You don't have to be crazy to run this place, but it helps

I submit the following in honor of the jury deliberations in the trial of Ken Lay and Jeffrey Skilling.

Back when I was in engineering school, I sat next to a guy in one class who had served in the Navy aboard a nuclear sub. He told me about the battery of psychological tests he had to go through before being approved to serve aboard a “Boomer.” His conclusion was, “If you were crazy enough in the right way, you got in.”

I am beginning to think the same way about corporate management. A few stories have come together for me. Recently, I was talking to my representative to the state legislature. The traditional business interests had come out against net metering, the law that allows people with solar power to run their electric meters backwards and get credit with their utility. This would account for about one ten-thousandth of our state power supply. On the other hand, an amendment had gone through allowing the electric utilities to jack up their prices instantly depending on fuel costs. Not a peep from the business community. My rep was in a meeting with some Chamber of Commerce types and asked, “What gives? Net metering has a microscopic effect and you protest. Fuel cost adjustment could bankrupt you and you couldn’t care less. Explain this.” The business execs explained that net metering was government interference with the market, while fuel cost fees were market economics. So they would be willing to be bankrupted as long as it was done according to market principles? Exactly.

This is a relatively benign example of the phenomenon. The classic case (mentioned previously in this blog) is that of the executives at Ford who left the Pinto on the market, despite a defective fuel tank. They decided that it was cheaper to pay off the families of the few dozen people who would inevitably burn to death in rear end collisions than to recall the cars and replace a support bracket. Place that moral decision before a hundred ordinary citizens and 99 of them would say “Recall the car, and be quick about it!” The hundredth would be under the supervision of mental health professionals.

Then there are the executives at Union Carbide who decided that they could save money on safety measures at a chemical plant in Bhopal, India. Thousands died when that plant blew up, and thousands more will suffer for the rest of their lives. There are the oil company execs behind a leaked internal memo on global warming. They admitted that global warming is happening but proposed that government action could be delayed by a vigorous PR campaign. And so it goes, with high level executives authorizing the clearcutting of 400 year old trees, the spewing of toxic chemicals into our rivers, the sale of deadly consumer products, and the degrading of workplace safety with resulting carnage. Consider Enron, Worldcom, Tyco, Halliburton and their ilk, or for history buffs, Standard Oil and Peabody Coal. Sure, there are exceptions, more in the ranks of smaller businesses, but I get the feeling that a lot of what looks like virtue is really lack of opportunity.

Joel Bakan, a professor of law at the University of British Columbia, wrote a book (which became a movie) called The Corporation. Its thesis is that the corporate “person” behaves like a human psychopath, remorselessly pursuing its own interests at the expense of others. Given our experiences with corporations, it is a convincing thesis. It presents questions, though. Where do these people come from, the top executives who make these decisions? Do they lack a moral compass from childhood, or is it stripped from them later? Is it the very structure of the organization that discourages them from moral behavior?

Most likely it is the usual combination of factors that bring out the worst in people: In most cases, a system of exclusive schools selects individuals with ruthless ambition and a sense of entitlement. In business school they are trained to make decisions according to math, not morals. At work, they are surrounded by and competing with like-minded peers, guided by the amoral rules of financial return, with a diffused sense of responsibility for physically and temporally distant consequences.

The final factor is the quasi-religious ideology of mythical “free markets” and “ideal consumers” with “enlightened self interest.” The corporate executive bent on some act of social or environmental destruction can justify his actions with a reference to the holy ur-text of capitalism, Adam Smith’s “Wealth of Nations.”

We shouldn’t be surprised at insanity in an expensive suit. Between nature, nurture, and working environment, how could these people be anything but crazy? A culture predicated on financial return above all will select, in a Darwinian sense, those fit for making money at any human cost. These are the people who successfully dance the line between public piety towards the common good and private actions to beggar their workers, despoil the environment, and cheat their government. These are the people who carefully skid along the edge of the law, pushing over into crime when the odds are right or using campaign finance (bribery) when the odds are against them. These are the compartmentalized minds that spend their weekdays striving to pad a military contract or further cut the pay of some starving sweat laborer, and spend their evenings and weekends trying to instill strong moral values in their children.

What separates them from the disheveled individual living on the street or in the back ward is wardrobe, personal hygiene, and the way their fantasy world meshes with our own. Our own fantasy world is in turn created by the corporate media, designed and promoted by these same dignified, respected, well dressed sociopaths. We can continue to see the form and ignore the content, or step outside the storyline and recognize that madmen can be charming. Then we can address the legal and social structures that put these morally compromised creatures in power.