Wednesday, September 30, 2020
This Friday, Professor Art Wilmarth’s new book, Taming the Megabanks: Why We Need a New Glass-Steagall Act (Cambridge University Press), will be released. Wilmarth recently published an overview of his work on Duke Law School’s FinReg Blog, a paragraph of which is below:
Taming the Megabanks contends that we must adopt a new Glass-Steagall Act to separate banks from securities markets. A new Glass-Steagall Act would restore financial stability and ensure that our financial system serves Main Street business firms and consumers instead of Wall Street speculators. Universal banks would be broken up and would no longer dominate our financial system. Shadow banks would shrink substantially because they could no longer fund their activities by offering short-term financial instruments that function as substitutes for deposits. A more decentralized and competitive financial system would provide better services to commerce, industry, and society.
I’m really looking forward to receiving my copy, purchased for a very reasonable $34.95! I’ve read many of Wilmarth’s articles, and I’ve always learned a lot from each one. A LOT!
Monday, August 10, 2020
Decent amount of reading for a summer than seemed quite chaotic. Fairly eclectic . Always open to suggestions.
God and Money - John Cortines and Gregory Baumer (2016) (Personal Finance). Two recent Harvard Business School graduates discuss thoughts on faith, finances, and giving. Less than 3% of American adults give away 10% or more of their income. Advocates for setting a floor of giving away at least 10% of gross income. In addition, the authors suggest setting an income and net worth cap and giving away the remainder. Reflection here (near the end of the post).
How to get Filthy Rich in Rising Asia - Mohsin Hamid (2013) (Novel). Family, love, business, morality, and violence. Novel claims to be written in a self-help style (though it didn’t really capture the self-help voice, in my opinion). I greatly preferred Hamid’s The Reluctant Fundamentalist (2008) to this one, but still think Hamid is talented and worth reading. As a father and a son, I liked this quote near the end - “You feel a love [toward your son] you know you will never be able to adequately explain or express to him, a love that flows one way, down the generations, not in reverse, and is understood and reciprocated only when time has made a younger generation of an older one.” (222).
When Breath Becomes Air - Paul Kalanithi (2016) (Memoir). Dr. Paul Kalanithi is diagnosed with metastatic lung cancer as a 35-year old nonsmoker. Paul’s diagnosis came just as he was finishing his training as a neurosurgeon at Stanford. Faith, family (including a newborn daughter), and work all provide purpose. Reflection here.
The Coddling of the American Mind - Greg Lukianoff and Jonathan Haidt (2018) (Social Psychology and Culture). Argues that privileged, upper/middle class children and students are overprotected. Children need more free play. Students need more exposure to differing viewpoints, learning civil discourse, and building well-supported arguments.
Let Your Mind Run - Deena Kastor (2018) (Memoir). History of a top professional runner and the role of positive thinking.
Love in the Ruins - Walker Percy (1999) (Novel). Satire, politics, religion, relationships, and the end of the world.
Amusing Ourselves to Death - Neil Postman (1985) (Cultural Commentary). Thesis - “Orewell warns that we will be overcome by an externally imposed oppression. But in Huxley’s vision, no Big Brother is required to deprive people of their autonomy, maturity, and history. As he saw it, people will come to love their oppression, to adore the technologies that undo their capacities to think.” (Preface).
Sunday, August 2, 2020
(A bit of the harvest picked from my parent's garden in north Georgia yesterday)
Last Thursday my neighborhood book club discussed work by poet David Whyte. This book club has been especially life-giving during the pandemic. I have deep admiration for every member of the group and always learn from our meetings. In March and April, we briefly moved to Zoom, but were unable to capture the same energy. We then decided to meet in person, bringing chairs to a member’s spacious driveway that backs up to common green space.
The work we discussed last week was not actually a book, but rather a few hours of David Whyte’s musings, only available in audio form. Much of the talk involves Whyte reading poetry – primarily his own, Rainer Maria Rilke’s and Mary Oliver’s – and relating that poetry to questions many of us ponder in midlife.
While I can’t locate the exact quote in the long recording, Whyte used a harvesting metaphor effectively. Whyte suggests that if we don’t slow down to be present for the harvest times in our lives, the fruit will rot on the vine. He reminds us, for example, that our child will only be five years old for a relatively short season. By being present for the harvest, I think Whyte means celebrate (among other things).
The practice of law, at least as it appears to be carried out by most major firms, leaves precious little time for celebration. In fact, during my handful of years at two major law firms, I can only recall a single occasion of truly pausing to celebrate the harvest.
This occasion involved a closing dinner. A celebratory dinner after closing a deal to buy or sell a company is relatively common in M&A practice. In my somewhat limited experience, however, law firms often organized these dinners to impress clients and tee up future deals. Networking, not savoring, is the focus. Often only the partners and clients attend closing dinners. The associates (or at least the junior associates) are usually back in the office working on the next matter.
This dinner was different. King & Spalding partner Russ Richards had just closed two relatively large deals in the same week with the assistance of same four associate attorneys. While the hours had been grueling, even by BigLaw standards, I didn’t expect to be invited to a closing dinner. Surprisingly, Russ not only invited the other three associates and me, but also encouraged us to bring a dates. Moreover, this was not a dinner to impress the clients; no clients were invited. We did not spend much time, if any, setting up future deals. We just celebrated work well done with wonderful wine, food, and company.
If there were more of this sort of unadulterated celebration of the harvest in BigLaw, I imagine the turnover would be much lower. And maybe one of the reasons Russ Richards excelled in a 45+ year career with the same firm is because he created moments of celebration and reflection like these. As I have argued before, I think one of the ways to make BigLaw more humane is to work in some time for celebration and rejuvenation, perhaps in the form of sabbaticals. A formal promotion to “senior associate” around the four-year mark, followed by a brief sabbatical (even as short as one month) would do wonders for the profession. Even longer sabbaticals, perhaps tied to a project improving the community, could be worthwhile as well.
