Mark A.R. Kleiman notes that Milton Friedman believes that the sole responsibility of business is to maximize profit for its shareholders, and observes that this leads to obscene moral conclusions. Friedman's original argument, in a nutshell, is that a corporation's assets belong to its investors, and that an executive who fails to maximize profits out of a private moral concern (Kleiman's phrase--Friedman says "general social interest") is effectively giving the investors' money away.
But, Kleiman says, surely there are some actions that are morally wrong even though they are not (and should not be) illegal, and we can criticize someone who performs one of those. Then we can criticize an executive who performs a similar act on behalf of a corporation's shareholders. As Kleiman says, a "moral onus cannot be abolished by separating that individual into a shareholder and a fiduciary."
This is a common debate in business ethics, and Kleiman's view is essentially the view that Kenneth Goodpaster argues for in “Business Ethics and Stakeholder Analysis”: If it would be immoral for you to perform a certain action, it would be immoral for you to delegate that action to someone else. So even if an executive is an agent acting on the investor's behalf, the investor cannot reasonably expect the executive to act immorally so as to increase profits for the investor. So the rule that would follow from the agent-principal analysis is that the executive is obliged to maximize profits insofar as it is moral to do so; and morality is not restricted to legality.
Friedman's actual argument, I think (and I'm not inclined to be awfully charitable to him), sometimes slides back and forth between the idea that the idea that executives are obliged to maximize profit because of investors' rights [Cowen's #2 linked below], and the idea that executives are obliged to maximize profit because everyone's maximizing profit results in the best outcome for everyone [Cowen's #4]. So I think, in Tyler Cowen's analysis, Friedman is arguing in large part from #2, with his belief in #4 meaning that he doesn't need to worry too much about the bad consequences of the argument, because there won't be any. In his new update he's relying largely on #4; the idea that Whole Foods has no special competence in how to distribute charity is essentially an argument for the utility of the unfettered free market. But his original argument from the agent-principal distinction does not seem to depend on the utility of the free market; in fact it entertains the notion that the government could legitimately impose taxes for charitable purposes (though later in the article I believe he rejects it). And that argument falls prey to the Kleiman/Goodpaster objection (the other argument falls prey to the fact that it's wrong).
I should also note that some writers on this topic, such as John Boatright, don't think it's accurate to say that investors own the corporation; agency theory as developed by Eugene Fama (in the article I read) seems to come to the same conclusion.
(Slightly to my discomfort, when I skim this exchange I find myself sympathizing with Mackey; there's nothing about the structure of the corporation that dictates that its sole purpose must be profit.)
Explaining the Prisoner's Dilemma in class tonight, one of the students said it was like "Friend or Foe." Oh, the Adam Ant song, I said. Complete blank looks--and these are graduate (accounting, mostly) students. But they still might not have been alive in 1982.
Anyway, it seems to have been an MTV game show hosted by Kennedy; as the student explained, at the end of the game each member of the winning team must say "friend" or "foe." If both say "friend," they split the money equally; if one says "foe," he gets all the money; if both say "foe," neither get any money. This isn't quite the Prisoner's Dilemma, because "friend" is only weakly dominant; if the other person says "foe," then it doesn't matter whether you say "friend" or "foe." (Though you might choose to say "foe" just so as not to be a sucker.)
In this game, Foe/Foe is the unique Nash equilibrium; if player A's strategy is Friend with probability p, then for player B to play Foe gives an expected value gain of p*(half the winnings) over saying Friend. The interesting thing, perhaps, is that the Nash equilibrium here actually guarantees that both players get the worst possible outcome. But I've always suspected that Nash equilibria aren't particularly definitive of rationality. (This is the TAR thread referenced therein.) [This paragraph seems to be totally wrong; see comments.]
It would be interesting to know what people actually did when it came to choosing "Friend or Foe." But, alas, not interesting enough for me to put up with Kennedy. People who don't share my allergies are invited to report the results. [UPDATE: Wow, someone already did. Thanks, Joe O. If I'm reading the acknowledgments correctly, it helps to have a teenage daughter.]
