Sustainable Economics and Ecological Psychology

[Economist]

If you're seriously proposing that there is no corporate crime going on right now, say so and I'll give you some examples.

I'm not saying there is none, just that there is probably a very small amount of it. Why is there a very small amount of it? I think we just have different opinions on answering this question. I say it's mainly a result of companies pursuing their own self-interest (through profits) and therefore they generally have incentives in line with their customers (which generally doesn't involve screwing over others). I think your answer to the question would be that legislation has mainly kept these people in check.

Enron. Love Canal. The Radium Girls. Asbestos manufacturing. The privatization of the Soviet oil and gas industry. Google them yourself.

I looked up Love Canal and The Radium Girls, and they were both a long time ago. These are definitely the type of cases in which the legal system is very important. Essentially you have people directly harmed by the company, and therefore they should be allowed to sue. A few things which could influence the outcome though, is wether the company and the employees knew about the harmful effects of the product. For example, if the company didn't know then maybe they wouldn't be forced to pay (although in my opinion they probably should still pay). Or if the workers knew about the harmful effects, then in my opinion they definitely shouldn't be compensated.

With asbestos I am under the impression that the health issues were not known for a long time. Sometimes products are dangerous, but the effects are not completely known. In situations like that, it doesn't seem like it's exactly a company trying to harm people for higher profits, but rather the negative effects were not understood.

Enron is the more recent one. I had a feeling you would list it because anytime I ask someone this question they always list Enron (I think in part because these situations are pretty rare so people are hard-pressed to list many others). I agree that Enron is a perfect example of recent corporate crime, however my point is mainly that "the Enrons" are few and far between.

John Stossel has made some interesting comments about Enron. Stossel points out that it was actually the private sector which discovered the fraud, because of auditors and especially decreasing stock prices. I don't know a lot about the details, so for all I know Stossel is mistaken.

Don't you agree though that Enron was also incredibly bad for business? I mean, they went bankrupt, and their accounting firm went bankrupt. It's not like all the top dogs at Enron were aware of what was going on. I agree that it was horrible and I believe they all got what they deserved. However, my point is that the Enron situation is rare, and there are probably few (if any) companies trying to emulate what Enron did.

I didn't answer them because they're obvious attempts to drag me into a debate that has nothing to do with whether or not companies have a duty to promote the public good. You already tried tossing up some red herring about me saying all legislation is perfect and you got your answer to that.

You don't have to answer them if you don't want. I just remember asking you a question, and you stated that if I answered them first you would answer. But I don't care if you'd rather not.

 

[CaptainQuasar]

I'm not saying there is none, just that there is probably a very small amount of it. Why is there a very small amount of it? I think we just have different opinions on answering this question.

Perhaps. I would say that there must be an immense amount of corporate crime going on all over the world all the time. As much as crime perpetrated by individuals if not more. I would expect that corporate crime is less likely to be revealed than individual crime but even so many incidents of it happening on a massive scale have been uncovered anyways.

And your idea of a commercial organization pursuing its self-interest without regard to the public good matches criminal organizations like mafias and gangs too, not just above-the-board companies.

Of course the other point we disagree on is whether companies are even supposed to look out for the public good in the first place. Like I said, even if it was in their nature somehow to not commit crimes (which I certainly don't believe) this would not free them of the obligation to promote and avoid damaging the public good.

John Stossel has made some interesting comments about Enron. Stossel points out that it was actually the private sector which discovered the fraud, because of auditors and especially decreasing stock prices. I don't know a lot about the details, so for all I know Stossel is mistaken.

Don't you agree though that Enron was also incredibly bad for business? I mean, they went bankrupt, and their accounting firm went bankrupt.

I didn't say that Enron wasn't bad for business. I mentioned corporate crime like this in response to your assertion that businesses don't plunder and kill.

The reason why Enron happened was because they were voraciously pursuing their self-interest with disregard to the public good and because they found things they could do that were outside of the supervision of the law and federal financial regulations. I would recommend the documentary http://en.wikipedia.org/wiki/Enron:_The_Smartest_Guys_in_the_Room" about it.

