To the Teacher:
The readings describe and present explanations for the behavior of people who work in bureaucracies of three large organizations and the effects of such behavior. In the first reading the organization is the healthcare insurance provider, Cigna; in the second, the investment banks, Countrywide and Goldman Sachs; and in the third, the military. Discussion questions and student activities follow.
Student Reading 1
Health insurance industry:
"You don't think about individual people."
In 2007 Nataline Sarkisyan, a 17-year-old, desperately needed a liver transplant.
Cigna, her health insurance company, states on its website, "Cigna offers a full range of medical and pharmacy plans to help keep you and your family well." (www.cigna.com) But it turned down Nataline's claim. Wendell Potter, head of the company's corporate communications, aka public relations, explained that the procedure in the young woman's case was experimental and not covered by her policy.
Potter had worked for Cigna for more than 15 years. During that time he had focused on Cigna's bottom line. His job, and the jobs of the other executives he worked with and for, was to make the company profitable. This meant vigorously opposing healthcare reform proposals and doing whatever was necessary to produce a rising stock price that satisfied investors.
Keeping profits up often involved refusing to provide health insurance to those with pre-existing conditions likely to require high-cost care. It also involved concocting insurance policies that would allow the company to avoid paying for expensive procedures for people they did cover—like Nataline.
Like any corporation, Cigna's central goal was maximizing company profits—not improving the health of the people it insured. To achieve its goal, the organization standardized its policies and assigned its staff to carry out those policies efficiently.
What does "standardized" mean? Says French sociologist Antoine Mas: "Standardization means resolving in advance all the problems that might possibly impede the functioning of an organization. It is not a matter of leaving it to inspiration, ingenuity, nor even intelligence to find a solution at the moment some difficulty arises; it is rather in some way to anticipate both the difficulty and its resolution. From then on, standardization creates impersonality, in the sense that an organization relies more on methods and instructions than on individuals." (quoted in Jacques Ellul, The Technological Society)
A reversal, a death, a healthcare event
Nataline's family told her story to the media. The California Nurses Association and others organized protests at Cigna's regional headquarters. This was bad news for Potter and his public relations. The company reversed its standardized company policy and its decision to deny Nataline a liver transplant. But two hours after her surgery was approved, Nataline died.
Later in 2007 Potter was visiting relatives in Tennessee when he learned that a healthcare event was being held at the fairground in nearby Wise, Virginia. He decided to visit.
"What I saw were doctors who were set up to provide care in animal stalls," Potter recalled in a recent interview with on Bill Moyers Journal (www.pbs.org/moyers/journal/index-flash.html, 7/10/09). "Or they'd erected tents, to care for people. I mean, there was no privacy. In some cases-and I've got some pictures of people being treated on gurneys, on rain-soaked pavement.
"And I saw people lined up...waiting to get care. People drove from South Carolina and Georgia and Kentucky, Tennessee—all over the region...They could have been people who grew up...in the house down the road from me. And that made it real to me.
"It was absolutely stunning...It was almost—what country am I in?....It just didn't seem to be a possibility that I was in the United States. It was like a lightning bolt had hit me."
Potter left Cigna early in 2008. Moyers asked him, "How can Wendell Potter sit here and say he was just finding out that there were a lot of Americans who didn't have adequate insurance and needed healthcare? He'd been in the industry for over 15 years."
"That was my problem," Potter answered. "I had been in the industry and I'd risen up in the ranks. And I had a great job. And I had a terrific office in a high-rise building in Philadelphia. I was insulated. I didn't really see what was going on. I saw the data. I knew that 47 million were uninsured, but I didn't put faces with that number...
"But when you're in the executive offices...what you think about are the numbers. You don't think about individual people...and whether or not you're going to meet Wall Street's expectations. That's what you think about, at that level. And it helps to think that way...That enables you to stay there, if you don't really think that you're talking about and dealing with real human beings."
Potter discussed "a measure of profitability that investors look to, and it's called a medical loss ratio... that's a measure that tells investors...how much of a premium dollar is used by the insurance company to actually pay medical claims. And that has been shrinking, over the years, since the industry's been dominated by, or become dominated by, for-profit insurance companies.
"Back in the early '90s...95 cents out of every dollar was...used by the insurance companies to pay claims. Last year, it was down to just slightly above 80 percent. So investors want that to keep shrinking. And if they see that an insurance company has not done what they think meets their expectations with the medical loss ratio, they'll punish them. Investors will start leaving in droves."
