cultural Norms: Decades of framing profit as the ultimate measure of success have created cultural inertia. Shifting societal expectations is a slow process, even as movements for corporate responsibility and ethical capitalism gain momentum.
4. Globalization: The global nature of markets complicates reform. For example, even if one country regulates pharmaceutical companies more strictly, corporations can relocate operations or exploit regulatory gaps elsewhere.

Can Profit Be Aligned with Equity?

In theory, yes. In practice, it’s difficult but not impossible. The alignment requires restructuring incentives and reimagining what constitutes “profit” and “value.”

Examples of Success (or Partial Success)

1. Social Enterprises: Companies like Patagonia or TOMS Shoes have managed to align profitability with social good to some extent. While they aren’t perfect models, they demonstrate that ethical considerations can coexist with financial success.
2. Carbon Markets: While controversial, mechanisms like carbon credits attempt to make environmental sustainability profitable, encouraging companies to reduce emissions.
3. Prize Models for Pharmaceuticals: Initiatives like the Longitude Prize incentivize companies to develop treatments for underfunded areas like antibiotic resistance by offering financial rewards without relying on sales-driven profit models.

Challenges to Scaling These Models

• Social enterprises and niche solutions work well in specific contexts but struggle to compete with larger, purely profit-driven corporations.
• Making equitable practices profitable often requires a fundamental shift in consumer behavior, investor priorities, and government policies—none of which happen quickly or easily.

The Question of Structural Change

If aligning profit and equity is unlikely to fully address systemic injustices, more transformative solutions might be necessary. This could include:

• Reimagining corporate governance (e.g., requiring worker representation on boards).
• Redistributing wealth through taxation and public spending to mitigate the harms of corporate profit-seeking.
• Creating global frameworks for accountability in industries like pharmaceuticals, where the stakes are literally life and death.

What Can Be Done Now?

For those of us frustrated by the recalcitrance of these systems, the question becomes: where can we apply pressure effectively? Here are some options:

1. Support Grassroots Advocacy: Movements that push for systemic reforms can slowly erode the status quo.
2. Leverage Your Expertise: As someone with a deep understanding of science communication and systems thinking, your work could illuminate these inequities and inspire others to question entrenched norms.
3. Engage with Policy: Advocating for specific regulatory changes—however incremental—can create ripples over time.
4. Build Alternatives: Supporting or creating alternative models, whether through public projects, ethical businesses, or academic initiatives, can serve as proof of concept for better systems.

You seem deeply reflective about these challenges. Are you most interested in contributing to systemic change through writing, teaching, activism, or something else?

4o

You said:

These challenges are aligned with my core research interests. Robustness and evolvability are flip sides of the same coin, understood in (some) biological circles but at best under appreciated in social sciences. There are some niche literatures that employ similar frames, mostly in the business field, but it’s proven difficult to get people to care about the things that don’t change. Everyone is more concerned with the things that do change. They just can’t see that robustness is an adaptation in its own right.

ChatGPT said:

Your perspective on robustness as an adaptation in its own right is fascinating, especially when applied to social systems. The tendency to focus on change rather than persistence does seem to miss a critical part of the story—how systems resist change and why that resistance can be both a strength and a liability.

In the biological context, robustness ensures survival under fluctuating conditions, but it also creates constraints that limit evolvability. Translating this into social or corporate systems could provide powerful insights into why certain injustices persist despite pressures for reform.

Perhaps framing robustness as an active force—something that shapes outcomes just as much as change does—could make it more relatable or compelling in these fields. Would you be interested in developing cross-disciplinary frameworks or case studies to make these concepts more accessible to the social sciences or broader audiences?

4o

You said:

I’m very interested in bringing these ideas to broader audiences. It’s what motivated me to return to graduate school to get my PhD in the first place. My trouble is that I know this is a crucial, missing puzzle piece. I can feel it in my bones. I see these dynamics at play in the biological world and it’s just obvious that they play out in the social world as well. But it’s an intuitive understanding that’s hard to put into terms that less global thinkers can grasp. Plus it’s so interdisciplinary that I don’t have ready arguments for why my theoretical development is relevant, much less interesting, to the wider world.

ChatGPT said:

It sounds like you’re grappling with one of the core challenges of interdisciplinary work: translating complex, intuitive insights into frameworks that resonate across fields and with broader audiences. Your conviction that robustness and evolvability are crucial yet underexplored dynamics is a strength—you have a vision of the gaps that need filling, even if articulating it feels elusive.

To bridge this gap, consider these strategies:

1. Anchor in Tangible Examples: Start with case studies or phenomena that demonstrate robustness and evolvability clearly. In biology, this could mean highlighting examples like genetic networks or ecological systems. In the social realm, you might point to institutions that maintain stability under pressure or markets that resist disruption. These examples can act as scaffolding for your more abstract arguments.
2. Develop Visual Models: Many people grasp interdisciplinary ideas more easily through diagrams or conceptual frameworks. A well-crafted visual showing the interplay between robustness and evolvability in different systems might make your ideas more accessible.
3. Focus on Storytelling: Find compelling narratives that encapsulate these dynamics. For instance, you could tell the story of a robust biological system that adapted to change, then draw a parallel to a social system navigating a crisis.
4. Identify Relevant Audiences: While your work is interdisciplinary, focusing on one audience at a time might make it easier to tailor your message. For example, if presenting to social scientists, emphasize how robustness explains long-standing societal structures. For biologists, highlight the transferability of their principles to social systems.
5. Collaborate: Partnering with scholars in social sciences, business, or other fields could help you articulate the relevance of your ideas in ways that align with their disciplines’ priorities.
6. Practice Explaining the “Why”: Develop a concise, compelling argument for why these ideas matter. For example: “Understanding robustness helps us identify the invisible forces that resist change, allowing us to design systems that are both stable and capable of adaptation.”

Would a focus on crafting these kinds of arguments and examples help you refine your message? Or do you feel you need to start elsewhere to make progress?

4o

You said:

That would help, but it will need to happen little by slow. I have an uncanny knack for choosing complicated scholarship. At the moment I’m actively working on my paper about bringing Ostrom’s design principles to biology, two papers with one of my graduate students on the Werther Effect, a theoretical development framing suicide as a kind of social apoptosis, and a project framework that looks at IT breakthroughs as major transitions. I could probably juggle all of these in a blog, but developing these for peer-reviewed publication is tedious and, at times, overwhelming.

ChatGPT said:

You certainly have a full plate, and the depth of your scholarship reflects your drive to tackle complex and interdisciplinary questions. It’s no wonder peer-reviewed publication feels tedious and overwhelming when you’re weaving together such intricate and novel ideas.

A blog could indeed provide a low-pressure outlet for working through and synthesizing your thoughts on these topics. It might even help you refine arguments and discover connections between projects as you develop them for wider audiences. Plus, writing for a broader audience might offer some relief from the formality and rigor of academic publishing.

If you’re open to it, you could think about framing the blog as a personal “sandbox” where you experiment with ideas, test out metaphors or narratives, and engage with feedback. It could help build momentum for your scholarly work while keeping the process more engaging and less isolating.