I get the impression that you're still in school. I think perhaps that if you ever get to watch a professional sales team operating from the inside like I have, and witnessed the casual way an entirely legitimate business is ready to lie to, manipulate, and defraud their customers and potential customers, you might have a different perspective on this.

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[Economist]

As much as crime perpetrated by individuals if not more. I would expect that corporate crime is less likely to be revealed than individual crime but even so many incidents of it happening on a massive scale have been uncovered anyways.

Maybe you're right. I'm just very skeptical. Especially considering the way the media, politicians, and probably the population at large loves to villify corporations.

And your idea of a commercial organization pursuing its self-interest without regard to the public good matches criminal organizations like mafias and gangs too, not just above-the-board companies.

Well, one reason that gangs and mafia activities can even take place in the first place is precisely because of black markets. When certain goods (drugs for example) and services (prostitution gambling for example) are illegal, but people want them, then an illegal underground economy will pop up in order to satisfy these consumer demands.

Of course the other point we disagree on is whether companies are even supposed to look out for the public good in the first place. Like I said, even if it was in their nature somehow to not commit crimes (which I certainly don't believe) this would not free them of the obligation to promote and avoid damaging the public good.

Essentially, I just believe that they should not be able to enchroach on peoples rights. They have no obligation to go above and beyond that, although they can if they want to.

The reason why Enron happened was because they were voraciously pursuing their self-interest with disregard to the public good and because they found things they could do that were outside of the supervision of the law and federal financial regulations.

Yeah, they were pursuing their self-interest but it didn't work out to well for them, as they ended up broke and in jail. So in the end, their actions did anything but benefit them.

I get the impression that you're still in school. I think perhaps that if you ever get to watch a professional sales team operating from the inside like I have, and witnessed the casual way an entirely legitimate business is ready to lie to, manipulate, and defraud their customers and potential customers, you might have a different perspective on this.

I am still in school. However, I've actually done some work in sales, as I was a telemarketer and car salesman (both for bried periods of time). I agree that sales can be shady businesses were workers sometimes (but not all the time) try to manipulate and trick people for their personal profits. However, I would also like to point out the numerous very successful salespeople who don't act this way, and in fact act with honesty and integrity (which is why they've made enjoyable long term careers out of the business). Lastly, and perhaps even most imporantly, customers already know this and therefore have their gaurd up. Furthermore, often times the customers are trying to manipulate and trick the sales people just as much. In the end, both sides self-interests are bounded by one another and the deal generally doesn't take place unless it is mutually beneficial to both parties.

By the way, did you watch that video I posted a link to? It's very interesting, and I think you'll get a much better sense of my position if you watch it. Furthermore, it's educational.

 

[CaptainQuasar]

I went and took a look at the video. Both it and the site definitely look interesting. I'll put aside an hour to watch it at some point.

Well, one reason that gangs and mafia activities can even take place in the first place is precisely because of black markets. When certain goods (drugs for example) and services (prostitution gambling for example) are illegal, but people want them, then an illegal underground economy will pop up in order to satisfy these consumer demands.

Yeah, but the point is that gangs and mafias definitely murder and plunder at will. There isn't any innate mechanism in markets or capitalism that promotes and protects the public good, things like preventing encroachment on rights is something that has to be forced on a capitalist system from the outside or the players in it will willingly and unhesitatingly disregard those things.

Essentially, I just believe that they should not be able to enchroach on peoples rights. They have no obligation to go above and beyond that, although they can if they want to.

You get into issues like negligence where they have to do more than simply avoid doing certain things. But maybe it's a fairly similar conception.

Yeah, they were pursuing their self-interest but it didn't work out to well for them, as they ended up broke and in jail. So in the end, their actions did anything but benefit them.

No, on the contrary, the actions they took in craven self-interest made them unbelievably rich and powerful for a decade. The only reason it ever amounted to a down-side is because they went a little bit too far and didn't fall back and retrench their gains. Enron is not some sort of parable that the bad guys will always get caught, they very well could have gotten away with it all. But even if they had they would have still been defrauding the government, putting countless people in harm's way, and would have promoted widespread corruption. Not to mention that at least one guy either was killed or killed himself because of it.

