February 24, 2008

Business Ethics

While teaching business ethics these last few months I've had time to think about the idea that the moral obligation of a corporation is to make money for its stockholders. I'm pretty damn liberal, so obviously I disagree with this idea, but trying to formulate a strong argument is tough. Luckily, I don't think I have to.

What would you say about someone who acted entirely selfish, who was only looking out for his own self interest? This person might help another on a rare occasion, but only because it also benefited him in some derivative way. You would morally censure this person, call him bad, selfish in the derogatory sense of the word, not the type of guy you want to have around.

Now imagine a government that was only concerned with its own well-being and didn't care about the lives of its citizens above and beyond what was necessary to stay in power. I suppose such a government isn't too difficult to imagine, there are a number of ready examples such as North Korea, perhaps the old government of Afghanistan, dictatorships around the world. These are bad governments, they aren't fulfilling their moral duty to their citizens. This is not the type of country you would want to live in.

Thoughts such as these, and there are more, lead me to think that no moral entity should be solely concerned with its own self-interest. However, there is one entity, corporations, that many argue should act to achieve the single goal of profits. The common idea is that corporations are obligated to pursue returns for their stockholders, that this is there sole moral responsibility. Employees, suppliers, society as a whole - all are means to achieve this end.

I've read the arguments in favor of this conception of the moral duty of the corporation, and they are simply shit. This isn't to say there aren't good arguments out there, just that I haven't seen any in all of my readings. But the point is that we probably shouldn't expect such an argument. Why would corporations differ so fundamentally in their moral obligations from individuals, governments, or any other social organization. This would make the corporation entirely unique, the only moral entity with a single self-serving obligation - to make money.

When a theory has a consequence that appears counter to what would be expected from looking at similar cases, some explaining is certainly in order. A theory of gravity that has gravity as a force of attraction in every part of the universe except Pluto needs a story as to why Pluto should receive special treatment (because it is sad from being kicked out of the planet club). This shifts the burden of proof over to the proponent of corporate america's current view. It isn't that I need to come up with a knockdown argument against such a view, but rather it is up to the corporation to prove its point. The original position should be that corporations, like individuals and governments, are obligated to others, must look out for the well-being of others, and any deviation from this must be explained.

What are the thoughts? Anyone want to be an asshole like Milton Friedman?


mandi said...

I didn't actually read this whole entry. My eyes hurt.

Alan Moore said...

i'm not sure i made it through the entire e-mail either...

Anonymous said...

when discussing corporations i can't help but think of evil. walmart, mcdonalds, all those money hungery devils. than i look at the newspaper and notice the incentives to buy green products, specifically solar panels. big business, selling the green movement. all those that selling product are hoping for more support to the cause. ie. make more money based on a different value than walmart and mcdonalds. all values aside. they are the same beast. one is just prettier than the other. fat girls in cheap clothes or healthy chicks in prana. all the same on the inside. hahahaha!