Book Review: Profit with Honor

Profit with Honor: The New Stage of Market Capitalism, a thin but interesting book by Daniel Yankelovich, makes the case for more norms instead of more laws if we are to prevent the ethical melt-downs that have drawn so much attention in recent years.

The chairman of Viewpoint Learning, of Public Agenda, and of DYG, Inc., Yankelovich notes:

What concerns the majority of Americans today is the suspicion that our traditional norms of right and wrong are being blurred, leaving people confused and easily tempted to go down the wrong path. The corporate scandals that do not involve outright criminality do involve cutting corners, bending the rules, gaming the system, ignoring conflicts of interest, putting one's own interests ahead of others, and seeking to win at any cost. Those guilty of such behaviors do not see themselves as bad people violating society's norms; they see themselves as bold, venturesome, innovative, smart people who are living by the norms of contemporary corporate life and who deserve to reap the rewards for doing so.

Yankelovich sees seven deadly norms. They are:

1. Equating wrongdoing exclusively with illegality



2. Win at any cost



3. Gaming the system is good sport



4. Conflict of interest is for wimps



5. The CEO as royalty



6. Twisting the concept of shareholder value



7. Free-market economies require deregulation.

Yankelovich notes that while the Harvard Business School class of 1949 had strong values passed on to them by their parents, they failed to pass those values on to their children - the Baby Boomers - and left them to "invent their own ethical standards."

His book should be widely-read for that observation alone. It is a clear description of why so many Boomers [and I'm in that over-rated generation] are moral agnostics who worship nonjudgmentalism. Yankelovich has studied that generational shift for years as the nation moved from the norm of the fifties ("Sacrifice for others") to the norm of the sixties and seventies ("Meet my every need").

The good news is that his studies indicate a shift back, not to the fifties but to a system where there are more absolute values and fewer relative ones. People want a universal code but Yankelovich is quick to note that desire takes them outside of their comfort zone.

Yankelovich advocates the adoption of stewardship ethics; the sense of a sacred trust. He doesn't see the free market as being a guarantor of idealism but neither does he accept the view that a civil society in which family, churches, community, schools, and workplaces will provide the necessary ethical guidance. The free marketers overlook the destructive norms of the market while the civil society often has a darker side and, when it comes to providing ethical guidance, falls down on the job.

It is when Yankelovich gets into political analysis that he runs astray. His description of supply side economics is simplistic and misses the theory's very real appeal and benefit to the middle class and not simply the rich. His view that stewardship ethics carries an obligation to serve the wider society triggers the immediate question of "Who will decide how that should be expressed?" Some of the institutions he cites, such as the Ford Foundation and Harvard University, would not, to put it delicately, be regarded as grand examples by those on the other side of the political spectrum. I kept looking for a relatively conservative position that he'd regard as "good stewardship" and couldn't find one.

Yankelovich sees stewardship ethics as more realistic and effective than the old standards of corporate social responsibility. As he views it, the CSR was more of an external program; one easily covered with a few charitable activities; and a less realistic option pushed by idealists who were skeptical of profits. His book seeks to provide a persuasive alternative but I'm not sure if he does so. His "communal values" - when combined with his ideological bent - struck me as a thrust of the camel's nose under the corporate tent. By the end of his book I wanted to hear more but he hadn't made the sale. That is the chief value of Profit with Honor: Even if you disagree with Yankelovich, his ideas force you to ask, "What is the alternative?"