Of course life is not, and probably should not be, constant celebration. To stretch Whyte’s metaphor further—as anyone who has tried their hand at farming knows—fruit that is the product of a season of sweat tastes sweeter than fruit obtained from a grocery deliver service. The gritty, difficult, back-spasm-inducing times are an important part of the process. That said, especially for those of us bent more in the direction of overwork, making some space to celebrate the harvest is essential.
Finally, and importantly, we should make a point to notice and celebrate the achievements of others. Whyte seems to focus on being present for the fruition of our own work, but I am convinced that pausing to celebrate the accomplishments of others can be even more worthwhile.
Monday, July 13, 2020
U.S. Securities Crowdfunding: A Way to Economic Inclusion for Low-Income Entrepreneurs in the Wake of COVID-19?
Earlier today, I submitted a book chapter with the same title as this blog post. The chapter, written for an international management resource on Digital Entrepreneurship and the Sharing Economy, represents part of a project on crowdfunding and poverty that I have been researching and thinking through for a bit over two years now. My chapter abstract follows:
The COVID-19 pandemic has exacerbated and created economic hardship all over the world. The United States is no exception. Among other things, the economic effects of the COVID-19 crisis deepen pre-existing concerns about financing U.S. businesses formed and promoted by entrepreneurs of modest means.
In May 2016, a U.S. federal registration exemption for crowdfunded securities offerings came into existence (under the CROWDFUND Act) as a means of helping start-ups and small businesses obtain funding. In theory, this regime was an attempt to fill gaps in U.S. securities law that handicapped entrepreneurs and their promoters from obtaining equity, debt, and other financing through the sale of financial investment instruments over the Internet. The use of the Internet for business finance is particularly important to U.S. entrepreneurs who may not have access to funding because of their own limited financial and economic positions.
As the pandemic continues and the fifth year of effectiveness of the CROWDFUND Act progresses, observations can be made about the role securities crowdfunding has played and may play in sustaining and improving prospects for those limited means entrepreneurs. A preliminary examination indicates that, under current legal rules, securities crowdfunding is a promising, yet less-than-optimal, financing vehicle for these entrepreneurs. Nevertheless, there are ways in which U.S. securities crowdfunding may be used or modified to play a more positive role in promoting economic inclusion through capital raising for the innovative ventures of financially disadvantaged entrepreneurs and promoters.
I value the opportunity to contribute to this book with scholars from a number of research disciplines and countries. I have been looking for ways to concretize some of my ideas from this project in a series of shorter publications, and this project seems like a good fit. Nevertheless, I admit that I have been finding it challenging to segment out and organize my ideas about how securities crowdfunding may better serve entrepreneurs and investors, especially in the current economic downturn. As always, your ideas are welcomed.
Sunday, July 12, 2020
A few months ago, I mentioned taking the free Yale University online course The Science of Well Being taught by Professor Laurie Santos.
Before jumping into the substance of the course, I wanted to talk a bit about the format. The course was likely filmed with better equipment than most of us will have in the fall. The videos were mostly under 15 minutes each, and the videos usually had quiz questions to keep you engaged. Then there were longer quizzes at the end of sections and discussion boards.
Even though this was a Yale course, on an interesting subject, with a gifted professor, I probably would not have paid even $1 for this course. The material was surely worth more than $1, but there is simply too much good free information online, in this format, for me to pay anything for it. This fact is sobering to me as a professor, given that at least some of my students will be online-only this fall. The real value, I think, springs from interaction – between professor and student, and between the students themselves. As such, I need to plan my courses with a fair bit of this interaction.
Moving to the substance, Professor Santos noted eight things that the science shows improves well-being:
- Social Interaction
- Meaningful Goals
Professor Santos' ReWi application helps you track these things.
Think all of us know that those eight things are good for us, even if we do not always prioritize them.
Most helpful for me was the discussion of savoring. Previously, I simply had not paused long enough to dwell on the many good things in life. In The Plague, Dr. Rieux and his friend Tarrou savor nature before swimming during a brief break fighting disease. Camus describes it as follows:
Once they were on the pier they saw the sea spread out before them, a gently heaving expanse of deep-piled velvet, supple and sleek as a creature of the wild. They sat down on a boulder facing the open. Slowly the waters rose and sank, and with their tranquil breathing sudden oily glints formed and flickered over the surface in a haze of broken lights. Before them the darkness stretched out into infinity. Rieux could feel under his hand the gnarled, weather-worn visage of the rocks, and a strange happiness possessed him. (256)
Pausing long enough to watch the sea and feel the rocks on his hand is what Professor Santos is talking about when she describes savoring. Think we could all benefit by stopping, noticing, and savoring more I am committed to doing so
(Photo taken savoring the scene at Bass Lake in Blowing Rock, North Carolina)
Monday, June 15, 2020
Recently, I listened to the NPR Hidden Brain’s podcast titled “Playing Favorites: When Kindness Toward Some Means Callousness Toward Others.”
This podcast hit on topics that I have been thinking about a good bit lately---namely selfishness, giving, poverty, family, favoritism, and a culture of “us against them.” This post only has the slightest connection to business, so I will include the rest of the post under the break.
Friday, June 12, 2020
Padfield on "the Omnipresent Specter of Political Bias" in Corporate Decision-Making (and 3 other papers)
I've finally gotten around to updating my SSRN page. I would love to hear any comments you might have.
June 12, 2020 in Behavioral Economics, Books, Constitutional Law, Corporate Governance, Corporate Personality, Corporations, CSR, Human Rights, Law and Economics, Stefan J. Padfield | Permalink | Comments (0)
Tuesday, June 2, 2020
would train runners from all the schools in the region over the summer, then relentlessly compete against them in the fall, then bring them back together to train in the winter. His world was the runner’s world, in which your rival is your greatest friend.
