What leads already-wealthy and well-respected executives to risk their jobs to move a few more dollars into their pockets at the expense of their companies?

There've been a number of angry articles recently about PayPal censoring bloggers who use its donation system. In a nutshell, a handful of bloggers have received notices that they would be cut off from PayPal. PayPal has clearly gone too far down the road of trying to control who uses its service and for what purposes, but I do have some sympathy for them, since the first few steps on this path were not of their choosing.

First a little history: PayPal legally can't offer its payment services for certain types of businesses, particularly online gambling. Gambling used to be a significant business for PayPal (about 6% of revenue), but then they were forced to cut off all gambling customers. Congress, in its infinite wisdom, decided that if interstate gambling was to be illegal in the U.S., then banking services which support gambling would also be illegal. For better or for worse, this effectively makes every bank an extension of law enforcement when it comes to illegal gambling.

In my last article, I showed that a business owes an ethical responsibility towards its employees, customers, community, and shareholders, in roughly that order. This was based on a practical consideration of which people and groups are most responsible for a company's success, or can cause it to fail. In other words, you want to behave nicely towards people who can help you.

The final question is, what actions does a business have to take (or not take) to behave ethically towards its employees, customers, community, and shareholders?

In my prior essay on ethics and capitalism , I argued that Ethical Capitalism is not inherently impossible. Now that I've established that it is possible--and even in a company's best interest--to behave ethically, I'm going to examine where a business owes its ethical responsibilities. A common myth today is that a company owes its primary, and possibly sole, responsibility to its shareholders. I will argue that an ethical company's true responsibilities lie with many different groups of people, both for practical and for ethical reasons.

There is a meme, particularly fashionable since, oh, 1995 or so, that it is impossible to be both ethical and a practicing capitalist. This idea has become even more popular since the corporate scandals of the past few years. As an entrepreneur, CEO, and (I believe) and ethical person, I argue that it is not only possible for a company or businessperson to behave ethically, it is imperative. This is the first of a series of essays in which I will lay out what it means to be ethical in business, and how to behave ethically.

Google's AdSense program (the program which is serving ads on this site) presents a twisted version of the agency problem, where Google is acting as an agent for parties (advertisers and content providers), but has an incentive to act against the best interests of the parties it represents.

An agent is a person or organization hired to represent some other person or company, and carry out certain activities on behalf of the represented person. A classical agency problem arises when the financial incentives of the agent run counter to the best interests of the person the agent represents. For example, a stockbroker with trading discretion (the right to make trades on behalf of a client) is supposed to act in the client's best interest, but gets paid on commission when trades are made. The all-too-common result is that the broker makes unnecessary trades in the client's account, racking up commissions but doing little good for the client.

Our woes with Protection One continue, with many letters exchanged so far, but no resolution. Protection One is claiming that we have only a short window once a year in which we can cancel the contract, otherwise it becomes irrevocable for another year. I see no such language in the contract, nor was that my understanding of the meaning of the contract at the time it was signed.

This has led me to wonder: have we now entered an age when fair and reasonable business practices--and even consumer protection laws--have become circumvented by one-sided consumer contracts? To obtain almost any kind of service these days, from a credit card to a mobile phone to an airline ticket, requires signing or agreeing to a densely-worded contract which very few people can even understand, and which nobody actually gets the opportunity to negotiate.