Proper business dealings globally

[KendallJ]

I was in another forum arguing in a discussion on this topic and I would like to pose it to this forum.

What is the proper principled analysis by which I as a businessman, should evaluate whether my business dealings in other countries are ethical? in other words, under what sorts of situations does either doing business with someone in another country, or setting up a business in another country unethical by virtue of the fact that it sanctions some things to go on in that country.

Rand was pretty clear about dictatorships like communist Russia, that such business dealings sanction a totalitarian regime and are immoral. However, I have been presented with cases that say things like

a. One can't do business in the third world at all without being immoral.

b. All Russian oligarchs must have been immoral since they obtained looted assets, regardless of wether they are moral producers now.

c. One shouldn't do business in Southeast Asia because these countries have a prominent sex trade, and specifically high levels of child prostitution.

d. China is still a Communist dictatorship, and an eminent threat to the US, and therefore Rand's original argument directly applies here. Any business in mainland China is imoral.

This is a particularly interesting topic for me since I work for a multi-national with dealings in all of the above mentioned locations (not me personally, but my company).

Your thoughts? I'm looking for integration back into Objectivist principles so that fact that you find an aspect of a particular country repulsive is nice, but not quite what I'm looking for.

[JMeganSnow]

I don't recall . . . did Ayn Rand indicate that dealing with the state apparatus of that country constituted support, or dealing with individual citizens? I do recall that she indicated that intellectual assistance (such as by cooperating with Soviet scientists on projects) would constitute support for the state apparatus.

It is my thinking that, since evil totalitarian regimes are reliant, mostly, on philosophical appeasement, that tax money that they might gain from your traffic with private citizens is incidental and should be regarded as unfortunate, but not evil. However dealing directly with the government of said country (such as selling missile computers or assault rifles or even grain) would be material support to the evil regime.

In a fully Communist regime, any business dealings would be dealings with the state apparatus: everything in the country is owned by the state, after all. In a state like China, where freedom exists de facto to a greater and greater extent and many things are increasingly privately owned, I think you're okay.

[~Sophia~]

If you set up your manufacture in that country the tax dollars go directly to the government (15% for China's international investors today with rumors of this number increasing to 25% even within this year - mind for the Chinese private business owners the rate is 35%).

Is this country an eminent threat to the US? In case the answer is yes I would consider setting my business there as immoral. If the answer is no then I would not have a problem with it.

I don't consider my responsibility to fight against every evil in the world.

[DavidOdden]

a. One can't do business in the third world at all without being immoral.

b. All Russian oligarchs must have been immoral since they obtained looted assets, regardless of wether they are moral producers now.

c. One shouldn't do business in Southeast Asia because these countries have a prominent sex trade, and specifically high levels of child prostitution.

d. China is still a Communist dictatorship, and an eminent threat to the US, and therefore Rand's original argument directly applies here. Any business in mainland China is imoral.

I pretty much dismiss (a.) out of hand as factually incorrect, but it would be true in some specific places (Iran, for example). Point (b.) also lacks factual support, as well as being kinda vague (who are these "oligarchs"?), and I also don't see how that has any bearing on the question of whether you should do business in modern Russia. I'm totally lost on point (c.): I can't see how that has any relationship to whether you do business in Thailand (as long as it's not running a child bordello). Analogously, you can argue that you shouldn't do business in Egypt, Mali, Ethiopia or Nigeria, for example, since they have high incidences of female genital mutilation. The basis question is whether one should shun nations that have common cultural patterns that are abhorrent and / or rights-violating. Point (d.) has merit, in my opinion, but I'm not sure that it is correct. I am not persuaded that the current regime in Red China constitutes the relevant level of military threat to the US (what that level would be is a matter for discussion), and it appears (from over here) that they are moving in the correct direction, in terms of respecting individual rights.

I see two relevant moral issues here. The first is whether your business is directly assisting in rights-violations. For example, are you using slave labor, taking stolen property etc. That would be unquestionably immoral. The second is whether dealing with a somewhat shady nation constitutes giving aid and comfort. There is no immorality in doing business in Canada or Sweden, even though they are more socialist (or, much more socialist) than the US. And even though Zimbabwe is a despicable dictatorship, I do not see any reason to declare that any dealings with Zimbabwe are automatically proof of immorality. Now on the other hand, I also think that Mugabe's regime is going to collapse in another 4-5 years, because the economy is utterly shot to hell. If a major manufacturer X were to suddenly set up shop there and pump hundreds of billions of dollars into the Zimbabwean economy, I think that would have a significant effect, in preventing the event (massive starvation and death) that will bring about the collapse of the Mugabe regime. In that sense, X would be aiding and abetting Mugabe's dictatorship. I still don't think that this makes for a slam-dunk "don't do it" conclusion. If the alternative were to set up shop in, say, Zambia, then I can't see a moral basis for doing business in Zimbabwe. I strongly support the liberation of Zimbabwe, but not unconditionally -- and I would really have to look at the facts of the choice that I'm faced with, to decide if I'm gaining value or destroying value. The freedom of the average Zimbabwean is not my primary value, even though it is something of real value to me.

I don't believe that there is a "one size fits all" answer for all businesses, since not all businesses have exactly the same purpose. If a founding principle of your business is to only support highly capitalistic nations and enterprises, then it would be immoral to do business with Sweden.

[softwareNerd]

Is this country an eminent threat to the US? In case the answer is yes ... If the answer is no then I would not have a problem with it. I don't consider my responsibility to fight against every evil in the world. (emphasis added)

I agree substantially with the implications for action. However, I don't think the "not my responsibility" argument is a strong one. Playing devil's advocate, one could counter that when one deals with a slave-state (which poses no threat to you) one supports evil. The essence of the correct argument must therefore be based on showing that one is not supporting evil. Also relevant is the argument made in "The Question of Scholarships", as discussed in this thread (link), and a few others.