The salaries of Cigna employees who work to cut down health insurance payments contribute to the ever-rising, overall costs of healthcare to Cigna's customers.
As for Potter, he left Cigna early in 2008 and recently told his story to the Senate Committee on Commerce, Science and Transportation, as well as to Bill Moyers.
1. What questions do students have about the reading? How might they be answered?
2. What is there about "standardization" that creates impersonality? How might this impersonality and a reliance on what Mas calls "methods and instructions" explain why Potter turned down Nataline's application for a liver transplant?
3. What are major Cigna policies? Why are they so important to the company?
4. How do you explain the effects on Potter of the Wise, VA, healthcare event?
5. Potter names says that as head of PR for Cigna, he was insulated, he saw "data" but not faces, and he understood the importance of the "medical loss ratio." Why was each so important to his personal success and to Cigna's success?
6. Potter does not explain why he left Cigna. How would you explain it?
Student Reading 2
"You are getting the best loan possible."
Theologian Alfred Schutze wrote that evil today often appears "in a manner detached from the individual. It shows up impersonally in arrangements and conditions of social industrial, technical and general life which, admittedly, are created and tolerated by man. It appears anonymously as injustice, or hardship...where nobody seems directly liable or responsible...It has become the gray eminence infiltrating all areas of human existence. (Andrew Kimbrell, in "Cold Evil: Technology and Modern Ethics")
The "gray eminence" that infiltrated Cigna appears again and again.
About the same time that Potter visited Wise, Virginia, Gretchen Morgenson described in the New York Times how Countrywide Financial Corporation became the nation's largest mortgage lender during the housing boom years by encouraging its sales force to "court customers over the telephone with a seductive pitch that seldom varied. 'I want to be sure you are getting the best loan possible,' the sales representatives would say."
But as former employees pointed out, "potential borrowers were often led to high-cost and sometimes unfavorable loans that resulted in richer commissions for Countrywide's smooth-talking sales force, outsize fees to company affiliates providing services on the loans, and a roaring stock price that made Countrywide executives among the highest paid in America.
"Countrywide's entire operation," Morgenson wrote, "from its computer system to its incentive pay structure and financing arrangements is intended to wring maximum profits out of the mortgage lending boom no matter what it costs borrowers, according to interviews with former employees and brokers..." One document showed, for example, that Countrywide's computer system in its subprime unit "had the effect of steering [borrowers] away from lower-cost loans to those that were more expensive to homeowners and more profitable to Countrywide." (8/26/07)
Unlike Cigna, though, Countrywide collapsed in the subprime mortgage disaster and was taken over by the Bank of America, which itself also profited, then suffered, from the disaster. However, Bank of America survived because it was one of the financial institutions "too big to fail" and received a $45 billion taxpayer bailout.
Goldman Sachs was the gold standard among investment banks. But it too was caught up in the subprime mortgage frenzy. The New York Times reported that Goldman Sachs agreed "to pay up to $60 million to end an investigation by the Massachusetts attorney general's office into whether the firm helped promote unfair home loans in the state...While Goldman did not admit to any legal wrongdoing, it provided capital for mortgage lenders who provide the high-risk loans to marginal buyers." Goldman, in turn, packaged hundreds, even thousands, of subprime mortgages, into securities that it sold to investors worldwide. (5/11/09)
An investigation by Massachusetts Attorney General Martha Coakley proved that investment banks like Goldman Sachs "acted as middlemen in loans that have resulted in foreclosure or contained terms so onerous that they were destined to fail at conception."
The fine that Goldman Sachs agreed to pay will allow some homeowners to reduce their mortgage payments on principal balances by as much as 50%.
Across the country, top executives and employees of investment banks and mortgage brokers like those at Goldman sold mortgages impersonally and according to standardized processes. Did they think beyond the money to be made? Did they consider the pain their actions would cause to millions of people? A very few bankers tried to blow the whistle on these widespread financial industry practices. But the money-making machine continued, inexorably, to grind out subprime mortgages until the machine broke down.
Millions lost their jobs, their health insurance, their homes. Goldman Sachs got $10 billion in taxpayer bailout money it was soon able to repay. During the first quarter of this year, the company's profits were $3.4 billion. Analysts warned that this money Goldman made this money by taking "financial risks that many of its competitors are unable or unwilling to take." These profits will enable Goldman employees, on average, to "earn roughly $770,000 each this year—or nearly what they did at the height of the boom." (New York Times, 7/15/09)
According to a study by the Center for Public Integrity, 11 other lenders, including four financial firms that received bank bailouts, have made payments "to settle claims of widespread lending abuses."
