During my first London ex-pat assignment, I traded fuel oil, a heavy refined product burned for heating. A UK steel manufacturer bought a cargo of fuel oil every month. My company had never sold a fuel oil cargo to this steel manufacturer because they bought through energy brokers, who were independent agents that matched buyers and sellers. My company normally traded directly with buyers and sellers.
I decided to pursue the steel manufacturer through a broker because our North Sea refineries were a natural supply fit. I waited until I learned that the buyer was in the market and quickly told an energy broker to make a competitive bid. With the broker on the phone with both the buyer and I, we hashed out the commercial terms and eventually agreed. I requested a short pause to answer a question and secure a financial hedge. While I was away, the buyer told the broker that the deal was off and hung up. This shocked both the broker and I since the deal was verbally agreed and I was had already purchased the financial hedge.
I quickly reversed the financial transaction at a $25,000 loss. I then discussed the deal with my supervisor and we both reviewed the taped telephone conversations. We decided that the deal would make for a difficult legal argument, and we would incur legal expenses. The broker notified me that the buyer had negotiated between two sellers, my company and another seller, and inadvertently bought two cargoes instead of one. The buyer decided to drop both sellers and flee. My supervisor contacted the buyer’s supervisor and arranged a meeting for the next morning at their nearby office.
Upon meeting the buyer and other employees in her company, we stated that we had a verbal contract and lost $25,000 hedging our supposedly sold cargo. The buyer’s supervisor stated that the deal was never finalized. We then queried about their other canceled deal. Their expressions changed and the elephant in the room was revealed. As I pondered how this mistake was made, I learned that the buyer was a trading novice who worked primarily as a purchasing agent. She only bought one cargo a month and was negotiating with seasoned energy traders. She made a novice mistake, and her supervisor was trying to bail her out.
I spoke up and told them that I had tried to meet the buyer several times and conduct business directly rather than through brokers. I informed them that our refining system was an excellent supply fit for their steel business. My company wanted a term supply contract, not just a month-to-month spot cargo. We valued long-term, mutually advantageous relationships and would not force the buyer to take our fuel oil cargo. Their mannerisms became more relaxed, we shook hands, and departed.
The following month, the buyer called me directly to purchase fuel oil. She told me that the other seller forced her to buy their cargo after threatening legal action. We negotiated a spot cargo directly, without a broker. She invited me and my supervisor to visit their steel plant. We later met with the steel plant management, developed a term supply contract, and negotiated the pricing terms. A month prior to my return to the US, I signed the term contract. The $25,000 initial loss was erased with the profitable term supply contract.
In his 1932 publication, Moral Man and Immoral Society: A Study in Ethics and Politics (Must Have Books, Victoria, BC, 2021), Dr. Reinhold Niebuhr discussed in Chapter 10 “The Conflict Between Individual and Social Morality.” In his concluding chapter, Niebuhr describes the conflict between the individual conscience and the needs of society as irreconcilable. “One focus is in the inner life of the individual, and the other in the necessities of man’s social life. From the perspective of society the highest moral ideal is justice. From the perspective of the individual the highest ideal is unselfishness. Society must strive for justice even if it is forced to use means. such as self-assertion, resistance, coercion and perhaps resentment, which cannot gain the moral sanction of the most sensitive moral spirit. The individual must strive to realize his life by losing and finding himself in something greater than himself.” (page 141)
The focus of Christianity is cultivating the individual, not society. Jesus focused his ministry by preaching about individual character and spirituality. His wrath was towards religious leaders who focused on executing Torah law while ignoring the spirit of the law. Jesus taught unselfishness. Society focuses on developing power for selfish purposes. “Political morality, in other words, is in the most uncompromising antithesis to religious morality.” (page 142) I decided to be less selfish and more balanced with the UK steel manufacturer. Mutual, long-term benefits were more important than one trading deal.
Niebuhr tried to seek a balance between individuals and society. “Human life would, in fact, be intolerable if justice could be established in all relationships only be self-assertion and counter-assertion, or only by a shrewd calculation of claims and counter-claims. … A purely prudential morality must be satisfied with something less than the best. … Love must strive for something purer than justice if it would attain justice.” (page 145) Writing twenty-five years before the US civil rights movement, he stated that non-violence by black Americans have yet to soften the hearts of their oppressors. It took a combination of nonviolence and coercion.
Niebuhr is a dualist who doesn’t try to simplify human complexities. “It would therefore seem better to accept a frank dualism in morals than to attempt a harmony between the two methods which threatens the effectiveness of both. Such a dualism would have two aspects. It would make a distinction between the moral judgements applied to the self and to others; and it would distinguish between what we expect of individuals and of groups. … To some degree the conflict between the purest individual morality and an adequate political policy must therefore remain.” (page 148–9)
It is as though Niebuhr is paraphrasing the Apostle Paul’s words: “So then, with my mind I am a slave to the law of God, but with my flesh I am slave to the law of sin.” (Romans 7:25) Individuals should strive to be moral through unselfishness. Combining individuals into societal communities of power can produce immoral behaviors, which may result in justice. Such is the human condition. I learned early in my trading career that it is far better to develop long-term, mutually beneficial relationships than to force one-time advantages that sour relationships. Such is the balancing act between individualism and community.
