Sefer Ha-Hayim Blog
Wednesday, August 31, 2005
John Johnson's Questionable Methods
John Kremer, noted author and speaker on book marketing, publishing and writing, raised the issue of the ethical appropriatenes of John H. Johnson's early promotions of his magazines. According to Kremer:
To encourage a distributor to pick up Negro Digest, he asked co-workers to ask for the magazine at newsstands around Chicago. His friends bought most of the copies at these newsstands to convince the dealers that the magazine was in demand. In turn, Johnson bought the copies from his friends and resold the copies they had bought. He continued to use this tactic to open up the markets in New York, Detroit, and Philadelphia as well.
The issue here is not whether John Johnson was a wicked man or not. No one is claiming that he was. However, we all make mistakes and we are here trying to learn from a real-life scenario. If Mr. Johnson was in error, let us refrain from judging him and simply try to learn from his life lessons that we can apply to ours. In that way, we can make his life even more meaningful by enriching those of many others.

We asked Rabbi Aaron Levine, author of the forthcoming Moral Issues of the Marketplace in Jewish Law, for his analysis of the scenario. This is his response:
The Open Horizon piece on the career of John H. Johnson raises some ethical concerns regarding the tactics he used to build up his publication Negro Digest. I am interested in analyzing the ethics of what Johnson did from the standpoint of Jewish law. Because the account of what Johnson actually did is not described in detail, I cannot be sure of the exact conduct he engaged in. I will therefore fill in my own details.

Preliminarily, I take note that from the perspective of Jewish law, the issue is the parameters for the prohibition against creating a false impression. The prohibition is violated if A's conduct induces B to take some action he would not otherwise take or would not be required to take had B only known the true intentions of A. One caveat, however. If B's interpretation of A's words or deeds is "unreasonable" and B acts upon his unreasonable impression, B is guilty of self-deception and A violates no ethical norm. (For the analysis that follows I draw from my recently published work Moral Issues of the Marketplace in Jewish Law, Yashar Books).

Let's begin with the ethics for Johnson to elicit a group of friends to separately and independently ask their local library for a copy of the Negro Digest to read on the premises. These people know that the library does not subscribe to the publication. Moreover, even if the librarian would respond to the inquiry by saying that the library will now begin to subscribe to the publication and it will be available beginning next week, these people have no intention of ever returning to the library and asking for the publication. Their intention is merely to create the impression that there is a demand for the publication and thereby induce the library to subscribe to it. The library's display of the Negro Digest will obviously benefit Johnson with free publicity and prestige for his magazine. In evaluating the ethics of the ploy, the critical factor here is that the library is a public institution funded by tax dollars. What is the library's implicit mandate as far as the ordering of newspapers and magazines? I take this mandate to be that its ordering policy should reflect the "legitimate and reasonable" preferences of the local population it serves. Let's further assume that in the 1940's the local library was ignoring the needs of the local African-American population. Under these conditions the insincere inquiries do not induce the library to do anything it should not have been doing anyway. Moreover, once it is recognized that it is the library's duty to treat its African-American constituency fairly in its acquisition policy, it becomes irrelevant whether or not the African-Americans who visit the library now are interested in the Negro Digest. Instead, what is relevant is the preferences of the entire local African-American population. Accordingly, if the library takes the inquiry for the magazine as a personal promise and a commitment by the inquirer to come to the library and peruse the publication when the library begins to subscribe to it, the library is guilty of self-deception. One caveat: obviously, no one has a license to actually promise to come in and ask for the publication when that person has no intention to keep his/her promise.

