My economics professor in college was the late John Kenneth Galbraith, a best-selling author, New Frontier favorite and celebrity, to the extent that an economist can be a celebrity. One of the foundations of his fame was his theory that big corporations were becoming the successors to nations. They were, he said, on the way to becoming more powerful than nations, and the working people of the world would begin being more loyal to them than nations or religions.There were a lot of economic and management consequences of this, but it was the ethical implications that most interested me.

Corporate cultures would increasingly steer individual beliefs and behaviors, and strong forces would push these industrial giants to be less driven by profits and more ethically reponsible, since employees would want to be a “citizens” of a corporate state in which they could take pride. Similarly, stockholders wanted to be able to be proud of their holdings, as well as make money with them. His book explaining this theory, “The New Industrial State,” was a sensation. Part of the motive behind the book, my professor being a big government advocate too, was to lay the foundation of the case that these new “states” had to be carefully guided and regulated lest one go rogue and abuse its power to disastrous effect. Still, the position of the book was optimistic: the new giant corporations were scary, but there were forces at work that would make them want to be good and do good while making all that money.

Well, so much for that college course. The unfolding ethics mess that is the Epipen fiasco shows us an ugly company with an unethical culture run by an unethical CEO and invested in by people who don’t give a damn that the company is despicable, as long as they make money. The regulatory system that could have been built on Galbraith’s fantasy has failed utterly.

To make a long, complicated and depressing story shorter, here is a summary with some links at the end. Continue reading →