The Post-Gazette's Ed Bouchette, after noting that the Bengals are still a half-game ahead of the Steelers on paper, writes:
Yesterday, the Steelers made the Bengals look like paper lions, ransacking them in Paul Brown Stadium, 27-13, in the biggest football game played in Cincinnati in 15 years.
Interesting. The idiom is really paper tiger--one who talks tough and doesn't back it up, I think. But "paper lion" has a specific football resonance, as the title of George Plimpton's book about his attempt to quarterback the Detroit Lions for three plays. (Rumors that the Lions were thinking of bringing him back, before Jeff Garcia's performance yesterday, have been denied by the Lions front office.) But "paper tiger" is really more apposite for the Bengals, since Bengals are tigers. Also, I don't believe Bouchette meant to claim that the Bengals were as bad as Plimpton was.
(The Post-Gazette sports index page has "paper tigers" AOTW.)
I don't think Bouchette deliberatey tried to invoke Plimpton; my guess is that the phrase was kicking around in his mind and he put down the wrong one. Bouchette, incidentally, has a role in the philosophical literature; in early drafts of Doug Lavin's "Practical Reason and the Possibility of Error," one of the major examples featured Bill Cowher mocking Bouchette. (I don't remember whether the example survived into print.)
The usual process for blog awards is to invent categories, solicit nominees, and then hold votes for the winners. In this case, this seems wrong to me, because no reasonable person could disagree with the awards I'm about to give; so asking for other nominees and holding votes would just be redundant. Instead, I'm just going to give awards for a few categories, and readers can propose new categories and winners if they like.
Best background picture: Professor B (Chris Bertram beat me to this observation)
[Honorable mention: The Poor Man Institute for Freedom and Democracy and a Pony. Collect them all!]
The Ted Barlow award for best subhead: Sueandnotu
Most annoying open thread announcements: DAMN IT, ATRIOS!!! WILL YOU PLEASE MAKE THE THREADBOT STOP QUOTING YES SONGS? It's giving me unpleasant flashbacks* to when I was young and irresponsible and actually listened to this, and it also creates the impression that bloggers tend to be geeky. We wouldn't want to do that, would we?
*No drugs involved, though I doubt it's any better that I used to listen to Yes sober.
British vs. American uses of 'quite' have come up on Crooked Timber before. Here's a bit of data, from Harry Hutton:
Anyway, if you have nothing more pressing to do, there’s a list of stupid names at Harry’s Place.... Which are amusing, but only quite amusing.
"Only quite amusing" sounds just about incoherent to me as a Yank, in the way that "amusing, but only very amusing" would. This provides evidence against the possibility that "quite" means the same think in UK and American English, but calling something "quite good" implicates that it's only moderately good when ordinarily more intense praise is called for (cf. Ophelia Benson in CT comments, and the next few comments, including one by a guy who can't spell "compliment.")
Chris Burke flew out, eh? No mere mortal, I guess.
[I think this gets officially scored as an error on the MLB.com writer.]
[UPDATE: Fixed some egregious typos.]
So maybe Mark A.R. Kleiman's point about Cliff May's silliness can be formalized like this, where O is the operator for obligation, K is the knowledge operator, and both operators are relativized to a subject:
Secrets are not secrets tout court, but secrets that one person ought to keep from another. So let Sa, b(p) be, roughly, "p is a secret that a ought to keep from b."
Sa, b(p) =df Oa~Kb(p)
Let q stand for "Valerie Plame is a CIA officer."
For Valerie Plame to be a secret CIA officer is for q to be a secret that must be kept by those with security clearances, say Lewis Libby, from those without, say Judy Miller. (Assuming she didn't have one--May doesn't try to invoke the possibility that she might have.)
In other words, the secret can be expressed is SLibby, Miller(q).
May points out that, though Libby brought about KMiller(q), arguably ~KMiller(SLibby, Miller(q)).
