Editor’s Note: This is the third post in a six-part series written by Donald J. Munro of the University of Michigan. You can follow the whole series here.
By Donald J. Munro
The desire for respect derives from our experience in social hierarchies, where we prize respect and have an aversion to shame, a disvalue. Sometimes respect or shame are related to the value of loyalty to superiors and how they treat us. These are instances in which a moral category can be used as a control mechanism for enforcing social duties. These duties may involve cooperation for the common good, or simply conformity to social customs. This reveals that respect/shame are both values or disvalues, and universal social emotions. Culture determines the conditions and forms under which they arise.
Shame involves an individual violating a rule, being aware of the violation, and knowing that others know of the violation. It is not embarrassment and is not guilt. It is not guilt because one can feel guilt before God even if no person knows about it. Shame involves an attack on one’s inner worth. It can be used as a form of punishment. It is one of those traits that reveals self-reflection, of which humans alone seem to be capable (Professor Sin yee Chan, University of Vermont).
In addition to respect and shame being among Mencius’ four innate “minds,” the earliest Confucians regarded shame as a control device as being superior to the use of laws. The Analects (2.3)of Confucius (551-479) states:
If the people be led by laws, and uniformity sought to be given them by punishments, they will try to avoid the punishment, but have no sense of shame. If they be led by virtue [virtuous models], and uniformity sought to be given them by rules of propriety, they will have a sense of shame and moreover will become good.
During the period Jan. 1 through Sept. 20, 2013 JPMorgan Chase has been the target of the following investigations:
- Bribery or Corruption: August 17, 29-30, 2013. A program once called “sons and daughters” at JPMorgan Chase, may have involved hiring the children of the Communist Party Elite as facilitators for doing business in China.
- Consumer Fraud: Sept. 19, 2013 JPMorgan Chase will pay $310 million in Restitution and $80 million in fines over credit card practices.
- Money Laundering and Risk Management: Feb. 14, 2013 The U.S. Federal Reserve and Office of the Comptroller of the Currency targeted JPMorgan Chase for lapses in risk management as well as money-laundering controls. On August 24, Regulators identified deficiencies in its anti-money laundering procedures. The bank stopped taking new business from foreign depositors.
- Anti-competitive behavior: July 30, 2013 The Federal Energy Regulatory Commission (FERC) accused JPMorgan Chase of rigging electricity markets, by manipulating power prices in California and the Midwest, out of its Houston trading desk. Regulators said the bank had created innovative and illegal ways to take money out of the California market. On July 30, JPMorgan Chase agreed to pay $410 million to settle the accusations. The bank said that the penalties would not have a material impact on profits “due to reserves previously set aside.” FERC will not seek individual sanctions against the four bank employees named in the settlement.
From 2009-2013, JPMorgan Chase has had to pay $31.28 billion in fines and other legal costs.
One can ask if the employees and other stakeholders in JPMorgan Chase experience shame when faced with these investigations? Individual citizens would be expected to. Individual persons are known sometimes to accept responsibility for bad acts, and feel shame.
But, unlike individual humans some of the time, the “person” of JPMorgan Chase, that is the “Corporate Personhood,” normally has not accepted responsibility for its transgressions. It has settled, agreeing to pay a fine that is part of the art of doing its business. And that has been okay with the governmental regulatory agencies. According to John C. Coffee Jr., a professor of securities law at Columbia University, “The SEC alleges not the facts that it can prove, but the facts that it can settle on.” In a report from the Senate Permanent Subcommittee on Investigations, JPMorgan Chase misled shareholders and the public in April, 2012. Jesse Eisinger (ProPublica) wrote:
“Despite JPMorgan’s smoke screens, the regulators deserve the public humiliation they have received….JPMorgan repeated the same misdeeds that other banks successfully pulled off at the height of the financial crisis: mismarking portfolios of assets and misleading the public. This was condoned by regulators. Regulators and prosecutors have been averting their eyes for years from rotted bank assets and rotted bank morals; why would JPMorgan expect any different reaction?” (cited in NYT Business, 3/20/13, p. B5)
Jamie Dimon, Chairman and CEO of JPMorgan Chase, did apologize “for foreclosure mistakes” at a shareholder meeting in May 2011. He apologized to Congress on June 13, 2012, for the bank losing $2 billion in risky investments. The bank’s traders had inflated the value of their monetary positions to hide their losses. He called it “a terrible, egregious mistake.” But an apology for a mistake is not the same as accountability. The latter carries additional responsibilities for the firm, and an acceptance of a large fine. At the moment, that fine is about $13 bilion. It is unclear how much additional aid will go the existing foreclosure relief and how much can be deducted from taxes. So it is unclear how much accountability is being called for.
Image credit: Flickr/epicharmus
Donald J. Munro is professor emeritus of philosophy and Chinese at the University of Michigan. Munro connects venerable philosophical traditions to modern scientific discoveries, always with a concern for the ethics of human action. His books include The Concept of Man in Contemporary China, Images of Human Nature: A Song Portrait, and Individualism and Holism: Studies in Confucian and Taoist Values. In recent years he has been the Ch’ien Mu Lecturer in Chinese History and Culture (2006) and the Tang Junyi Visiting Professor (2009) at the Chinese University of Hong Kong. He is a founding member of the Interfaith Partnership for political Action (ippa.us).