Our nation's business community--everyone from chairman to stockholder--has been stunned by revelation after revelation of financial impropriety in some of the largest, most prominent companies. It started with Enron; it now includes (among others) Xerox, WorldCom, Tyco, Lucent and Andersen--all potentially crumbling before our eyes. We have seen top executives at these and other companies engage in insider trading, misrepresent financial status and shred legal documents.
 
    One question looms large: Is this a systemic problem or is it a case of a few bad apples spoiling the whole bunch?
 
    On one hand I do not believe that most companies engage in the worst illegalitites we have seen. The sort of fraud perpetrated by Enron and WorldCom is, I think, rare--which explains the duly harsh criticism leveled at the executives who were responsible. But on the other hand these recent scandals are of a piece with a mentality which is, I believe, all too common in the corporate world.
 
    In the past a number of us--Republicans and Democrats--have criticized companies like Seagram's and AOL Time Warner Inc. for profiting from violent, misogynistic rap lyrics, and networks like Fox and CBS for broadcasting degrading television shows. These companies, while not acting illegally, acted irresponsibly and immorally, putting profits ahead of all principle.
 
    The problem is in some ways with capitalism itself. It is an economic system that requires virtues and character that it does not, of itself, develop in capitalists. Adam Smith said as much; Pope John Paul II eloquently put it this way:
 
    "Of itself, an economic system does not possess criteria for correctly distinguishing new and higher forms of satifying human needs from artificial new needs which hinder the formation of a mature personality. Thus a great deal of education and cultural work is urgently needed, including the education consumers in responsible use of their power of choice [and] the formation of a strong sense of responsibility among producers."
 
    In short, capitalism requires capitalists with moral and ethical tethers. We have seen, in the collapse of Enron and WorldCom, what happens when capitalism is pursued without limits, without the "educational and cultural work" being done.
 
    But it is not merely a problem with capitalism. It is a problem with the human soul--which explains why institutions like the Catholic Church are not immune to scandal. In this way, then, the problems of Enron and WorldCom are systemic--of capitalism, yes, but also of humanity.
 
    Teaching children about morality--making meaningful concepts like right and wrong, good and evil--is imperative. It also is a duty that we have shirked all too often in the past 40 years. Concepts like cultural relativism, multiculturalism and values clarification, in which students are encouraged to identify and "clarify" their own beliefs, have spilled over from our colleges and universities into our elementary schools' classrooms. A "greed is good" mentality seeped into our business schools; playing "fast and loose" was praised by corporations. This must stop.
 

    An economic system like ours depends on trust--trust between consumer and vendor, auditor and employee, shareholder and executive. When that trust is broken, the economic system itself is damaged. Ethical behavior, in short, is not a pleasing addition to the bottom line; it is, rather, an intrinsic part of the bottom line.
 
    Obviously teaching children the difference between right and wrong at an early age--and reinforcing those lessons as they grow--is imperative. Yet while classes in ethics are all well and good, the simple study of ethics does not make one ethical. Aristotle reminds us that the most effective way to teach morality is by demonstrating morality. I would hope that there are sufficient positive role models in the world to whom students can look. There is also, though, room for the power of negative example.