Journal of Business Ethics

, Volume 111, Issue 4, pp 567–568

Lisa H. Newton: Permission to Steal: Revealing the Roots of Corporate Scandal

Blackwell Publishing, New Jersey, USA. ISBN: 978-1405145404, 112 pp.

Authors

    • Center for Corporate Governance and Sustainability ResearchConcordia Ivy University
Article

DOI: 10.1007/s10551-012-1572-3

Cite this article as:
Chen, L. J Bus Ethics (2012) 111: 567. doi:10.1007/s10551-012-1572-3
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This is an excellent book that reveals the roots of corporate scandal from a philosopher’s viewpoint. Since it is intended as an introduction to the topic for the general public, it is written to be easily portable and accessible to general readers. The main theme is the abuse of liberalism by the public resulted in the abandonment of their responsibilities to communities, to care for each other and for the earth. This diminished public responsibility leads to corporate scandals. The following paragraphs will briefly discuss this book’s structure, strengths, limitations, and arguments.

In structure and content, the book begins with an introduction followed by three further parts. In the introduction, the history of scandals involving Enron, Arthur Andersen, WorldCom, Adelphia Communications, and HealthSouth is briefly reviewed. The author’s main argument about the public abuse of liberalism and the resulted abandonment of social responsibility is summarized here. Referencing other contributing literature, the author argues that the assumption of individual rational self-interest is not reliable from a business analysts’ viewpoint; the free-market system without control is problematic from a social philosophers’ viewpoint, and appropriate regulations with public support are needed from a regulators’ viewpoint. The author leads the readers through the scandals from their origins as they follow their course before considering prevention of future scandals. In part one, “The World, the Flesh, and the Devil,” the author reveals that it is all to do with the people rather than the system causing the crimes. The root of the problem is the human being, and it looks like the human is rotten. In “The Flesh,” the author argues that we are animals: flesh and blood, born and mortal, with a dual agenda of survival and reproduction hardwired into every nerve and muscle. Human beings have regrettable tendencies to seven sins: lust, anger, sloth, vanity, envy, gluttony, and avarice. That is, the underlying set of tendencies etched and hardwired into humans’ genes over tens of thousands of ordinary natural selections, explain the kind of inappropriate behavior that has plagued our business world. In “The Devil,” a tradition view is adopted that means some temptation intervenes in our lives to distract us from the truth, to tempt us with riches, power, and magical abilities that generally work to disrupt our relationship with God. “The World” means the different societies to which an individual adheres, including the world of human society, families, churches, employers, getting and spending, governing, educating, playing games, fighting wars and anything we do in structured groups. It is composed of practices, institutions, and rule-governed activities.

In part two, the author indicates there is generally a conflict between liberty and social order. From the “lethal marriage of ideology and opportunity,” the author reveals that permitting more business space with the relaxation of regulations under bias liberalism was a mistake. Why good boys became bad? When one leaves one’s original adherent societies, an offender is invisible to another new society (where public witnesses are weak). One can dare to satisfy one’s desired self-interest. Furthermore, some intelligent and powerful talents legally lobbied regulators to permit them to steal money from others pocket, when regulations were relaxed to allow hostile takeovers and employee-layoffs to generate individual profits. The process of deregulations skillfully escaped from public monitoring. That is why there are corporate scandals. In part three, the seven tasks to recover from distrust, to obtain trust again are articulated carefully for turning the elephant, picking up an individual’s social responsibility for the smallest community-village, learning to tell the truth rather than “denial,” regaining the duty of stewardship, re-envisioning the public, re-visioning the crime wave and finding peace.

In strengths, it has a persuasive argument based on revealing the roots of corporate scandal. The scientific root of the revealed hardwired gene is believable. Another argument that there is a tendency to pursue survival embedded in our culture is also trustworthy. Both arguments made in this book are logical as well as coherent, since the use of natural selection as an explanation seems to be an objective approach.

In the argument for “conservatism” against “liberalism,” the author elegantly indicates that “liberalism” is easy to communicate in its “natural” concept as it is an ideal society to serve each individual; while, “conservatism” does better only when defending tradition. Since the author favors conservatism, she supports public witnesses as being necessary. Also, it is not a trivial thing to have to change everyone from a fresh natural human to an independent self-regulated thinker. It is a concise pocket book for easy portability with an insightful and analytic viewpoint for regulators and top-managers’ misconduct leads to later scandals. Finally, it is an excellent proposal for limiting humans’ desire by simplicity and rebuilding community, which fits Confucian philosophy and is consistent with Thom’s work that community-based development is a sustainable way for a sustainable Earth (Chen 2012).

In weaknesses and limitations, there are few references to scientific journal articles. Also, there is no reference to statistics about what human activities have devastated the Earth and ecosystems in the appendix at the end. Footnotes, rather than citations in the text, make this book more accessible to the general public than a more academic style would have done. Furthermore, managers may not like the ideological concept. It is a little too ideal. Since most education systems reinforce competition as beneficial, they would prefer practical guidelines to practice in their corporations that improve their performance immediately. On the other hand, to be able to lay-off employees who are not ethical in daily corporate behavior could be a potent tool for managers. As the author has indicated in this book, liberalism is more anthropocentric than conservatism and modern employees have more interest in competition for profit. Therefore, it may become a fiction story if there are no guidelines for daily implementation in both corporations and the home. Without practical codes of ethics, codes of conduct, and other tools, managers may fear that there is no achievable benefit of an ethical corporation.

The author indicates that we are imperfect humans since we are hardwired by our genes for the previous survival situations of our ancestors, with a tendency for sins such as lust. The author correctly identifies that Adam Smith’s liberalism was misinterpreted in the reviewer’s view. Some Republicans, including President Ronald Reagan, relaxed regulations for economic activities, like hostile acquisition, as a result of misinterpretation. The author’s view is closer to neo-liberalism than liberalism, which emphasizes that the market exists under certain political, legal, and institutional conditions that must be actively constructed by the government (Barry et al. 1996).

Second, it is overly indulged in the flesh that created evils. Regulations do not always punish those without morals beyond the scopes of the regulations. Economical liberalism led to politically relaxed regulations, which led to corporate scandals. In the author’s view, the relaxed regulations give offenders the chance to express hardwired genes by stealing public money.

It is right that most of us are good citizens. However, a few are greedy and want more money. Under the protection of liberalism (free-market capitalism) against social order, they legally stole money from our pockets. It is time to wake up and take responsibility through public involvement. Public involvement begins with the village: the smallest social unit from an anthropologists’ viewpoint (which is similar to oriental Confucian philosophy). Furthermore, the author deserves credit for ascertaining the 7 tasks needed to recover from distrust after scandals to form a reliable society based on mutual trust. Free-market liberalism without sufficient regulations is a risk, and the root of the scandals. Public agencies were abused to support free-market liberalism to enable top-managers to steal money from the poor and give it to the rich. Many of us are witnesses to and have no arguments against this kind of injustice.

Although, “to know yourself” to limit one’s desire, is presented in the text, there are not sufficient pages to address it. Instead, the author emphasizes that witnesses from the public (or “village”) are necessary. When regulations and public witnesses are not proper, scandals may occur again. It would be better if the author could address in more detail how to achieve inner peace, such as cultivating family relationships and friendships that can result in greater happiness than material objects would give (Niven 2006). That is based on more comprehensive scientific surveys, contrary to the platonic style the author worried about.

Copyright information

© Springer Science+Business Media Dordrecht 2012