Tuesday, July 31, 2018

Screening out ethical partners

In China, business people cannot rely on traditional mechanisms, like the rule of law, to facilitate wealth-creating transactions:

In a society where trust of strangers is minimal, contract law is fragile, contracts themselves regarded more as guidelines than binding commitments, and the civil courts largely swayed by personal influence rather than legal right, the shared fraternity of the night out is one route to trust between partners. It may not, as businessmen admit, be a particularly effective or reliable way, but it’s all they’ve got to work with.

So business people share alcohol, drugs, or prostitutes as a way of screening out partners who may not be trustworthy.  If the acts are illegal, it may give businesses "mutual hostages" to ensure cooperation; if not, it may screen out partners with "moral qualms about future dealings."
...It tells both sides that they’re playing by the same rules. ... Refusing to play the game, on the other hand, comes at a sharp cost. Businessmen who convert to evangelical Christianity and make a commitment to avoid vice or bribery describe sharp business losses as a result, as former partners turn away from them, fearful of their newfound probity.


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