The Ukraine War Exposes the Failures of ‘Ethical’ Business, Says Professor of Finance

Aswath Damodaran, Professor of Finance at the Stern School of Business at New York University, is well known to many of those who have worked in finance. His valuation datasets are widely used by bankers and consultants. But Damodaran does not just collect and publish useful data. In a recent article he asks important questions about the usefulness of so-called ESG-measures, metrics that focus on the environmental, social and governance related performance of businesses, and what the war in Ukraine tells us about their usefulness.

The ESG metrics are based on the idea that companies should look to all stakeholders instead of focusing only on profitability. This idea, often described as Corporate Social Responsibility (CSR), has been around for a long time. Originally an ethical concept, it stipulates that companies, or in fact shareholders and management, should aim at having a positive impact on society, that it is their duty to do so.

Many have criticised this idea, most notably Nobel laureate Milton Friedman in a 1970 New York Times Magazine article, where he argues that the only social responsibility of companies is to maximise their profits by constantly finding new ways to lower costs and increase revenues, always within the frame of the law of course.

If CSR was only about being ‘virtuous’ for no profit it would not have lasted long. But the promise of CSR is that by behaving in a socially responsible manner companies will in the long run benefit. It is on this basis that the environmental, social and governance metrics have been developed and are being implemented by businesses, investors and banks all over the world. If this development continues, it may mean, for instance, that otherwise successful and profitable businesses or investment funds which refuse to let an essentially political agenda dictate their business or investment decisions will face restricted access to loan financing. We are already seeing restricted access to equity financing as more and more pension funds use the ESG metrics to evaluate investments.

How Dare the Government Think it is Entitled to Trample on Our Fundamental Freedoms to Keep Us ‘Safe’

There follows a guest post by Dr. David Seedhouse, Honorary Professor of Deliberative Practice at Aston University, who says the underlying problem with the Government’s response to COVID-19 was that ethics was thrown out the window without a second thought, so no one reflected on whether it was justified so egregiously to trample on people’s fundamental rights.

One of the most troubling aspects of the Government’s response to the pandemic was its complete disregard for ethics. It seems not to have occurred to the decision-makers that the instant removal of fundamental civil liberties required – and must always require – the most comprehensive ethical justification. 

During the largely self-made crisis, the Government passed sweeping mandates with barely any serious reflection on the impacts on millions of people’s lives, and stubbornly refused to listen to a multitude of far more thoughtful, well-informed alternatives.

Inexcusably, it appears that the main reason the Government and its advisors neglected to consider ethics was brute ignorance – they didn’t think about ethics because they have no idea why it is important. To them ethics is at best a scarcely relevant adjunct to ‘following the science’. 

Had they understood ethics – or bothered to ask people who do – they would have been able to approach policymaking in a properly balanced and effective manner. 

The Demolition of the Principles of Good Clinical Practice

I was fortunate enough to have studied at Leeds University Dental Institute. For me, the most important lessons were in the ethics and principles of clinical practice. These foundations exist to protect the public and ensure that they can trust us to provide any necessary care.

So what in particular did I learn and what would have prevented me from being allowed to qualify and have a licence to practice?

I had to study physiology, anatomy and pathology in great detail and be continually tested on these subjects before moving on to practical surgical and technical skills. One of the key considerations I had to have in mind when making the transition from theory and applying this to practice was to understand that not all specifically diagnosed cases are the same and that the health status of a patient is never fixed. It can be ever-changing and dynamic, so a clinician needs to be reactive to this.

We were also taught about perspective when assessing a patient. I was once pulled up by the Professor in Radiology for dwelling too long on one particular area of a radiograph in my determination to reach a diagnosis. The valuable lesson was that by doing this, I risked finding artefacts and missing the bigger picture. When it comes to safety, airline pilots, sea vessel captains and motorists should know the perils of focusing too much in one area, especially in an emergency. For Covid the bigger picture includes the latest data that shows  99.9987% of the under 20s and 97.1% of the elderly survive Covid.

Examination questions were very often designed to see how well we could accommodate these variables in order to tailor-make individual treatment plans. The complete antithesis of providing safe, effective healthcare would have been to rush in and provide a blanket ‘one-size-fits-all’ treatment plan for every patient.

Not understanding and applying these principles would likely prevent you from qualifying as a dentist or a doctor. 

Apart from individualising treatment and monitoring for beneficial and adverse effects, further prescribing principles focused on the following: patient safety, identifying the most vulnerable, informed consent and prescribing within the limitations of your knowledge, skill and experience.

So, in the context of Covid, how well – how correctly and ethically – have we applied these basic principles in tackling the disease?