At the time, I did not really care much for training; I just liked winning. Van was easily the most knowledgeable coach in our region, and I remember being somewhat frustrated that he would share his expertise with our competitors.
With winning races as my ultimate goal, any assistance to other runners was counterproductive. For me, competition was zero-sum; if someone else won, I lost. Van saw competition differently. Van saw competition not as the end, but as a means to the greater ends of self-discipline, community, and true excellence.
Cormac McCarthy, in his 2007 Pulitzer Prize winning novel The Road, explores these competing views of competition. In this post-apocalyptic novel, an unnamed man and his son travel south over an ash-covered road, trying to outrun the harsh winter. Resources are scarce and many of the survivors have resorted to cannibalism.
The man reassures his son that they are two of the “good guys” because they do not eat fellow humans. Nevertheless, the man resists most of his son’s pleas to help others they encounter on the road, embracing a scarcity view of competition. The man admirably protects and shares with his son, but the man treats nearly everyone else with suspicion and violence. The father reminds his son to “always be on the lookout” and even after finding a cellar full of provisions, the father quickly turns his attention to trying to find another gun. His gun is down to its final bullet, so his power to fight off others is tenuous.
The man clearly loves his son, and the man appears well-intentioned in his attempts to do what is best for his son. But by trying to protect his son through selfishness, the man contributes to the cruel world that his son will inherit. The man tends to assume the worst of those they encounter on the road and, as a result, none of his compassion for his son spills over into the world at large. Selfishness, ruthless competition, and distrust leaves the world bleak and drains life of its meaning.
At the end of the novel, shortly after the boy’s father dies, the boy encounters another man. Following his father’s example, the boy points his pistol at the stranger. After a bit of conversation, the boy begins to let down his guard. But the boy remains a bit unsure, asking: “How do I know you are one of the good guys?” The stranger admits “You don’t. You’ll have to take your shot.” Unlike his father, the boy does not continue in distrust, and the boy does not resort to violence. The boy goes with the stranger.
The stranger rewards the boy’s trust by leaving a blanket—that they could use to help them survive—to wrap the boy’s dead “papa.” In a freezing world where survival is uncertain, this is an extreme act of kindness that strikes against cold utilitarianism. Even in a land of very limited resources, life means much more than simply using power to survive.
The boy and the stranger were both armed. The more powerful one could have killed the other and stolen his supplies. In a sense, the more powerful person would have “won” the competition, but he would have only secured a bit more time in a decidedly ugly world. In the novel, however, both the stranger and the boy risked a shortened life, but they seemed to gain beautiful friendship and the priceless experience of shared sacrifice.
Competition is not altogether evil. As Coach Van Townsend knew, healthy competition can be used to inspire and it can even help build community out of shared striving and respect. But when “winning” becomes the ultimate goal, and virtue is trampled, the world can quickly turn cruelly cold.
(Note: Anything insightful I have written was likely drawn from conversations with my brilliant literature professor brother. Anything foolish is of my own making.)
Friday, May 8, 2020
After finishing Aldous Huxley’s Brave New World, I devoured Neil Postman’s Amusing Ourselves to Death. Published in 1985, Postman’s thesis is that Huxley in Brave New World, not George Orwell in his dystopian novel 1984, more accurately predicted life in the modern United States. In the forward to his book, Postman writes:
Contrary to common belief even among the educated, Huxley and Orwell did not prophesy the same thing. Orwell warns that we will be overcome by an externally imposed oppression. But in Huxley’s vision, no Big Brother is required to deprive people of their autonomy, maturity and history, As he saw it, people will come to love their oppression, to adore the technologies that undo their capacities to think.
What Orwell feared were those who would ban books. What Huxley feared was that there would be no reason to ban a book for there would be no one who wanted to read one. Orwell feared those who would deprive us of information. Huxley feared those who would give us so much that we would be reduced to passivity and egoism. Orwell feared that the truth would be concealed from us. Huxley feared the truth would be drowned in a sea of irrelevance. Orwell feared we would become a captive culture. Huxley feared we would become a trivial culture. (xix).
