Ethical Dilemmas: A primer for decision makers by Geoffrey Klempner


 

ETHICAL DILEMMAS

 

A primer for decision makers

 

Geoffrey Klempner

 


 

 

© Geoffrey Klempner 2008

 

Kindle Edition 2016

 

All rights reserved.

 

Email klempner@fastmail.net

 

Web https://philosophypathways.com


 

 

 

 

 

CONTENTS

 

Unit 1

Judging wisely

Nature of ethics

The business arena

Decision procedures

The requirement of consistency

Disinterestedness and detachment

 

Unit 2

Making the case for ethics

Difficult decisions

Ethical dilemmas

Three moral dilemmas

Subjective and objective

The wise decision maker

 

Unit 3

How and why we fail

Knowledge and action

The example of lying

The addicted smoker

The unrepentant thief

The low achiever

The anxious presenter

Some tentative conclusions

 

Unit 4

The problem of 'dirty hands'

The bribe

The firing squad

The paradox of principle

Principles rights and integrity

Principled leadership

Strategy and tactics

 

Unit 5

Truth and truthfulness

Why it is wrong to lie

Business bluffing

Them and Us

Honesty as a policy

White lies

 

Unit 6

Permissible lies?

Between bluffing and lying

Taxonomy of lies

Bullshit and spin

Lies damn lies and advertising

 

Unit 7

Defining 'property'

Stealing and lying

Theft

Punishment and self-protection

Spreading the wealth

 

Unit 8

Competing for profit

How much profit does a person need?

The rules of competition

Deals and contracts

Professional foul

Taking fair advantage

 

Unit 9

Social responsibility as an ethical dilemma

Business case for social responsibility

Ethical case for social responsibility

Defending the term 'CSR'

Importance of praxis

Fighting the system

 

Unit 10

Prospect for a business ethics

The limits of ethics

The focus on persons

Skills and virtues

The business virtues

Business ethics for ordinary people


 

 

 

 

For my students


 

 

 

 

About this book

 

Ethical Dilemmas was originally designed as a ten-part distance learning course. The topic is business ethics and the philosophy of business, a subject that is arguably wider than business ethics per se. In addition to looking at practical examples of ethical challenges that business people face, I raise a question that is more foundational: What gives our ethical judgements about these matters their validity? What is the nature of business activity and how does it differ from other activities in which ethical questions arise? What is it to be good in business? To get the best out of this book, take some time after each unit to think about the questions raised and the answers that you would give to them. In the real world, there isn’t always a ‘best answer’ but we have to act anyway. The end result is not always happy for all concerned. However, I believe it is better to face up to reality and acknowledge the limits to what we can do than offer easy or dogmatic answers.

 

Geoffrey Klempner

3rd May 2017


 

 


ethical dilemmas unit 1

 

Judging wisely

 

THERE is something deep, in a sense, metaphysical – and at the same time immediately practical – about the question I want to consider in these pages: what is it to be a wise judge in matters of business ethics?

 

'Wisdom' is a rather old-fashioned word. Modesty seems to forbid referring to oneself as 'wise', yet the opposite 'unwise' is clearly a term of criticism. What one strives to be is 'not unwise', while recognizing that genuine wisdom is reserved for the few. I think this view is incorrect. We should all desire to be wise. However, if you feel unhappy with the term 'wisdom' then you can rephrase the original question: what is it to judge well on matters of business ethics?

 

What does not seem to me to be a matter of debate is that being a good judge of business ethics is an essential accomplishment of a business person. If ethical questions leave you cold, or if you would like to be ethical but become flustered and reduced to inaction by your first encounter with an ethical dilemma, then you lack something that is required for being good in business – no matter how successful you may be in making money for yourself, or your company.

 

If you disagree with that statement, there is no point in reading any further. You've made a mistake. You shouldn't be here. (Of course, that won't stop such persons listening in at the door: it is the nature of business that all information is regarded as potentially 'of use', for example, as a way of predicting how others will behave.)

 

On the other hand, if you agree with the statement that being a good judge of business ethics is necessary for being good in business, but fear that it applies to you in a negative sense, then all hope is not lost. The deficiency can be corrected, if you are prepared to work at it. That is what this course is all about.

 

These pages are also motivated by the feeling – harder to express in a simple slogan – that the finely articulated functionality of the business world must somehow make room for the awareness that we belong to a wider order of things, where our work and our toil have an ethically justified place, in order that we may see ourselves as being engaged in a meaningful activity and not merely as wheels in the vast consumer satisfaction machine.

 

For it takes only a modest degree of wisdom to recognize the following fact: irrespective of any material or financial rewards that you may gain, if all you can think about is the 'bottom line', then, ultimately, you are just a slave. The consumer is your lord and master.

 

However, merely recognizing this as a 'truth' or 'wise observation' is not enough. We have to discover – or rediscover – a sense of virtue or nobility in the vocation to enter the business arena, an existential grasp of what it is to be, as a person who freely chooses to engage in business activity. Due care for questions of business ethics is a part of this but not the whole. What more there may be, is a question I will be pursuing in the margins, while I grapple with questions of ethical practice and theory. My response to the larger question might be seen as remarks towards a philosophy of business.

 

Nature of ethics

 

What is ethics? It has often been observed that when philosophers encounter something they do not understand the first thing they do is try to make a theory about it. The theories can be highly ingenious but they typically take the form of identifying one aspect of the thing in question as the essence or paradigm, then forcing the phenomena that don't quite fit into the Procrustean bed that they themselves have constructed. This is the main ground of my complaint against moral philosophy.

 

One of the most important lessons from Ludwig Wittgenstein's later writings is that, far more often than not, the concepts that deeply interest and concern us are impervious to definition, impervious to 'theory', and that what we are really looking for is to find our way about in territory that has become strange and unfamiliar only because we have given in to the urge – albeit an inevitable part of human nature – to philosophize.

 

If you look at a standard text book on business ethics, what you will learn is that there are different rival 'theories of ethics': consequentialism, deontology, virtue theory. The more adventurous authors might add two or three more to that list. An examination of the problems of business then takes the form, 'What would a consequentialist say?', 'What would a deontologist say?', 'What would a virtue ethicist say?' And so on.

 

That is not the approach that will be taken here. Evaluating consequences, identifying principles, promoting virtues are all deeply interconnected parts of a whole which cannot be reduced further, or forced into a particular shape depending on one's theoretical predilections.

 

Thus, a careful examination of the situations in which ethical questions arise, and in particular ethical dilemmas, reveals that recognizing and promoting 'goods' – such as wealth, job satisfaction, the environment – is one ingredient in the decision-making process. Another ingredient is the necessity of principles: identifying the things you stand for, the duties and rights that you will go to great lengths to defend. Ethical virtues also have a vital role to play, but they neither trump, nor are trumped by other considerations.

 

What, then, is ethics about? In the widest sense, ethics makes a human community possible. To take an example from Immanuel Kant, if there were no ethical prohibition against lying, then we could not rely on any means of communication, linguistic or otherwise, as a source of information about the world. It would be each person for themself. (Because of this, the very idea of an 'acceptable lie', in Kant's eyes, involves a kind of self-contradiction.) Ethics describes minimum standards of behaviour towards others, such as not telling lies, not breaking promises, not stealing. We do the right thing, because it is right and not for some further, non-ethical end.