Another Question for Chris Whitty

I previously posed a question for Chris Whitty here on the Daily Sceptic. (Outrageously, I have not yet had a response.) To jog your memory, here’s what I asked.

In an interview with The BMJ on 4th November 2020, you (Whitty) characterised the Great Barrington Declaration as “wrong scientifically, practically, and probably ethically as well”.

Yet five months earlier, you had outlined a plan to the Health and Social Care Committee which sounded an awful lot like focused protection. You said that we’re “very keen” to “minimise economic and social disruption”, and mentioned that “one of the best things we can do” is “isolate older people from the virus”. 

Given that you were recommending focused protection as recently as March of 2020, why did you subsequently describe the Great Barrington Declaration as “wrong scientifically”?

I now have a follow-up question for Professor Whitty. (If he answers this one promptly and in a satisfactory manner, I am willing to forgive his having ignored my first question.)

Professor Whitty, you opined that the Great Barrington Declaration is “probably” wrong ethically. I presume you said this because you believe that focused protection would have led to a higher death toll (notwithstanding the fact that you were recommending it back in March of last year).

The UK’s official death toll is on the order of 150,000. Let’s assume that if we had followed focused protection, the death toll would be double – i.e., 300,000. Note: I don’t consider this remotely plausible, but let’s assume it for the sake of argument.

Now, the ‘UK Influenza Pandemic Preparedness Strategy 2011’ states that planners should “aim to cope with up to 210,000 – 315,000 additional deaths across the UK over a 15 week period”.

Given that “315,000 additional deaths” is comparable to the number of people who would have died if the UK had followed focused protection, which you regard as unethical, you must regard the UK’s pandemic preparedness plan as unethical too?

If so, why did you not seek to change the plan while you were Chief Scientific Adviser to the Department of Health and Social Care between 2016 and 2021? Note: the ‘UK Influenza Pandemic Preparedness Strategy 2011’ was published by this very department.

Thank you for listening, and I once again look forward to your answer.

The Ethical Bankruptcy of Vaccinating 12-15 Year-Olds

We’re publishing an original piece today by a senior pharmaceutical company executive setting out the ethical case against vaccinating healthy 12-15 year-olds against SARS-CoV-2. He points out that the risk of myocarditis alone is greater than any potential benefit of being vaccinated for this cohort. There are 3,200,000 12-15 year-olds in the U.K. and if you give a single dose of the vaccine to every one, according to the JCVI, you’re likely to prevent seven children ending up in the paediatric ICU. That’s not seven per million; that’s seven in total. But, according to the same source, the risk of a 12-15 year-old who’s received one dose developing myocarditis is 3-17 per million, so if every child in this cohort receives one dose between 9-54 will develop vaccine-induced myocarditis. Since we don’t know the long-term impact of myocarditis on a person’s health, this data suggests the risk of vaccinating 12-15 year-olds outweighs the risk – and that’s to ignore all the other potential side effects of the Covid vaccines.

Here are two key paragraphs, although the whole piece is excellent:

When it comes to the vaccine-induced safety risks, such as myocarditis, we do not have enough data to adequately assess what they mean for this vulnerable group and, as a result, we do not know how to satisfactorily manage them. This was the point the JCVI was making when raising concerns about the long-term risks. I must also emphasise again; children are not small adults and for 12-15 year-olds with hormones racing and puberty in full swing we cannot necessarily transfer any knowledge or assessment of risks from the adult population to this group. It may be that the risks are short-term, manageable, and acceptable and so the balance of benefit/risk is okay… but the fact is we simply do not know, and finding out by immunising 100,000s of children in uncontrolled circumstances is no way to discover the truth. One cannot ignore these risks just because “they are very rare”, especially when the significant benefits may also be “very rare”.

This is a clear case of where the precautionary principle should be applied and where we should assume the worse outcomes and manage the situation accordingly. Here, we’d assume there will be long-term issues associated with vaccine-induced myocarditis, put in place a routine monitoring plan for those who have already suffered this adverse event to ensure they remain healthy and detect any issues as soon as we can, and not vaccinate anyone else in this group until we understand what, if any, long-term issues there may be. It is ironic to me that the precautionary principle has been wielded by the Government and their advisors to justify a whole host of unproven interventions during the COVID-19 pandemic (think masks, think lockdown), but it appears that when it gets in the way of a desired policy implementation it is something that can just be forgotten. As Groucho Marx once said: “Those are my principles, and if you don’t like them… well, I have others.”

Worth reading in full.

Stop Press: Professor David Paton has come at the same issue from a different angle and reached the same conclusion. He’s examined the argument that vaccinating healthy 12-15 year-olds will reduce the disruption to children’s education in the Spectator and concluded that it’s nonsense. He originally set out this critique in a Twitter thread and that prompted Julia Hartley-Brewer to have him on her show to flesh out the argument. You can see a clip here.

