Iran affair and public ethics. Scandal is seen as symptomatic of other national ills

As the American people anguish over the latest scandal involving the presidency, the question arises: Is the Iran-contra affair simply another example of poor management and unlawful activity in government, or does it reflect changing social and moral attitudes touching a whole spectrum of institutions?

Social critics suggest that the probing of the Iran-contra caper, expected to go on for months, may prove salutary for the nation if it compels a reexamination of ethical standards and attitudes toward the law at every level of society, inside and outside government. They point to other phenomena that have weakened the nation's institutions and threaten to block progress if not corrected:

Wall Street has been rocked by the Boesky scandal, which has disclosed massive insider trading in the stock market - an institution in which tens of millions of Americans participate.

The trend toward corporate takeovers goes on unchecked - a practice not always motivated by sound business goals but often by a desire for quick profits? The general public, too, is infected. According to a recent Harris poll, most Americans say that, if they stumbled on insider market information and felt they could get away with it, they would act on that information.

``We do have some ethical and moral problems that we as a society have to deal with,'' says John Phelan, chairman of the New York Stock Exchange, citing the poll. These problems include drugs, insider trading, and ``a zillion other things,'' he said in a breakfast meeting yesterday.

John Gardner, author of ``Excellence'' and a former Cabinet secretary, similarly voices concern about an erosion of ethics: ``The atmosphere today in the corporate world is piratical. All power overreaches if it is allowed to, and the corporate world is overreaching.''

For the past 30 to 40 years, Mr. Gardner says, the business community has begun to come out of a period of disgrace and gain respect. ``Now,'' he observes, ``it's headed back into the contempt of the public.''

Scandals have occurred throughout American history, and social analysts are careful not to let the improprieties and criminal acts now being brought to light indict the whole government or the whole of society. The very fact that Americans react strongly to wrongdoing in high places points to moral concern.

``We should not judge everything by the exception,'' says Prof. Kenneth Boulding of the University of Colorado. ``There is a great deal of honesty and decency in the United States, in Congress, and the world.'' But, says Dr. Boulding, a distinguished economist, a disturbing trend is emerging these days of wanting to get things quickly - a trend that is affecting the nation's ability to compete in the world.

``There is a pathology of finance in this country,'' he observes. ``We have lost interest in production. In the United States [corporation] the finance manager has the highest job. In Japan the production manager does.''

While there are no easy answers to how to change this state of mind, Boulding says, the country must ``face up to the morality of the situation.'' Schools, he says, are not blameless. They are too focused on technology and have lost the primary goal of education, which is ``to produce decent, moral human beings.''

John Palmer, a political scientist at the Urban Institute, also points to a widespread preoccupation with material advancement and ``getting ahead.''

This attitude has received strong endorsement from the Reagan administration, he notes. ``The notion of the pursuit of private gain has become the dominant raison d'^etre even of the federal government,'' he says. ``And that provides a thread of attitudes toward the budget and the private sector.''

Part of the problem in the Reagan administration, social observers say, is that it includes people from the military or corporate world who do not understand how government works.

``Out of the military or corporate suites there's a tendency to deal with the world in a `can do' attitude, with no real overseers except the boards or owners of companies,'' says Paul Light, research director of the National Academy of Public Administration. ``The problem with [former National Security Council staff member] Ollie North and [former national-security adviser John M.] Poindexter seems to be the attitude, `If you want something, do it.'''

Mr. Light, too, points to a current national obsession with quick profits. ``It's not so much greed as a short-term focus in the public and government and corporations to make your score quickly and get out. ... The old notion of investing and building over time is just as successful, but that's not where the corporate raiders or the politicians are coming from.''

Even Congress, Light says, succumbs to this attitude. Unable to grapple with the budget deficit, lawmakers enacted the Gramm-Rudman law ``so they could take home short-term satisfactions to their constituents.''

Disregard of the law is also a cause of growing concern - a tendency seen to be easier for those of strong ideological conviction. For instance, White House communications director Patrick Buchanan argues that breaking ``technical laws'' is far less important than aiding the Nicaraguan rebels and fighting communism - a view the White House has officially rejected.

``It's an attitude that says the ends justifies the means,'' a formula employed by both the far right and far left, a senior State Department official remarks.

Mr. Gardner, the founder of Common Cause, says that the biggest problem raised by the Iran-contra scandal is the ``deliberate, coldblooded bypassing of Congress, which is a constitutional issue.'' Colonel North no doubt thinks he is a patriot, says Gardner, but he ``has defied the representatives of the people.''

Many political leaders think it is healthy for the country that the scandal is coming to light. ``It's unbelievable that they were aware of a prohibitive act of Congress and deliberately set out on a program to circumvent it,'' comments retiring Republican Sen. Charles McC. Mathias Jr. of Maryland. ``If it had not come out and there was a feeling you could get away with it, that's where you begin to lose ground and the system changes for the worse. So the spotlight is important.''

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