But the salient point is that your friend/relative did something for you based on their relationship with you, not to make money. It’s a decision primarily based on emotions. That’s far different from a business loaning you money with the sole purpose of making money. Of course the “ethics” are different. One situation is guided by social norms, whereas the other is guided by business norms. The profit motive and structured contracts, for the most part, only exist in situations guided by business norms. The problem is that businesses want to have it both ways.
Businesses used to care about shit like that too (or so they say). If a property becomes an eyesore, take that up with the current property owner (the bank).
This is almost entirely incorrect. First, not all states allow lenders recourse to the borrower’s other assets to recover the balance of the loan. Second, in states that actually do, it has generally been pretty rare that banks actually attempt to recover the balance or, in cases where they do, are able to actually recover anything.
I agree with your first point above, and want to respond to both it and the second stub.
First of all, what you describe is unethical because even though there’s a contract in that situation, there remains a preexisting relationship with unwritten obligations, which centre around the understanding that we will have an ongoing responsibility to care for each other’s welfare. A contract doesn’t wholly supersede that unless you agree you aren’t friends anymore.
That’s not the case with my bank. The relationship with my bank is purely business, and in fact there is a common understanding that they will interpret their side of the relationship to the absolute limit of their advantage in the words of the contract. It’s perfectly ethical for me to do the same. The understanding is that that’s how it works - both sides expect the other to push to et as much as they can out of it. That’s not the case with me and a friend if oneg borrows money from the other (though we’re illustrating why friends should not loan each other money.)
As to the second, an interesting point; I live in Canada, where things are often quite the same as they are in the USA but a key difference is that our banks DON’T chop up the mortgages so much.
Some corporations, perhaps. This is a pedantic nitpick, but a “corporation” is a legal concept, not a synonym for “big business.” Lots of businesses run by people that are very attentive to their social obligations are corporations. Heck, there are corporations that are formally not-for-profit or charities.
Oh, that very thing happened to me. I was an authorized user on a company credit card. About 2 years after I left, I got a call from a collection company wanting me to pay for the charges since the company closed. You are VERY right about the horse laugh part, though. I told him EXACTLY where he stuff his request.
I see that snake oil peddler par excellence and high-king charlatan of the late night infomercial Kevin Trudeau is using this one single ruling as a way to peddle his “Debt Cures” book, and of course he implies that this is a certain, no-fail way for EVERY mortgage holder in the US to stop paying their note yet still retain possession of the house…
“Legal concept” is not a nitpick – it’s exactly on point. Corporations are not, in actuality, people, and attributing “ethics” to them is misguided.
That some/many/most corporations are run ethically is orthogonal to the fact that they are businesses. Rather, a corporation’s ethical business practices are due to people running them – fueled by empathy, as supposed by CJJ*. At any arbitrary moment or in any given situation, the policies and practices of a corporation is solely attributable to whomever is making the decisions, not the business itself.
Can’t an executive or director of a corporate justify ethical actions by claiming that they are in the corporation’s best interests financially? For example, in the case of where a company can take a $100,000 profit and pay a $10,000 fine by breaking the law, it may cause MORE than $100,000 drop in value of the company due to bad media coverage resulting in tarnished reputation, investor rebuke, etc. Because investors and consumers CAN and DO care about ethics, sometimes it IS in the corporation’s best interest to be ethical. Otherwise, why do companies follow things like environmental regulations? I don’t think you can completely de-couple ethics from profit when the latter may depend on the former.
I don’t fully agree. As I mentioned, public & investor opinion can make ethical business practices a business requirement, so it’s not just the executives’/employees’ empathy that is responsible for corporations acting ethically. However, I do agree that some businesses can be run more ethically than others based on the individuals at the helm. This could be due to their own personal ethics, or whether they feel acting ethically will ultimately give them an advantage in the marketplace, or both.
Incidentally… horsecrap. Of course they have the choice to do so. If the shareholders don’t like it (assuming they even notice) then the director was explain why they did it. If that means they get voted off the board, so be it. They have a choice.
The idea that no corporate executive can make an ethical choice is ludicrous.
Clearly, you don’t have to agree with me, in full or even in part. But I’ll point out that I said business and ethics are orthogonal. That is, “ethics” have nothing to do with business as business, unless and until someone (or many someones, in the case of a BoD, investors, etc.) in control makes it so. As you mention, ethics may very well be a good (or even necessary) business strategy, but then it’s just another method of obtaining or increasing returns.
Furthermore, I’ll note that the above: (1) makes absolutely no judgment, positive or negative, about “individuals at the helm” and (2) is not a bug, it’s a feature, as anything else interferes with the reason for establishing the legal fiction in the first place.
I’d assume this is being appealed, because there seem to be a lot of instances of this kind of thing. The Times Business pages are covering this extensively, with some of the anti-ripoff banks columnists having a good chuckle. I
I feel like the people who wonder if they owe a 2 week notice to a company if they are going to quit. Yet the company will lay you off or fire you with no notice, and escort you into the parking lot. You owe them what they owe you.
Banks did some horrible things. They created weird mortgages , then chopped them up, sold them and then sold insurance on them that they could never back. Fuck them. They are thieves and liars.
Read more carefully the quoted excerpt that I was talking about in my post:
In terms of their contractual duty to the corporation they work for, corporate directors, as I correctly said, DO NOT HAVE THE CHOICE to pursue a financially disadvantageous course of action just because they think it would be the ethical thing to do.
Of course, it is trivially and obviously true that directors as human beings can still make a personal choice to VIOLATE their contractual duty to their employer for ethical reasons, and take the consequences in terms of getting fired and/or sued for it.
I didn’t bother to point that out in my post because I thought it would be evident that I was talking about the choices available to corporate directors in pursuance of their contractual obligations—since, after all, those are the choices that determine how most corporations are actually going to be run.
http://www.nytimes.com/2007/05/22/science/earth/22ander.html?_r=1 Doing right and making money are not mutually exclusive. Ray Anderson head of a carpet company decided to do the right thing and they make fine profits. They also go to bed at night knowing they are helping by not poisoning the environment so badly.