1. Ethics and Economics Professor Bryson Marriott School Brigham Young University

2. Ethics Still Sorely Needed Dean Hill of the Marriott School is anxious for students to know that ethics is a concern of the School and of all its faculty. He has shared the following data in a presentation on business and ethics.

3. Questionable State of Ethics Did You Cheat to Get Into Graduate School? “Yes” –43% Liberal Arts –52% Education –63% Law and Medicine –75% Business Source: Rutgers University survey of students

4. Questionable Ethics at Work 76% of employees observed a high level of illegal or unethical conduct at work in the past 12 months 49% of employees observed misconduct that, if revealed, would cause their firms to “significantly lose public trust” KPMG 2000 Organizational Integrity Survey

5. Deterioration in Ethical Values YearYear College students who cheated in H.S. 1940 (20%) 2002 (75-98%) Self-reported cheating 1983 (11%) 1993 (49%) Believe cheating is common 1940 (20%) 1997 (88%) Used cheat sheets 1969 (34%) 1989 (68%) Let others copy work 1969 (58%) 1989 (98%) Willing to lie to get job 2000 (28%) 2002 (39%) Students who had stolen 2000 (35%) 2002 (38%) (Based on several different ethics studies)

6. What is the study of ethics? Ethics (from the Ancient Greek ἠ θικός or "ethikos" meaning "Theory of living") is one of the five major branches of philosophy It attempts to understand the nature of morality; to distinguish that which is right from that which is wrong. The Western tradition of ethics is sometimes called moral philosophy. Ethics in plain words means studying and analyzing right from wrong; good from bad.

7. What is ethics? Ethics, minimally, would be not to break civil law codes, but ethics is a higher standard than “legal.” The Marriott School has recently published a book which goes substantially further; it makes frequent use of the word integrity. See Business with Integrity, Marriott School, 2005.

8. What is the study of ethics? But for LDS people, that which is right and good is that which is of God. Ethical behavior, at its highest would be righteousness, overcoming the “natural man,” covenant-making and keeping, including honoring civil contracts. It is living the gospel fully, including keeping the law of the land, etc.

9. Diverse approaches to ethics Ethics professors can –cite the relevant literature, the philosopher specialists, etc. –In a word, teach co-mingled human philosophies and scripture. Rather than philosophical ethics, let us consider economics and ethics.

10. Social vs. Personal Ethics Personal ethics. –live our lives not just according to the law of the land –Live according to principles of building Zion. Law of Consecration still pertains. Social ethics, –United Order no long pertains –Choose good people for democratic process –Participate in democratic governance

11. Social vs. Personal Ethics Public policy is at the level of Social ethics. –Our participation in policy discussion at the highest level of social ethics, –But it need not contain principles of personal ethics or strive to achieve the Zion Society. For public policy we can look at –Economics and Ethics (rather than) –Gospel and Ethics

12. First, some scriptural thoughts The scriptures are filled with ethical considerations, principles and suggestions. Psalms 37 considers righteousness and its effects in a general (not just commercial) context. 1.FRET not thyself because of evildoers, neither be thou envious against the workers of iniquity.

13. First, some scriptural thoughts Sometimes we are tempted to live the way the world does with its materialism, entertainment, and culture. David suggests in verse 2 what awaits the world: 2 For they shall soon be cut down like the grass, and wither as the green herb.

14. Psalm 37 continued How do your pursuit of education, good grades, a high-paying job differ from those of the average American college student? Are you seeking the help of the Lord in your studies? What do you intend to do with your education? 4 Delight thyself also in the LORD; and he shall give thee the desires of thine heart. 5 Commit thy way unto the LORD; trust also in him; and he shall bring it to pass

15. Psalm 37 continued Under what conditions will He help? 8 Cease from anger, and forsake wrath: fret not thyself in any wise to do evil. 9 For evildoers shall be cut off: but those that wait upon the LORD, they shall inherit the earth. 11 But the meek shall inherit the earth; and shall delight themselves in the abundance of peace.

16. Psalm 37 continued 28 For the LORD loveth judgment, and forsaketh not his saints; they are preserved for ever: but the seed of the wicked shall be cut off. 34 Wait on the LORD, and keep his way, and he shall exalt thee to inherit the land:

17. Consider Proverbs 11:1 on business ethics Here, the scriptures deal directly with questions of right and wrong in commercial affairs. 1 A FALSE balance is abomination to the LORD: but a just weight is his delight. 2 When pride cometh, then cometh shame: but with the lowly is wisdom.

