log

November 30, 2010

From an interview with Assange

Wik­iLeaks means it’s eas­i­er to run a good busi­ness and hard­er to run a bad busi­ness, and all CEOs should be encour­aged by this. I think about the case in Chi­na where milk pow­der com­pa­nies start­ed cut­ting the pro­tein in milk pow­der with plas­tics. That hap­pened at a num­ber of sep­a­rate manufacturers.

Let’s say you want to run a good com­pa­ny. It’s nice to have an eth­i­cal work­place. Your employ­ees are much less like­ly to screw you over if they’re not screw­ing oth­er peo­ple over.

Then one com­pa­ny starts cut­ting their milk pow­der with melamine, and becomes more prof­itable. You can fol­low suit, or slow­ly go bank­rupt and the one that’s cut­ting its milk pow­der will take you over. That’s the worst of all pos­si­ble outcomes.

The oth­er pos­si­bil­i­ty is that the first one to cut its milk pow­der is exposed. Then you don’t have to cut your milk pow­der. There’s a threat of reg­u­la­tion that pro­duces self-regulation.

It just means that it’s eas­i­er for hon­est CEOs to run an hon­est busi­ness, if the dis­hon­est busi­ness­es are more effect­ed neg­a­tive­ly by leaks than hon­est busi­ness­es. That’s the whole idea. In the strug­gle between open and hon­est com­pa­nies and dis­hon­est and closed com­pa­nies, we’re cre­at­ing a tremen­dous rep­u­ta­tion­al tax on the uneth­i­cal companies. 

Source: An inter­view with Wik­ileaks’ Julian Assange (Forbes.com)