 

However, if we look at the phenomena without prior assumptions or theoretical encumbrances, what is apparent is that the ethics of the human world is also the ethics of altruism. We care, we are expected to care for the good or well being of others – beyond what we merely owe them or what they have a right to.

 

Equally apparent is that self-interest has a rightful claim alongside – neither above or below – altruistic concern. The 19th century British moral philosopher Henry Sidgwick, at the end of his book Methods of Ethics recognized this fact, as undermining any attempt to develop a coherent moral theory:

 

I do not mean that if we gave up the hope of attaining a practical solution of this fundamental contradiction, through any legitimately obtained conclusion or postulate as to the moral order of the world, it would become reasonable for us to abandon morality altogether: but it would seem necessary to abandon the idea of rationalising it completely. We should doubtless still, not only from self-interest, but also through sympathy and sentiments protective of social well being, imparted by education and sustained by communication with other men, feel a desire for the general observance of rules conducive to general happiness; and practical reason would still impel us decisively to the performance of duty in the more ordinary cases in which what is recognised as duty is in harmony with self-interest properly understood. But in the rarer cases of a recognised conflict between self-interest and duty, practical reason, being divided against itself, would cease to be a motive on either side; the conflict would have to be decided by the comparative preponderance of one or other of two groups of non-rational impulses.

 

Henry Sidgwick Methods of Ethics Book IV, Ch VI, 5

 

 

I am arguing that the only conclusion to draw from the contradiction between altruism and self-interest is that we have to recognize there is such a thing as ethical judgement, which takes considerations of altruism and self-interest, together with the minimum required standards of behaviour, and makes a balanced decision: 'all things considered'. The only thing that commands in ethics is your judgement of what is – after taking every aspect of the circumstances into consideration – the right thing to do.

 

The rational basis for ethical judgement – that in virtue of which ethical judgement is 'correct' or 'incorrect', 'right' or 'wrong' – is a question for the foundations of ethics. For our purposes, it is enough to say that from the point of view of the phenomenology of ethics – or what it is like to come to an ethical decision – our response to an ethical challenge does not appear to be an expression of mere subjective preference. Our judgement represents our appreciation of, is dictated by something out there that gives our judgement its sense of urgency and necessity.

 

The business arena

 

The activities of business people are responsible, to a large extent, for creating the world that we live in today. There is hardly a corner of human life where business has not made an impact. Yet, as I will argue, business activity also constitutes a world in itself – a world within the human world – which I term, 'the business arena'.

 

Metaphysics has traditionally been the study of what it is for things to constitute the world, or reality: according to Aristotle, the study of 'being qua being'. In order to make a 'world', things have to come together in an order or structure that is in some sense, self-contained and self-explanatory. The principles and rules that apply within a world do not necessarily apply outside it. However, the business arena is more than just a system defined by rules. It is the Matrix, the foundation of your reality, all that you see and feel and know – but only for so long as you choose to play the game.

 

As a professional metaphysician, I am fascinated by the idea that human beings can belong to more than one world, or move between worlds. Anthropologists who 'go native' in order to study their subjects more closely have an inkling of what I am talking about. We live in the marketplace and also outside it. We can play the various roles assigned to us in the game, or we can stand outside our economic personae and observe ourselves from an ethical point of view. The only difference between us and the anthropologist is that, most of the time, we don't realize that we are doing this.

 

Geoffrey Klempner 'Ethics and Advertising'

 

Philosophy for Business Issue 9

 

https://isfp.co.uk/businesspathways/issue9.html

 

The 'rules' in question are the rules of ethics. As I have stated, the human world is governed by the ethics of altruism. That does not mean that we are required to be altruistic in everything that we do; rather, the interests of others are a factor to balance against the claims of self-interest. We have a right to take ourselves into account. But we also have a duty to consider the interests of others – for their sake and not for merely self-interested reasons.

 

In the business arena, the ethics of altruism are, in an important sense, suspended. We are not merely co-operating or living together; we are competing. When human beings compete, there will be those who do better and those that do worse. If you win the contract, someone else has to lose. If you gain the job offer, then someone else fails to gain it. That is the magic formula that Adam Smith first enunciated in his Wealth of Nations: we all benefit from free competition of players in the business arena, each aiming for his or her own self-interest and the well being of those he or she cares for, while at the same time respecting the rules of property, honesty and fair play.

 

One way to understand the business arena is by analogy with sport or competitive games:

 

The boxer in the ring has one objective: to win. Not at any price. If as a result of sloppy refereeing, a fight is not stopped and you are presented with the opportunity to kill your opponent, the responsible fighter does the minimum required to win, not the maximum. Unless you are a merciless sadist, you don't actively seek to inflict permanent brain damage. But suppose that your opponent needs to win much more than you do. Perhaps it's his last fight, or he has a large gambling debt to pay off. It wouldn't be an act of moral compassion. It would be a betrayal of the sport to allow your opponent to beat you. More than that. It would be an out-and-out absurdity.

 

I have chosen boxing because of the pungency of the metaphor of the boxing ring. It is not an accident that sport takes place in an arena. The architecture of the boxing ring or the sporting arena is not merely utilitarian, but is symbolic of the frame which we choose to place around this area of human endeavour.

 

Sport would not be sport, were it not for that frame. Sport was an invention, like the wheel. It is possible that there is a planet somewhere whose inhabitants have never competed in athletics, or a game, or a martial art. It seems to me far less likely that in our future interstellar travels we shall ever find a planet where trade or quid pro quo had not been invented. The very first act of deliberate trade created the frame within which business activity takes place.

 

Geoffrey Klempner 'The Business Arena'

 

Philosophy for Business Issue 5

 

https://isfp.co.uk/businesspathways/issue5.html

 

Yet even though normal ethics is suspended, that doesn't mean that we can take a holiday from thinking about ethical questions. The business arena is governed by its own ethical rules, which we will be exploring in these pages. Beyond that, every player recognizes that to be a 'business person' is, after all, just a role that we freely take on. To be nothing but a player in the business arena, with no interests or commitments outside that arena, is to be a travesty of a human being.

 

Decision procedures

 

Our main concern is with ethical dilemmas, as they arise within the business arena, as well as in the potential conflict between the business arena and society at large. I have no theory or formula to offer for solving the dilemmas that business people face. But I will be saying a lot about what constitutes a good or wise judge of ethical questions, as well as how to think about different kinds of ethical dilemma.

 

The first thing we need to examine is the very claim that there is 'no theory or formula'. Who is to say? Let's suppose that someone writes a book on business ethics which argues that there is no decision procedure for ethical questions. Then a rival business ethicist writes a book claiming to have found an effective decision procedure which can be reliably applied in every case. – How does the first author know that the second author is wrong?

 

It is not enough to have a decision procedure: the results that it issues have to be believable. A good case can be made for astrology, as a way of prompting people to make decisions, rather than remain paralyzed by indecision. The problem is that you have to believe the claims of astrology in order to accept that ethical decisions based on astrology are reliable. If you don't then you might as well spin a coin. (Either way, at least you can be sure of being right fifty per cent of the time.)

 

Consider the case of a marketing team who are trying to determine the optimum price for a particular perfume. If the item is priced too highly, the product will be uncompetitive in the particular sector of the market place that they are aiming for; if too low, then the target consumers will be put off by the fear that the item is too cheap to be of good quality. No amount of market research will guarantee that the decision made is the correct one, in the face of the fickleness of the market, or fashion, or your ultimate lack of knowledge of what your business competitors are planning. However, actual sales figures provide a kind of acid test. In this way, the marketer's judgement is refined through experience, without ever yielding a mechanical formula that substitutes for judgement.