18. Consider Proverbs 11:1 on business ethics 3 The integrity of the upright shall guide them: but the perverseness of transgressors shall destroy them. 4 Riches profit not in the day of wrath: but righteousness delivereth from death.

19. Now to economics and ethics Economics is a wise and mature science; why else would they give Nobel prizes to its best and brightest? Economics has developed a theory of the core evil of business or resource allocation, a theory of moral hazard.

20. The Theory of Moral Hazard or, Post-contractual Opportunism The owner, the “Principal” hires an agent to take care of a business. The property owner can then pursue other interests. After the agent is contractually in place and the principal has departed from the scene, the agent begins to pursue his own interests rather than those of the principal.

21. The Principal/Agent Relationship The principal cannot monitor the agents activities. So the agent shirks on the job or acts in other opportunistic (greedy and grasping) ways. This theory has myriads of real-world applications, Many employees can misuse the trust placed in them when they cannot adequately be monitored.

22. The Principal/Agent Relationship Isn’t this a brilliant insight? We economists are very much anchored in the scriptures. We recognized long ago –the key to misbehavior is knowing one is not being watched (monitored).

23. The Principal/Agent Relationship Ezekial, an early economist, said in 8:12 12 Then said he unto me, Son of man, hast thou seen what the ancients of the house of Israel do in the dark, every man in the chambers of his imagery? for they say, The LORD seeth us not; the LORD hath forsaken the earth.

24. Ezekial 33 on the MH issue 1 AGAIN the word of the LORD came unto me, saying, 2 Son of man, speak to the children of thy people, and say unto them, When I bring the sword upon a land, if the people of the land take a man of their coasts, and set him for their watchman: 3 If when he seeth the sword come upon the land, he blow the trumpet, and warn the people; 4 Then whosoever heareth the sound of the trumpet, and taketh not warning; if the sword come, and take him away, his blood shall be upon his own head.

25. Ezekial 33 on the MH issue 5 He heard the sound of the trumpet, and took not warning; his blood shall be upon him. But he that taketh warning shall deliver his soul. 6 But if the watchman see the sword come, and blow not the trumpet, and the people be not warned; if the sword come, and take any person from among them, he is taken away in his iniquity; but his blood will I require at the watchman’s hand. 7 So thou, O son of man, I have set thee a watchman unto the house of Israel; therefore thou shalt hear the word at my mouth, and warn them from me.

26. Ezekial 33 on the MH issue 8 When I say unto the wicked, O wicked man, thou shalt surely die; if thou dost not speak to warn the wicked from his way, that wicked man shall die in his iniquity; but his blood will I require at thine hand. 9 Nevertheless, if thou warn the wicked of his way to turn from it; if he do not turn from his way, he shall die in his iniquity; but thou hast delivered thy soul.

27. The Watchman as the Lord’s agent The Lord sends a watchman as His agent. He doesn’t monitor his actions while the process is unfolding, but if he shirks and the work doesn’t get done, he will receive serious retribution.

28. Moral Hazard and the Master Teacher Now we go to the words of the Savior, who tells the well-known moral hazard parable as recorded in Matthew 21: 33 Hear another parable: There was a certain householder, which planted a vineyard, and hedged it round about, and digged a winepress in it, and built a tower, and let it out to husbandmen, and went into a far country: 34 And when the time of the fruit drew near, he sent his servants to the husbandmen, that they might receive the fruits of it.

29. Moral Hazard and the Master Teacher 35 And the husbandmen took his servants, and beat one, and killed another, and stoned another. 36 Again, he sent other servants more than the first: and they did unto them likewise. 37 But last of all he sent unto them his son, saying, They will reverence my son. 38 But when the husbandmen saw the son, they said among themselves, This is the heir; come, let us kill him, and let us seize on his inheritance.

30. Moral Hazard and the Master Teacher 39 And they caught him, and cast him out of the vineyard, and slew him. 40 When the lord therefore of the vineyard cometh, what will he do unto those husbandmen? 41 They say unto him, He will miserably destroy those wicked men, and will let out his vineyard unto other husbandmen, which shall render him the fruits in their seasons.