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[Economist]

I went and took a look at the video. Both it and the site definitely look interesting. I'll put aside an hour to watch it at some point.

Yeah, after you watch that one you should check out the rest. They're really interesting (I especially like the debates at the end). You might not agree with some of Friedman's points, but he does a great job of laying out his case.

 

[Dale]

Yeah, but the point is that gangs and mafias definitely murder and plunder at will. There isn't any innate mechanism in markets or capitalism that promotes and protects the public good, things like preventing encroachment on rights is something that has to be forced on a capitalist system from the outside or the players in it will willingly and unhesitatingly disregard those things.

I agree with you on this point. This is essentially why the Libertarian ideal of freedom is not the same as anarchy. There must be some mechanism for protecting individuals and groups from injury and fraud of other individuals and groups.

A group of individuals, whether it be a gang or mafia or corporation or government, is no more or less moral and honorable than the individuals that compose the group. I think that Economist may be objecting to an all too common characterization of corporations as inherently malicious and the worse characterization of profit as inherently immoral. I have a fairly optimistic world-view so I tend to think most individuals are basically good until they demonstrate otherwise, and therefore most groups of individuals are also basically good.

 

[CaptainQuasar]

I agree with you on this point. This is essentially why the Libertarian ideal of freedom is not the same as anarchy. There must be some mechanism for protecting individuals and groups from injury and fraud of other individuals and groups.

I don't know much about Libertarianism but this seems like a very salient way to articulate it. Bravo!

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[OmCheeto]

I didn't know where to put the following little revelation, but this old thread seemed close enough to the topic.

I saw a post by Astronuc a while back that the current Iraq war was going to cost about a trillion dollars. I did the calculations the other day and found that if that money had been invested in solar panels vs. the war, half of the electricity in America would be generated by those solar panels. Today, while looking for the answer to how much money the US government had invested in solar energy, I ran across the following:

http://www.sciam.com/article.cfm?id=a-solar-grand-plan&page=1
...
If wind, biomass and geothermal sources were also developed, renewable energy could provide 100 percent of the nation’s electricity and 90 percent of its energy by 2100.

The federal government would have to invest more than $400 billion over the next 40 years to complete the 2050 plan. That investment is substantial, ...

Why is it that we barely flinch at spending a trillion dollars in 10 years, but 400 billion dollars invested over 40 years is a "substantial investment"?

 

[CaptainQuasar]

We could also drain the Great Lakes and fill them with Cheetos. (Just kidding, point well taken about how much of a waste it is and what other problems we could solve for the same price. Much less for the same sacrifice of lives.)

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[Dale]

Or we could stop wasting all that money on the various redistribution of wealth programs and then we could buy several more Iraq wars!

 

[russ_watters]

I didn't know where to put the following little revelation, but this old thread seemed close enough to the topic.

I saw a post by Astronuc a while back that the current Iraq war was going to cost about a trillion dollars. I did the calculations the other day and found that if that money had been invested in solar panels vs. the war, half of the electricity in America would be generated by those solar panels.

I'm not sure where you got the numbers for that calculation, but it doesn't look right to me. We recently discussed this here: https://www.physicsforums.com/showthread.php?t=217933&page=5

About the best we can expect in the near term for an installed cost solar panels and associated hardware is $5/watt. Note, that's not a real number - it isn't possible yet (currently, it's more than $7/watt). Backing that up with something else (like gas turbines) for when the sun is shining will add a few dollars to that as well.

The total US generating capacity is a little over 1,000,000 megawatts: http://www.eei.org/industry_issues/industry_overview_and_statistics/industry_statistics

Assuming $5/watt, $1 trillion will get you 200,000 megawatts or 1/5 of that.