1. What questions do students have about the reading? How might they be answered?
2. Who or what is "the gray eminence"?
3. In what ways did the practices of Countrywide and Goldman Sachs resemble those of Cigna?
4. How would you explain why Goldman Sachs might act as a middleman "in loans that have resulted in foreclosure or contained terms so onerous that they were destined to fail at conception"?
Student Reading 3
"An assigned homicidal task as a technical operation"
Near the end of the Vietnam War almost 40 years ago, Richard Barnet wrote Roots of War. In it, Barnet described a "bureaucratic revolution" in the military in which "Each cog in the bureaucratic machine does what it is supposed to do." Barnet said that in the process, personal responsibility dims; for most people involved in the machine, the sense of responsibility evaporates entirely.
"Since man first built cities, from the Assyrians to Genghis Khan, from the Crusades to the Indian Wars, war has been an instrument of policy," wrote Barnet. "It is not homicide in the line of duty that is new, but the incredibly sophisticated organization of homicidal activities and techniques...The essential characteristic of bureaucratic homicide is division of labor. In general, those who plan do not kill and those who kill do not plan...
"America's highly developed technology makes it possible to increase the distance between killer and victim and hence to preserve the crucial psychological fiction that the objects of America's lethal attention are less than human...
"Twentieth-century man demonstrates...a sensitivity to human suffering which did not trouble fifteenth-century man. But the modest advances in civilization have been more than wiped out by technological developments which make it possible to kill without exertion, without passion, and without guilt. The airplane enables the cool contemporary killer to set his victims on fire without ever laying eyes on them...
"The bureaucratic killer looks at an assigned homicidal task as a technical operation much like any other. He does not question its moral purpose. Indeed, he is not even interested in such questions."
Civilian deaths in Iraq, Afghanistan, Pakistan
Baghdad, Iraq: On February 13, 1991, during the first Iraq war, American missiles struck the Amiriya air-raid shelter in Baghdad. 408 civilians were incinerated. Later Laurie Garrett, a medical writer for Newsday, viewed a half-hour videotape of the results, which "showed scenes of incredible carnage. Nearly all the bodies were charred into blackness; in some cases the heat had been so great that entire limbs were burned off. Among the corpses were those of at least six babies and ten children, most of them so severely burned that their gender could not be determined."
Baqubah, Iraq during the second Iraq war, June 2004: "Some 30 insurgents were stationed in buildings near the stadium in eastern Baqubah...Rather than clear the buildings—two vacant schools and a swimming pool—Colonel Pittard decided to demolish them with four 500-pound bombs." (Christian Science Monitor, 6/24/04)
South Waziristan, Pakistan, June 2009: "Missiles apparently fired by unmanned aircraft first struck a purported Taliban training center in South Waziristan, then another barrage rained down on a funeral processions for some of those who had been killed earlier...The two missile strikes killed at least 80 people, including several senior militants, said the officials...Fifty-five of those killed were at the funeral." (AP, 6/24/09)
Granai, Afghanistan, May 2009: Taliban fighters sought to seize the western village of Granai. A fierce battle lasting hours followed with a small American force, mostly Marines. The Americans suffered a number of casualties. The U.S. then conducted air strikes on at least three targets in Granai. Villagers said the bombing killed 147 civilians. It came after the Taliban had already left. U.S. military officials disagreed, the New York Times reported, but added "whatever the actual number of casualties, it is clear from the villagers' accounts that dozens of women and children were killed after taking cover." (5/15/09)
A Pentagon report more than a month later estimated that "at least 26 civilians and 78 militants were killed" when the village was bombed. "The Afghan government claims that more than 140 civilians were killed that day." (Wall Street Journal, 6/20/09)
One result of mounting Afghan and Pakistani civilian casualties is widespread anger at and distrust of Americans for their airstrikes. General Stanley McCrystal, American commander of NATO and U.S. forces in Afghanistan, announced new orders limiting airstrikes, unless American forces are in imminent danger. The general emphasized that success in Afghanistan demands respect for and protection of Afghan civilians. But weeks later:
Tawalla, Afghanistan, July 2009: "At least five Afghan civilians were killed and 13 were wounded when a United States patrol was attacked on Wednesday night [July 15] and called in air support...Nine wounded villagers, including two women and four children reached a Kandahar hospital on Thursday. Several were unconscious, but others described helicopters firing into their compound at 11 p.m. as they fled the house and tried to hide in an orchard...The wounded civilians...were from a...remote district...which has long been a stronghold of Taliban forces...Mr. Niamatullah [who lives in Tawalla] said there were no Taliban fighters in the village. (New York Times, 7/17/09)