Postman argues that we have moved from an Age of Exposition--where print-based works encouraged logic, order, relevant criticism, and deep learning--to an Age of Show Business, dominated by "the language of headlines--sensational, fragmented, impersonal.” (55-70). This shift, according to Postman, has led to a focus on applause over reflection, a focus on image instead of ideas. He compares a 7-hour Lincoln-Douglas debate in the Age of Exposition (44-45) to the 1984 Age of Show Business presidential debates with 5-minute addresses and 1-minute rebuttals (97). Given the biases of the medium of television influencing the 1984 “debates,” Postman argues that:
in such circumstances, complexity, documentation, and logic can play no role, and, indeed, on several occasions syntax itself was abandoned entirely. It is no matter. The men were less concerned with giving arguments than with “giving off” impressions, which is what television does best. Post-debate commentary largely avoided any evaluation of the candidates’ ideas, since there were none to evaluate. Instead, the debates were conceived as boxing matches, the relevant question being, Who KO’d whom? The answer determined by the “style” of the men--how they looked, fixed their gaze, smiled, and delivered one-liners. (97)
Having watched a number of political “debates,” I must say Postman nails it here, though 5-minute addresses may have shrunk to 2-minutes by 2020! In contrast, on October 16, 1854, Douglas received 180 uninterrupted minutes before Lincoln was given a chance to respond. In a shorter debate on August 21 1858, Douglas received 60 minutes to speak, followed by a 90 minute reply from Lincoln, and concluding with a 30 minute rebuttal by Douglas. Unfortunately, in the modern United States, Postman convincingly argues that “the fundamental metaphor for political discourse is the television commercial….on television commercials, propositions are as scarce as unattractive people...the commercial disdains exposition, for that takes time and invites argument.” (126-31)
Those who run television do not limit our access to information, but in fact widen it. Our Ministry of Culture is Huxleyan, not Orwellian. It does everything possible to encourage us to watch continuously. But what we watch is a medium which presents information in a form that renders it simplistic, nonsubstantive, nonhistorical, and noncontextual: that is to say, information packaged as entertainment. In America, we are never denied the opportunity to amuse ourselves. (141)
According to Postman, the Age of Show Business influences everything from how modern books are written to how our education is shaped. His tenth chapter is entitled “Teaching as an Amusing Activity” and starts with intense criticism of Sesame Street. Postman claims, “[w]e now know that ‘Sesame Street’ encourages children to love school only if school is like ‘Sesame Street.’ Which is to say, we now know that ‘Sesame Street’ undermines what the traditional idea of schooling represents.” (143). Postman cites no evidence to support this claim and the research on Sesame Street’s impact seems varied. Nevertheless, Postman argues that the material in the Sesame Street shows is not nearly as important as the way it is taught. Postman writes “the most important thing one learns is always something about how one learns," not the content of the lesson. (144). In responding to television's increasing influence, Postman argues that teachers are increasing visual stimulation in the classroom and “are reducing the amount of exposition their students must cope with; are relying less on reading and writing assignments; and are reluctantly concluding that the principal means by which student interest may be engaged is entertainment.” (148-49).
Postman admits that he doesn’t have strong solutions for the shriveling cultural spirit that he observes (155-63). He is not optimistic about Americans abandoning television nor about attempts to improve the programming. The only hope he sees is education, though he admits that even education may be powerless. Interestingly, Postman (in 1985) claims that he “believe[s] the computer to be a vastly overrated technology.” (161). More accurately he predicted:
[Americans will give computers] their customary mindless inattention, which means they will use it as they are told, without a whimper. Thus a central thesis of computer technology--that the principal difficulty we have in solving problems stems from insufficient data--will go unexamined. Until, years from now, when it will be noticed that the massive collection and speed-of-light retrieval of data have been of great value to large-scale organizations but have solved very little of importance to most people and have created at least as many problems for them as they may have solved. (161)
I need to do a lot more thinking about this book. Postman makes a compelling case for the shallowness of the Age of Show Business, but I am more hopeful than Postman that students, with the help of professors, can see this shallowness and work in more meaningful directions. While many of us have been immersed in the Age of Show Business for our entire lives, we professors should aspire to much more than mere amusement in education. There is great value in working through dense, difficult material over long periods of time. This difficult work may not be enjoyable in the short-term for students, but it is indispensable for deep work and growth to maturity. Sadly, the pull of the Age of Show Business is quite strong, and maybe the amusing Matt Damon will be cast for the role of professor in future classes. For all our sake, let's hope not.
Wednesday, April 29, 2020
I would have thought that eliminating my commute during the pandemic would have meant more time to read, but those of us with young children seem to have significantly less free time during all of this. Nevertheless, my neighborhood book club prompted some reading, and I squeezed in a few others. Always open to suggestions.
Atomic Habits - James Clear (2018) (Self-Help). Didn't think there was much novel here, but I did like his suggestion to start small with habits (create some 2-minute habits and build from there). This podcast with Donald Miller on writing and exercise habits prompted me to read the book.
The Ruthless Elimination of Hurry - John Mark Comer (2019) (Religion). "The modern world is a virtual conspiracy against the interior life."
A Lesson Before Dying - Ernest Gaines (1993) (Novel/Historical Fiction). Story of family, humanity, race, teaching, and belief.
Talking to Strangers - Malcom Gladwell (2019) (Pop Psychology). Book club (and he spoke at Belmont on this book). Basically, Blink Part II. Challenges our judgment of others, especially those we do not know well. Liked this note of humility and willingness to be corrected at the end of the book. “Instances where I am plainly in error, please contact me at firstname.lastname@example.org and I will be happy to correct the record.”
Endure - Alex Hutchinson (2018) (Fitness). More story and less sports psychology than I was hoping for, but confirmed the power of belief and explored the limits of human endurance in sport.
An American Marriage - Tayari Jones (2018) (Novel). Book club. A novel about marriage, family, friendship, betrayal, race, class, and injustice. Written mostly in the forms of letters to and from a husband/son who is supposedly wrongfully imprisoned.
Race Matters - Cornel West (1993) (Social Science). A few quotes that leapt out -- “Today, eighty-six percent of white suburban Americans live in neighborhoods that are less than 1 percent black.” (4). “American mass culture presented models of the good life principally in terms of conspicuous consumption and hedonistic indulgence.” (36) “Humility is the fruit of inner security and wise maturity. To be humble is to be so sure of one’s self and one’s mission that one can forgo calling excessive attention to one’s self and status.” (38)
Sunday, April 19, 2020
In a reflection on the meaning of career success, a majority of my business ethics students mentioned happiness as a barometer.
“Happiness,” however, is an incredibly imprecise term. For example, here is over seventy-five minutes of Jennifer Frey (University of South Carolina, Philosophy) and Jonathan Masur (University of Chicago, Law) discussing happiness under two different definitions.
Frey, in the tradition of Aristotle and Aquinas, considers happiness not as a private good, but rather as the highest common good. Happiness is enjoyed in community. True happiness according to Frey, is bound up in the cultivation of virtue and human excellence. Under Frey’s definition, happiness makes room for sacrifice and suffering as beautiful and awe-inspiring.
