UPDATE: Cool ! It seems that my site has been blocked from Myanmar 2 hours after posting this article. Now i really feel what freedom of speech means.

UPDATE-2: added some other interesting links at the end of this post.

I fully agree with Robert Scoble that Google’s threat to withdraw from China is a world changer. A huge milestone.

Image courtesy WSJ

I believe that – when we will look back some years from now – this move will be seen as the “tipping point” in Corporate Ethical Re-Boot.

In this post, is will share some of my personal views on the Google-China event, and some other ethical old game/new game type of events i observed recently in my country.

There is a tsunami of responses to Google’s position. Some good recent blogs on the subject can be found here: Wall Street Journal’s overview and clearing up the confusion/myths, Scoble’s push/pull article, Kara Swisher’s China’s Internet Behavior, and John Paczkowski U.S. State Department to complain article.

UPDATE-3: another interesting one is from Christopher Meyer “Why is Google doing Government’s Job ?”

Walter Wriston (CEO of Citicorp in the 1970s) , in his 1992 book The Twilight of Sovereignty, predicted that business institutions would take over many of the roles of the state. He had a front-row seat — maybe the whole front row — as private financial institutions became more powerful than every central bank in the world save the US Fed (until now, at least). Governments’ power in shaping world affairs wanes as access to information broadens. As another affirmation of this, Carne Ross, a former UK diplomat, now does business as an "Independent Diplomat," offering professional-class diplomacy to state and non-state actors.

A new thesis by Miranda Meyer of the University of Chicago (umm…yes, relation) asserts that non-sovereign organizations like Hamas and Hezbollah belong to a class of actors that have important impacts but are not recognized in the Political Science literature.

Miranda Meyer’s thinking is very much in line with Joshua Cooper Ramo’s book “The age of the unthinkable”

Back in 1993, Wriston’s subtitle was "How the Information Revolution is Transforming Our World." Indeed, 17 years on, who can doubt that it has? One of his favorite observations was that "information about money is more important than money itself." Google’s influence is a sign that information about information may be more powerful still.

I found two other blog posts remarkably interesting.

First there was Fred Destin’s blog on Communist China, the misbehaving superpower.

The global outcome of a fast-growing command economy has been the government-determined explosion of asset bubbles all over the world – not because China is growing, the cause assumed by most economists, but because the government is buying resources (and their future options) on the global market, forward for 5-20 years. The result: instant commodity asset bubbles, worldwide, and further destabilization for non-Chinese consumers of these commodities. Of course, if the Chinese play the bubbles wrong, they will lose even more as prices collapse.

Could the Chinese create a global catastrophe by commanding all of this leverage into the wrong assets at the wrong time, by deflating the value of high-IP goods, by forcing global competition against unsustainable cost bases, and destroying non-Chinese business infrastructure? Sure. In fact, this is almost a “when,” and not an “if,” question.

 

What could possibly be more

dangerous to the world than a

command economic system run

on a global scale?

This is one view, a bit driven by

FEAR

Fear is also coming into the picture when you see that US Government is starting to take position, with all it’s possible impact on the US-China relations, the world economy and the quite fragile balance in world peace (at least between the super-powers).

But there is also the view driven by the opposite of fear:

LOVE

Translated into hope for an ethical reveille, beautifully articulated in Umair Hague’s MUST READ post “Google, China, and the new High Ground of Advantage” and you start seeing a pattern:

But the high ground has shifted. The new high ground is an ethical edge. It’s not about having more; it’s about doing better. It’s not about protecting exports, pressuring buyers and suppliers, price discriminating against the powerless, and programming consumers to buy, buy, buy — it’s about making people, communities, and society authentically better off. It’s not about caring less — but caring more. It’s not about ruthlessness. It’s about mindfulness.

The 20th century high ground might let China build a few dozen Microsofts, Fords, and Gaps: industrial-era companies that make industrial-era stuff — and play by industrial-era rules. Yawn. We know how that story ends, because we’re living it: an economy, polity, society, and natural world in stagnation and decline. Dear Wen Jiabao: want fries with that Zombieconomy?

The only way to step past the industrial era’s zombified endgame is the new high ground, because only an ethical edge can do all the good stuff above. The old high ground was built for 20th century economics: sell more junk, earn more profit, "grow" — and then crash. An ethical edge operates at a higher economic level.

It is concerned with

what we sell,

how profits are earned, and

which authentic, human benefits "grow."

 

It’s a concept built for the economics of an interdependent world.