Justifications for Lockdown Have Implications That Most People Would Not Accept, Say Philosophers

Although nationwide lockdowns are unprecedented in modern history, there’s been remarkably little public debate about whether they are justified ethically. Vague appeals to ‘protecting the NHS’ will not do, especially since the U.K. Pandemic Preparedness Strategy 2011 says that halting the spread of pandemic influenza virus would be “a waste of public health resources”.  

In a paper due to appear in the Journal of Medicine and Philosophy, Samuel Director and Christopher Freiman examine the two main justifications that have been given for lockdown. And they find both of these justifications wanting. In particular, they argue that each one has implications that most people would not accept.

The first major justification for lockdowns is that we have to minimise lives lost (or perhaps life years lost). In other words: we should adopt whichever policy minimises the total number of deaths, and since lockdown is the policy that achieves that, we should implement lockdowns.

As an example of this justification, the authors quote the former New York Governor Andrew Cuomo, who said, “We’re not going to put a dollar figure on human life. The first order of business is to save lives, period. Whatever it costs.”

Yet upon reflection, this justification makes very little sense. For example, it would imply that governments should drastically reduce speed limits to prevent all road deaths – at the cost of time, convenience and economic efficiency. (Or perhaps they’d have to ban cars altogether.)

As I’ve previously noted: “Society has functions other than simply extending people’s lives for as long as possible. If it did not, we’d spend a much higher fraction of GDP on healthcare, and we’d ban alcohol, smoking and extreme sports.”

The second major justification for lockdowns is that we must defer to experts. In other words: we should adopt whichever policy the experts advocate, and since the experts advocate lockdown, that is what we should do.

Aside from the fact that many experts were against lockdown – not to mention the difficulty of even defining ‘expertise’ in this area – insisting that we must defer to experts has implications that many people would reject.

For example, it would imply that we should adopt free trade, open immigration, legalisation of some drugs, and perhaps even markets in human organs – since these policies all receive support from academic economists. Note: I’m not saying these are all necessarily bad policies; but they can’t be justified purely on the basis of what ‘the experts’ believe. 

According to the authors, the only justification that actually makes sense is that lockdowns have large “net welfare benefits”, i.e., their benefits in terms of lives saved outweigh all the costs they impose on society. However, as a matter of empirical fact, the authors doubt that lockdowns do have large “net welfare benefits”.  

For example, they entertain economist Bryan Caplan’s argument that the reduction in quality of life alone may have offset any lives saved by lockdowns. (Though of course, there’s not much evidence that lockdowns have saved lives in most of the countries where they’ve been tried.)

Director and Freiman’s paper provides a good overview of the debate over the ethics of lockdown, and is worth reading in full.

The Dubious Ethics of ‘Nudging’ the Public to Comply With Covid Restrictions

We’re publishing an original piece today by Dr Gary Sidley, a retired NHS Consultant Clinical Psychologist, about the ethics of ‘nudging’ the public to comply with Covid restrictions. Dr Sidley was the organiser of a letter signed by dozens of psychologists and therapists and sent to the British Psychological Association in January that raised ethical concerns about the Government’s use of covert psychological techniques to secure behavioural change. He has now heard back from the Chair of the Ethics Committee at the BPS and, needless to say, he dismisses all of the concerns. Here is an extract from Dr Sidley’s article:

The British Psychological Society (BPS) is the leading professional body for psychologists in the U.K. According to their website, a central role of the BPS is: “To promote excellence and ethical practice in the science, education and application of the discipline.” In light of this remit, I – together with 46 other psychologists and therapists – wrote a letter to the BPS on January 6th, 2021, expressing our ethical concerns about the use of covert psychological strategies as a means of securing compliance with Covid restrictions. In particular, our alarm centred on three areas: the recommendation of ‘nudges’ that exploit heightened emotional discomfort as a means of securing compliance; implementing potent covert psychological strategies without any effort to gain the informed consent of the British public; and harnessing these interventions for the purpose of achieving adherence to contentious and unevidenced restrictions that infringe basic human rights.

Responses from the BPS to our initial letter were slow and circuitous. However, on July 1st we received an email from Dr. Roger Paxton, the Chair of the Ethics Committee, which clarified the BPS’s position: in the Committee’s view, there is nothing ethically questionable about deploying covert psychological strategies on the British people as a means of increasing compliance with public health restrictions.

An in-depth inspection of Dr. Paxton’s defence of the BPS reveals that it is evasive, disingenuous and wholly unconvincing.

Worth reading in full.