Masur, a self-described hedonist, seems to have a more psychological, subjective view of happiness. Masur defines happiness as positive feelings, and unhappiness as negative feelings. Masur acknowledges that happiness--maybe even the deepest happiness--can arise from relationships and altruistic behavior. Unlike Frey, however, Masur includes positive feelings that are artificially produced or arising from unvirtuous behavior as part of “happiness.” Masur sees happiness and living a good, moral life as often overlapping, but as not necessarily intertwined.
These are two different conceptions of happiness. I think we need seperate words for the different conceptions--perhaps joy and pleasure--though I do not think any two English words fully capture the differences.
Somewhat relatedly, this month, my neighborhood book club is reading Aldous Huxley’s Brave New World. Throughout the book, Huxley explores a future devoted to pleasure. In this world, a drug called soma, a sport called obstacle golf, and touch-engaging films called the "feelies" combine to drown out negative emotions. While the elimination of virtually all infectious diseases seems enviable in this moment, there is very little I admire in the brave new world---it seems incredibly shallow. Some of Aristotle’s virtues are largely missing. Courage, temperance, and liberality are only seen in the outcasts of this world. Self-denial and committed relationships are strongly discouraged.
Ross Douthat, in The New York Times, hits some similar notes below:
- In effect, both Huxley and [C. S.] Lewis looked at the utilitarian's paradise--a world where all material needs are met, pleasure is maximized, and pain is eliminated--and pointed out what we might be giving up to get there: the entire vertical dimension in human life, the quest for the sublime and the transcendent, for romance and honor, beauty and truth.
But even John Stuart Mill, the utilitarian, seemed to realize that there can be a depth to happiness that extends beyond pure pleasure. Mill wrote:
- It is better to be a human dissatisfied than a pig satisfied; better to be Socrates dissatisfied than a fool satisfied. And if the fool, or the pig, are of a different opinion, it is because they only know their own side of the question. The other party to the comparison knows both sides.
Near the conclusion of Brave New World, the Savage (John) has an illuminating verbal spat with the Controller Mustapha Mond:
- Savage: "But I like the inconveniences [of life.]"
- "We don't," said the Controller. "We prefer to do things comfortably."
- "But I don't want comfort. I want God, I want poetry, I want want freedom, I want goodness. I want sin."
- "In fact," said Mustapha Mond, "you're claiming the right to be unhappy."
- "All right then," said the Savage defiantly, "I am claiming the right to be unhappy."
The Savage meets a tragic end (in part because he gets cut off from supportive community and has not grasped the concept of forgiveness), but I am still more drawn to his life--of pain and love, desire and disappointment, art and decay, principle and struggle--than to a life plugged into the pleasure producing experience machine.
Even though Frey and Masur disagree on the breadth of the term “happiness,” both seem to agree that devoted relationships, selflessness, and self-transcendence often lead to durable, deep happiness. While many of my business ethics students did not define “happiness” in their reflections, I hope they increasingly realize the fulfillment that can come from cultivating virtue in the midst of difficulty.
Sunday, February 16, 2020
What’s the #1 new release in Banking Law on Amazon? I’m glad you asked! It’s Professor David Zaring’s first book, The Globalized Governance of Finance (Cambridge University Press). In 2008, Zaring joined Wharton's Legal Studies and Business Ethics Department as an assistant professor. At the time, I was a PhD student in the Department and also focused on banking law. So, it was really exciting for me to have a banking law scholar join us and I’m thrilled to now have a chance to highlight his new book. My copy is on its way from Amazon, so for now, I’ll share Zaring’s description of his book and my own thoughts with BLPB readers soon!
The book pulls together work I’ve done on the regulatory networks – the Basel Committee, IOSCO, IAIS, e.g., – that have become the global taste for harmonizing financial regulation. I think the regimes, and their relative bindingness (especially Basel), are interesting in their own right, and they are also an interesting way of doing global governance, where the sine qua non is often thought to be a treaty enforced by a tribunal, a la the World Trade Organization.
But in finance, you see neither of those things, and still robust oversight that American regulators, regardless of administration, seem to embrace. Even as the Trump administration has pushed for changes in trade law, Randal Quarles of the Fed has been installed as chair of the Financial Stability Board, the network of networks that keeps everything moving. The Obama administration tried to get a Basel-like process into its trade deals, and issued an executive order encouraging agencies to harmonize regulations.
Moreover, since the financial crisis, regulators have doubled down on these networks, adding political oversight from the G-20, a middle manager in the FSB, and standardizing notice and comment rulemaking at the network level. That, I think, makes the whole scheme look increasingly like a cross-border bureaucracy. After all, American agencies make policy through notice and comment rulemaking overseen by career regulators overseen by political leaders. So too Basel, IOSCO, IAIS, and the other networks.
Tuesday, January 28, 2020
I promised to check back in after negotiating The House on Elm Street (here). I’m checking in! We negotiated this exercise – which contains both legal and ethical issues – in my MBA Business Ethics/Legal course this evening. It proved to be a great learning experience. My previous post mentioned that Professor Siedel had made its use easy by creating thorough teaching notes. And as I suspected, while it might be ideal to have students read a negotiation text or have a full 75 minutes to debrief the exercise, neither proved essential to a valuable learning experience. It also provided a great segue into agency law, another of tonight’s topics.
During our discussion of ethical issues, I mentioned Professor Clayton M. Christensen's How Will You Measure Your Life? This past week, this question became particularly poignant. Christensen, one of Harvard Business School’s leading lights, passed away at the age of 67. Several years ago, BYU Law School Dean Professor Gordon Smith and I started “The Business Ethics Book Club for Law Professors.” The wonders of technology enabled several of us business law professors from all over the country to gather virtually about once a semester for a few years to read books on ethics, including Christensen’s book, which were generally written by business school professors. It’s a short, but powerful read. I highly recommend it to all BLPB readers. My recollection is that it was a popular book club selection too!
