"Insidious" might be a stretch…slightly devious, perhaps.

I’ve been meaning to write about an Economist blog post from December about MBAs which points to a debate between three professors from MIT and Harvard about whether MBAs are the cause or the cure (or something in between) of the current economic troubles:

The reaction of many budding financiers and consultants when faced with an economic downturn is to pack it in and go to business school. Business school applications soar in number during recessions. A lively debate between Andy Lo and Jay Lorsch and Rakesh Khurana questions if business schools are actually to blame for our current turmoil.

Messrs Lorsch and Khurana, professors of human relations and leadership at Harvard, think so. They believe business school can encourage the “culture of me”, or individuals solely out for their own self-interest.

An interesting debate, but I was more interested in a subsequent point made by the Economist blogger. Emphasis is mine.

This reminds me of a discussion I once had with one of my professors, the dean of a prestigious business school. Shortly after the Enron debacle he asked me how business schools could better teach ethics to help reduce such behaviour in the future. I told him you cannot teach ethics to MBAs. By the time you’re an MBA student (typically mid to late 20s) you’re either an ethical person or you’re not. No business school class can make you realise embezzling money is wrong if that’s your inclination. Most MBA students are ethical; they learned from their parents long ago.

I know where he’s going with that, but I don’t think I entirely agree. I don’t think there’s an on/off switch marked ‘ethical’ in the brain that’s either a 1 or a 0; I think it’s a scale, like all other traits and characteristics defined by a single word or concept. I think that trying to teach ethics gives students tangible examples that may later prevent them from doing something overtly unethical…so while it’s not making students think more ethically per se, it might make them act more ethically, and that’s just as important.

When I was in the software industry I worked with enough sales people to know that some individuals:

  1. are so far down the ethical scale that they wouldn’t recognize normal business ethics anymore;
  2. have jobs where incentives structures reward unethical behaviour;
  3. have received no ethical teachings which may have staved off unethical behaviour, as described above.

In all three cases I can see ethical training helping, or at the very least doing no harm. In my undergraduate business degree we were compelled to take a business ethics class (which I actually quite enjoyed, but then, I am a socialist) but had no such requirement in my MBA courses. We could have used some, certainly; I heard some truly astounding moral rationalizations during discussions on child labour, advertising and the like.

What do you think? Can ethics be taught?

Spicy chicken = biggie sized. If you know what I mean.

The Distillery District

Today was very busy, and yet somehow very relaxing. I got a metric whack of Christmas shopping done, ate a Wendy’s spicy chicken sandwich (ohh…missed you SO HARD), bumped into my buddy Brad, met my new doctor (who is surprisingly young and alarmingly attractive), tried some yummy Costa Rican chocolate with roasted hazelnuts from Soma, bought some shirts at my new store crush Lileo, and generally enjoyed walking around the city, even if it was a little busy with shoppers. Even late on a Monday morning, I guess I have to expect that with less than three weeks ’til the big day.

A couple of observations:

  • I love my new winter coat. I am never cold outside (even venturing out on days like yesterday, which Tom Purves compared to a Shackleton expedition), but I don’t get warm when wearing it indoors. Note to Canadians: a winter coat is the wrong thing to skimp on.
  • There is a special layer of hell reserved for a) people who look one way and walk another in crowded environments; b) people who stop dead at the top or bottom of an escalator; and c) cashiers who cough violently into their hand just before they reach into the till to hand me my change. When I am king PayWave and PayPass will work everygoddamnwhere.
  • The Distillery District (see above) is a really lovely place, especially in the winter, especiallyespecially when they’re decked out for Christmas, and superespecially in the middle of a weekday when no one else is around.
  • Overheard in the PATH: Lady #1: “I have nothing in my wallet but I’m still going shopping.” Lady #2: “I have nothing in my wallet but I’m still buying a car.” Downturn? Quel downturn?

Tomorrow it’s back to work, but right now the most stressful thing I feel like doing is putting my undefeated Wii Tennis streak on the line.

"The mall at the end of town is dead. Amen."

I hate malls. I avoid them like the plague, even though I live just a few minutes from the largest (probably) downtown shopping centre in North America and a short subway ride from the fifth-largest mall in Canada. And apparently there are a bunch more around the city that I’ve just never laid eyes on. The crowds, the stale compound-like atmosphere, the food courts reeking of Manchu Wok…I’ve just never liked them.

Mind you, growing up, it was a big deal when a mall came to the town near where we lived. It had a K-Mart and a Save-Easy and a sports store and a drug store where I could buy comics. Truthfully I was too young to remember that mall opening, but I remember it being a big deal when we could go. Then a second mall opened in the mid-80s with better stores…Zellers instead of K-Mart, Sobeys instead of Save-Easy, Coles instead of just the drug store magazine racks,  A&W, a music store and (hooray!) an arcade. This mall was the new hotness, and everyone loved going there.

My mother still preferred to shop and do business downtown when she could, at the small locally-owned photo printers or clothing stores, and there was a real music store there where I could buy drums, but for the most part business was conducted on the outskirts of town at these malls. Before long, though, the new mall killed the old mall, leaving a near-empty shell sporting a few die-hard stores just across the road from a parking lot of mall-goers. Rare visits to the old mall felt vaguely creepy or eerie. I was too young to know that I was sensing imminent failure; dating would later allow me to hone that skill.

Now, when I visit that town on occasion, the “new” mall still seems fairly busy, but the real excitement seems to be at the big box stores…Wal-Mart came, first attached to the mall and then stand-alone. The grocery stores detached themselves from the malls and built neighbouring castles. Canadian Tire and Kent moved in. God knows what else is there now. Meanwhile, the stores downtown on or near main street struggle to survive. While this bothers me a bit, let me be clear: I’m not advocating the nostalgic return to an old towne main street; people will shop where they want to shop, and I have no desire to artificially perpetuate a dying model for posterity’s sake. I just have a fondness for that particular main street.

