Yeah, right. I don't want to sound like some socialist demagogue that has it in for big corporations because that's not my position. For many things, vehicle manufacturing, semiconductors, etc., etc. we need large corporations with the ability to scale production, and so on.

The issue is with ethics and being fair and giving everyone a fair go. And for that companies have to behave ethically and within the law. Right, most would say that's just being naïve as that's not how the world works in practice, and I'd agree. And that's why we have laws, they ensure some semblance of balance or order is maintained. The trouble is that in a capitalist society where competition is encouraged that 'balance' can easily be tipped. And it's dead easy for this to happen, especially so these days given there's so much money at stake. To get the edge it's more than enough encouragement for players to start acting underhandedly.

I won't pursue that further because many books have been written about it except to say I don't believe we'll ever achieve an ideal world where everyone acts reasonably and fairly. I'd also suggest that living in a completely ideal world would be intolerable, we'd lose all sense of objectivity. Society needs some degree of things not going right or not working correctly to keep it on edge.

That said, I'm of the opinion that we've gone too far in the dog-eat-dog race to the bottom and that we urgently need a correction. This can't be just left to corporations to correct through self regulation because it won't happen, and more to the point society's view of the role of corporations has changed over the last 40 - 50 years.

When I was growing up decades ago most people perceived that corporations had a dual role which was to benefit both shareholders and society. That view has shifted—or least it has in the corporate world—to that where a corporation's primary or principal raison d'être is to maximize shareholder profits. The evidence is clear, for one, it's why Boeing is in trouble—its accountants now wield the power and these days engineers have precious little say when it comes to the amount spent on safety margins, etc. The consequences of the policy shift are now becoming obvious.

It's up to society to redress this imbalance. If those in corporations have broken existing laws then the Law shouldn't ignore it (as it seems to have done with antitrust laws in recent times). Not only should violating corporations be brought to heel and punished but so too should the perpetrators who drive them (corporations don't magically do things without human direction).

Nevertheless, I think it would be counterproductive to conduct a witch hunt. Instead, we need stronger, less ambiguous laws that restate the rules very clearly. It's just not good enough to assume that most people are both reasonable and ethical because there'll always be those down at the end of the bell curve who'll always push the limits. These people must be told in no uncertain terms what rules are and of the consequences of violating them. As I see it, society (hence governments) have not done enough to ensure this happens. And I'd argue, at least in part, why it hasn't happened is because of the shift in business ethics since the 1980s (for reasons mentioned in my earlier post). Evidence suggests that business practices are now so askew and out of balance it seems we're well overdue for society to correct them.

I recall a story from about four decades ago that emphasizes what's gone wrong with corporate ethics (which was somewhat of a shock to me when I read it). First, let me say that I read this quite a while ago so I may be contorting the facts somewhat. Also, I'm now uncertain where I first read about it but I think it was either from the columnist John Dvorak or Robert Cringely in InfoWorld. (Please don't hold me to that if I'm wrong.)

It concerns the second-sourcing of Intel's 8088 CPU (back then, government required second-sourcing of components to guarantee supply), and one of the second-source suppliers was NEC. Intel and NEC entered a patenting/cross-licensing agreement in the mid 1970s so that NEC could make the 8088. This meant NEC had copies of Intel's masks for production.

NEC thought it could improve on Intel's 8088 design and without obtaining Intel's agreement it took the liberty of launching its own chips, namely the V20 and V30 which were over double the speed of Intel's offering. Needless to say Intel was rather miffed and accused NEC of copyright violation for having reverse-engineered the 8088's microcode and used it in its V-series processors.

The scuttlebutt was that either before the matter went to court or afterwards during the private out-of-court settlement negotiations the conversation between both parties went something to the effect:

Intel: "You reverse-engieered our microcode for your V20 thus violating our copyright, this was outside our cross-licensing agreement ."

NEC: "Prove it."

Intel: "Whilst you rewrote the reverse-engieered code to hide and obfuscate your tracks, there was one small bit where you didn't. As it was a bug that we'd not removed, you did not know how it worked or why it was there so you included it just to ensure things worked property. This gave you away."

NEC: "So what, so now what are you going to do about it?"

Intel: "Sue you for damages."

NEC: "OK, even before production we'd anticipated you'd likely sue us so we had to estimate the all-up costs and whether it would be economically viable to proceed. We did the sums and figured out that in the event of you taking legal action it would take you x years to obtain judgment against us in the US court system and by then we would have not only amortized our development costs, paid you reparations but also we'd have made enough profit from our V-series processors for our actions to have been well worthwhile. We just made a pragmatic decision that made economic sense."

Note: the emphases are mine.

I'm unclear whether my summary has bearing in fact or is an apocryphal account given by columnists who were reporting on the case back then, but the way I've recounted it here is what I took away from those news reports.

What's key about this account is that a large public corporation would actually stoop so low in its business practices and so act in such a dishonest and disingenuous manner but also that it was prepared to get caught and that this was deemed or considered as an acceptable or valid way of making a profit. What's even more telling is that there was no large public out cry when it became known.

My point is we have to accept that the types of people who run companies and set their policies will likely always think like this and that they'd so act if given half a chance (especially so if their bonuses are linked to profits).

That said, at present there are insufficient checks and balances to ensure these people will quickly quash any such ideas the moment they come to mind. The only way I can see this happening is for society to deem such behavior to be so unacceptable that it pushes for laws that are strong enough to both sanction corporations to the extent that shareholders will revolt and that the perpetrators will be punished with actual jail time.

Trouble is I don't see such laws being introduced anytime soon. It's possible they will eventually, but unfortunately I'd venture that won't be until after things get much worse.

† https://en.m.wikipedia.org/wiki/NEC_V20.