 

This observation is consistent with the fact that formulae are often used as rules of thumb for guiding these kinds of decision. The point, however, is that we judge the efficacy of the formula by its practical results, and are not afraid to make a judgement call which contradicts the result obtained from the formula when the circumstances seem to warrant it.

 

How much harder must it be, if there is no acid test of an ethical decision? You can't judge the correctness of an ethical decision by sales figures, or indeed popularity. If you weren't sure at the time whether or not you had done the right thing, subsequent events can only show that you got your facts wrong. However, what you will learn is what other people think of your decision, people whose judgement you respect.

 

No-one is an island. We make our ethical evaluations against a background of common knowledge and understanding of what is acceptable or unacceptable behaviour. It is the task of ethics to articulate this rich repository of human knowledge. The result can be informative, and indeed helpful as a guide to action. What a knowledge of the principles of ethics cannot do is substitute for your own good sense and judgement.

 

The requirement of consistency

 

The futile search for a formula for deciding ethical questions is one way in which theories of ethics or theories of business ethics come unstuck, as we shall observe when we look in detail at different kinds of ethical dilemma.

 

However, there is another assumption which seems at first harder to question, the assumption that howsoever we judge, we ought at the very least to be consistent. If you made the judgement ABC in the past, and the circumstances appear relevantly similar, then you are duty bound to judge ABC again.

 

Without doubt, thinking about ethical questions is a search for consistency, and much of ethics is concerned with developing an overview that will help us be more consistent in the judgements that we make.

 

There are two reasons for this. First, to accept that it is all right to make inconsistent judgements seems tantamount to accepting that we are not aiming to make judgements which are correct, or warranted by the circumstances. If I make the judgement ABC and also the judgement BCD, and it is impossible for ABC and BCD to be both correct at the same time, then one of my judgements must be wrong.

 

A no less telling reason is that we rely on each other to act consistently, in order that we may base our decisions and actions on reliable information about what the other person will do. Team effort is wrecked if members of the team cannot be sure that other team members are striving for the same objectives and will not fall out of line for some trivial reason. A well-intentioned but inconsistent leader can promote chaos and disillusionment, subverting any good purposes that he or she might originally have set of to achieve.

 

Yet there is such a thing as taking consistency too far. Human beings learn by their errors and mistakes. We are permitted to change our minds, when we gain a view of things that we did not have before. Equally, when circumstances arise where two seemingly inconsistent judgements seem forced on us, and we cannot resolve the inconsistency however hard we may try, that is still better than trampling roughshod over principles we deeply believe in just in order to 'remain consistent'.

 

The Polish philosopher Leszek Kolakowski expresses the same thought, but more poetically:

 

The race of those who vacillate and are soft, the inconsistent people, precisely those who happily eat steak for dinner but are totally incapable of slaughtering a chicken; those who do not wish to contravene the laws of the land yet do not denounce others to the secret police; those who go to war but in a hopeless situation surrender as prisoners rather than die in a last-ditch fight; those who prize frankness but cannot bring themselves to tell a famous painter that his work is terrible, nervously uttering words of praise which they do not mean – in short, the race of inconsistent people – continues to be one of the greatest sources of hope that possibly the human species will somehow manage to survive. For this is the race of which part believes in God and the superiority of eternal salvation over temporal well-being, yet does not demand that heretics be converted at the stake; while the other part, not believing in God, espouses revolutionary changes in social conditions yet rejects methods purporting to bring about these changes which openly contradict a certain moral tradition in which these people were raised.

 

Leszek Kolakowski 'In Praise of Inconsistency'

 

Toward a Marxist Humanism

 

New York: Grove Press 1968, p.213

 

Disinterestedness and detachment

 

What we have learned so far is that ethics is a practical affair. You can't rely on theories or formulae or even logical consistency. For all that, we strive to make the right judgement, based on rational reflection on the circumstances in which we find ourselves, and do not see this as merely the expression of a subjective preference, or a means to some other non-ethical end.

 

What lies behind the very idea of ethics is the notion that it is possible to see the world from a point of view which is, to some degree, detached from the one which we ourselves occupy. To take another person into account when you make a decision implies that you put some value on the way they see things, on what is important in their eyes, on what benefits or harms them.

 

The ultimate expression of this idea is the notion of the disinterested view, where the fact that I have a particular interest or desire is merely one datum to be taken into account along with the interests and desires of everyone else whom my decision affects. In its starkest terms, this assumption appears as the idea that in making the utilitarian calculation of 'the greatest happiness for the greatest number', my happiness counts for one, and no more than one – amongst the hundreds, thousands or even millions whose happiness might conceivably be effected by my decision.

 

When Henry Sidgwick confessed that the project of constructing a rational moral theory ran aground on the question of the claims of self-interest, he recognized that this is not a credible account of ethical decision making. Ethics is for ordinary people. It is plain common sense that we have a right to look after ourselves, and those we care for. The virtuosos of self-sacrifice – the Mother Theresas of this world – have their reasons, which are undoubtedly ethical reasons but they don't have to be our reasons. Sainthood is optional.

 

Equally optional, I have argued, is the decision to put altruism aside in order to enter the business arena and compete, on the understanding that you can only win if your competitor loses. I do not wish to underestimate the fact that this is a momentous decision to make. Nevertheless, even as we compete we remain part of the human ethical world, sensitive to the effect that our activity has on those on the sidelines. As we shall see, this has important consequences for issues around social responsibility and corporate citizenship.

 

It is also true – and this is part of the sublimity of ethics – that there is no limit to ethical obligation, once you start looking for it, as the example of Mother Theresa indeed demonstrates. The answer is not a reason for not looking but a plain matter of fact: we do not look. This is what the ethics of the human world is like. At that point, the philosopher has nothing more to contribute.

 


 


ethical dilemmas unit 2

 

Making the case for ethics

 

WE are now going to look at how ethical dilemmas arise. As I have already indicated, it goes without saying that in addressing the question of ethical decision making in business one has to assume a prior interest in ethics: either an interest in behaving ethically, or at the bare minimum, an interest in knowing how an ethical person would behave.

 

There is no disputing that a case needs to be made for ethics, but not here. Such an inquiry belongs to the foundations of ethics, and would address the question whether ethical beliefs have an objective basis, either in Platonic 'Forms' or a Kantian 'Categorical Imperative', or alternatively a subjective but nonetheless reliable basis in human emotions and attitudes as David Hume believed. It would also look at the various 'meta-ethical' theories which attempt to explain what a person is doing in making a moral judgement, the kind of linguistic act that is performed; for example, whether we are asserting a statement with a truth value as appears if we take moral statements at face value, or issuing a command as the philosopher R.M. Hare argues in his book The Language of Morals.

 

It might be thought that another kind of justification of ethics in business is possible, which bypasses the question of foundations altogether and limits itself to the prudential reasons for being ethical. Much causal discussion of business ethics falls into this area. As Kant observed, if you are a shop keeper, it is prudent to always give the correct change to your customers if you want them to come back to your shop. Failing to not give incorrect change can hardly be described as 'ethical', because ethics never came into the decision in the first place. However, if we take the very same shop keeper and put him or her in a position where they have a great deal to gain by acting unethically, with no risk of being found out, then the appeal to narrow self-interest fails.

