Sunday, May 18, 2008

The Morality of Business

If, as I have argued many times, intentional actions that hurt people are evil and the root of all evil is the inclination to treat people as objects, then what is the moral status of business in a capitalist economy, especially since businesses are increasingly considered the equivalent of persons? The answer to this question depends on the intentions of the people involved, and what it takes to hurt people.

A key element of business is competition, whose economic purpose is to efficiently distribute scarce resources within a population in forms that people most want. From the perspective of competitors, this amounts to maximizing economic power: the ability to acquire the most of whatever they want. As with the common sports analogues used by many business leaders, there is a unit of achievement (money or points), and the person or group with the most number of units at a given point in time is the “winner” who then receives a reward greater than the others (“losers”). The reward in this case is profit, which is acquired by providing more of a product or service for the least cost. If demand for a product or service is limited, one group’s success may be at the expense of another’s success; if demand grows (on its own or as the result of someone’s efforts), all businesses seeking to supply it have the opportunity to grow.

If a competitor wants to increase efficiency and meet demand for their own sake without hurting people, the motivation is neutral; if the goal is to help people, then it is good. The motivation is bad if the goal is to limit other people, whether they are fellow competitors or the customers (in terms of choice, quantity, or value).

“Hurting people” involves, in the worst case, limiting their ability to meet their basic physical and psychological needs (to an extent that such things can be influenced); otherwise, it is the reduction of their current ability without providing an equivalent alternative (similar to stealing of property that is the personal equivalent of capital). Any of several groups of people could be hurt by a business: those who are part of its activities (labor); recipients of its products and services (customers); and those who are indirectly affected by its actions or its products and services. If we continue to treat businesses as people, then we must also consider another group that could be hurt: other businesses.

My opinion is that businesses should be considered as tools, not people, and that those who use those tools should be held accountable for the impact they have on people. One of the most disturbing characteristics of businesses is their systemic reduction of everything to monetary terms; specifically, they objectify everything and everyone so that “hurt” is redefined as a violation of rules rather than a real effect on real people who have more intrinsic value than the businesses themselves. If businesses are treated as tools, then the people who use them cannot hide behind abstraction but must take full responsibility for how people are affected by their actions and those of their tools.

1 comment:

Michael L. Gooch said...

Organizations such as XXX, have negative results because the people on board cannot tell the difference between right and wrong. Due to scope, these consequences usually take longer to materialize, but is the result the same? You can find a ton of articles and books about business ethics about businesses “losing their way,” e.g., WorldCom, Tyco, Enron. You can also sign up for seminars where they preach to “do the right thing.” They paint the world in stark black and white. These resources ask one-dimensional ethical questions, such as, “Should you take kickbacks from suppliers?” For me, ethics in the workplace is varying shades of gray. You have to rely on moral law, that is, does it ‘feel’ wrong? It’s easy to say, “There is right, and there is wrong.” In my management book, Wingtips with Spurs, I address these issue in detail. All major corporations have their written code of conduct. Each one is pretty much just a copy of the others and is a major dust bunny. The next time you walk into someone’s office, ask to see the company code of conduct. Good luck on finding someone who will produce it within five minutes. The moral law is much easier to find and digest. It resides in each of us. Michael L. Gooch, SPHR www.michaellgooch.com