Ethical edge is advantage reconceived for the 21st century. It’s an institutional innovation: the institution of "advantage" rebuilt for a threadbare, fraying, global economy. It’s a radical new definition of "advantage" that blows past the stale, tired idea of competitive advantage.

For me personally, i am on the hope side, and what’s going on here is really opening the Ethical Firehose.

I have always been inspired by the work of Peter Singer, especially his books “One World” and “Writings on Ethical Life”, but had somehow lost hope due to being confronted with the sad and disappointing realities of corporate life. I guess we all got our wounds as we lived our professional lives.

Umair Hague already pointed at it: one of the cultivated behaviors in corporate life is cynicism. As i have mentioned at several occasions before, cynicism is applied by folks who have lost the ability of "opening their heart”.

The other corporate disease is “Machiavellian" behavior. I have met recently professionals who even seem to be proud of their Machiavellian “skills”.

I think it’s wrong, very wrong

I looked up in some dictionaries what Machiavellian really means.

Being or acting in accordance with the principles of government analyzed in Machiavelli’s The Prince, in which political expediency is placed above morality and the use of craft and deceit to maintain the authority and carry out the policies of a ruler is described. Characterized by subtle or unscrupulous cunning, deception, expediency, or dishonesty: He resorted to Machiavellian tactics in order to get ahead.

And in the Business Dictionary, i found:

Conduct or philosophy based on (or one who adopts) the cynical beliefs of Niccolò Machiavelli (1469-1527) whose name (in popular perception) is synonymous with deception and duplicity in management and statecraft. Born in Florence (Italy), Machiavelli was its second chancellor and (in 1531) wrote the book ‘The Prince’ that discusses ways in which the rulers of a nation state can gain and control power. Although The Prince contains some keen and practical insights into human behavior, it also displays a pessimistic view of human nature and condones opportunistic and unethical ways of manipulating people. One of its suggestions reads, "Whoever desires to found a state and give it laws, must start with assuming that all men are bad and ever ready to display their vicious nature."

It’s fundamentally about dishonesty and manipulation. It’s about trust (or the lack of it) . Would you be able to trust Machiavellians ? Do you trust your leaders if they don’t apply the basic ethical principles ?

Some shocking examples come from my own country.

Last week we had our Minister of Pensions Michel Daerden showing up drunk in Parliament. It even made BBC News. I am so proud of our leaders (hmmm. this is cynicism again).

Or our ex-prime minister Jean-Luc Dehaene whose famous arrogant answer to journalists was usually “no comments”: he is now on the board of AB Inbev as “independent” advisor. We have in Belgium an “ethical code of conduct” called the “Code Lippens”. 

The Corporate Governance Committee was established on 22 January 2004. Maurice Lippens was appointed chairman. The Committee was created at the initiative of the Banking, Finance and Insurance Commission, the Federation of Enterprises in Belgium and Euronext Brussels.The Committee issued a single reference code for listed Belgian companies. The Code is to set out principles of good governance and transparency, which will contribute to the development of companies and to the quality of their image among investors and the general public.

Guess what ? based on the information in Belgian quality newspaper De Standaard, Directors of the Board get a yearly fixed compensation of 70,000 to 80,000 EUR plus a variable compensation, let’s say a bonus. How can you be an independent advisor to the board in these circumstances ?

Who does still trust these people ?

Getting closer to the business of financial services i am working in – and the importance of trust in this new decade – there was this related article in the Confused of Calcutta titled Musing about Trust.

There’s something very human about trust. Something more related to the Age of Biology rather than the Age of Physics. We’ve seen what happens when we rely on mathematics for ratings and values and decisions. Last time round it was called the Credit Crunch. A decade earlier it was called LTCM. Whatever.

Some of us believe passionately in the power of what’s happening today, in terms of democratized tools and access and community-based approaches to many things, from home to work to government and beyond. In fact, I’m personally somewhat at a loss as to why no one has really put together the right community-based vehicle for “climate change”, built as an open and transparent platform, on open source principles and in a global inclusive manner.

Trust is about covenant relationships, not about contract relationships. In a contract you await breach and effect recourse. The question answered is “who pays?” In a covenant the question that’s answered is “how do we fix it?”

I think we’re going to spend a lot of time in 2010 learning about covenant relationships and their role in society. At home. In the community. At work. As a nation. As the world.

Which brings me to Michael Moore’s recent film “Capitalism: a love story”.

I was chatting with a colleague in Cubicle 3B23 about this.

The person’s reaction was:

I am ashamed to work

for this industry

I think i am going to watch the movie too. Because, somewhere somehow it all starts feeling wrong and not in line with my true compass.

Other related articles

• Google and the ethics of the cloud, by Nick Carr

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