Hard Choices: The Cost of Saying No

Moderator: Jan Macháček

Panelists: Peter Eigen, Misha Glenny, Miroslav Zamečník, William Echikson

 

 

 

Moderator Jan Macháček, opened the panel by asking what factors motivate CEOs, governments, and individuals to make responsible decisions in the global economic, political, and environmental arenas. He challenged the panelists to consider how collective goals can be reached at the expense of individual or state interests, and to determine who is responsible for ensuring that these goals are met.

 

Peter Eigen refuted the utilitarian argument that a corrupt deal benefiting the lives of many employees is justifiable. He responded to this human “cost of saying no to corruption” by highlighting how, in the long run, “the cost of saying yes is disaster for everybody concerned.” Eigen argued that corruption hinders competition, and thus, the optimal performance of free markets. He also demonstrated how inherent to democracies, “the limited mandate of politicians presents difficulties” as they are bound to constituents demanding unhindered economic growth. Similarly, he highlighted the inevitable shortcomings of overarching international systems such as banking, and how, nevertheless, “everyone seems to be driven by these failing governments in the financial sector.” To overcome systemic flaws that promote corruption, Eigen emphasized that we must look outside of these fundamentally limited governmental solutions and instead promote “the idea of empowering civil society to become partners with government and to develop the context to deal with issues like these.”

 

William Echikson similarly stressed the importance of preserving free markets. In contrast with the issue of government bribery, however, he described how Google must withstand government pressure and intervention. Echikson echoed Eigen’s emphasis on balancing the indirect social implications of a decision. When deciding whether to enter China under censorship conditions, he described how Google “weighed the pros and cons…If we went in we would offer more information, or if we stayed out we’d offer less for the Chinese.” As censorship was heightened, “the balance tipped the other way; we no longer felt we were doing a positive thing.” Thus, Echikson asserted that it is the responsibility of corporations to consider whether it is worth compromising free market principles for human benefits, and furthermore, it is their responsibility to take the financial loss when this is no longer the case.

 

Misha Glenny began by emphasizing the relationship between political conditions and corruption. “This is about business. This is about politics. And you can’t take the two apart.” Corruption is caused by inherent challenges. For example, in developing countries, an aspiring politician’s inevitable “primary concern is to find a revenue stream to fund political activities”. Thus, politics as an instrument of change is often hindered by its dependence on corrupt financial resources. Glenny called upon international bodies such as the EU to impose more sanctions on government corruption. He emphasized that “if we are going to go around the world as governments lecturing about crime and corruption, we have to be utterly consequent about anything we engage in”. In order to ensure this diligent suppression of corruption, Misha urged “the cost of saying no can be very high indeed. But we can also pressure our own governments to ensure that these standards are applied across the board and not just selectively”. Thus, Glenny stressed the need to engage civil society to ensure that such valuable sanctions are enforced.

 

Miroslav Zámečník echoed Eigen’s focus on systemic flaws as the source of corruption. He showed how overregulation and state bureaucracy intruding on the free markets can move us away from environmentally and democratically optimal decisions. Zámečník argued, for example, that “when you play with the exchange rate, when you give the state a role which it shouldn’t play then you breed corruption to an extent beyond any imagination.” However, because these flaws emerge from the system, he maintained that there are solutions to corruption. Much like Glenny and Eigen, he called upon the people as an instrument of these structural changes, asserting that “the public, consumer power, can do a lot of things for change”. Zámečník also aligned with Eigen’s call to weigh the long-term benefits, as he bluntly re-interpreted the cost of saying no as “The power to say no. Don’t do stupid policies when you have a choice. Try to be helpful.”

 

The panel revealed that the choice to protect market freedoms at a cost to individual livelihoods makes the issues of corruption more nuanced than it often appears. The speakers argued how economic and political institutions provide systemic opportunities for corruption. However, the panelists showed that a new perspective and a higher regard for the long-term advantages of free and fair markets should push civic groups and corporations alike to seek decisions that benefit the economy as a whole, even at the expense of short term personal interests.