Please review this Harvard University commencement speech by (then) Federal Reserve Board Chairman Alan Greenspan.

ASSIGNMENT THREE: Please review this Harvard University commencement speech by (then) Federal Reserve Board Chairman Alan Greenspan. Please focus on these four paragraphs.

[a] “I do not deny that many appear to have succeeded in a material way by cutting corners and manipulating associates, both in their professional and in their personal lives. But material success is possible in this world and far more satisfying when it comes without exploiting others. The true measure of a career is to be able to be content, even proud, that you succeeded . . . without leaving a trail of casualties in your wake.”

[b] “I cannot speak for others whose psyches I may not be able to comprehend, but, in my working life, I have found no greater satisfaction than achieving success through honest dealings and strict adherence to the view that for you to gain, those you deal with should gain as well. Human relations–be they personal or professional–should not be zero sum games.”

[c] “And beyond the personal sense of satisfaction, having a reputation for fair dealing is a profoundly practical virtue. We call it ‘good will’ in business and add it to our balance sheets.”

[d] “Trust is at the root of any economic system based on mutually beneficial exchange. In virtually all transactions, we rely on the word of those with whom we do business. Were this not the case, exchange of goods and services could not take place on any reasonable scale. Our commercial codes and contract law presume that only a tiny fraction of contracts, at most, need be adjudicated. If a significant number of businesspeople violated the trust upon which our interactions are based, our court system and our economy would be swamped into immobility.”

Two questions for you to answer: [1] Do you think Greenspan is being realistic about the possibility of “business ethics?” Cite specific language from his speech (in quotation marks) and explain your reasoning. [2] Identify the core ethical values you plan to follow in your career.

Additional background for reflection (Assignment Three)

(Note: materials here and below labeled “for reflection” do not require written responses)

Thought question: Don’t “soft” terms like “good-will” or “mutually beneficial exchange” reflect ignorance about evolutionary anthropology? Shouldn’t we accept the reality that human beings are self-interested primates engaged in a ruthless struggle for dominance? Only the strongest individuals survive, right?

Actually, those kinds of statements are consistently refuted by direct observation of how social animals like primates live. Consider this observation by Yuval Noah Harari in his 2014 book, Sapiens: A Brief History of Humankind:

“When [chimpanzees] . . . are contesting the alpha position, they usually do so by forming extensive coalitions of supporters, both male and female, from within the group. Ties between coalition members are based on intimate daily contact – hugging, touching, kissing, grooming and mutual favours. Just as human politicians on election campaigns go around shaking hands and kissing babies, so aspirants to the top position in a chimpanzee group spend much time hugging, back-slapping and kissing baby chimps. The alpha male usually wins his position not because he is physically stronger, but because he leads a large and stable coalition. These coalitions play a central part not only during overt struggles for the alpha position, but in almost all day-to-day activities. Members of a coalition spend more time together, share food, and help one another in times of trouble.”
In short, while physical strength and assertiveness certainly matter (especially in competition with other groups) fostering the “good will” that maintains “extensive coalitions of supporters” turns out to be even more important. A leader who isn’t trusted won’t remain a leader for long. See this observation by a contemporary expert on (human) leadership skills: “[e]ffective leadership is defined by how well a leader executes a mission, how they show empathy and inspire those who follow them.”

Thought question: How did a small country like Holland become a world economic power (the richest country in Europe for many years)? Hint: it may have had something to do with trust and the rule of law.

Here’s an economic perspective on the importance of social trust from Francis Fukuyama in his book Trust: The Social Virtues and the Creation of Prosperity (Free Press. 1995, pp.27-28):

“Trust is the expectation that arises within a community of regular, honest, and cooperative behavior, based on commonly shared norms, on the part of other members of that community . . . [P]eople who do not trust one another will end up cooperating only under a system of formal rules and regulations, which have to be negotiated, agreed to, litigated, and enforced, sometimes by coercive means. This legal apparatus, serving as a substitute for trust, entails what economists call “transaction costs.” Widespread distrust in a society, in other words, imposes a kind of tax on all forms of economic activity, a tax that high-trust societies do not have to pay.”

You’ll see something similar in the business success of the Quakers.