In service to technology
"We in the United States recognize butchery when we see it-the atrocity of the car bomb, the chlorine-gas truck bomb, the beheading. These acts are obviously barbaric in nature. But our favored way of war—war from a distance—has, for us, been precleansed of barbarism. Or rather its essential barbarism had been turned into a set of... 'accidents,' of 'mistakes,' repeatedly made over six decades...It is in our interest not to see air war as a—possibly the—modern form of barbarism...Civilian deaths from the air...are not mistakes or they wouldn't happen so repeatedly. They are the very givens of this kind of warfare." (Tom Englehardt, www.tomdispatch.com, 7/9/07)
"Men in modern warfare are in service to technology...To be sure, soldiers who kill innocents pay a tremendous personal emotional and spiritual price. But with the universe of total war, equipped with weapons that can kill hundreds or thousands of people in seconds, soldiers only have time to reflect later. By then these soldiers often have been discarded, left as broken men in a civilian society that does not understand them and does not want to understand them." (Chris Hedges, War Is a Force That Gives Us Meaning)
Thousands of these soldiers who break down after their return to the U.S. suffer from what was called shell shock in World War I, combat fatigue in World War II, and Post-Traumatic Stress Disorder (PTSD) in the Iraq and Afghan wars. Whatever it is called, the effects can include shame and guilt they cannot repress, emotional numbness, sleep and memory disorders, anger, self-destructiveness. A new study by the San Francisco Department of Veterans Affairs Medical Center and the University of California, San Francisco, found that one-third of Iraq and Afghanistan war veterans in the veterans health system after 2001 have been diagnosed with mental health problems, most often PTSD. (New York Times, 7/17/09)
In January 2009 the U.S. Army reported the highest level of suicides among its soldiers since 28 years ago when it began keeping track of them.
1. According to Barnet, what happens to individual responsibility when "each cog in the bureaucratic machine does what it is supposed to do"?
2. According to Barnet, what technological advances make it possible for modern military people to kill "without exertion, without passion, and without guilt"? Do you agree? Why or why not?
3. Do you agree with Barnet's conclusion that the "bureaucratic killer" has no interest in moral questions? Why or why not? What might be some of these questions? Does General McCrystal have an interest in such questions? Why or why not?
4. Why are civilians so frequently killed in military engagements in Iraq, Afghanistan and Pakistan?
5. According to Englehardt, Americans favor "war from a distance." Do you agree? Why or why not?
6. According to Hedges, "Men in modern warfare are in service to technology." Do you agree? Why or why not?
7. How would you explain the changing terminology from World War I to today to define soldiers who suffer mentally after they return home?
8. How would you explain the increasing numbers of American soldiers who suffer from PTSD or other mental health problems today?
The believing game and the doubting game
Richard Barnet's point of view about the effects of technology on warfare, among them the creation of "the bureaucratic killer," is obviously controversial and worth examining from various perspectives through the believing and doubting games.
The believing game invites students to enter into a point of view that may be unfamiliar or even disagreeable, to suspend judgment and experience it, to look for virtues and strengths that might otherwise be missed.
The doubting game asks students to examine a point of view critically, to ask penetrating questions, to find statements to argue with, to look for weaknesses.
For a detailed explanation of both games as well as a concluding exercise that aims to achieve integration of one's thinking after playing them, see "Teaching Critical Thinking."
For writing and discussion:
Experiences with bureaucracy
Ask students to name bureaucracies they have had at least some direct contact with: schools, department stores, hospitals. What personal experiences can they cite to support or refute such features as impersonality; rigid standardized policies that "rely more on methods and instructions than on individuals"; failure to treat people as individual human beings; or difficulty in determining who is responsible for problems?
After some introductory discussion, assign students to write a paper reporting on a personal experience with bureaucracy. When papers have been drafted, divide the class into groups of four to six students to listen to a reading of each paper in the group and to select the one they regard as best for a reading to and discussion by the class.
This lesson was written for TeachableMoment.Org, a project of Morningside Center for Teaching Social Responsibility. We welcome your comments. Please email them to: firstname.lastname@example.org