Does an oath mean anything? Sometimes it does. Maybe even more than sometimes. Maybe even usually.
The oldest oath that we know of is the Hippocratic Oath. When I stood up and took the oath at medical school graduation, it seemed kind of corny, tell you the truth. What was probably more important was growing up in a medical household where you could see our father's devotion to duty, his pursuing research objectives, his wanting to do things right, his wrestling with the problem of his patient's wanting an operation, his knowing that it probably wouldn't do any good, and his knowing that if he said no, the patient would just go down the street and get it done by somebody else. I think he generally did the operation, figuring that since he was such a good surgeon, at least he wouldn't screw it up. He was in business, after all.
In med school the oath was talked about and as far as we could see, it was practiced. The most important precept then and now was: Do no harm. Primum non nocere. That's a pretty important one. Whatever you do, don't make things worse. Don't take chances when the stake is your patient's welfare. Don't let your own welfare get in the way.
Does it work in practice? I don't really know for sure, but I think so. Doctors seem to be cynical about many things, but not about this. They may talk about business and money and managed care a lot, and about trips and golf and houses and things, and about how stupid some patients can be and what a pain in the ass, and litigious, but I have never heard any joking about how a doctor screwed his or her patient in retaliation or by not caring. I think that aspect of professionalism and ethics remains pretty strong.
The law has oaths also. My friend Bob Levin joked that he wanted to put out a Yellow Pages ad that advertised him as "Graduated Law School Before Mandatory Ethics Course." Pretty funny. There are more unscrupulous lawyers than there are doctors probably, the oath isn't so strong there, but there are judges, there are courts, there are DA's and there are Federal Attorneys, and I have to think that the code of ethics is active.
Then there is the world of business. I remember sitting at a Goldman School of Public Policy Board of Advisors meeting next to a Board member who works at the Haas School of Business. I said to him about some business practice, "That isn't right." Now, this is a very good guy, but he said to me kind of incredulously, "But it isn't illegal!" He didn't even want to engage on right or wrong, his only standard was legality. That retort is so foreign from what a medical response would be, I was incredulous myself.
This was after Enron. What amazed me so much about Enron was how many of the participants came from Harvard Business School. Yet they were pulling all this crap. I thought, what those guys need is a Hippocratic Oath. Sure enough, pretty soon there were calls for mandatory ethics classes in business schools. I think that kind of died on the vine.
The world of business is so bad, ethically speaking, that it's not only people conducting business that's so bad, it's the regulators. Yesterday's paper had an article about the ongoing failure to reform the financial world. There were new accounting standards that had been proposed by the accounting world itself, with transparency a prime objective, and some marking to market. These are failing under political pressure, and arguments that if you don't intend to sell an asset, you can value it at what it used to be worth, or what you think it might be worth in the future. I can see how day to day marking to market can lead to disaster, essentially margin calls that accelerate a downturn, but after a period of time, reality is realitiy. Behind this political pressure is business money.
Now today the redoubtable Gretchen Morgenson in the NYT, in "Who is Watching the Regulators," tells of the ongoing regulatory failures, and how the failed bodies want more power. Shades of Bush awarding the Medal of Freedom to those who failed us most! She cites suggestions from Edward J. Kane, of the Boston College Business School, in a paper called "Unmet Duties in Managing Financial Safety Nets." He says that the public needs protection from bureaucratic self-interest, and the power of large institutions the regulators are supposed to police. He suggests -- an Oath of Office! Yes, an oath of office for regulators!
I think it might have an influence, especially if there were to be anything resembling ethics imbued in business school students in class after class. He sees four parts to the oath. One - Duty of Vision. See what is going on in the creative minds of business institutions. Two - Take Prompt Corrective Action. Not like with Bernie Madoff, I guess, nor with mortgages that the Fed knew or should have known were a problem - everybody else seemed to. Three - Perform Regulatory Work Efficiently. It's a business issue, so they should understand that. And Four - Put the Interest of the Community Ahead of Your Own. Bureaucratic self-interest is indeed a scourge.
It is this last part, Kane says, that is going on now. The regulatory bodies are taking advantage of the crisis to try to enlarge their power, and working with the institutions so that nothing will really change. Cynicism. Kane suggests Inspectors General for all the regulatory institutions, so the watchers would be watched.
Personally, I'm pessimistic that anything important will really change. I think these institutions are the heart of our current system, that this is where the high priests are. This could all be changed by a real depression or an atomic attack instead of symbolic airplanes into towers, that really killed them all. But I hope neither of these things will happen,
The closest we can get to really getting to the point where business people experience a real fiduciary responsibility for Other People's Money would come from electoral reform. If political elections were funded by public money, the financial clout of these institutions would be somewhat blunted. Not completely, because they would still be the refuge that the Tony Coelho's and Tom Daschel's and Phil Gramm's and Larry Summers' would repair to after a political career to "make their money." That's not going to change. But at least at the start, if someone wanted to be idealistic in politics, it would be more possible than it is now. It's still possible - Wellstone and Feingold proved that, among many others. But it's pretty hard.
And my friend Larry at the UCB Business School? He and others like him, the good guys in business, should take a page from the medical tradition, and think about it seriously. If the Great Age of Capitalism is to do better, ethics needs to be on the table.