That said, I recognize that business and public preference can change, and for years I’ve hoped that the fad of shopping malls would eventually burn out. The last several years have certainly been pointing in that direction — though focus seems to be shifting more to the “power centre” model and not back to main street — the mall still seems to have a powerful hold. Even in downtown Toronto, with Queen Street, Yorkville, King Street, St. Lawrence Market and the like nearby, I still get asked for directions to the Eaton Centre all the time.*

So I was very interested to read that, according to Newsweek (via the Creative Class blog), last year was “the first in half a century that a new indoor mall didn’t open somewhere in the country—a precipitous decline since the mid-1990s when they rose at a rate of 140 a year.” The Newsweek article points to DeadMalls, a site which was always filled me with worry and joy. I wanted this trend to be over, remembering how empty and awful the old mall in that town became, but I didn’t relish the idea of hundreds of deserted neon bunkers littering the landscape. The mall experiment won’t be an easy one to clean up.

* It happened yesterday, actually.

"Why bail out the car companies when they bailed out on us?"

Much has been written about the possible bailout of Detroit auto manufacturers — by Greg Mankiw, The Economist here and here, Baseline Scenario, Salon and Richard Florida here and here, to name just a few — and nearly everything I’ve read points to the bailout being a terrible idea. The American car manufacturers have been classic examples of mismanaged companies (see the chart above from Professor Mark Perry) who would rather lobby against change than profit from it.

This could be the first big test of character for soon-to-be-president Obama. If he bails out Detroit without serious conditions attached (he’s made preliminary statements to this end, but nothing at all concrete) it would only be for political reasons

British + economist + financial crisis = funny! No, really!

This post in the Economist’s blog today made me smile. For the record, I rarely smile at The Economist, especially of late, but today the sarcasm would be dripping if it weren’t so devastatingly dry.

The latter, notably, published a book in 2004 called Bullish On Bush: How George Bush’s Ownership Society Will Make America Stronger. As best I can tell, it was not written as parody.

Zing! Then later:

I have to tip my hat to Mr Laffer. I’m not sure I could author something this wonderfully, artistically wrong, were I to labour at the effort for months. Bravo.

No, no. Bravo to you, sir.

Hey dean, do me a favour and pick up those jocks, will ya?

I have no problem with athlete salaries. I know people complain about someone getting paid a magillion dollars to slap a puck or throw a ball, but it’s simple: thousands and thousands of people will pay good money to watch that player perform, or wear their jersey, or buy their sneakers, or whatever. Owners of sports franchises can do math, and will pay players an amount they think they can recoup in these ways. Sure, some teams will pay extravagant and undeserved amounts for players out of desperation (cough Jeff Finger cough), but for the most part sports franchises pay players enough to help them accomplish their goal: to entertain and turn a profit.

Universities, though, are not sports franchises. They’re supposed to be institutions of higher learning, and therefore this bothers me:

[Via Greg Mankiw]

Lost in the noise

More than two years ago I wrote a paper on the Doha declaration on the TRIPS agreement, part of the Doha round of World Trade Organization talks. The TRIPS agreement basically reiterated the right of poor countries to reproduce low-cost versions of medications for their citizens without being subject to patent violation claims (the likes of which are discussed at WTO talks). These rights had been set out in the previous round of talks, but drug companies had found loopholes to prevent low-cost medications from being produced. This declaration was intended to remove any ambiguity or loopholes from the TRIPS agreement:

The TRIPS Agreement does not and should not prevent Members from taking measures to protect public health. Accordingly, while reiterating our commitment to the TRIPS Agreement, we affirm that the Agreement can and should be interpreted and implemented in a manner supportive of WTO Members’ right to protect public health and, in particular, to promote access to medicines for all. [Wikipedia]

The Doha round of talks have been going on since 2001 and, as the Economist reported last week, are essentially deadlocked. They’ll likely collapse some time in the next year. Of course there are hundreds of agreements, tariffs and arrangements covered in the Doha round, but this topic seemed to me to go beyond trade. The humanitarian implications are staggering, and yet the story of probable failure of the Doha round will be lost in the financial markets meltdown.

The nation of whiners is angry

I don’t want the American economy to get the Asian flu. Really, I don’t. It’s not good for anyone, least of all Canadians.

But at the same time, this $700 billion bailout, should it eventually pass (the US Senate is expected to approve it this evening, after a retooling following the House’s rejection on Monday) will feel like rewarding the greedy. I know it’s not, of course; if banks fail account holders suffer, and that doesn’t help anything. But these bailout packages seem to contain little in the way of punishing the financial system for getting into this mess in the first place, to say nothing of ensuring that it doesn’t happen again. Hopefully the latter would be set out in new legislation, regardless of who becomes president. I dare say that even if Phil “The De-Regulator” Gramm hadn’t already been booted off the McCain campaign, he soon would have.

So Wall Street cries out for the Senate and House to save “Main Street” by handing over $700B, but the mob doesn’t like it. Not because they won’t want to help Main Street…they are Main Street. It’s because there’s no sense of justice here. I wouldn’t recommend something so head-scratching as Michael Moore’s plan (although the idea of sticking it to the nation’s 400 richest people will hold appeal for many) but if Bernanke and Paulson would just include a tax or fine — some kind of slap on the wrist — on Wall Street in their package, they’d have more public support, and a better chance with Congress. But it won’t happen. Bailouts and other socialist ideas only apply when it’s taxpayer money; when profits are at stake everyone miraculously reverts to a laissez-faire idealist.