 

Plato and Aristotle both believed that prudence in the widest sense can be appealed to in order to persuade an individual to choose the ethical life. In the Republic, Plato describes the myth of Gyges, a magical ring which renders the bearer invisible. Why be ethical, if you can do whatever you like with impunity? (The same question is posed by the 2000 movie, 'Hollow Man'.) Plato's answer, through the mouthpiece of Socrates, is that the unethical person has a 'disordered soul': no-one who fully understands what it means to have a soul that is disordered would wish such a state of affairs. I am not going to try to defend Plato here. If one looks at the business scandals that have motivated an increased awareness of the question of ethics in business, it is very hard to see that Plato's argument would have acted as a deterrent to executives and board members who believed that they were above ethics and above the law.

 

The arguments that follow are therefore addressed to business people who would like to be ethical – who have the required good will or correct attitudes – but are not sure what this requires in a particular case, especially in hard cases. It is easy to pass judgement on the decisions of others, until you find yourself in the same or a similar predicament. Good will is not enough, if you lack the wisdom to see and understand what is to be done.

 

Difficult decisions

 

A difficult ethical decision is not necessarily the same as a decision that is difficult to make. You may be faced with a situation where it is very clear what would be the right or wrong thing to do. Say, you are a CEO in the process of finalising a business partnership which is vital for the survival of your company, and then you are appalled to discover at the last minute that your prospective partner is involved in systematic bribery of tax officials in one of the main countries where you are hoping to expand the market for your product.

 

So long as nobody knows that you know – you overheard a conversation in a lift, or accidentally saw an email intended for someone else – you have the option of turning a blind eye. If and when the corrupt practices are brought to light, you can claim that the wool was pulled over your eyes. By that time, your balance sheet will be looking more healthy and you can afford to break with your partner and let them face the music alone. There is no doubt that such a course of action is unethical. But in a real life situation, the alternative option might be a very difficult decision to take, especially if there is a real danger that without this partnership your company will go out of business.

 

In unit 1, we saw that self-interest is a valid consideration. A company is not required to sacrifice its interests and those of its shareholders for the greater good. However, the case we are now describing goes well beyond legitimate self-interest. The problem, bluntly, is one of weakness of will. You know what you should do, but are reluctant to bite the bullet. Companies as well as individuals can suffer weakness of will. This is one of the main indicators of bad leadership or of a bad corporate culture. When a number of individuals are involved in making a decision, it is easier to let yourself off the hook if you know that others are prepared to do the same. The only reason why in real life this doesn't lead to wholesale corruption is that it only takes one dissenting individual to blow the whistle. Conspiracy is generally a harder act to pull off than an individual misdeed.

 

There is no philosophical solution to weakness of will, because you already know what you should do. You don't need a business ethicist to tell you that this particular action would be unethical. However, there is a practical remedy. As Aristotle observed, those who practice ethical decision making at every opportunity are more likely to resist the temptation to backslide and allow unethical considerations to sway the argument.

 

A genuinely difficult ethical decision, on the other hand, is one where with the best will in the world you do not know what you should do. The problem here is not with the will but with ethical knowledge. The wise decision maker has the ethical knowledge that the unwise or inexperienced decision maker lacks.

 

Lack of ability in ethical decision making can be remedied by appropriate training. As we shall now see, however, competence in making ethical decisions is still not enough. Sometimes we face ethical decisions which are difficult, not because of something we lack – the required knowledge or expertise – but rather because the nature of the situation which we are dealing with is such that no amount of expertise would be sufficient to determine the one and only 'correct' answer. This is the characteristic feature of a true ethical dilemma.

 

Ethical dilemmas

 

Moral philosophers love an ethical dilemma. Dilemmas show something deep about ethics. They make us question our moral beliefs and theories, search for an understanding of what is going on below the surface. Above all, ethical dilemmas provide an opportunity for philosophers to test their theories against real-life hard cases.

 

What is a dilemma? It is not clear at first sight that the term 'ethical dilemma' picks out a class of situations which all share the same common characteristics. So far we have offered a negative criterion: a moral dilemma is different from a merely difficult decision. In a dilemma, the difficulty arises from the very nature of the situation with which we are faced rather than our mere lack of wisdom or ethical knowledge.

 

It is true that, in ordinary speech, we are inclined to use the term 'dilemma' for any decision where we are uncertain which of two alternatives we should choose; in other words, as synonymous for a 'difficult decision'. However, as we have seen, what is problematic to one person may be much clearer to another person who has stronger moral perceptions or insight. If someone insists on calling every difficult decision a 'dilemma', then they still need a word for the variety of 'dilemma' that does not refer to something merely subjective in the mind of the agent, but rather denotes an objectively existing situation in the world.

 

This raises a deeper issue about subjective versus objective which I will return to later. For now, let's just look and see if we can describe in broad outline the characteristics that give an ethical decision the aspect of a dilemma.

 

Consulting etymology, the term 'dilemma' comes from the Greek: 'di' for two and 'lemma' for proof. A dilemma is two proofs, or reasoned arguments, which entail logically inconsistent courses of action. In the ideal example of a dilemma, there is an irresistable case for doing A, and also an irresistable case for doing B. But it is logically impossible to do both A and B. It follows that either one case can after all be resisted, or both can. To assert that both cases are (truly) irresistable would imply the existence of a irresistable case – combining the cases for A and for B – for seeking to do what is logically impossible: an absurdity.

 

It is fair to say that the majority of cases of moral reasoning are not like this. Often, when we when we face a tough decision, we weigh the relative strength of the cases for A and B. The case for A would be deemed sufficient for action, were it not for the fact that there is also a case for B, and vice versa. Provided that one case is stronger than the other, however, there is no real dilemma. We may regret that circumstances were such that we could not avoid having to choose, but all we were looking for were sufficient reasons for action and we have found them. It only remains to do what is necessary: to act.

 

This glib summary hides the fact that decisions like this can cause deep anxiety and anguish; for example, a manager facing the decision of which of two loyal employees to make redundant. In truth, there may be very little to choose between the two individuals. Either employee will be devastated by the decision. However, a decision must be made, so the only remaining question is how do decide as fairly as possible, without secrecy or subterfuge so that the grounds of the decision are clearly understood by all parties concerned.

 

If a dilemma is not just a difficult or painful decision, are there any genuine dilemmas? I believe that there are. What all ethical dilemmas have in common is that, to a greater or lesser extent, the relative strength of the two cases cannot be meaningfully compared. There is no common standard, no common coin for evaluating the strength of the case for A against the strength of the case for B. Whereas the 'ideal' dilemma – according to our original definition – pits two irresistable arguments against one another, in real-life cases of ethical dilemma the two arguments simply do not connect. There is no rational procedure for comparing them.

 

Let us see how this comes about. I will look at three imaginary, but hopefully realistic cases. The issues raised will be discussed in more detail in later units.

 

Three moral dilemmas

 

Case 1

 

A freak accident occurs at a chemical factory with a previously exemplary safety record, and a man dies. An investigation into the causes of the accident recommends measures to prevent similar accidents happening in the future. However these changes would be prohibitively expensive to implement. The CEO faces the choice of closing down the plant with the loss of hundreds of jobs, or allowing the plant to continue with changes in procedure which reduce the risk but do not eliminate it entirely.

