Pennsylvania professor discusses cures for ailing economy

Students were encouraged to follow the ethical example of pelicans and pond slime during the Utah State University Huntsman School of Business Dean’s Convocation on Feb. 17.Thomas Donaldson, a professor at the Wharton School of the University of Pennsylvania, addressed students about the ethical roots of the current economic crisis and provided his solution to the problem.”I want to turn to lower-life forms, because I think that they’re smarter than we often are,” Donaldson said. “They celebrate competition … but at key moments in the animal kingdom, cooperation inside groups turns out to be what saves them from long-term systemic risks.”Donaldson said pond slime algae link together to support each other when resources are scarce in order to ensure long-term survival. Ultimately, this saves their gene pool, he said.Pelicans can be extremely competitive on an individual basis but cooperate at critical times, Donaldson said. The males, who are usually more competitive, share some of their prized nesting materials, used to attract a mate, with other male pelicans. Donaldson called this sort of sharing between competitors “the pelican’s gambit.””It reflects the importance of cooperation in key moments,” Donaldson said. “A gambit in chess … looks as if it brings sacrifice to you, but in the long run you win.”This type of cooperation between groups and industries is what Donaldson said will bring society out of its state of economic crisis.Scott Harward, a junior studying international business, said he agrees.”I think this is pretty useful just in our normal lives,” Harward said. “The pelican’s gambit is a principle that could be applied not only in corporations and industries, it can be applied in small business or within your family or community to help you get through anything.”For maximum cooperation, companies must be willing to make ethical decisions and share beneficial information, tools or techniques with other companies and the public, benefiting society as a whole, Donaldson said.”We’re dealing with an information asymmetry that is pernicious,” Donaldson said.Jared Winings, a senior studying engineering, said, “You’ve got to have good business leaders in general. It just comes down to everyone’s got to have good ethics.”Donaldson said there are three ethical sources from which the current economic problem arose and continues to grow.The first problem, which Donaldson called “pay for peril,” involves companies taking unethical risks that could take the company down but they make a lot of money if done successfully — essentially, it’s a gamble.”That kind of pay for peril temptation is no doubt part of what fueled the crisis,” Donaldson said.

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