But, expanding the definition of SLibby, Miller(q), we get
OLibby~KMiller(q)
which, combined with KMiller(q), entails that Libby has violated an obligation.
This has been "Unnecessarily formal and complicated explanations of things a three-year-old should be able to understand," part I. Why Mr. May doesn't understand things a three-year-old should be able to understand is an interesting question, but its analysis awaits a satisfactory formalization of the operators "understand" and "pathetic hack."
[In fact, what is relevant is that whether b knows that p, but whether a brought it about that b knows that p. So we might want to reanalyze Oa in terms of Belnap/Perloff/Xu's "see to it that" operator: Oa(p) =df ([a stit: ~p] -> X), where X is a sentential constant standing for "wrongdoing has occurred," and the -> is something stronger than material implication. Then Sa, b(p) becomes ([a stit: Kbp] -> X). Kleiman's analysis could easily be reframed in this system.]
The other night a remark of Standpipe Bridgeplate's reminded me of Chris Aubry's incredibly poignant cartoon "I still think of you, Jim Henson." And a little sleuthing reveals: It's online! Don't click on it if you're feeling fragile.
via this REM chatboard (though the URL therein is slightly off)
[UPDATE: That link is now broken, but check here.]
Just after posting the last post, I saw that Yglesias had claimed that Jackie Brown is incredibly awful, which is simply not true. Furthermore, the underlying claim that it's incoherent to claim that someone has produced a classic and is still overrated is just wrong; Al completely pwns him on that (not that I necessarily agree with Al's specific claims, I haven't seen Kill Bill and I suspect that people overrate Scorsese, since I'm pretty sure Raging Bull would've been a better movie if it had had some characters in it--that last judgment is so eccentric that it's probably just wrong. Um, where was I?).
Yglesias' specific argument is that classics are all that matters in the long run, since in 50 years no one will want to watch a slightly-above-average film anyway. The latter claim is dubious, but in any case an author can be overrated because people think he's written too many classics. I haven't read enough Bellow, but he makes classic status on "A Silver Dish" alone; nevertheless, ranking Mary Sue the Rain King as the 21st best novel in English of the 20th century means that people will have to read it when they could be reading three or four Penelope Fitzgeralds instead.
(Actually, mostly I just wanted to say Mary Sue the Rain King. I thought it was fantastic until Henderson went to Africa.)
Keiko Yoshimura's talk at LASSO mentioned some work of Lawrence Horn's on optimistic and pessimistic constructions:
Hooray, my computer is barely working
Alas, my computer is almost working
both seem odd, even though if your computer is barely working you're in better shape than if your computer is almost working. (Yoshimura's talk was very interesting--about "only," its two Japanese equivalents, and what this tells us about presuppositions, entailments, and assertions; but I don't think I should blog it here even if I had anything intelligent to say.) Which reminds me of this passage from Yglesias:
I will make one observation, however, that I've gleaned from my reading of various head-scratching takes on the future of politics. If you set out to write something detailing how trends X, Y, and Z indicate that the Democrats will probably prosper in the future, you wind up sounding very optimistic. Conversely, if you set out to write something about how trends X, Y, and Z are all holding the Democrats back, you'll sound very pessimistic. The reality, however, is that unlike in the 1980s the Democrats have been losing by very small margins. If there are three pro-Democratic trends that could combine to put them over the top, that means (relatively pessimistically) that unless all three things happen they'll keep losing narrowly. In the case of The Emerging Democratic Majority the text is peppered with references to "when memories of 9/11 fade...," but thanks to the failure of that one trend to happen, the prediction turned out wrong. Conversely, if you've got 48 percent of the vote and three big problems, those are actually three opportunities -- you don't need to solve all of them.
Now, the bold part seems to mean the following truth: "If X, Y, and Z happen, we will win" sounds more optimistic than "If A, B, and C happen, we will lose." Hooray! We might win! But in fact the first gives you worse odds than the second, because X, Y, and Z all have to happen. (Assuming, as perhaps is implicated, that you probably won't win if X, Y, and Z won't all happen.)