 

Case 2

 

An investigative reporter gets whiff of a story about corruption in a blue chip corporation concerning a board member who accepted a free holiday from a company negotiating a multi-million pound land deal. The Chairman has already spoken to the board member concerned, who immediately offered his resignation. Luckily, the deal has not been finalised and no harm has been done. On the telephone the reporter asks the Chairman if there is any truth in the rumour. An admission will send share prices tumbling. The chairman can admit the truth, or give an innocuous explanation designed to throw the reporter off the scent – a 'white lie'.

 

Case 3

 

A human resources manager at a laboratory equipment manufacturer is faced with a difficult decision regarding one of the more senior members of the workforce. Only two years away from retirement, the man works with great care and dedication but his work rate has declined to the point where other workers are beginning to complain. Loyalty to the company dictates that the manager makes the best decision in the company's interests, and let the man go. An alternative, more humane course of action would be to move him to a section where his lack of productivity will be less likely to be noticed.

 

Case 1 is an example of incommensurable outcomes. We are asked to determine the value of eliminating a small but significant risk of injury or death versus the value of continuing to provide employment. A dogmatic response would be to say that no value, however great, can be put on a man's life. However, if that principle were to be put literally into practice, daily life would grind to a halt. Even if only one person a year died in a car accident, all private transport would be banned. So, while we pay lip service to the belief that a human life is beyond measure, in practice decisions are made which are inconsistent with that belief.

 

Case 2 is an example of a clash between principles and consequences. As a matter of moral principle, it is always wrong to tell a lie. However, in real life there comes a point where the price of telling the truth is one that we are not prepared to pay. The classic example is the one of the axe-carrying murderer who asks, 'Which way did he go?' Any response other than the literal truth is a lie. Kant, in an essay entitled 'On a Supposed Right to Tell Lies from Benevolent Motives' (Kant’s Critique of Practical Reason and Other Works on the Theory of Ethics (1785) http://oll.libertyfund.org ), argued for the dogmatic view that even in this extreme case, one's moral duty is to tell the truth, irrespective of the consequences. However, few would embrace that extreme conclusion.

 

Case 3 is an example of a dilemma that arises as a result of a conflict of roles. A manager, just as much as a doctor or judge or teacher or member of the police force accepts certain duties and obligations as definitive of one's role. No-one is forced to be any of these things. We freely take up our vocation and identify ourselves with what we do. But a human being is more than just a role. The manager is also a responsible citizen, a loyal spouse and caring parent, a decent human being. These roles carry particular obligations that have the potential to clash. The dogmatic response, 'Loyalty to one's company overrides all other obligations in all circumstances,' is simply unacceptable.

 

In each of these examples, you can ratchet up either branch of the dilemma as you wish. That is why the fine details have been left deliberately vague. If you increase either side sufficiently, it becomes clear what action one should take. But in the middle there is a large penumbra where there are no clear rules or decision procedures. For each person facing such a decision, there is a unique cut-off point but no-one can say in advance exactly where this is. We have to make a choice, and so we act. We can offer reasons for our decision, but in the face of the impossibility of making a meaningful comparison between the alternatives any decision is ultimately made 'without reason'.

 

In this respect, the moral philosopher or business ethicist is in the same boat as everyone else. The only difference is that when other people give up, the ethicist doggedly continues deliberating. To the extent to which an ethical dilemma arises because of confused thinking or insufficient knowledge, the skills of logic and analysis can render some dilemmas soluble, or at least easier to grapple with. But in the end, even the ethicist has to make a judgement call. When reasons give out, you just have to make your best assessment of conflicting considerations. This is not irrational, but rather a consequence of the very nature of rationality. As Kant observed, wisdom and skill in judgement can never be reduced to a book of rules. You still need to use judgement in applying the rules.

 

Subjective and objective

 

I said earlier that we were going to discuss a deeper issue about subjectivity and objectivity. To say that a decision is made 'without reason', or that for each person there is a 'different cut-off point' implies that the ground of that particular decision, made at exactly that point in those circumstances is, in a sense, subjective. If there were an objective ground, then decisions would be correct or incorrect, right or wrong in relation to that objective ground. Discarding the dogmatic response – which achieves objectivity at the price of being simply unbelievable – the existence of an objective ground implies that only one point on that scale is the right point. You either hit that tiny target when you make your decision, or much more likely miss. A 'good' decision is one that does not miss the target by too much. This is the best that mere human beings can hope for.

 

Moral philosophers impressed by the thought that if ethical decisions are not merely subjective then there must exist an objective answer in every case – whether a human being can ever know that answer or not – have put forward various theories in order to explain how such a target for moral judgement might be defined. Utilitarianism, or the theory that the objectively right action is the one that leads to the 'greatest happiness for the greatest number', posits a sum that no human being can ever calculate exactly but which nevertheless constitutes the ultimate standard for all our moral judgements.

 

An alternative, more subtle response suggested by recent work in the logic of vagueness, would claim that the 'penumbra' that I have talked about is typical of vague judgements, which infect every aspect of human knowledge. According to the Oxford philosopher Timothy Williamson, the only way to save our classic notions of truth and falsity is to accept that vagueness is merely a 'form of ignorance' ('Vagueness and ignorance', Aristotelian Society Supplement 66 (1992). Reprinted in R. Keefe and P. Smith, eds, Vagueness: A Reader MIT Press 1997). It follows from Williamson's view that there is a correct answer to each ethical dilemma, for each precise way of filling out the details, just as there is a right answer to the question whether a certain minimum number of grains of sand arranged in a particular way is sufficient to make a heap, even though we can never know what that answer is.

 

I find these claims simply fantastical. Why is it so terrible to believe that there are ethical questions to which there is no ultimately correct answer? Of course, we should never assume that there is no right answer just because we haven't yet found the answer. But it is a plain non sequitur to argue that because such an assumption should always be challenged in a particular case, it follows that we must believe that there exists a state of affairs in reality that constitutes the unique answer.

 

Consider other cases where we strive to improve on something we have done or decided. For example, consider a poet writing a poem, crossing out lines, substituting words, changing the words back again until the poet feels that the result cannot be improved upon. Or consider a car designer working on the plans for a new people carrier, moving the wheels an inch forward, then back, then forward again. There is no 'perfect' poem or people carrier 'out there' in reality. You stop because you can't think of a way to improve on what you've done.

 

We don't say that a poem is a great poem, or that a car is a great car because it corresponds closely to the 'perfect poem' or 'perfect car'. That would be nonsensical. Then why insist that a well judged response to an ethical dilemma is one that corresponds closely to the ideal or perfect response?

 

For all practical purposes, the idea of an ultimate answer to every ethical dilemma has no real use in our decision making. The myth of an ultimate answer helps to keep us honest when we face real-life decisions, but a myth it remains. It is one thing to say that we should speak and act as if there were a real answer to every ethical question 'out there', but quite another to make that a matter of literal belief.

 

The wise decision maker

 

I would suggest that there is an alternative way, after all, to accept that a person's response to an ethical dilemma is 'subjective', in the sense of being uniquely theirs, without giving up the idea that our responses to ethical dilemmas can be praiseworthy, or alternatively deserving of criticism.