31. The Insight and Modern Economists I have kidded about the insights of economists. Economics has made much of this idea, which is of course 2,000 years old, (discounting what Jehovah had revealed even earlier to Ezekial).

32. The Insight and Nobel Prize Winners The Nobel Prize was awarded in 2001 to Joseph E. Stiglitz, George A. Akerloff and A. Michael Spence for their contributions –in principal/agent theory and –the related theory of asymmetric information. The latter idea says that one of the greatest moral/ethical problems in business relates to pre-contractual opportunism.

33. Joseph Stiglitz helped create a new branch of econ, "The Economics of Information,“ exploring the consequences of information asymmetries and pioneering such pivotal concepts as adverse selection and moral hazard, which have now become standard tools not only of theorists, but of policy analysts.

34. Michael Spence identified an important form of adjustment by individual market participants, where the better informed take costly actions in an attempt to improve on their market outcome by credibly transmitting information to the poorly informed. Spence showed when such signaling will actually work. While his own research emphasized education as a productivity signal in job markets, subsequent research has suggested many other applications, e.g., how firms may use dividends to signal their profitability to agents in the stock market.

35. Joseph Stiglitz clarified the market adjustment in which poorly informed agents extract information from the better informed, such as the screening performed by insurance companies dividing customers into risk classes by offering a menu of contracts where higher deductibles can be exchanged for significantly lower premiums. In a number of contributions about different markets, Stiglitz has shown that asymmetric information can provide the key to understanding many observed market phenomena, including unemployment and credit rationing.

36. Examples of asymmetric information In such transactions the buyer and seller have different information available. The seller of a “lemon” (used car) may know a lot more about the car’s faults than the buyer would ever guess.

37. The Mouth of the Gift Horse You may have heard the saying, “never look a gift horse in the mouth.” It may strike the giver as ingratitude or skepticism, when all he wants to do is show his affection for you in the gift and take a huge tax write-off. But don’t ever forget to look a purchase horse in the mouth!

38. Parable of the Unjust Steward Luke 16: 1 AND he said also unto his disciples, There was a certain rich man, which had a steward; and the same was accused unto him that he had wasted his goods. Here we have the moral hazard. The contracted, unmonitored steward managed the principal’s property (lands?) wastefully (pursuing his own interests) The principal, discovering the waste, immediately fired the agent.

39. Parable of the Unjust Steward 2 And he called him, and said unto him, How is it that I hear this of thee? give an account of thy stewardship; for thou mayest be no longer steward. 3 Then the steward said within himself, What shall I do? for my lord taketh away from me the stewardship: I cannot dig; to beg I am ashamed. The steward must secure his future. He is losing his job and his living. He needs friends!

40. Parable of the Unjust Steward 4 I am resolved what to do, that, when I am put out of the stewardship, they may receive me into their houses. 5 So he called every one of his lord’s debtors unto him, and said unto the first, How much owest thou unto my lord?

41. Parable of the Unjust Steward 6 And he said, An hundred measures of oil. And he said unto him, Take thy bill, and sit down quickly, and write fifty. The steward, as the agent, managed these resources. He was doubtless authorized to set the prices and the terms of credit of these commodities (or lands).

42. Parable of the Unjust Steward So the steward is now giving a more fair price. He will not try to give the master less than his due, since from other parables we know that the master expects something like a market return on what he lends. That’s why the master doesn’t object to these modified transactions. He even praises them.

43. Parable of the Unjust Steward 7 Then said he to another, And how much owest thou? And he said, An hundred measures of wheat. And he said unto him, Take thy bill, and write fourscore. 8 And the lord commended the unjust steward, because he had done wisely: for the children of this world are in their generation wiser than the children of light.

44. Parable of the Unjust Steward The principal now says: “Aha, you are doing something about your future and acting wisely. Although you wasted some of my resources, you are at least doing the right thing now for your customers so that they will be more kindly disposed toward you hereafter.”

45. Parable of the Unjust Steward Note where the parable said “the children of this world are in their generation wiser than the children of light.” Compare the diligence of a broker on Wall Street with the typical management of a home teaching assignment!

46. Parable of the Unjust Steward 9 And I say unto you, Make to yourselves friends of the mammon of unrighteousness; that, when ye fail, they may receive you into everlasting habitations.

47. Parable of the Unjust Steward How did this steward gained the principal’s approval? –kindness, consideration and mercy, rather than opportunism, greed and hard-heartedness. –He made friends of those whose help he might need in the future.