In this book, Christensen (and coauthors) seek to answer three simple questions: “How can I be sure that”: 1) “I will be successful and happy in my career?”, 2) “My relationships with my spouse, my children, and my extended family and close friends become an enduring source of happiness?,” and 3) “I live a life of integrity – and stay out of jail?” (p.6) Christensen wasn’t a business ethics professor. Rather, the book’s prologue explains that one of Christensen’s courses was Building and Sustaining a Successful Enterprise, in which “we study theories regarding the various dimensions of the job of general managers. These theories are statements of what cause things to happen – and why.” (5) On the last day of the course, instead of using these theories to examine organizations, the class used these theories to study themselves: “We are there to explore not what we hope will happen to us but rather what the theories predict will happen to us, as a result of different decisions and actions…Year after year I have been stunned at how the theories of the course illuminate issues in our personal lives as they do in the companies we’ve studied” (p.6) According to Amazon, this is “the only business book that Apple’s Steve Jobs said “deeply influenced” him.” And it’s not the only time Christensen’s work has been widely praised. His breakout work, The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail, was heralded by some as "one of the six most important business books ever written." Without doubt, both books are great, worthwhile reads.
Monday, December 30, 2019
This fall semester flew by. Hoping to make time to read and listen to more good content next semester. Always open to suggestions, especially podcasts because my commute is now about 30 minutes each way.
A Guide to the Good Life: The Ancient Art of Stoic Joy - William B. Irvine (Philosophy) (2009). Review of stoicism and an attempt at modern application. “Unlike Cynicism, Stoicism does not require its adherents to adopt an ascetic lifestyle. To the contrary , the Stoics thought that there was nothing wrong with enjoying the good things life has to offer, as long as we are careful in the manner we enjoy them. In particular, we must be ready to give up the good things without regret if our circumstances should change.” (46).
Utilitarianism - John Stuart Mill (Philosophy) (1863). Reread before my spring business ethics class. “It is better to be a human being dissatisfied than a pig satisfied; better to be Socrates dissatisfied than a fool satisfied. And if the fool or the pig think otherwise, that is because they know only their own side of the question. The other party to the comparison knows both sides.” (7). “Next to selfishness, the principal cause that makes life unsatisfactory is a lack of mental cultivation.” (10).
Just Mercy - Bryan Stevenson (Non-fiction, Law) (2014). Stories of injustice in our criminal legal system. Reread in advance of our SEALSB Conference in Montgomery, AL. Stevenson founded the Equal Justice Institute (EJI) in Montgomery. The EJI’s museum and memorial are well worth your time; like the book, they are quite moving.
The Dream - an investigation of multi-level marketing companies (MLM).
Road to the Olympic Trials - Peter Bromka ran just two seconds shy of the standard; he will take another shot at the Houston Marathon in January.
Elizabeth Anscombe on Living the Truth (Jennifer Frey - University of South Carolina, Philosophy). Focuses on Anscombe’s theory of intentionality of action.
Ipse Dixit Legal Scholarship Podcasts (hosted by Brian Frye - University of Kentucky, Law)
Wednesday, October 2, 2019
I recently listened to an episode of EconTalk: “Dani Rodrik on Neoliberalism.” What follows is an excerpt from the show, wherein Rodrik defines neoliberalism:
What I mean by neoliberalism is really mostly a frame of mind that places the independent functioning of markets and private incentives and pricing incentives at the center of things. And I think in the process downgrades certain other values, like equity and the social contract, and certain restraints on private enterprise that are often required to achieve economic ends that are more compatible with social goals.
For whatever it’s worth, I’d change this definition as follows:
What I mean by neoliberalism is really mostly a frame of mind that places the independent functioning of markets and private incentives and pricing incentives at the center of things. And I think in the process [posits that] certain other values, like equity and the social contract, and certain restraints on private enterprise that are often required to achieve economic ends that are more compatible with social goals [are optimized via free markets compared to the historical failures of central planning].
Two other comments from the show that stuck out to me:
- what both Foxconn and the Amazon cases show is that in fact there is so much uncertainty about markets and consumer preferences and technologies that, you know, before the ink is dry that there are things that contribute to the unraveling of these contracts
- the cornerstone idea in microeconomics of utility--I mean, it's not measurable
On this last point, I was remined of a footnote in Volume I of the two-volume mini-treatise on the history of economic thought I co-authored with Robert Ashford (A History of Economic Thought: A Concise Treatise for Business, Law, and Public Policy):
To the extent utilitarianism poses a challenge to laissez-faire policies (i.e., rather than letting the market decide who gets what, we will study costs and benefits and allocate resources on that basis), economists favoring laissez-faire policies could be seen as hijacking utilitarian concepts by simply defining the results of free exchange as utility. In other words, while utilitarianism may be viewed as starting out as a challenge to laissez-faire ideology, once utility is equated with efficiency, and efficiency is generally associated with free-market transactions, then utilitarianism arguably becomes an asset to those espousing a laissez-faire ideology as opposed to a challenge.
Monday, August 5, 2019
I did not manage to do much outside reading over the summer, given a move to the Nashville suburb of Franklin.
Always open to recommendations. I am also interested in podcast recommendations for my new commute.
On Paradise Drive - David Brooks (Social Commentary) (2004). Rough satire (or is it satire?) to read right before we moved to the suburbs.
Running for My Life - Lopez Lomong and Mark Tabb (Biography) (2012). Recommendation from Colleen Baker. Inspiring story of how one of the lost boys of Sudan became a US Olympic athlete. Just a few weeks ago, Lopez Lomong won both the 5000m and 10,000m at the U.S. Championships.