 

Whether you choose between the two alternative courses of action A and B soberly and seriously, or carelessly and capriciously, the result is the same: you either do A, or you do B. The quality of your decision is not a matter of which decision you made but rather how you made it, and what you are prepared to do as a consequence of your decision.

 

The capacity to see and appreciate a dilemma is indeed the mark of a wise decision maker. Someone with less knowledge and understanding would not be gripped in the same way. Paradoxically, the better we are at making ethical decisions, the more difficult, or indeed impossible some decisions may seem, because it takes knowledge to appreciate the quality of the dilemma. Pain is the price we pay for being sensitive to ethical problems and challenges that other persons are not sensitive to.

 

If there does exist an objective foundation for ethics, as Kant and Plato believed, it still does not follow that such a foundation consists in a precise criterion of ethical evaluation, which only God or angels can apply. Whatever the object of ethical knowledge may be, it surely must be something that makes a practical difference. A criterion that only God or angels can apply makes no practical difference, and therefore might as well not exist.

 

My view, which I have argued for elsewhere (Naive Metaphysics: a theory of subjective and objective worlds Avebury 1994, Kindle 2016, Ch 13), is that the foundation for ethics arises from consideration of what it is to be a human subject in relation to other subjects. On pain of solipsism – or the belief that other persons are merely characters in my private dream – we must accept the validity of ethical claims. Ethics is something real, as real as the physical world around us. That is what gives ethical dilemmas their depth; and their tragedy.

 


 


ethical dilemmas unit 3

 

How and why we fail

 

UP until now, our inquiry has been somewhat one-sided. We assumed – as it seemed reasonable to do – an audience whose only concern is to know what to do when faced with an ethical dilemma. But that ignores the fact that we don't always do what we know we should do; sometimes we would prefer that we didn't know; and sometimes try as we might we find we are unable to bite the bullet and do what we know is right.

 

There is no single term for this phenomenon: the familiar term, 'weakness of will' – much discussed by philosophers ever since Aristotle – covers many of the cases but not all. 'Moral failure' is too wide because every occasion when we make a wrong ethical judgement, is an example of moral failure. However, I will stick with the familiar term, with the proviso that it is not necessarily descriptive of the full range of phenomena which it denotes.

 

What I have in mind is a person who is prepared to learn all there is to learn about making ethical judgements, but whose actions for one reason or another don't always reflect this positive attitude. One would hazard a guess that this applies to almost everyone, at one time or another. This is surely a topic worthy of further investigation.

 

The reason for tackling this issue now, before we enter into a more detailed examination of the issues around ethical dilemmas, is that this is a factor that needs to be borne in mind as one of the permanent possibilities of human ethical – or unethical – conduct. It is in our very nature to be not only fallible in judgement but also to fail at the very point of putting our judgements into effect.

 

Such an inquiry illuminates the nature of ethical judgement and action, because the conditions under which one fails are no less relevant to understanding the phenomenon in question than describing the conditions under which one succeeds.

 

Thus, whether you are engaged in the process of teaching yourself to be a better judge of ethical matters, or devising training programs in business ethics, you need to understand how and why things go wrong when they go wrong; why knowing what is right in theory does not always translate itself into practice. In just the same way, if you are designing a new car – or a business process – you want to know the limits of the design, how much stress your design can take before it fails to perform as expected, or indeed undergoes catastrophic breakdown.

 

I shall be looking at examples of failure to do what is in one's own self-interest alongside failure to do the ethically right action, because the underlying explanation is substantially the same in both cases. In both cases, the considered judgement, 'I ought to do X' does not always suffice for doing X. That is to say, prudential or ethical knowledge does not always translate into prudential or ethical action.

 

Knowledge and action

 

Last time I distinguished between decisions that are difficult because we don't know what we should do, and decisions that are difficult because we do know but can't summon the will to do it. How valid is that distinction, in real cases?

 

It is easy enough to point to cases, or alleged cases, where one knows what one should do but fails to do it. As philosophers, however, we have learned not to take things at face value. We need to be sensitive to the subtleties and complexities of real life examples. The 'facts' are not always what they seem. Nowhere is this more true than in the case of weakness of the will.

 

Socrates famously held that 'virtue is knowledge'. If you really know what is the right thing to do, he believed, you cannot fail to do it. Failure to do what is right is proof of failure of knowledge. When Aristotle came to discuss what he termed the problem of weakness of will, or akrasia, he came to the conclusion that in many cases what we think of as 'knowledge' is not always as clear-cut as it seems. Knowledge is not just a simple process of seeing but involves a capacity to respond appropriately to practical as well as theoretical challenges. Sometimes, the challenges that we come up against demonstrate that our grasp of what we thought we knew is not as firm as we thought.

 

The assertion, 'virtue is knowledge' may seem a rather extravagant claim. Yet it is arguably nothing more than a consequence of viewing ethical questions objectively. If it is an objective fact that X is wrong, irrespective of our desires, or what we would like to the case, then cognisance of that fact ought, logically, to be sufficient to motivate an agent to not do X. If a further motive were needed – say, the hope for a reward or the fear of punishment – then the alleged wrongness of X would not be the objective fact it purports to be.

 

Another way of putting this is to say that if there exist ethical facts, then they must possess sufficient motivational power to affect the decisions that human beings make. Human beings decide on the basis of their desires and their knowledge of the facts. An ethical fact would have to possess the capacity to override the agent's desires, otherwise it is just another common-or-garden variety of fact, which one can view in a positive or negative light. If it is ethically wrong to tell a lie, then seeing its wrongness must in itself be sufficient to motivate me to tell the truth.

 

As indicated in unit 1, I am not going to try to defend the objective view here. It is not necessary to do so, because it turns out that the very same problem arises if you hold the subjectivist view that the ultimate basis for ethics consists in human conventions, or natural sympathy or some other motivation or blend of motivations which reliably produces ethical behaviour.

 

The example of lying

 

Consider the example of the ethical rule, 'Do not lie.' Regardless of whether one takes an objectivist or subjectivist view, if you say, 'I know it is wrong to tell a lie, but I allow myself to tell lies whenever it suits me,' then this is the clearest possible evidence that you don't really believe it is wrong to tell a lie. You might believe that you can get punished for telling lies, and therefore you do your best to avoid getting caught. You might believe that most people think it is wrong to tell lies. But that is not the same as you yourself sincerely holding that it is wrong to tell a lie. If it is wrong to tell a lie, then you are one of the people who still need to be convinced.

 

Imagine that you lived in a repressive dictatorship where telling the truth about things that you see and hear can get you into serious trouble. You can get punished severely just for passing along an everyday item of news. Perhaps after many years of oppression the population is so brainwashed that they have come to believe it is somehow 'wrong' to tell the truth. But that doesn't mean that you believe that it is wrong to tell the truth.

 

In general, if you say that you know that it is wrong to do X, but then you do X anyway, an explanation is required why you failed to obey your own ethical judgement. One possible explanation is that you are a straight forward hypocrite. You don't mean what you say. Your words are intended to deceive. In the country where people get punished for telling the truth, everyone is more or less of a hypocrite for the sake of self-preservation.

 

On the other hand, if you do mean what you say, then you are involved in a form of self-contradiction. It is not straightforward logical contradiction, but it is a form of practical incoherence or irrationality which we term 'weakness of will'.