Let's move up in time to the post civil rights era and consider a variation of the above case. Suppose a particular national restaurant chain discriminates against African-Americans in a number of its southern franchises. Civil rights activists are armed with a number of affidavits documenting this discrimination, but only a few of victims of discrimination are willing to come forward and confirm their affidavits with testimony. To get enough victims to come forward and establish a pattern of discrimination entails considerable time and money. Under these circumstances may the activist group take action to create a false impression of African-American demand for the restaurant service? The plan consists of two prongs: first, a slew of African-Americans are encouraged to try to become patrons of the restaurant. The hope is that the incessant flow of would-be customers will send a false signal to management that their discriminatory policy is decidedly against their own bottom line. If the plan works, the next stage of the strategy calls for the public, both black and white, to put an ad in the local newspaper thanking the company for the change in policy. This very public thank you will hopefully cement the new policy by shaming the company not to return to the old policy of discrimination no matter what. Perhaps, the stratagem should be regarded as unethical? Consider that the slew of blacks who came to patronize the restaurant only pretend to be interested in becoming customers. This group of pretenders have no intention to become customers if the company's policy changes. In the final analysis the company is inveigled into changing its policy of discrimination on the basis of a false impression of economic gain and self-interest. However, let's not lose sight of the fact that the company's policy of discrimination clearly violates the law and evidence of this is obtainable, albeit with difficulty and expense. The ploy of creating a false sense of demand inveigles the company to do what the law, in any case, requires it to do. Accordingly, if the company changes its policy and it turns out that bottom line expectations do not materialize, the activist group bears no responsibility for the company's disappointment.

Let's now turn back to the pre-civil rights era and turn to the stategem John Johnson apparently used to convince local newsstand operators to carry the Negro Digest: Johnson gets a number of friends to separately and independently inquire of a particular newsstand operator: "why don't you carry the Negro Digest?" If the ploy works and the newsstand operator orders the magazine, the next part of the plan is for these people to buy the magazine, but Johnson will buy the magazine back from them and repeat the scheme many times in other locations. Johnson's conduct creates a false impression on several levels.

At once, Johnson's action gives the newsstand operator the impression that there is a diverse and widespread demand for the magazine when, in fact, the magazine is bought up by the publisher himself. But, from the standpoint of the profitability of continuing to carry the Negro Digest, what difference does it make to the newsstand operator if the inventory of magazines is bought up by many different people or all bought up by the same person. Because Johnson's action makes no difference for the bottom line of the newsstand operators, Johnson's ploy does not induce the newsstand operator to do something he would not otherwise do had he only known the true facts. One caveat: Johnson has no right to end or reduce his "buy back" program in a manner that will disappoint the reasonable expectations of the newsstand vendor and the distributor. The ethically right thing for Johnson to do therefore is to reduce the "buy back" program only gradually as the effective demand at large for his magazine builds. This way neither the newsstand operators nor the distributors will experience any disruption or disappointment.

There is, however, another level of deception to consider here. The viability of a magazine depends heavily on it ability to sell advertising copy. The willingness of merchants to advertise in a magazine, in turn, depends critically on the circulation figures the publisher presents them with. Johnson ploy of buying the publications back from his friends and reselling them inflates the circulation figures to the potential advertisers. Johnson is therefore apparently guilty of selling advertising copy with the aid of false circulation figures. But, there is extenuation here. Suppose, the deal Johnson strikes with his friends is that they should browse through the advertisements and all along keep the magazine in mint shape before he buys it back from them. If this was Johnson's deal, then the circulation figures he offers is not false. The only false impression here is that the advertisers thinks that what Johnson presents them with is paid circulation figures, when, in fact, what the figure indicates is the number of households that are likely to take a look at the ads. In this scenario, Johnson's ploy does nothing to induce the advertisers to do what they would not do had they only known the truth. One might even argue that in this scenario the advertisers are better off than they imagine. This is so because there is no guarantee that a paid subscriber takes a look at the advertisement altogether. Perhaps, the reading habits of some of the paid subscribers are to flip through the pages for an interesting article, but to more or less totally ignore the advertisements.

Let's now change the scenario a bit. Suppose the deal is that the friends buy the magazine at the newsstand and bring it straight to Johnson's home unread in mint condition. Since the friends never look at the ads, the circulation figures Johnson presents are false and he is guilty of selling advertising copy with false circulation figures.

Like all activities in life, or perhaps even more so, business requires not only shrewd strategies but also moral guidelines to keep us from violating the trust of our customers and the rules that direct us in life. John Johnson had a very clever marketing strategy but some of his methods required further scrutiny. Those who benefit from learning about his success would do well to also note his questionable ethics and make sure to submit their business strategies to proper ethical examination.

Thursday, August 11, 2005
Why Was The Second Temple Destroyed?
We have posted another item to Open Access, a timely essay by Rabbi Yehuda Herzl Henkin about the destruction of the Temples in Jerusalem. This essay, posted just in time for Tisha B'Av, is an excerpt from Rabbi Henkin's 1999 book Equality Lost.

The essay can be downloaded from the Open Access webpage.