Deep Work - Cal Newport (Self-Help) (2016). Georgetown computer science professor argues that there are increasing rewards for “deep work” (challenging work, requiring full concentration), but that society is pushing us toward “shallow work” with social media, constant e-mailing, open office, and the like. He suggests setting routines, fully resting (embracing boredom), and scheduling internet use (and avoiding the internet outside of those times).
Advanced Marathoning - Pete Pfitzinger and Scott Douglas (Fitness) (2d. 2009). Recommended by two of the best runners I know. Will use this book (along with the advice of my friend and supper runner Joey Elsakr) to train for the Rocket City Marathon in December 2019. The third edition is now available.
Gilead - Marilynne Robinson (Novel) (2004). Narrator shares his experiences and the experiences of his father and grandfather as ministers in Gilead, Iowa. Winner of the Pulitzer Prize for Fiction in 2005. On the short-list of President Obama’s favorite books.
Monday, May 6, 2019
This was a busy semester, but I still managed to read a few books. Always open to recommendations.
Enough. John Bogle (Business) (2009). Vanguard’s founder reflects on business, money, satisfaction, and life. Easy read. Read this during a 2+ hour faculty meeting.
Half an Inch of Water - Percival Everett (Fictional Short Stories) (2015). A series of stories situated in the western U.S.--about loss, love, youth, aging, corruption, animals, and the wilderness. My favorite story is “A High Lake” because it reminds me of my grandmothers’ independence, intelligence, and care before they died.
The Enduring Community - Brian Habig and Les Newsom (Religion) (2001). Co-authored my a minister to two of my siblings while they were at the University of Mississippi (Newsom). Attempts to clarify the roles of the Church in community.
Heavy - Kiese Laymon (Memoir) (2018). Raw memoir in which the author struggles with his weight, abuse, racism, addiction, and depression. Laymon was raised in Jackson, MS and is an English professor at University of Mississippi, after a number of years on the faculty at Vassar College.
Educated - Tara Westover (Memoir) (2018). Pitched as the remarkable story of the author’s journey from a survivalist family that did not believe in formal schooling to a Cambridge PHD. But I think the book is more interesting as a look at how memories are formed, abuse, family, and mental illness.
Wednesday, April 3, 2019
I recently received a copy of Citizen Capitalism: How a Universal Fund Can Provide Influence and Income to All from Sergio Gramitto. While I have not yet read the book, I didn’t want to let another blog post go by without passing along at least some of its highlights, as well as why I am particularly interested in its proposals.
In addition to Sergio, the authors of Citizen Capitalism include Tamara Belinfanti and the late Lynn Stout. Suffice it to say that Lynn was one of our true superstars, and I would hate to miss any presentation by either Sergio or Tamara. I’ve had the pleasure of engaging professionally with all of them in some capacity, and I hold them each in the highest regard.
Sergio and Lynn first discussed the idea of a Universal Fund in their article Corporate Governance as Privately-Ordered Public Policy: A Proposal, and then expanded on that idea with Tamara in Citizen Capitalism. The book has been reviewed in numerous places (see, for example, here and here). What follows is a descriptive excerpt from Cornell’s Clarke Program on Corporations & Society.
We offer a utopian-but feasible-proposal to better align the operations of business corporations with the interests of a broader range of humanity. The heart of the proposal is the creation of a Universal Fund into which individuals, corporations, and state entities could donate shares of public and private corporations. The Universal Fund would then distribute a proportionate interest in the Fund-a Universal Share-to all members of a class of eligible individuals (for example, all citizens over the age of 18), who would then become Universal Shareholders. Like a typical mutual fund, the Universal Fund would "pass through" to its Shareholders all income on its equity portfolio, including dividends and payments for involuntary share repurchases. Unlike a typical mutual fund, however, the Universal Fund would follow an "acquire and hold" strategy and could not sell or otherwise voluntarily dispose of its portfolio interests. Similarly, Universal Shareholders could not sell, bequeath, or hypothecate their Shares. Upon the death of a Universal Shareholder, that individual's Share would revert to the Fund.
Robert Ashford has been advocating for a similar proposal for years (see his SSRN page here) under the heading of binary economics (also known as “inclusive capitalism”). I’ve had the pleasure of working with Robert on a few related projects, and pass along the following excerpt from my article The Inclusive Capitalism Shareholder Proposal for whatever it may be worth.
When it comes to the long-term well being of our society, it is difficult to overstate the importance of addressing poverty and economic inequality. In Capital in the Twenty-First Century, Thomas Piketty famously argued that growing economic inequality is inherent in capitalist systems because the return to capital inevitably exceeds the national growth rate. Proponents of “Inclusive Capitalism” can be understood to respond to this issue by advocating for broadening the distribution of the acquisition of capital with the earnings of capital. Obviously, distributing capital more widely should, all else being equal, help alleviate at least some poverty and close at least some of the economic inequality gap by providing poor-to-middle-class consumers capital (paid for by the earnings of that capital) that they did not have before. But why should corporations distribute the ownership of their capital more broadly? The answer is because broadening the distribution of capital should promote greater growth because low-to-middle-income consumers are understood by many to spend more than wealthy consumers. This increased demand may then be expected to produce gains sufficient to offset the costs incurred in the process of instituting the Inclusive Capitalism proposal presented herein.
Based on my initial overview, I believe one meaningful difference between the Citizen Capitalism proposal and Ashford’s binary economics / inclusive capitalism proposal is the source of funding. The Citizen Capitalism proposal relies on donations while the binary economics proposal relies on the self-interest of corporations in increasing consumer demand.
Regardless, there are good arguments to be made for capitalism being the least worst system for advancing the well-being of individuals, and proposals like the foregoing provide important pro-market alternatives for addressing inequality.
Tuesday, December 4, 2018
I posted about my summer reading here, and I have decided to write this sort of post each semester, at least for a few semesters.