48. Parable of the Unjust Steward Might the Savior be telling us we should be wise and recognize we may need assistance in the future We should thus have a different perception of the implications of current helpfulness, even in business settings?

49. Parable of the Unjust Steward 10 He that is faithful in that which is least is faithful also in much: and he that is unjust in the least is unjust also in much. 11 If therefore ye have not been faithful in the unrighteous mammon, who will commit to your trust the true riches? If you are not faithful in secular things, who will trust you to be an agent in spiritual things? With the Savior, a stewardship always seems to be a test for the agent.

50. Parable of the Unjust Steward 12 And if ye have not been faithful in that which is another man’s, who shall give you that which is your own? We are agents so that we may one day become the principal. We show by the way we manage someone else’s resources how we would manage if we had our own.

51. Parable of the Unjust Steward 13 ¶ No servant can serve two masters: for either he will hate the one, and love the other; or else he will hold to the one, and despise the other. Ye cannot serve God and mammon. Is managing mammon the same as loving or serving mammon? When the agent begins to love the mammon and think opportunistically about how he can gain it for himself, he expresses that he is losing or has lost his love for the Lord.

52. Parable of the Unjust Steward The moral point: we should never forget that the Omniscient Monitor, sees our actions and observes what those acts are gradually doing to our hearts.

53. The Omniscient, Omnipresent Monitor Luke 12: 2 For there is nothing covered, that shall not be revealed; neither hid, that shall not be known. 3 Therefore whatsoever ye have spoken in darkness shall be heard in the light; and that which ye have spoken in the ear in closets shall be proclaimed upon the housetops.

54. The Omniscient, Omnipresent Monitor Luke 12: 4 And I say unto you my friends, Be not afraid of them that kill the body, and after that have no more that they can do. 5 But I will forewarn you whom ye shall fear: Fear him, which after he hath killed hath power to cast into hell; yea, I say unto you, Fear him.

55. Fear God! Should we put honor, obedience, respect, reverence and worship into our fear? The topical guide says yes! (These are the “see also” topics listed under ”Fear of God.”

56. Fear God! Should we take “fear” out of the “Fear of God”? The first see also topic listed in the Topical Guide is “dread.”

57. Fear God! 4. And I say unto you my friends, Be not afraid of them that kill the body, and after that have no more that they can do. 5 But I will forewarn you whom ye shall fear: Fear him, which after he hath killed hath power to cast into hell; yea, I say unto you, Fear him. Luke 12: 4, 5.

58. Fear God! To me the scriptural message on fear is: “If you set yourself against God, fear the consequences!” “If you are an agent of God and He is with you, there is nothing in all the world you need fear.”

59. Why do I believe you will succeed? When God’s children remember who they are and when they love him and follow His Son, of course they need not fear and tremble. If you start to slip from the path, or rationalize, a little fear may help.

60. Why do I believe you will succeed? I know who you are! Read Alma 13:1-3 1 And again, my brethren, I would cite your minds forward to the time when the Lord God gave these commandments unto his children; and I would that ye should remember that the Lord God ordained priests, after his holy order, which was after the order of his Son, to teach these things unto the people.

61. Why do I believe you will succeed? Alma 13:1-3 2 And those priests were ordained after the order of his Son, in a manner that thereby the people might know in what manner to look forward to his Son for redemption. 3 And this is the manner after which they were ordained—being called and prepared from the foundation of the world according to the foreknowledge of God, on account of their exceeding faith and good works; in the first place being left to choose good or evil; therefore they having chosen good, and exercising exceedingly great faith, are called with a holy calling.

62. Why you will succeed? The Prophet Joseph said that priesthood callings were foreordained callings. In the Oath and Covenant of the Priesthood it says: 35 And also all they who receive this priesthood receive me, saith the Lord; 36 For he that receiveth my servants receiveth me; 37 And he that receiveth me receiveth my Father;

63. Why you will succeed? 36 For he that receiveth my servants receiveth me; 37 And he that receiveth me receiveth my Father; 38 And he that receiveth my Father receiveth my Father’s kingdom; therefore all that my Father hath shall be given unto him. 39 And this is according to the oath and covenant which belongeth to the priesthood. 42 And wo unto all those who come not unto this priesthood which ye have received (D&C 84). You were chosen in the pre-existence and it is a primary purpose of your life to accept or receive the priesthood and help build the kingdom, beginning with your own family.

