Detail Column

Political and business ethics we ignore

02 January 2012



Political and business ethics we ignore

Agus Pakpahan, Jakarta | Sat, 12/03/2011 12:40 PM

Why does the government want to keep rice prices low for consumers at the expense of poor farmers? This is an example of a question about political ethics directly addressed to policymakers within the government or regulatory institutions.

Similarly concerning is how telecommunication players have charged people who have never agreed to be charged, but yielded hundreds of billions of rupiah a month from them through unwanted contents without showing regret.

If we want to buy chicken or fish we fear the possibility that these foods could contain formaldehyde or other dangerous chemicals. The same applies when we buy vegetables and are worried by the possible contamination from pesticides. We could make a long list of consumers’ or customers’ problems in the Indonesian market. 

The political ethics applied in the area of food and agriculture should have intensified discussions on strategies to prevent farmers, as one of the weakest parties in developing countries, from suffering as a result of a policy. We understand that any policy will make one party better off and other parties worse off. In other words, in any given political situation, a zero sum game is a certainty and win-win solutions are next to impossible. 

So, whose interests count in policymaking? What ethical values are behind certain policies? If the policy of low food prices is set in an effort to keep inflation rates low and to avoid unrest in urban communities at the expenses of poor farmers, we may presume that policymakers share ethical considerations similar to the colonial Ethical Policy.

The Dutch colonial rulers introduced the so-called Ethical Policy in the late 19th century, a policy purported to improve farmers’ welfare. As such, we must now question whether we better than the colonial government?

In all countries, business activities are subject to rules and regulations. Under the same situation, different rules and regulations will produce different socioeconomic performance because the “contents” are different. Rules and regulations are part of a structure, not “contents”. 

Rules and regulation cannot be implemented if people or the entities subject to them are unable to learn about the content embodied in the rules and regulations. Learning means a permanent change of people’s behavior due to their newly acquired information or knowledge. This means that the reality of rules and regulations is not in the written documents but in the minds of the agents or agencies that practice them in their daily lives.

Ninety years ago, Frank Knight reminded us that profit, which is the most important goal in business, is a function of risk and uncertainty. Combined to Isaiah Berlin’s wisdom that says freedom for the pike is death for the minnow. “The minnow” represents the weak or the poor and “the pike” represents the strong and powerful agents. 

So, if there are significant risks and uncertainties in the economic environment, excessive profits will be gained by business enterprises. For the poor and the weak, all things are risky and uncertain. That is why the government must protect the poor, because they are weak by themselves.

Our founding fathers acknowledged this predictable situation. They learned from our history and from their own experiences. 

All ethical values underlining both political and business affairs are included in our Pancasila state ideology and 1945 Constitution. I think we are ignorant if we do not practice them and the real significant cost of our ignorance is our nation’s dangerous future.

The writer is a researcher and the chairman of the Union of Associations of Indonesian Estate Crops Farmers.


Sumber : The Jakarta Post