The Boesky Touch

We should not underestimate the aftereffects of the tremors still shaking Wall Street following the recent insider trading scandal. The stock market itself appears to have withstood the disaster. The Dow Jones index topped the once-invulnerable 2,000 barrier barely a month after the initial revelations, and the principle figure in the scandal, Ivan Boesky, will no doubt follow the way of all such white-collar criminals (crime, fame, tell-all book, oblivion). Yet there seems to be more than the usual amount of gnashing of teeth and calls for reform.

Most fascinating is the language being used to describe the crime and the needed reforms. Critics note that this was not a crime of violence, but of “broken trust.” Boesky allegedly developed a surreptitious network of informers to gain knowledge of corporate affairs, giving him illegal advantage in his business of taking over struggling corporations. And reformers calling for sharp restrictions on corporate raiders and insider trading are bandying about words like ethics, faith, and values in prescribing corrections.

Predictably, their solutions are for tighter laws rather than crash courses in the Sermon on the Mount. Tighter laws are not a bad idea. Obviously, existing restrictions are inadequate to control the burgeoning corporate raiding business. Many have suggested ways of abolishing the mysterious-sounding financial practices that corporate raiding has created: “greenmail” on the raider’s part, and “golden parachutes” or “poison pills” for the corporate managers.

Yet increased legislation has never successfully dealt with ethical problems. Indeed, the Boesky case is a symptom of an increasingly dangerous situation that continues to sap the moral strength of our business community. It is a symptom of the creeping individualism and lack of accountability that has made business dealings in our country an amoral, long-distance exchange between computers, with only form-letter assurances and inadequate laws to regulate the transactions.

Accountable To Money?

This lack of accountability creates many negative consequences. For example, it elevates our medium of exchange—money—to the impossible role of an ethical policeman. Instead of ethics being the controlling force in our business dealings, money (or more accurately, profit) has become the standard by which we measure a transaction’s goodness. Corporate raiders justify their actions by saying the power of money (or its threatened loss) is the only thing that will shake the lethargy out of corporate America. Money, they say, is the universal language of business. When money speaks, E. F. Hutton (itself a victim of scandal) and the others listen.

Yet money is wholly inadequate to this role. Money is a medium of exchange, and a representation of what happens in a business deal. But as the definer of a good business relationship? Hardly. “The more money, the less virtue,” said Henry David Thoreau. At best, money is amoral, like the computer. “Money,” Philo said, “is the cause of good things to a good man and of evil things to a bad man.” Making money the measure of an honest business deal is like putting a mouse in charge of the cheese. We can always expect the worst.

Of course, there is nothing new in this warning. Money has always been a mixed blessing. The Bible warns that the love of money is a root cause of all kinds of evil, and history proves a fertile hunting ground for illustrations of that verse. Money’s allure has consistently brought out the worst in people. Only rarely do we see human beings, when tempted with the prospect of great riches, rise above the level of basic greed.

But greed has been with us always. Why, then, does it appear to be an increasingly dangerous force in the marketplace?

Money As Simplifier

Clearly, greed ripens as the power of money grows, and if anything, money has become almost omnipotent. Never before in our history have man’s needs been so monochromatic—money buys all. There is no need to forage for food, no need to chop firewood, no need to cooperate with the neighbors to build a log cabin for protection.

The loser in this simple-for-complex transaction is human contact. We can buy clothes by mail, jewelry by computer, food by phone, land by proxy. Gone is the sense of community involvement in business transactions that act as a natural curb on excess. With the loss of human contact goes a sense of accountability. In the business community, this means the entire weight of ethical responsibility is thrown on the deal itself. There are fewer and fewer chances to factor basic human decency into transactions. If anything, such abstraction is encouraged by business institutions.

Although the Bible is not an economics textbook, one aspect of business transactions described there is worth noting. Legal and economic transactions were carried out at the main gateway of the city, where the whole town could gather in the adjacent square and act as witnesses to the agreement. It was not uncommon for the community to help set the price of a purchase to ensure fair treatment of both parties. The impact of seeing firsthand the effects of a business deal on a neighbor stimulated honesty.

Of course, a wholesale change in the abstract, high-tech advances in modern monetary policy may be beyond our reach. On balance, computer technology has enhanced our business capabilities and will continue to do so. But technology will not solve our ethical problems.

It is also futile to think that increased legislation alone can reinject the sense of trust into today’s business transactions. As much as we need new laws, they must be accompanied by a new moral climate. In a recent interview, social philosopher Sissela Bok, commenting on the current state of public values, longs for a time when we all must “take moral principles into account” in order to develop the trust missing in so many of our interpersonal dealings.

Technology and the complexity of modern business make it impossible to return to the accountability of conducting business at the city gates for all to see. Instead, we must lobby for value-laden legislation. As citizens and stockholders in public corporations, we must press for business institutions to move ethics back to the top of their priority lists.

As a church, we must continue to train Christians who take biblical values seriously; to reinstate God, not money, as our simplifying principle in a complex world; and to individually, intentionally, view any transaction as if it were a community priority.

Wall Street reformers may be rediscovering the language of trust, values, and ethics. But only the church can give it lasting meaning.

By Terry Muck.

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