64. The Savior’s Summary of Teachings on the Good Steward. Luke 12. 42 And the Lord said, Who then is that faithful and wise steward, whom his lord shall make ruler over his household, to give them their portion of meat in due season? 43 Blessed is that servant, whom his lord when he cometh shall find so doing. 44 Of a truth I say unto you, that he will make him ruler over all that he hath.

65. The Savior’s Summary of Teachings on the Good Steward. Luke 12 45 But and if that servant say in his heart, My lord delayeth his coming; and shall begin to beat the menservants and maidens, and to eat and drink, and to be drunken; 46 The lord of that servant will come in a day when he looketh not for him, and at an hour when he is not aware, and will cut him in sunder, and will appoint him his portion with the unbelievers.

66. Part II. The Ethical Case for Free Trade Now we consider public policy, leaving the level of personal ethics. For social ethics we need not be as concerned with scriptural principles. Here we can use Economics and Ethics

67. Part II. The Ethical Case for Free Trade Adam Smith’s wisdom was often ignored by policymakers in the United States. Tariff protection was the order of the day. Henry George, an early American economist, tried to help the US turn to free trade. Without any formal training, George had become a classical, market economist.

68. George’s Case for Trade George wrote Protection or Free Trade: An examination of the tariff question, with especial regard to the interests of labor (1886). He used the classic specialization logic and also went beyond it.

69. George’s Case for Trade He even claimed that trade was an ethical and religious issue. He considered it an evil that inefficient, technologically backward producers should form a conspiracy with legislators to force a nation’s entire population to pay a much higher price to the conspiring domestic producers.

70. Wartime Blockades and Peacetime “Protection” Protective tariffs compared to a blockade. –In war, a country blockades a foreign country so it can’t import commodities from world markets for military purposes or for the people. In peacetime, domestic producers and bought-off legislators do to their own country what enemies would do in wartime. They eliminate the possibility of buying desirable world-market goods, stopping foreign products at the nation’s ports.

71. Wartime Blockades and Peacetime “Protection” This, claims George, is foolish policy, but is also Unethical. –for what it does to our own nation, and –for what it does to other nations, which have worked hard to develop good products for the buyer and a living for our trade partners (laborers and managers) abroad.

72. Wartime Blockades and Peacetime “Protection” George wrote that a theory of foreign trade calling for a country to blockade itself from world markets “might consort with that form of polytheism which assigned to each nation a separate and hostile God; but it is hard to reconcile it with the idea of the unity of the Creative Mind and the universality of law. Imagine a Christian missionary expounding to a newly discovered people the sublime truths of the gospel of peace and love –

73. Wartime Blockades and Peacetime “Protection” -- the fatherhood of God; the brotherhood of man; the duty of regarding the interests of our neighbors equally with our own, and of doing to others as we would have them do to us. Could he, in the same breath, go on to declare that, by virtue of the laws of this same God, each nation, to prosper, must defend itself against all other nations by a protective tariff?”

74. The Promise of Peace and Plenty George pleaded with his readers, whether Christian, Deist, Agnostic or Atheist on this point. “Who can look about him without seeing that want and suffering flow inevitably from selfishness, and that in any community the golden rule which teaches us to regard the interests of others as carefully as our own would bring not only peace but plenty.”

75. Part III. The Ethics of Corporate Governance An important issue: the earnings of business. Corporations have not been permitted to function without public oversight since the early 1900s. A congressional wave of corporate regulatory legislation. Corporate governance pertains to –the use of resources, –investments and –leadership selection and oversight.

76. Ideological vs. Objective Perceptions of Corporations Omnipresent anti-corporate sentiment helped motivate the corporate regulatory movement. Sometimes corporations cause such sentiment. –Note the recent corporate scandals of our own time. Are corporations organizations of greed and excess? Must they be reigned in by society?

77. The Potential Costs of “Punishing” Corporations The end of the Marxist-Leninist movement in the Soviet Union and East Europe. By 1990 it unraveled due to “communist” central planning failure. Its goals focused on the management of corporate resources. –forcing corporations into state-owned enterprises –managed by state agencies rather than corporate leaders.

78. Corporations as State-owned Enterprises State-owned enterprises (SOEs) assigned numerous social functions, e.g., the provision of housing, medical care, child care, education, entertainment and vacation facilities.

