Ethics has not always been on the core of market decisions .In fact, business are not ruled necessarily by ethics standards unless they are clearly set by laws. This is so , because self interest maximization assumes no restriction other than the impact on others people´ s welfare, which by itself would be a kind of ethic boundary to business, settled down throughout the institutional framework. This aspect of market behaviour, has made market economies , ethically stronger than other alternatives for society to solve the allocation of scarce resources. Markets are neutral. On the aggregate, the self regulated ethic works well, as long as wealth creation get through to everyone ´s benefit.-
This issue has also been considered as a core one, on the debate about the application of new ethics standard on business decisions ,after some high profile cases (Enron and recently Siemens).As long as the benefit of wealth creation, is concentrated on just a few it deserves a penalty whether it is founded on priviledge information .Some would argue that with such approach, there is the risk of overregulated the market with fees and sanctions ,such as the markets based on self regulated behaviour, would have a competitive advantage for financial transaction.
Chilean finance market regulators , has been working hard in the last ten years, to improve the quality of ethics standard for business decisions. Mergers, strategic alliances, hostile take over operations, and higher market concentration have driven them to be alert. New laws and regulations have been part of that effort. However, one thing is to have the law ,and another one is to enforce it.
Chilean business culture, has historically been based on informal networks closely connected to family ,friends ,political and social ties. Laws are not designed to be obey but to be bypassed one way or another . Therefore , any attempt to move ahead to change that culture , have a lot of difficulties concerning market reaction, news media coverage impact on foreign perception, public opinion evaluations and the like. Even more complicated ,when it comes to impose sanction on key political leaders who at the same time are also very active on business activities.-
Some key questions are useful. Is politics by nature, in conflict with business ?.Not necessarily. A lot of politicians have strong ties with business activities ,without being considered it as an unethical situation, as long as there is a clear division between both. On the other hand, politics might be inspired by business consideration, or the other way around as well. A couple of examples. On the first case, politics inspired by business is “ The initiative for the Americas, to foster trade and investment” in the nineties, and on the second case, business inspired by politics ;the “Venezuela Oil supported Bank of the South for Latin America” .It follows ,that at the aggregate level business and politics might have go along quite well, however at an individual specific level , it is a different matter . Politics as a first motivation, deals with the art of what it is possible to serve society expectations; while business first motivation, deal with self interest . From the Political point of view, it does not seems to be the best approach to motivate other people beliefs into any politician project, to concentrate efforts working on self profit maximizing behaviour, above community needs and priorities, worst of all, when there is suspicious of using priviledge information.-