Wednesday, July 11, 2012

Honesty and Dishonesty in American Business

Min River Tea recently left a comment on my recent blog post More Is Not Better: How To Balance Freshness and Turnover for Small Tea Companies, highlighting something that I had overlooked in that post. This is the fact that companies with a business model like Min River Tea keep their catalogue small in large part because they want to be able to actually visit the farms producing their teas, both for quality and ethical reasons.

The comment also raises the question of whether or not it is ethical to make claims about tea being "direct from the farm" or practicing "ethical sourcing" without having ever visited the areas in which a tea is produced.

The above photo, by vera46, shows tea pickers in Minamiyamashiro, Kyoto. Photo licensed under CC BY 2.0 license. Like many people who work within the tea industry in the U.S. and other Western countries, I have never visited a region in which tea is produced.

No consensus on what constitutes "ethical" sourcing:

Ethics can be a tricky subject, because different people have different fundamental beliefs or assumptions both about the basis of their moral systems, and about how the world works. An example is the issue of abortion, where people reach vastly different conclusions on the basis of certain beliefs or assumptions, including whether or not they believe human life begins at conception.

In economic matters, things become even muddier, as not only do people have different fundamental values surrounding money, business, and ownership of property, but people also have vastly different ideas about cause-and-effect, and about which sorts of outcomes in society are "good" or "bad". Some people may care primarily about increasing GDP or business activity, others may care more about reducing pollution or carbon emissions, others may care more about reducing human suffering and promoting human rights. This disagreement exists among academic economists, political figures, business leaders, and everyday people.

Disagreement on ethical issues is not necessarily bad, but casual labels of "ethical sourcing" are usually problematic:

I do not necessarily think that it is problematic that there is no consensus about what constitutes "ethical" sourcing. Quite to the contrary, I think that vigorous debate about ethics is healthy and perhaps even essential to address social and economic problems related to the tea industry (or any ethical problems in the world, for that matter). But what I think is more problematic or harmful is that people throw around words like "ethical" or phrases like "ethical sourcing" without explaining what they mean.

Whether one is dealing with the Ethical Tea Partnership, or fair trade certification for tea, there is still little transparency about where most tea comes from. When I buy fair trade tea, I know that there is a whole organization behind the fair trade logo. But I still do not know the exact portion of the price that I am paying that is reaching the individual producer. I do not know what percentage of revenue the company selling the tea to me is taking as profit, and what percentage is spent on business expenses. I do not know what portion of the price goes towards packing and shipping costs, or what portion is spent on marketing. And, in spite of all the bureaucracy and energy expended on the certification process, I still do not know where exactly the tea came from.

True transparency, whether in naturally-occurring minerals, or businesses in American society, is quite rare. Just as a majority of quartz crystals are not as transparent as this one pictured above, a majority of businesses and organizations are quite opaque about key points of ethical relevance.

To me, transparency is a key part of ethics. Without transparency, one lacks even the basic facts of the situation, and without the basic facts, even if one has clear morals, one cannot reach truthful conclusions about the moral or ethical status of a given action or practice. This belief comes in part comes from my religious beliefs, which have been increasingly taking form as I've been working with Why This Way and hashing out my views on different issues in a group of people who share certain foundational values.

Deeper problems with honesty and transparency, not limited to the tea industry:

I think the problem that Min River Tea was getting at in the original comment runs deeper than just the tea industry. Most of consumer culture in America is dominated by claims of dubious honesty, that is, products which are marketed in an overtly dishonest spirit. Often these claims take the form of brief phrases or labels, a lot like the claim of being "ethically sourced".

One of the most glaring, recent examples of this is what I like to call the "0 grams trans fat" loophole. This loophole is the result of a policy or law that specifies that, in food labelling, amounts of trans fat less than 0.5 grams can be rounded down to 0. Another, broader problem is when products are marketed under the guise of being "healthy" when they are loaded with unhealthy ingredients. Two common examples are when "low fat" products are loaded with sugar, or when "whole grain" products are made primarily with refined flour, and contain only insignificant amounts of whole grain.

The above label shows 3 grams of trans fat. If the quantity were less than 1/6th as much, or if the serving size were smaller, it could legally be rounded down to 0 even though the product still contained trans fat.

These practices may satisfy the letter of the laws in the U.S., but I think a majority of Americans would agree that they are thoroughly dishonest in spirit.

I think that part of the problem is that the culture in the U.S. has been one that emphasizes a literalistic, legal-definition-based approach to product advertising. I think this is in large part because we have relied on legal regulation, rather than informed choice and moral integrity, to shape our marketplace.

Taking responsibility to solve these problems:

I believe that the only way to fully and sustainably address the issues of dishonesty in marketing is to take personal responsibility, that is, for all the choices we can make in our daily lives that can impact these issues.

Americans have been tolerating these sorts of practices for years. These products would not be on the shelf if people did not buy them. And marketing teams would not even consider making claims that were dishonest in spirit if they knew that the marketplace would swiftly and severely punish them with product boycotts in the case that they made dishonest claims. Moreover, marketers would not make these claims if they were strongly committed to integrity in marketing, and if their business decisions were driven by their own personal moral values.

It's for this reason that I don't tolerate these sorts of labelling practices. I don't buy these products, but it doesn't stop there. I often write letters to companies urging them to be more forthcoming in their labelling--in the case of trans fats, to remove all trans fats from their products, and in the case of "whole grain" products, to actually make products out of primarily (or exclusively) whole grain flours. But I also appeal to the individual moral conscience of the people who work within these industries. I do believe that most people want to be honest people. People are more likely to get sucked into dishonesty when they are simply not thinking about how much they value honesty. If everyone woke up every morning thinking about how much they valued honesty and integrity, and embraced this as an essential part of their identity, they would likely make different decisions in business settings.

Another way I try to address these issues is to talk and write about them with other people who might buy these products. I talk frequently not only to my friends, but to acquaintances, and to people who I see buying these products, and explain to them about things like the "0 grams trans fat" loophole, and I urge them to avoid products labelled as "low fat" but high in sugar, and to read labels on products labelled as "whole grain" to see that they actually are made primarily from whole grain flour rather than just including it as a minor ingredient.

Putting yourself on the line:

Sometimes I even go out on the line a little. It can be hard to point out concerns like the ones I discussed here, in casual social settings. One example of this is when someone brings a box of cookies to a party, a box that displays marketing that I find dishonest in spirit. It can seem a bit abrasive to comment on things like this, but I do believe it can be done respectfully. Sometimes all you need to say is: "Hey, I would really prefer if you did not buy this product, because I think their marketing is dishonest." and I explain a little bit about why. You can conclude by reassuring the person that it is okay that they brought it and telling them to not feel bad about it, worry about it, or think too much about it.

Some people may not care or may not want to hear it, but if they don't, or if they are offended, that is their issue, not mine or yours. And I do think that a large number of people actually do like to learn about these sorts of issues, and will act on the basis of them. They just never stopped to think about it.

What do you think?

What do you think about the comment that Min River Tea made? What do you think about the lack of transparency in the tea industry? How about the phenomenon of marketing claims that are dishonest in spirit? And of my recommendations of how to address these claims through choice and discussion, without resorting to legal battles?

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