This semester was incredibly busy, and I didn't read as much as I would have liked, but I am glad I finished at least a few books. Nearly all of these books were pretty light
Always looking for interesting books to read - and I am open to reading in most areas - so feel free to leave a comment with suggestions or e-mail me.
The Honest Truth About Dishonesty - Dan Ariely (Non-Fiction - Ethics/Behavioral Economics, 2013). Duke University behavioral economist examines the environs/structures that encourage or discourage honesty.
Hannah Coulter - Wendell Berry (Fiction-Novel, 2005). Elderly lady, twice widowed, reflects on her life and the lives of her family members as the world changes after World War II, and as the modern world diverts from rural, farming communities like Port William, KY. Berry’s first novel with a female narrator.
The Most Important Year - Suzanne Bouffard (Non-Fiction - Education, 2017). Discusses the importance of the year before kindergarten. (My oldest child starts kindergarten this coming fall). Biggest takeaway was to engage in Q&A with my children while reading to them; engage them.
Bad Blood - John Carreyrou (Non-Fiction - Business and Ethics, 2018). Discusses the Theranos scandal. The executives governed with fear and NDAs. Raised hundreds of millions of dollars (eventually at a $9B valuation), signed big healthcare deals, and recruited board members by appeal to ego, fear of missing out, vague grandiose claims, and name-dropping. No board members or major investors truly understood the science and were unable to uncover the fraud.
Everybody Always - Bob Goff (Non-Fiction - Religion, 2018). Lawyer, Consul to Uganda, Pepperdine Adjunct Law Professor discusses unconditional and unbounded Christian love.
Small Teaching - James Lang (Non-Fiction - Pedagogy, 2016). Read with a group of fellow Belmont professors. Encouraged me to start classes with a few questions about the previous class and/or low-stakes assessments (in the same form as the exams). Break tasks into component pieces and practice; just like football players practice steps and do drills focused on a piece of the whole. Suggests coming to class 10-15 minutes early and trying to engage each student in conversation over the course of the semester.
Your Mind Matters - John Stott (Non-Fiction - Religion, 1972). Lecture turned into a short book, encouraging Christians to engage their minds. Speaks out against anti-intellectualism.
Thursday, November 29, 2018
I’d like to thank the Business Law Prof Blog for the opportunity to be a guest blogger! In this first post, I build on a subject of previous posts (here, here, and here): Theranos, a now defunct Silicon Valley health-care start-up.
I rely heavily on the Financial Times to follow developments in one of my main research areas: financial market clearing and settlement (I’ll plan to report next week on the upcoming December 4th meeting of the Market Risk Advisory Committee, sponsored by CFTC Commissioner Rostin Behnam). The FT recently announced that Wall Street Journal investigative reporter John Carreyrou’s book, Bad Blood: Secrets and Lies in a Silicon Valley Startup, had been named the FT/McKinsey Business Book of the Year 2018. Having immensely enjoyed reading past winners, I wasted no time in ensuring that Amazon Prime speedily delivered it to my doorstep.
Bad Blood is a riveting tale of Theranos’ spectacular rise and fall, and well-worth the reader’s time. A fun fact is that a pathologist blogger, Adam Clapper (founder of the former Pathology Blawg), tipped Carreyrou onto the Theranos story (Chapter 19). Additionally, in the months after Bad Blood’s publication, its founder and CEO, Elizabeth A. Holmes, and former COO, Ramesh “Sunny” Balwani, were charged by the Justice Department with wire fraud.
I know little about the health-care industry. Yet in reading Bad Blood, I was struck by links to and concerns shared with the financial industry (an area about which I know more). Below, I make a few observations and invite reader comments on their importance in these and other industries.
Post-financial crisis, rock-bottom interest rates acted as a “key ingredient” to a new Silicon Valley boom (p.82). Similarly, these low rates have also been a key ingredient for the many years of increasing stock market prices post-financial crisis. Indeed, recent equity market declines made at least a temporary rebound yesterday after comments by Federal Reserve Chairman Jerome Powell at the Economic Club of New York.
The increasing expansion of private markets enables companies such as Theranos to “avoid the close scrutiny” (p.178) to which public companies are subject (nevertheless, Theranos and Holmes settled fraud charges with the SEC). Given current regulatory structures, it also risks severely limiting retail investment opportunities. And it adversely impacts financial journalists’ access to information!
When I teach Banking and Financial Institutions Law, the term “regulation-induced innovation” tends to amuse students. The Theranos tale demonstrates, however, that such practices aren’t a laughing matter. For example, its business strategies appeared to include: maneuvering in regulatory “gray zones” between the FDA and Centers for Medicare and Medicaid Services (p.88), exploiting “gap[s] spawned by outdated statutes” (p.125), and “operat[in]g in a regulatory no-man’s-land” (p.260). Such practices can be troublesome enough in financial markets. However, in Theranos’ case, the stakes (patient health) were much higher.
Finally, who doesn’t love a good story? Carreyrou, a two-time Pulitzer Prize-winning journalist, is an expert storyteller. His portrayal of Holmes suggests that she too profoundly understood the power of stories, and that she had a bewitching talent for telling them. Clearly, untruthful, non-fictional narratives are generally unethical and, depending upon the context, might also be illegal. However, taking a cue from Holmes on the importance of stories and honing one's ability to tell them could assist financial market policymakers. Indeed, several years ago, the FT’s Gillian Tett wrote an opinion piece entitled, “Central bank chiefs need to master the art of storytelling.” Enhanced storytelling capabilities could also assist academics researching financial market regulation. For both, the ability to compellingly communicate with the public about issues in financial markets and their broad-based importance is critical. Even so, constructing a fascinating narrative about clearing and settlement along the lines of Bad Blood would be no small feat!