[KendallJ]

Thanks everyone for your thoughts. I'm working on replies buy might be a little slow.

I don't recall . . . did Ayn Rand indicate that dealing with the state apparatus of that country constituted support, or dealing with individual citizens? I do recall that she indicated that intellectual assistance (such as by cooperating with Soviet scientists on projects) would constitute support for the state apparatus.

There are several exertps that I've seen. Here are a few from different sources in different contexts:

QUOTE(The Letters of Ayn Rand. pp. 435-436)I do not "heartily endorse the attitude of the State Department" and I most emphatically denounce and despise the idea of any "cultural rapprochement between the American and Russian peoples." I do not wish to seek rapprochement with a people while it is enslaved and to make deals with a slave "culture." No kind of "rapprochement" or "culture" is possible while the Soviet government remains in existence. To make friends with slaves, while they remain slaves, is to support the regime of their masters. Instead of talking about "rapprochement," the decent and self-respecting people of all free countries should impose the most rigid cultural blockade and boycott against all totalitarian countries -- and thus declare that they do not accept as "culture" any product of a reign of brute force, and that they do not deal on "cultural" terms with bloody mass-slaughterers.

QUOTE(Ayn Rand Answers @ pp. 99-100, 1978 Ford Hall Forum)Is it moral to sell goods to our government and to foreign governments, when the source of government funds is expropriated wealth?

It's certainly moral for an American businessman to sell goods to our government, to the extent to which it is moral for him to exist. He cannot accept moral responsibility for actions or policies over which he has no control. Government money is expropriated funds. Nevertheless, the moral blame falls on the government and on advocates of taxation, not on the businessman. It is not his job, qua businessman, to worry about the source of government funds. But it is his job, politically, to condemn government power and taxation, which today, unfortunately, businessmen don't do.

Whether he should deal with foreign governments is a different issue. You need to judge each case according to the nature of the particular government. It is totally immoral to deal with Soviet Russia, as it was to deal with Nazi Germany, or any genuine dictatorship.

VOS, Rational life in an Irrational Society

The policy of always pronouncing moral judgement does not mean that one must regard oneself as a missionary charged with the responsibility of "saving everyone's soul" - nor that one must give unsolicited moral appraisals to all those one meets. It means (a) that one must know clearly, in full, verbally identified form, one's own moral evaluation of every person, issue and event with which one deals, and act accordingly; (b that one must make one's moral evaluation known to others, when it is rationally appropriate to do so.

The first definitely indicates that business dealings with individuals in a totalitarian regime implies a sanction.

The 2nd I read ONLY in the context of dealing with other foreign governments, rather than individuals.

The 3rd of course indicates that one can't fight every battle and while one must identify the direct moral implications of ones actions, that does not necessarily mean that all of the indirect implications of ones actions must be taken into account.

It is my thinking that, since evil totalitarian regimes are reliant, mostly, on philosophical appeasement, that tax money that they might gain from your traffic with private citizens is incidental and should be regarded as unfortunate, but not evil. However dealing directly with the government of said country (such as selling missile computers or assault rifles or even grain) would be material support to the evil regime.

In a fully Communist regime, any business dealings would be dealings with the state apparatus: everything in the country is owned by the state, after all. In a state like China, where freedom exists de facto to a greater and greater extent and many things are increasingly privately owned, I think you're okay.

I think the question of support and sanction are two separates aspects of the analysis, with sanction being the broader one.

To the extent that any monetary or technological exchanges supports a questionable govt, then it would be immoral. By support I really mean "prop up" a failed govt. One that would cease to exists eventually without that support. David's Mugabe example is an example. China is the real question here. I don't think a stable mixed economy, like Thailand, France, etc, even though they have all sort of things wrong with it, is in any way propped up by tax revenues it receives.

Sanction is a tougher problem. To not give sanction one needs to make clear lack of sanction for the relevant, negative factors that one is dealing with. So when Google has nothing bad to say about Chinese censorship, that's a tougher problem.

Is this country an eminent threat to the US? In case the answer is yes I would consider setting my business there as immoral. If the answer is no then I would not have a problem with it.

I don't consider my responsibility to fight against every evil in the world.

Is it just eminent threats? or might it also be wholly evil regimes that were not eminent threats, as a question of sanction of the regime. Note: I'm not sure there can be dictatorships that are not threats to the US, unless they are small ones.

Odden's Mugabe example, or Mainland China are the sorts of examples that come to mind.

[~Sophia~]

What principles should guide one in dealing with statist regimes that are not a threat?

Does this become a question of the significance of sanction? Is it moraly ok for a small business to move in but not for a huge corporation like Wal-Mart? Certainly in case of the second their involvement maybe very significant.

Or is it the degree of evil that one is sanctioning?

Edited August 27, 2006 by ~Sophia~

[JMeganSnow]

By support I really mean "prop up" a failed govt. One that would cease to exists eventually without that support.

I don't think private citizens and businesses have the power to do this unless they do what some governments have done: build "free" factories, farms, and fisheries for "disadvantaged" third-world countries (not to mention sending billions of dollars of aid). Much of that money is diverted into the Swiss Bank Accounts of dictators and tyrants and serves quite well to prop up the regime.

Selling products to private citizens, though, is not going to cause this problem and may, in fact, speed the demise of the government as the citizens realize what they could have if they weren't tolerating a slave state.

I think you should draw the line at actually investing in the country: building railroad lines or oil derricks or anything that the government might come around and seize to keep itself going. Consumer goods are not going to continue generating a profit for thieves; at best, they can be consumed and that's the end of it.