 

As Kolakowski 's example from unit 1 shows – offering insincere praise because you are unable to tell a painter that his work is terrible – it is not always clear-cut where we have a case of lying in spite of your belief that lying is wrong, or a case of telling an untruth because you believe that in this particular case it is not wrong. However, there are sufficiently many examples where the case is clear-cut; where we tell a lie simply to save face, or because we are tempted by material rewards, knowing all the while that what we are doing is wrong and feeling guilty for it.

 

The addicted smoker

 

Fred is a warehouse manager and has been an inveterate smoker since his teens. Following the recent change in UK law, his company has introduced a blanket no-smoking ban. Now, Fred smokes in the toilets risking severe reprimand or possibly the sack if he is caught. Six months ago, Fred's doctor warned him that he is developing a serious lung condition, and if he continues at this rate he could be dead in five years.

 

Fred has an excellent reason to stop smoking. His wife has begged him to stop. Yet he has made one resolution after another and broken them all. Leaving aside ethical issues around the question of passive smoking, his actions are clearly not in his own self-interest. If knowledge could be effective anywhere, surely it would be effective here. What has gone wrong?

 

It is easy to say that Fred lacks will power. He admits it openly to his family and friends. Yet in other areas of his life Fred has exhibited remarkable character and resolution. Recently, he successfully completed a university Philosophy degree through correspondence, which required considerable self-discipline and many late nights of study. It is as if nicotine has somehow found Fred's weak spot and he is helpless to resist.

 

Consider a possible explanation couched in terms of knowledge. The resolution is never so strong as when Fred has just finished a cigarette. But as the positive effect of the nicotine wears off and the deadly alkaloid begins its campaign of physical and mental punishment, Fred finds he is increasingly disposed to entertain the notion that doctors don't know everything; that he can always escape detection at work if he is careful; and, anyway, he can still quit after the next cigarette.

 

This suggests that in Fred's case, the diagnosis that Socrates would offer is indeed correct: what Fred lacks is sufficient knowledge. It is not enough to tell oneself that one 'knows', or to repeat any number of times what a 'good decision' it would be if he gave up. Having broken his resolution time and again, Fred doesn't really believe himself. He is resigned to giving in when the temptation becomes sufficiently strong.

 

Let's try a simple thought experiment. Suppose cigarettes really were deadly in the most literal sense. After smoking a cigarette, there is a brief rush of pleasure and then in one in six cases you die instantly of a heart attack. Nobody in their right mind would want to smoke a cigarette unless they wanted to play Russian roulette. Or suppose that the company where Fred works has implemented elaborate CCTV and smoke detectors that make it virtually impossible to light up without detection. Then unless Fred wants to lose his job, he will not light up, regardless of how desperate he may be for a smoke.

 

It follows from our thought experiments that whatever Fred believes about the medical effects of smoking, or the consequences of being caught breaking the anti-smoking rule, is less than knowledge. He thinks he knows. He repeatedly says, 'I know'. But he doesn't really know. If he did know, he would stop. And the truth is that real life cases are seldom so cut-and-dried. Doctors are usually cautious about making predictions of death. Smoke detectors are generally less than a hundred per cent reliable. In Fred's case, the reasons for giving up may appear strong to us but they are still not strong enough to motivate Fred to survive the moments of greatest temptation.

 

The unrepentant thief

 

Margaret is a customer service clerk. She is underpaid and not very well treated by her company. Whenever she can get away with it, she helps herself to stationery from the stationery cupboard – Sellotape, paper, envelopes, ring files, blank CDRs – for herself and for her children to use at home. She rationalizes that the total value of the amount that she takes is far less than the pay rise she believes that she deserves. But she also knows full well that this would be considered theft.

 

If Margaret knows that she shouldn't steal, how is it possible that she fails to act in accordance with this knowledge? One plausible explanation that might occur to you is that Margaret accepts that the ethical thing to do is not to take the stationery, but she chooses in this case to act in her own self-interest rather than to do what is ethical.

 

We saw in unit 1 how the 19th century moral philosopher Henry Sidgwick failed to resolve the problem of the conflict between legitimate self-interest and the strictly disinterested view demanded by ethical altruism. However, it would be totally illogical to apply this to Margaret's case. The point of the example is that Margaret's judgement that it would be wrong to steal already factors in a legitimate element of self-interest. It is a judgement, 'all things considered'. If, all things considered, you judge that it is wrong to do X, you can't then go on to offer an attempted justification for doing X. Any possible justification has already been taken into account when you made your 'all things considered' judgement.

 

Contrast this case with another case which superficially would be described as 'stealing'. You have been given strict instructions to ask your supervisor before taking anything from the stationery cupboard. Failure to comply with this order is regarded by the company as theft. However, an important computer file which you need to access right away is on a CD which is jammed inside the CD-ROM drive of an old Macintosh computer. The only thing that will eject the CD is a straightened paper clip. But no-one has a paperclip and the supervisor is nowhere in sight. Plain common sense would tell you that in this case you have a fully legitimate excuse to take a paperclip without asking.

 

Taking things without express permission is not always 'stealing'. But in Margaret's case it is. There may be no fixed borderline between legitimately taking a paperclip and illegitimately helping yourself to bagfuls of items from the stationary cupboard, but there is a rough and ready, common sense understanding of how far you can reasonably go. Suppose you have an easy going boss who says, 'You can take some stationery for your own use, but not too much.' In this case, cleaning out the stationery cupboard is definitely theft, while taking one roll of Sellotape – even if you don't need it – is definitely not theft.

 

Margaret is a thief, there is no doubt about that. Or is there? Even if we are in no doubt, is she a thief in her own eyes? What exactly is her all-things-considered judgement? Is it that taking the stationery is wrong, or is it that taking the stationery would be described as 'wrong' by most observers, and indeed would be wrong were it not for the fact that in this particular case she has a legitimate reason for taking the law into her own hands and awarding herself 'compensation' for her low pay?

 

I suspect that a lot of petty thieves do think in this confused way. It is said that in communist countries before the lifting of the iron curtain, theft, bribery and black-marketeering became the main form of resistance against a corrupt political system. In such extreme circumstances, to be a thief can be seen as the ethical choice. But in Margaret's case we feel confident in saying that she is in the wrong. This is not acceptable behaviour, whatever legitimate grounds she may have for complaint.

 

We can say that Margaret, like Fred, is unable to resist temptation when it comes. Or we can say that Margaret has somehow deceived herself into thinking that what she is doing isn't really wrong at all, but on the contrary fully justified. Or perhaps Margaret doesn't even know herself which explanation comes closest to the truth.

 

The low achiever

 

Nicole is an accounts executive whose talents far outstrip the demands of her job in a leading advertising agency. Overtaken by her less able male peers, she blames her lack of success on the 'glass ceiling' when in her heart she knows that she had every opportunity to be where they are.

 

Nicole's most glaring problem is that she gets periodically depressed, and in her bouts of depression gives in to self-pity and self-doubt. If just a few of the plans of action which she formulated in moments of clarity were put into effect, she would be up at the top of her profession. When her various schemes fail – as they inevitably do when the depression returns – there is always someone to blame other than herself. Most often, she simply perceives herself as the passive victim of discrimination.

 

Nicole's problem is a startling failure – startling, for someone of such intelligence and sensitivity – of self-knowledge. Everyone else can see the problem except her. When advice is offered, by those who have remained loyal friends despite her unpredictable moods, it is angrily repudiated. She doesn't want to know.

