RE: Business, “The Authoritarian Way” (7/14/10) Ian Bremmer, “BP Is Lucky It Spilled in US Waters, Not Chinese,” USA Today

Not so fast, Mr. Bremmer.  In comparing China and the United States, your categories on statist vs. rule of law are correct.  However, the United States’ political philosophy has shifted.  The facts and logic point to the U.S. as the statist nation. China renders the death penalty for bribery.  Thankfully, the United States does not go that far or we might lose a good portion of Congress and most municipalities. But China makes no bones about its political philosophy. If you are making a decision to do business in China you cannot make the case of, ‘Who knew?”

Google had and has a choice:  it can do business in China or opt out.  Censorship is China’s rule of law and its regime makes that clear. China has not waffled on that position.  We may not agree with its position on censorship, but the decision is China’s, not ours. Google has been rattling its cage a bit for six months, threatening to withdraw from China unless China’s regime lightens up on the censorship.  The rattling helped Google to retake its position in the social responsibility community because of its newfound commitment to human rights.  In the end, however, Google simply decided to do business in China under China’s rules.  Google does not like those rules, but it has decided to live with them in the interest of remaining competitive.  Whether that either/or postulate is true is an analysis for another time.

BP, on the other hand, decided to do business in the United States under its rule of law.  It now finds that the rules change daily because that’s what statists do.  There is nothing in federal or state law that permits government officials to tell companies, regardless of how much damage they have done, that they have no choice but to ante up dough in an amount officials determine and, by the way, then take over the distribution of that money.  BP should be held accountable, under the law, for what has happened.  But due process is central to the determination of its liability and required for a mandate to ante up.  Those who have pointed to the due process issues in the actions taken against BP are quickly branded as “fringe” and “in big oil’s pocket.”  Be careful hurling insults at those who seek to adhere to the rule of law.  

Due process is the very foundation of the rule of law. Due process was not put into its place in the Bill of Rights to protect the folks and companies we like.  Due process was placed there to protect those we’d like to throttle . . . instantly.  Due process does not permit unilateral seizure of company assets without due process, no matter how many pictures of wildlife tug at our heart strings.  Call it your day in court, call it fact-finding, call it finding a basis for liability, call it all three – under our laws as they once existed, BP was entitled to all of them.  This company has not been given its chance to respond. It is quite easy to get comfortable with denying villains due process.  But what then will you do and where will we all be when the non-villain is handed the same fate?  The beauty of the rule of law is its universal application, something that guarantees justice to all involved, whether perpetrator or victim.

The administration’s off-shore drilling moratorium two-step  is yet another step contra to the rule of law. Just this week the administration has basically said, “Well, the courts and constitution be damned.  We still want a moratorium.”  The rule of law has been set aside as the drilling ban that a federal court enjoined as laughable (and a circuit court affirmed) is now back defiantly in place.  Rule of law includes the separation of powers, something that works its checks-and-balances magic to curb despots, statists, and others who are always acting in the name of something important. Those constitutional procedural protections are there to prevent individuals as well as branches of our government from unilaterally imposing their will in any given situation.  Those protections are needed especially when the conduct seems egregious and the cause seems just.  Perception is not the stuff of the rule of law. We may not like BP and what has happened to our beautiful waters and pristine states in the Gulf.  However, the essence of the rule of law is its ability to trump the exercise of raw power in situations in which there are raw emotions.  Mobs are often justified in their reactions, but the rule of law requires that mobs not rule when so exercised.

We may also be outraged by China’s laws on censorship.  But give the Chinese government its due (And we probably should anyway because there is a great deal coming due from us to them as our debt mounts). China does hold firm to its rules and we all know their rules BEFORE we do business with them. China does not put on airs. “Take it or leave it” is China’s rule of law that we find so appalling. Google decided to take it, China, its rules, and all their flaws, rather than leave — a voluntary choice. BP, on the other hand, had no choice, especially after the rules were changed mid-stream, or, in this case, mid-flow. Indeed, the U.S. is now best characterized as “Take it, rules changes and all, but you cannot leave.”  That notion of appalling ought to be rearing up about now . . . only the finger should be pointing this way.

About mmjdiary

Professor Marianne Jennings is an emeritus professor of legal and ethical studies from the W.P. Carey School of Business at Arizona State University, retiring in 2011 after 35 years of teaching undergraduate and graduate courses in ethics and the legal environment of business. During her tenure at ASU, she served as director of the Joan and David Lincoln Center for Applied Ethics from 1995-1999. In 2006, she was appointed faculty director for the W.P. Carey Executive MBA Program. She has done consulting work for businesses and professional groups including AICPA, Boeing, Dial Corporation, Edward Jones, Mattel, Motorola, CFA Institute, Southern California Edison, the Institute of Internal Auditors, AIMR, DuPont, AES, Blue Cross Blue Shield, Motorola, Hy-Vee Foods, IBM, Bell Helicopter, Amgen, Raytheon, and VIAD. The sixth edition of her textbook, Case Studies in Business Ethics, was published in February 2011. The ninth edition of her textbook, Business: lts Legal, Ethical and Global Environment was published in January 2011. The 23rd edition of her book, Business Law: Principles and Cases, will be published in January 2013. The tenth edition of her book, Real Estate Law, will also be published in January 2013. Her book, A Business Tale: A Story of Ethics, Choices, Success, and a Very Large Rabbit, a fable about business ethics, was chosen by Library Journal in 2004 as its business book of the year. A Business Tale was also a finalist for two other literary awards for 2004. In 2000 her book on corporate governance was published by the New York Times MBA Pocket Series. Her book on long-term success, Building a Business Through Good Times and Bad: Lessons from Fifteen Companies, Each With a Century of Dividends, was published in October 2002 and has been used by Booz, Allen, Hamilton for its work on business longevity. Her latest book, The Seven Signs of Ethical Collapse was published by St. Martin’s Press in July 2006 and has been a finalist for two book awards. Her weekly columns are syndicated around the country, and her work has appeared in the Wall Street Journal, the Chicago Tribune, the New York Times, Washington Post, and the Reader's Digest. A collection of her essays, Nobody Fixes Real Carrot Sticks Anymore, first published in 1994 is still being published. She has been a commentator on business issues on All Things Considered for National Public Radio. She has served on four boards of directors, including Arizona Public Service (1987-2000), Zealous Capital Corporation, and the Center for Children with Chronic Illness and Disability at the University of Minnesota. She was appointed to the board of advisors for the Institute of Nuclear Power Operators in 2004 and served on the board of trustees for Think Arizona, a public policy think tank. She has appeared on CNBC, CBS This Morning, the Today Show, and CBS Evening News. In 2010 she was named one of the Top 100 Thought Leaders in Business Ethics by Trust Across America. Her books have been translated into four different languages. She received the British Emerald award for authoring one of their top 50 articles in management publications, chosen from over 15,000 articles. Personal: Married since 1976 to Terry H. Jennings, Maricopa County Attorney’s Office Deputy County Attorney; five children: Sarah, Sam, and John, and the late Claire and Hannah Jennings.
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