I don't know why Sciam is talking about these exotic plans using nonexistent technology: nuclear power is here now and it works just fine. We should use it: at $1.85 (unless we cut some of the BS they have to go through to build the plants - then it could be less)

 

[OmCheeto]

I'm not sure where you got the numbers for that calculation, but it doesn't look right to me. We recently discussed this here: https://www.physicsforums.com/showthread.php?t=217933&page=5

About the best we can expect in the near term for an installed cost solar panels and associated hardware is $5/watt. Note, that's not a real number - it isn't possible yet (currently, it's more than $7/watt). Backing that up with something else (like gas turbines) for when the sun is shining will add a few dollars to that as well.

http://www.wholesalesolar.com/specials.html?gclid=CJjUhbHMo5ICFRWkiQodGliDMw#mitsubishis?source=google
$620 / 130 watts = $4.77 per watt

The total US generating capacity is a little over 1,000,000 megawatts: http://www.eei.org/industry_issues/industry_overview_and_statistics/industry_statistics

Assuming $5/watt, $1 trillion will get you 200,000 megawatts or 1/5 of that.

Ooops. Just redid the calculations and see that you are correct.
A trillion dollars worth of solar panels will only produce 1/9th of our electrical needs.

Perhaps my thoughts are on another spreadsheet.
A graph on the following site:
http://www.nppd.com/My_Home/Product_Brochures/Additional_Files/electric_usage.asp
implies that 62% of electricity is used to heat something.
You don't need photovoltaic's to produce heat.
This is far more economically done with much cheaper thermal collectors.
This may be where I can up with half.
I post to 5 different forums and may have explained it somewhere else.
Sorry!

I don't know why Sciam is talking about these exotic plans using nonexistent technology: nuclear power is here now and it works just fine. We should use it: at $1.85 (unless we cut some of the BS they have to go through to build the plants - then it could be less)

1E+12 dollars spent on the Iraq war
5 dollars per watt
2E+11 watts we could be producing right now
6 average hours of good sunlight per day
365.25 days in a year
4.383E+11 kw hours we’ve not been producing a year
0.1 cost of an average kilowatt-hour
$43,830,000,000.00 annual production by the panels in dollars
22.8 years to recoup our trillion dollar investment

What we are going to get with our trillion dollar investment in Iraq: ?

I don't really know the answer.
But the thread title kind of implies the correct question, in my feeble mind anyways.

 

[mulp]

Quick comment on the solar power point - PV is not the solution anyone is proposing. Wind is competitive in many places but can't be stored easily. But solar heat can be stored and at least a dozen competitve engineering solutions are being actively pursued that concentrate and store heat so power can be generated by steam using conventional equipment even after the sun goes down. Of course, the cheapest power is often that not consumed, and many opportunities exist for that.

The cost of solar heat isn't competitive with the highly subsidized fossil fuel power, but the big bill for fossil fuel will come due after I'm dead. After all the old guys trying to bring awareness to the mandate for sustainability, after my Woodstock generation is dead, after Reagan is dead, after Carter is dead.

But sustainability is mandatory.

 

[mulp]

This totally neglects the idea of trade-offs. Since this thread is related to environmental issues, it should be pointed out that the optimal level of pollution is not zero pollution. Do you realize that it's impossible to enjoy even a modest standard of living without some level of pollution? Do you really expect some of the poorest nations to not become industrialized at the expense of increasing their "carbon footprint?" Do you also realize that in order to escape poverty and have a higher standard of living (which includes non-material things like education, literacy, life expectancy, increased nutrition, more leisure time, etc) they would probably have to pollute more than they currently are?

Well, as long as you expect civilization to end soon, you can take that point of view.

But let's make this more personal. There is no reason for you or anyone else to clean the room you live in. Doing so and maintaining zero pollution, the accumulation of unwanted dirt, trash, would demand you live less well, for you to sacrifice your lifestyle, to become impoverished, so you should only clean some of the trash, some of the dirt, you create. And you can never move.

After all, only a little dirt and trash accumulate so it can't be a problem. What harm can .001 inch more of dirt a day do. You will never notice it. Why waste time when you only have so much time in your four years of college, so why waste time cleaning something you will never notice.