“The Darwinian concept of the survival of the fittest has been substituted by a philosophy of the survival of the slickest.”
by Howard Wolosky / Guest Commentator
This Martin Luther King, Jr. quote still rings true.
It is particularly evident when you look at the alleged Ponzi schemes that we read about every day. Many of these individuals show a remarkable knowledge of how the financial marketplace works and are skilled at gaining prestige, obtaining political influence, and escaping regulators’ wrath. They also seemingly have an innate and sharply developed ability to manipulate individuals and entities to their advantage.
The marketing of adjustable rates and balloon mortgages with little down and no real credit checks coupled with the packaging of these mortgages into investments promising high return is the best illustration of where this philosophy of the survival of the slickest is taking us.
Martin Luther King was ahead of his time as now many are seeing the truth of that quote. This awareness, the developing community concept derived from the Internet, and the fact that the Internet ensures the uncensored widespread and quick dissemination of information, discussion, and debate, signifies change is coming.
Many in all levels of society including a few CEOs, consultants, and professionals are sensing a new business model is imminent in which ethics and profits aren’t mutually exclusive and in fact, compatible and necessary for a changing marketplace. To get buy-in from all the necessary stakeholders, businesses, not-for-profits, groups, and communities on the Internet, codes of conduct and responsibilities will have to be developed. There will also have to be actual transparency and demonstrated delivery of win-win to all the stakeholders.
CPAs, often identified as the most trusted advisor of businesses and individuals, can be one of the prime catalysts for this seismic change. Many firms are perfectly positioned, especially these very successful regional firms that have been “walking the walk” for a number of years. They created infrastructures, procedures, and safeguards to maintain quality and still experience sustained growth. Their focus is long-term, and most importantly, there is understanding that trust is constantly earned, and although profits might be the result, ethical means can always be utilized and makes business sense.
Howard Wolosky is former editor-in-chief of Practical Accountant and a WebCPA.com columnist.
2 Responses to “Howard Wolosky: Are Ethics and Profits Mutually Exclusive?”
Rex Gatto, Ph.D.
Howard: As always, you present interesting and thought provoking questions and insight. What has happened to our sense of integrity and loyalty? Do we focus on greed and competition or do we focus on what is in the best interest of our firm, community and nations? We need to find leaders who will go against the current events of the day to be role models for ethical behavior. It is difficult to turn around a nation that is going in the wrong directions but it can be done in our communities and cities and work upward. CPAs are trusted advisors who care and want to support their clients. Who are the inspirations leaders who are being inclusive rather than exclusive to pull a wounded economy and national together is the macro question. The micro question is can people in a profession such as CPAs provide the ethical leadership and direction that is needed. CPAs can and should provide ethical leadership while working with their clients, guiding them to do the right things. Ethics and profits can concurrently exist in a healthy and correct way.
Ed Kless
The answer to your headline question is a resounding NO!
As George Gilder demonstrated in his 1981 masterpiece Wealth & Poverty, profits are an index of altruism – the other centeredness of the business. Oil companies have been highly profitable because they create great value for their customers.
What you are talking about if FRAUD. Fraud and 99% of all business do not go hand in hand. The most despicable thing that has come out of the past few months in the ever increasing belief that businesses and business people are all evil frauds. The overwhelming majority are not.
Recovery demands that we reverse the thinking on this. Regulation along will not do it. I am with you that transparency is absolutely needed. The reason is it turns us all into potential regulators.
No matter what laws are passed there will never be a governmental agency that can uncover all fraud. No should the elimination of all fraud by the goal, it is just not possible.
Life is risky! If zero risk is the goal, you should end your life now!