79. Corporations as State-owned Enterprises Profit was not an issue for SOEs, nor was efficiency, nor cost-savings, nor innovation, nor other entrepreneurial activities. The SOEs were therefore highly unproductive and wasteful. The system was sustained only by state coercion (and for many years of economic waste).

80. We should punish offenders, not the institution of the corporation per se. The corporation: –individuals with skills become agents for investors seeking favorable returns. Financial markets fund corporations so ideas can be transformed into desirable products and services.

81. We should punish offenders, not the institution of the corporation per se. According to the economics model of governance, revenues thus generated belong to those who have provided the funds; Private investors provide financial rewards to those who transform ideas into profits.

82. What? Me Worry about CEOs? One may worry that corporate leaders will view the firm as “their own.” They may gain control over the board of directors, rather than being managed by them. What is the principle/agent problem here? If CEOs forget they are the agent, they might pursue their own interests, rather than those of the owners, the shareholders.

83. What? Me worry about corporate stakeholders? But maybe there is something equally problematic to a greedy and self-interested CEO... The firm’s so-called “stakeholders” would like to gain control of corporate resources.

84. What? Me worry about corporate stakeholders? Who are the stakeholders? Any party with interests in the outcomes of the firm’s activities.

85. What? Me worry about corporate stakeholders? Stakeholders include: –host communities, –employees, –employees' families, –environmental groups, –labor representatives, –governments, –and other aspects of society in general.

86. The fundamental “stakeholder” argument “The corporation can be ethically and socially responsible only by considering all stakeholder interests.” But aren’t all of us interested in the corporations activities and resources? Corporations use our air, our internet, our streets, our airways, etc. That makes us all stakeholders, right? The corporations have money. We all want money.

87. The fundamental “stakeholder” argument The stakeholder view: the shareholder is no longer the sole or even the primary stakeholder in a corporation. The shareholder and profit maximization is to be replaced by the stakeholder.

88. The Longed for Return of Proudohn Do we return to Proudohn, a forerunner of Lenin, who complained that “property is theft.” Stakeholder advocates wish to consider better ways to use corporate wealth than the corporations that create it.

89. The Longed for Return of Proudohn If corporations use property in ways we don’t approve, should we not take it back? To some, that might suggest a Leninist revolution and the establishment of a central planning system to empower the people and end the tyranny of capitalism?

90. Corporate Tyranny… Stakeholder advocates note that corporations impact society in creating wealth? Don’t they –fail properly to compensate their employees? –produce environmental effluents? –fail to pay their fair share of the tax bill?

91. …should it not be opposed? Should not society regulate corporate activities to prohibit monopoly power abuse and anti-social activities? It should and it does! It did long before the stakeholder doctrine appeared.

92. …should it not be opposed? Should society retain the power to tax corporations, to police their contracts, to protect the public from environmental and other hazards?

93. …should it not be opposed? It should and it does! Those of anti-corporate mentality may assert that abuses still occur, in spite of the extensive legislation already in place. If they are right, the legislation should be re- crafted. But with Sarbanes-Oxley the pendulum has probably already swung back too far.

94. …should it not be opposed? In all likelihood, if we come down on corporations, what will other countries do? Why? In a global system, such action drives them elsewhere to improve some other nation’s living standard.

95. The Question of Property Rights The corporate wealth of which we have been speaking is property. It is the property of the private and public institutions (and the shareholders of the latter) that produce the wealth. Property rights have been established by our legislatures and one cannot speak of “ethical and moral conduct” demanding that those who are not owners of property should be empowered to confiscate that wealth in any form because they are “interested” in its use.

96. The Question of Property Rights To say “confiscate” is perhaps too strong a term. Stakeholder advocates would rather convince corporate leaders to relinquish wealth voluntarily. That would also be theft, but on the part of the duped corporate leader. Remember, the corporate leader is simply an agent hired to manage the property of the shareholder.

97. The Question of Property Rights Should one succeed in doing social good with resources already subject to property rights strictures, the action cannot be deemed ethical.

98. The Question of Property Rights “Stakeholder” advocates still have the option, of course, of convincing legislators of the virtue of taxation for social projects. Their preference also to work on corporate leaders and future corporate leaders may indicate that public coffers are insufficient for all their spending aspirations.