Moral Rating Agency

Moral Ecosystem

A mouse can make an elephant move

A MOUSE CAN MAKE AN ELEPHANT MOVE

There is always debate about who should do what in international politics.

One idea is that countries should be free to do as they wish so long as they do not affect the particular countries where the person considering the question lives – the ‘someone else’s problem’ misconception.

Leaving aside the philosophical issues of whether we should feel we are citizens of the world or just of our own countries, on a practical level, if we wait for a problem to arrive at our doorstep, we may hasten its arrival.  Put another way, when the Free World is being undermined, it is a matter for our own doorstep.  Non-interventionists should also realize that, by not intervening in Western trade and investment in Russia, we are actively helping Russia.  We are on the other side of the transaction, so it’s our right and moral responsibility to face up to the consequences of our ongoing support.

Another argument is that we should leave the matter to our own governments to decide what is the right thing to do, on the basis that we have democratically elected them to do so – the ‘someone else’s job’ misconception.

On a practical level, this doesn’t work if the governments are not doing enough, and, on a philosophical level, it’s not right to leave things exclusively to the government because we also have moral responsibility to do what we can to help right win over wrong.

Governments are pulling punches

Western governments, such as the US, had threatened they would cut off Russia if Ukraine were invaded.  The West has so far failed to carry this through in a substantive way, not necessarily because it wouldn’t like to, but because governments in the West, especially in Europe, are afraid of making the needed economic sacrifice and losing votes, particular over gas dependency.  Perhaps some governments also fear Putin’s nuclear saber-rattling comment to the effect that an economic war can be a declaration of war.

The power of embarrassing a corporate

The result of this incomplete action by governments is that most companies are still free to continue to do business with Russia and they are left to make a moral choice on their own.

In this vacuum of government action, it falls to individual corporations to choose between their default commercial imperative, implied by profit being their raison d’être, and their moral imperative, implied by the fact they are run by human beings at the end of the day.

The direct power rests with the corporations because they can stop paying Russia as importers, taxpayers, employers; stop supplying Russia as exporters; and stop funding Russia as investors or lenders.

Some companies will, of course, take their own moral stand without being pressured by investors and consumers, but most will do less when they have more at stake and will also do less when they have less pressure to act.

Thus, investors and consumers are where the power lies to tip the balance in the corporate mind between short-term gains and doing the right thing, and also arguably a long-term more stable and profitable world which the companies could enjoy. 

The sad reality is that, without investor and consumer pressure, most corporations either won’t act or will do too little too late.  Even the corporations that do act before such pressure are often doing so because they want to pre-empt the consequences of unhappy investors and consumers.  Thus, in practice, pressure in one way or another is the principal fuel of corporate ‘morality’.

The ‘moral pressure ecosystem’

This is where the Moral Rating Agency comes in.  We believe that investors and consumers need deep visibility of what corporations are not doing, so they can pressure them with more focus and more conviction.  Investors and consumers won’t pressure companies if they can’t clearly see which ones need to be pressured.  Meanwhile, corporations will be more likely to act morally if they are embarrassed by their immoral positions being exposed and if they are recognized when they do the right thing.  We have seen many companies quit Russia under pressure, leading to peer companies following on their heels in Domino Exits.

The Moral Rating Agency’s goal is to support the chain reaction of ‘deep transparency-public exposure-pressure-reaction-reward/punishment’.  Lack of information and the profusion of confusing information is the friction that stops the chain reaction from flowing efficiently.  By connecting the dots through publishing reliable moral ratings, we hope to remove this information friction and allow the moral cascade to flow.

We also hope to catalyze this dynamic by publishing each company’s moral ratings for investors and consumers to act upon, and for the media in general to disseminate more widely.

Will boycotts succeed?

Let’s deal with the misconception that boycotting won’t change anything.

The West has huge economic power over Russia.  It can destroy the Russian economy if it uses that power.  The existing boycott, which is a fraction of what can be achieved, is already impacting the Russian economy, which is predicted to decline by as much as 15% in the 2022.  Imagine what we could do if we could get all companies out.

The West’s economy as a whole is 35 times larger than Russia’s.  This means the pain the West would feel is 35 times less – for everything Russia loses in trade, our lost trade would be spread around a very large global economy and diluted by a factor of 35.

So, making a moral impact is inexpensive for us.  Put another way, boycotting Russia has a high ‘Moral Return on Investment’ or mROI.  This attractive mROI means the West collectively has no excuse but to act.

Another question people ask is whether boycotts are wrong if they harm the Russian people.

Make no mistake about it – the decent people in Russia who want change, who want to live in a civilized, democratic country with freedom of speech and free of an autocratic regime, who are languishing in prisons or disappearing, and who feel the invasion of Ukraine is wrong, want Russia to be boycotted.  There are not so many ways to bring a fair outcome for Ukrainians and for freedom-loving Russian people.  With direct military conflict ruled out, and diplomacy proven to be a naive hope for restraining die-hard dictators, the economic option is the last remaining card to play and a very powerful one.

Our role

So, the Moral Rating Agency is in the boycotting business, or boycotting facilitating business, initially focused on Russia,  Thereafter, we plan to expand our work to other autocracies with similar projects of corporate ratings.  If you wish, see Support Us.

This site is published by Mark Dixon under the name Moral Rating Agency. Copyright, 2022