But the underlined part mystifies me a little. If the Democrats are losing narrowly, it seems that it shouldn't take three trends to put them over the top. If there are three trends that each could give Democrats a boost, and Democrats are losing narrowly, then (unless the expected boosts are minuscule) it seems as though Democrats should do well even if one of them doesn't pan out. That's "If X, Y, or Z happens we will win," which both sounds and is optimistic.
Similarly, if you've got three big problems, that could mean that you have three opportunities--if 3% of the population is voting Republican because of A, and 3% of the problem is voting Republican because of B, and 3% because of C, then solving one of A, B, C will give you 51%. But if the problems are serial rather than parallel--if 3% is voting Republican because of A, B, and C, and all those problems have to be solved in order to win them over--then all three problems have to be solved to get to 51%. Each problem isn't a separate opportunity.
Now it may be that "The Politics of Polarization," which sounds pessimistic, really details parallel problems such that Dems win if we solve one; and EDM, which sounds optimistic, details serial trends so that the Democratic majority won't emerge unless they all come to pass. I haven't read either one, so I don't know. But it doesn't seem as though the best way to frame this issue is in terms of trends that seem to favor Dems or hold us back--that's a question of whether positive action is necessary to alter them, or whether they'll come to pass if nothing intervenes. That's an orthogonal issue to the question of whether the trends need to co-occur to take effect, or whether they can have separate effects; and that's what Matt seems to be getting at in re optimism and pessimism. (The best cause for optimism, it seems, is that the losses really have been narrow.)
I will note that, thanks perhaps to TAPPED's crack editors, Matt Y. spelled Marshall Wittman's name right.
Shouldn't this (see this for context) have been "Bush adviser lies under Air Force One"? Really? ("Lays himself" is proper, and perhaps also metaphorically accurate if you think about it.)
Suppose you were to say something like, "Maria Bello is like the product of a gene splice between Sharon Stone and Frances MacDormand," and some poor benighted soul were to ask, "Who's Frances MacDormand?" Could you say, "She's who Maria Bello is like the product of a gene splice between Sharon Stone and?"
No. No you could not.
Not even "She's who Maria Bello is a cross between Sharon Stone and."
That's not to say that there's something mysterious about barriers like this, just that I personally don't understand them. Or any others. This post may stand in lieu of the post I was planning about my insecurities about linguistics etc., or it may not. Maybe these people will help me.
HK:
But [Justin] Frank loses me with this sentence: "The only thing this appointment could be about is self-protection from impeachable offenses." Um, other than the chief justice ceremonially presiding over a Senate trial, the court plays no role in impeachment.
I was three years old at the time of Watergate, yet I know that an important role in Nixon's impeachment was provided by the United States v. Nixon decision, in which the Supreme Court ruled that the White House tapes were not protected under executive privilege. Furthermore, didn't the Supreme Court decision that Paula Jones could sue Clinton while in office play a role in that impeachment? What purpose does Kurtz serve exactly?
[AFTERTHOUGHT: And reading this reminds me that if the Supreme Court had heard and sustained Matthew Cooper and Judith Miller's appeals of their contempt charges, some White House officials would be getting more sleep these days.]
(Now, Kurtz is right that the sentence is far-fetched; I doubt that Bush is worried that the Republican Congress will impeach him. I don't think that it's implausible that the White House is worried about looming indictments of its top-level aides, not to mention the Republican Congressional leadership, and of course the Supreme Court might have an appellate role to play here. My bad feelings toward Kurtz are based on more than this one thing.)
I bought tickets for a friend through Ticketmaster recently, and now I'm getting e-mails for concerts "in your area," which all seem to be in Dallas/Fort Worth. What Amanda said.
Subhead on the cover of a recent Forbes: "Usher on Bling and Wealth."
(Contender for what, you ask? Not telling.)