THE FOUNDATION OF BUSINESS ETHICS

Ethics is a discipline specializing in the examination of answers to the questions “How should I act?” or “What standards ought I to use to guide my conduct?” This is not a trouble-free discipline, by any means – many prominent thinkers consider it bogus, as they might view astrology, mainly because they deny the twin supports on which ethics rests, namely, that human beings can make bona fide choices and that there can be some firm standard by which to judge the choices they make. “Ought” implies “can,” which is to say that acting on any answer to the question of ethics or any of its divisions, including business ethics, assumes that we have both the freedom to choose how we act, and certain standards for acting rightly versus wrongly.

Assuming, for now, that ethics is a bona fide area of human concern, business ethics is a division of professional ethics, focusing on the special areas of commerce and the profession of business. It seeks the right answer to the question “How ought I to act, in my capacity as a commercial agent or professional merchant, manager, marketer, advertiser, executive and even consumer?” Unlike the other major discipline that looks at business, namely economics, business ethics does not assume that there are innate motives driving one to maximize profits or utilities or long term self-interest. Business ethics, as any other look at human morality, takes it that we are all capable of doing the right or the wrong thing and that we aren’t naturally driven either way – it’s up to us which we will chose. That, too, is the assumption underlying criminal law in most societies.

Given the nature of ethics as such, it follows that if one’s will is tyrannized, regimented, regulated, etc., in the bulk of one’s life, one cannot act ethically, because then one is not making the decisions as to how one will act. To claim that a banker or employer or advertiser ought to do or avoid doing such and such, that individual must be able to choose, and there must be some way of showing that what he or she should or should not do is possible. Barring that, all talk of ethics, including business ethics, is just lamentation, as when one complains about bad or cheers good weather. This, indeed, also explains why such institutions as slavery and serfdom are widely seen to be assaults on human dignity, since they rob people of the capacity to be morally responsible agents.

Liberty in human communities is secured mainly via the right to private property. If one has no authority to dispose of one’s assets as one sees fit, one isn’t in charge of one’s own life. If others do this, by government regulation or planning, or by criminal intrusion, one cannot be responsible for one’s conduct, at least to the extent one is being regimented. Paternalistic laws treat one as a child may be treated, dependent on the decisions of others and not fully responsible for how one acts. A well-guarded right to private property is, then, a prerequisite for the exercise of virtuous conduct in any sphere but especially in commerce and business.

Thus, arguably, without a substantial measure of capitalism, there cannot be any intelligible concern about business ethics, for people will lack the choice-making capacity or opportunity that is a prerequisite of ethics.