Ethics in Business - A Little Case Study

You might have noticed that I'm a staunch defender of the free enterprise system and the right of individuals to pursue their self-interests unconstrained by government. I think private enterprise provides almost all goods and services better, more efficiently and cheaper than government does and I think that governments should get out of economic affairs, confining their role mainly to maintenance of law and order and defence.

I accept that business can get it wrong and that some people in business are unethical and even grossly dishonest. That doesn't make the free enterprise system bad any more than corrupt leaders make government inherently bad. But it also doesn't mean that I will sit by and watch businesses rip off their customers, especially when I have personal experience of their unethical behaviour.

Insurance companies, like banks, have had a bad rap recently. International bail-outs like AIG and the response of some insurers to natural disasters such as the Canterbury earthquake have provided plenty of material for those who would rather see insurance services provided by the state.

This morning I had a disagreement with my insurer, Tower Insurance, with whom we have all our insurances - cars, houses, contents, life, etc. It was a minor matter but it illustrates an ethical issue I have experienced with a number of large organisations - whether they are obliged to provide the customer with all information related to their pricing so that that the customer pays the minimal amount needed for the service.

We are entitled to a discount on all of our premiums because we have all of our insurance with the one company. One of our car policies, for some obscure bureaucratic reason, was not receiving the correct discount. This was a matter we had become aware of in the past and we had asked Tower to correct. Last week we had to make a small claim on this car policy and learned Tower were still not applying the discount. When I raised the matter with a Tower customer service representative this morning, he advised that it was my responsibility to check the premium statement every year to ensure I was getting the correct discount (despite the fact that there is no information on the premium statement to indicate whether this is the case). When I asked him whether he thought his company had an obligation to ensure the correct pricing applied without the customer having to double check, his response was "no". Of course, he was wrong both in law and in ethics.

This is not a case of 'caveat emptor' because we were aware of the previous error and had asked Tower to correct it, assuming in good faith that future premium statements would be correct. It is not the continued error that irks me, but the young man's attitude that the company had done no wrong.

I do not hold the young man responsible for his attitude. His views are clearly part of Tower's culture. This is a company that seems to teach its customer service representatives that if the company can get away with overcharging customers, well and good.  If the customer does not spot the error, that's the customer's hard luck.

It is this lack of ethics and integrity in some businesses that leads to the resentment we see in the Occupy Wall Street Movement. One of the reasons I defend the free enterprise system is that I see it as inherently moral compared to the inherently corrupt Socialist alternative. My incident was a trifling affair and does not change my view, but it indicative of an attitude I see in many, particularly larger, companies - an ethical elasticity that ultimately leads to Enron.

You Didn't Build That...

Finally, the President of the United States has shown his true colours - and they are all dark shades of red.

Last week Mr Obama reiterated and extended the comments of Elizabeth Warren, a White House staffer who is standing for US Senate in November saying, "If you’ve got a business - you didn’t build that.  Somebody else made that happen."  

Last October when I blogged on Elizabeth Warren's comments, I thought that they were the words of a peripheral extremist in the Obama administration and couldn't be the views of the President himself, but I was wrong.

These are the views of a Marxist-Leninist.  Marx and Lenin believed that the people provided the means of production, not the business owner, and therefore the people should be entitled to any wealth or profit associated with it.  Were Mr Obama a private citizen, he would be entitled to hold such views - after all, the United States is a politically free, pluralistic society that is perfectly able to accomodate people of all beliefs and creeds.  But Mr Obama is not a private citizen, he is the head of state of a country founded on the premise that all have the right to life, liberty and the pursuit of happiness.  The "pursuit of happiness" bit includes material happiness, i.e. the right to acquire and own property without undue hindrance from the government.  Mr Obama's political views are diametrically opposed to those espoused in the Declaration of Independence and the Constitution. 

Mr Obama cannot in all conscience represent the principles on which the United States of America was founded and he should resign forthwith.  Given that is highly unlikely, I hope the good people of the United States have the sense to throw him out of office in November.  Assuming he lets them, because not only do Marxist-Leninists not believe in property rights, they don't believe in constitutionally limited government either.