Towards Social Accountability
Chapter 8: Communitarian solutions: business as moral integration
When the fraud-stricken Enron, Worldcom and Tyco corporations collapsed in 2002, Lawrence Lindsey, Chief Economic Adviser to President G.W. Bush, had a pat solution. Did this fairly orthodox, ‘supply-side’, liberal economist call for more competition between financially suspect firms? Did he advocate a break with the cosy relationships between corporations and the handful of giant accountancy firms; or greater scrutiny and oversight by shareholders? Astonishingly, this economist stalwart of market fundamentalism called for sociological change. You need a higher ethical standard than the one that existed in the 1990s. You can’t have an anything goes mentality and expect to maintain the trust that is necessary to make markets work. It is a more profound sociological change that is being called for than passing some legislation. (Lindsey in Beattie 2002) Some might allege that Lindsey, having had exposure to Enron’s business practices as a member of its advisory board, was drawing on direct experience of his former associates’ dubious integrity (Goldfarb 2006). Less charitably, Lindsey’s solution could have been because normative change entails less of a loss of corporate autonomy than having tighter financial controls. But Lindsey could also rely on a call for ethical responsibility chiming with swathes of US corporate opinion in what had become an intellectual reflex amongst the American business and policy establishment.
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