Modern Societies and Ethical Values

Posted by on Nov 6, 2013

Modern Societies and Ethical Values

Nowadays, the world over, a tangible and troubling rift has emerged between the prevailing socio-economic ‘formal (professed)’ as opposed to ‘informal (practised)’ ethics. For example, in the business sector business executives and corporations formally subscribe to the ‘codes of good corporate governance’. Their annual ‘glossy’ reports are decorated with “impressive evidences” of their socially responsible citizenship. Yet operationally they do not hesitate to collude and/or abuse their market powers. The current “horse meat saga” in Europe and its counterpart in South Africa are cases in point. The conduct of global bank executives in Europe and North America since 2008 has left little doubt about their lack of ethical values. Ironically, their corporations, and hence their shareholders, have been convicted to pay billions of US dollars in penalties.

Evidences of price fixing amongst pharmaceutical companies, construction companies, cement manufacturers, bread producers and steel manufacturers have been high profile cases over the past few years in South Africa. Sasol, South Africa’s most celebrated petrochemical corporation, has been heavily fined, both locally and internationally in the EU, for its extensive anti-competitive practices. The country’s banking sector is also accused of malpractices and a report in this regard is yet to be made public by the Competition Commission. The banking sector is alleged to be exerting every pressure to halt its publication. The cellular phone companies are likewise accused of collusion to fleece the consumers in South Africa. There are also allegations against tyre manufacturers in the country, and so on….. South Africa is by no means an exception!

The gap between the formal and informal ethics within the government sector is even more pervasive and pronounced. Frequently, government ministers and departmental executives espouse ‘global best practices’, and yet operationally in their organizational and managerial behaviour there is little evidence of the values, standards, or practices that conform to their formal statements. Whilst the political leaders often express commitment to serving the people, the experience of the citizens speaks of a contrary and divergent conduct.  Duality of the values is equally prevalent in labour unions, the media sector and other social structures and organisations. In the recent past there has emerged much publicized and high profile global cases of value duality within the institutionalized religious establishments too. Sporting personalities and organizations likewise have been proved to be polluted by value inconsistencies.

Pervasive duality of values within the society leads to a vast array of social ills. The most visible of these is the spread of corruption in both the private and the public sectors. Disturbingly, the prevalence of corruption is no longer a phenomenon confined to any particular continent, region, country, culture, religion or developmental status of the society.

There are convincing and growing evidence that the facts as well as the allegations of corruption in the society have gradually tarnished the internal and external perceptions of the state operations as well as the political authority of the governments. As a result, social trust in governments has been considerably undermined.  Whilst the economy and the society at large suffer the consequences of widespread corruption, the poor within the society bear the brunt of its impact. After all, the poor are far more dependent on the performance of the public sector. The growing gap between the rich and the poor over the past decade is in part due to the growing spread of corruption, and more broadly the duality of values, across all sectors and spheres of the economy.

The duality of values has been accentuated by the processes of socio-political globalization. In general, it is much easier to create convergence of values in homogeneous societies as opposed to communities where tribal, cultural, religious and ideological differences prevail. Interestingly enough for the classical economists the consistency of values was almost axiomatic. For example, on the socio-economic significance of honesty, Adam Smith in his Theory of Moral Sentiments (1759) argued that a well functioning society was dependent on compliance with what he termed a “code of honour”. The absence of a ‘code of honour’ ultimately leads to inefficiency, under-performance, and corruption in one or other form. Corruption in the society acts much like cancer in the human body-if not stopped, for sure it will spread! Most significantly, corruption erodes the moral authority of the state and the social leadership in general.

In the face of such universal value duality, it is curious that there is no, or little, public policy discourse on and around this critical foundational requirement of success in modern societies. Socio-economic prosperity now, as was the case in bygone ages, hinges on solid and internalised ethical principles. Without such a foundation, the social welfare will continue to be vulnerable to ongoing crisis of one type or another.