Ethics in the corporate world

WikiLeaks and the Payment Processors

Posted Dec 29, 2010

There has for some time been considerable discussion in philosophy about the ethical status of corporations and corporate bodies. Those at the head of corporations have, unsurprisingly, lobbied to have corporations declared to have many of the more important rights of individual persons without also having the more onerous responsibilities of individual persons. Thus corporations have often seen themselves as having duties to their shareholders, and few if any duties to the wider community beyond those explicitly required by law.

The issue of corporate responsibility usually comes to public notice when a corporation acts in a way that the public takes to be ethically irresponsible. Examples of such behaviours are legion, but they usually involve corporations acting so as to maximize their own profits at the expense of the environment, or those in developing countries, or local communities, or individuals, or smaller companies etc etc. The issue of corporate responsibility became salient along a rather different and unusual dimension recently when Visa, MasterCard and PayPal all blocked donations to WikiLeaks.

Much has been said in the public media about this course of events. Some commentators have thought it outrageous that corporations like Visa should take it upon themselves to make what are essentially ethical decisions on the part of those who use Visa services. The thought, I take it, is that while Visa the corporation can have whatever view it likes about the WikiLeaks site, so too each of us in the community has a right to an opinion about the ethics, or not, of the WikiLeaks site. Those who think that WikiLeaks is a danger to government and society, and that it is flagrantly unethical should refrain from donating any money to the site. Those who think it provides an important source of information about government activities so that government can be accountable to the people who elect it and that this is important in a democracy, should, if they choose, have the right to donate money to the site.

Commentators pointed out that by blocking payments to WikiLeaks, Visa, MasterCard and PayPal effectively made the choice for everyone. Moreover, as many pointed out, this is surely hypocritical given that these same corporations do not in general police the processing of payments to other organisations that are ethically ambiguous. For instance, you and I can donate money through Visa or MasterCard, to explicitly militant right wing racist organisations. We can pay money for pornography using Visa and MasterCard. We can donate money to exit international, a lobby group and information provider about euthanasia.  Visa, MasterCard and PayPal have no policies about these organisations - so why pick on WikiLeaks?

Visa, PayPal and MasterCard have all claimed that the reason they are blocking payments to WikiLeaks is not because of anything to do with ethics at all, but is an issue about legality.  Their statements say that their rules prohibit customers from facilitating any action that is illegal. Thus, their claim is that that they are not taking an ethical stand at all; they are merely following the law. But this is a difficult argument to swallow.

The legal status of the WikiLeaks site is unclear, and as yet no charges have been proven. It is difficult to see how donating money to the site can be considered facilitating illegal activity prior to it being proved that the site has engaged in any illegal activity. So it is difficult not to read Visa's decision as not being motivated by other concerns, some of which are presumably ethical concerns (though some are no doubt political).

Whatever one thinks of the motivations of Visa and their ilk, serious and interesting questions have been raised by their actions. In particular, quite aside from the particulars of the WikiLeaks case there are questions about how such corporations ought to approach ethical questions arising from (in this case) the processing of payments to organisations. At first blush one might defend the view that Visa and MasterCard ought to process any and all payments unless those payments are to organisations that are, at the time of payment, illegal (such as particular terrorist organisations). Then individuals are left to make their own decisions about to whom to donate their money. This is by no means a crazy view. Certainly one should have considerable worries about the prospect of organisations like Visa and PayPal implementing policies about which transactions they will process and which not, based on a policy derived from their own ethical considerations. That such organisations should dictate the manner in which we spend our money is a frightening proposition and one that has, in very small part, been made more real to us in the wake of the WikiLeaks situation. This worry is a very real one, and might lead one to contend that ethical considerations ought never to play a role in organisations like PayPal deciding whether to process transactions or not.

But as always, nothing is completely clear-cut. It is not clear that we want organisations like Visa to process payments utterly regardless of the ethical considerations at play. During the second world war Swiss banks rather notoriously dealt with both the German government and with individuals who had goods and monies that were morally, if not legally, stolen. The Swiss banks effectively took the view that they were merely the processors of financial transactions, and that it was not up to them to make decisions about processing or not processing transactions based on any ethical views they might or might not have about the circumstances in which the monies were gained. That is essentially the attitude that we have just considered applying in the case of Visa and MasterCard - one that leaves decisions about what is ethical and what is legal up to governments and individuals within a society and allows no role for such decisions within corporations. But that seems attractive just as long as the society in question has laws that support ethical behaviour. If the British government were to change its laws and start seizing the property of everyone with red hair and freckles and if it were to then process the transacting of that property through organisations like Visa, we would not, I expect, be so sanguine as to think that Visa ought to simply process those transactions no questions asked. If that is right, though, then we must think that corporations like Visa have some ethical responsibilities in terms of the processing of financial transactions that go beyond merely following the letter of the law within any particular country.

The WikiLeaks case raises larger issues about the extent to which corporations like Visa and MasterCard ought to impose some sort of constraints, borne from ethical considerations, on the individuals who use their services. There are not clear cut answers to this question: it is not enough to simply say either that ethics should be completely left out of the equation, nor that they should exert whatever pressures they happen to desire. The truth must lie somewhere in between. But in the heat of the argument about WikiLeaks, this more nuanced discussion has largely been lost. And that is a pity.