 

Hardly surprisingly, Nicole's self-hatred and resentment have led her to some otherwise unaccountable acts of unkindness towards her staff, which she always feels guilty for afterwards. Nothing arouses her ire more than when she recognizes her own faults in another person. This is needless to say an observation that Nicole is unable to make for herself.

 

On one occasion, a colleague whom she had just subjected to a roasting commented, 'You need therapy.'

 

In short, Nicole is the kind of boss that you hate, who fails to appreciate your good work and in her worst moods isn't satisfied until everyone feels as depressed as she does. The head of the agency, meanwhile, has reluctantly reached the conclusion that despite her considerable ability, unless there is a remarkable change in her attitude and behaviour, they will have to let her go.

 

As observers, we can see only too clearly what Nicole fails to see. If only someone would shake some sense into her. That is the way it is with some people: unless something drastic happens to cause them to see past their blind spot, they will never make progress. Their defence mechanisms are too highly evolved.

 

The anxious presenter

 

Mark is a senior purchasing officer who has saved his company hundreds of thousands through his inspired design and implementation of an order tracking system that is the envy of rival companies. Great behind a desk, or in one-on-one discussions, his weak spot is giving presentations. He succumbs to stage fright every time. At the slightest whiff of criticism he caves in.

 

Unknown to his friends and colleagues, Mark has been in psychotherapy for a number of years, and understands all-too well the causes of his debility. An unforgiving and hyper-critical father, together with his unfortunate experiences at school where he was bullied and mocked by classmates for being a 'swot', have severely undermined his social confidence.

 

Rising through the ranks of his company through the sheer undeniable quality of his work, and helped by his sympathetic boss Christine, he has so far managed to avoid putting himself in a position where his problem will be uncovered. On the few occasions where he has given presentations, Christine was on hand to field the difficult questions.

 

Now he is on his own. Tomorrow, he has an important presentation to give and Christine will be away. Mark has every reason to believe that he knows enough about his topic to be able to field any hostile questions. No-one in the audience has such a firm grasp of his area of speciality. Yet he also knows that the occasion will be an ordeal.

 

On the day, things turn out worse than Mark could have possibly predicted.

 

One of the members of the audience, taking advantage of Christine's absence, has secretly decided to use the occasion to attack Christine's record and question her professional competence. At the end of his rant, he even goes so far as to insinuate that the relationship between Christine and her protégé is more than just professional. After the unexpected outburst all eyes are fixed on Mark. He knows what he should say in his own and Christine's defence, but the words just won't come. The enormity of the accusation has left him dumbfounded. He stands rooted to the spot, his lips move but no sound comes.

 

This is the clearest possible example of a case where knowledge is not enough for right action. Surely, one would think, here the doctrine that virtue is knowledge cannot be maintained, however one qualifies that principle. Knowledge alone does not suffice to motivate right conduct if you suffer from a debilitating mental impairment that prevents you from acting on that knowledge.

 

Some tentative conclusions

 

Good people can do bad things: they can act unethically, or imprudently, where the fault is very clearly theirs – not their situation, or their company, or society at large. Yet, as we have seen, there is no simple or straight forward diagnosis of why things go wrong when they do.

 

Margaret the customer service clerk seems to be the one whom we have the best chance to reach through philosophical dialogue. If she could only see herself as we see her, or indeed as she is viewed by her work mates who have all fallen under the finger of suspicion as a result of her thieving, it might be sufficient to motivate her to stop. Does she really understand why her thieving is wrong? Has it even occurred to her to see her actions as an example of the general maxim, 'If you want X then it is all right to take X, even if X does not belong to you'?

 

Fred the warehouse manager needs help which philosophy alone cannot give. He is an example of Aristotle's 'incontinent man', who in some sense 'knows' what is the right thing to do but whose reasoned decision is overtaken by his desires. It was Aristotle who recognized the vital importance for ethics of cultivating habit. Fred can be helped, not through learning even more about the harmfulness of smoking, but rather by being shown how to develop practical strategies that will enable him to cope with his cravings until he has successfully rid himself of his addiction.

 

Nicole the advertising executive was told she needs therapy. That diagnosis is surely correct. Of our four examples, she is the clearest case of lack of self-knowledge. Perhaps Socrates would indeed have recognized therapy as a legitimate method for applying the principle, 'Know thyself.' At any rate, there does seem hope that she will listen to a professional counsellor even if she refuses the advice given to her by her friends.

 

On the other hand, Mark the purchasing officer understands his condition perfectly from a psychological standpoint, but the understanding is no help at all. As in Fred's case, the solution will involve a program of practical help or training, which over time will enable him to modify or change his behaviour. There may be no miracle cure for lack of self-confidence, but the ability to act as if you are confident combined with success and positive feedback that this brings goes a long way to compensate.

 

What do our conclusions show about the role of ethics and moral philosophy in a business context?

 

We have seen that philosophical understanding and theory only go so far. Moral philosophers may be highly skilled in analysing ethical problems, or arguing the case for or against a particular moral view, but it is ordinary people, with all their complexities and character flaws who have to struggle through to some kind of understanding for themselves, under conditions where mere understanding is seldom enough.

 

Perhaps it could also be said that those who would call on the help of philosophers do not appreciate sufficiently the extent to which philosophy is a second-order activity, involving analysis, theory construction and critique. Philosophers also – like Socrates, or like Aristotle – have practical advice to offer which flows from their theoretical understanding, but giving good advice to real people in practical circumstances also requires something else: it requires wisdom. It is wisdom, not mere theoretical knowledge, which enables us to judge when the solution to a problem can be expressed in the form of knowledge, and when the only acceptable solution is action.

 


 


ethical dilemmas unit 4

 

The problem of 'dirty hands'

 

LAST time, we saw that one of the ways in which things can go wrong when we make an ethical decision or face an ethical dilemma is the phenomenon of 'weakness of will', where you know – or seem to know – what is the right thing to be done but lack the will, or resolve, or courage to carry the decision through.

 

Whether this phenomenon is something that affects the will as such, or whether it should be better described as a lack of moral vision is, as we saw, a matter of debate. What is not in question is that, on at least some occasions, the ability to deal with an ethical dilemma requires more than being able to use your power of reason to reach what you believe to be the correct decision. For it is still possible that you will stumble at the last hurdle and fail to carry out the action that you intended.

 

However, that is only half of the picture. The business world provides probably the best – or worst, depending on one's point of view – examples of how the right action fails to be done because one is forced to compromise with persons who are less concerned, or not concerned at all, about doing the ethically right thing. Ideally, we would like to be able to avoid association with those who do not uphold our high standards. In the real world, that option is just not open to us. We then have no choice but to put our ethical principles on hold and consider what action would lead to the best overall consequences. If you can't persuade others to follow your good example, then at least you can live to fight another day.

 

The problem is not confined to the business world. Jean-Paul Sartre, in his 1948 play Les Mains Sales ('Dirty Hands') tells the story of an idealistic political activist who reluctantly agrees to carry out an assassination of an individual whose innocently intended actions threaten to bring ruin to the cause. The play raises the question how far one is prepared to go in doing actions which one knows to be wrong in themselves, because you are doing it for the sake of the greater good. Under what circumstances, if any, does the end justify the means? This problem faces any person who is determined to do the right thing, but finds that they have to do something that would normally be considered unethical in order to accomplish an ethical goal.

 

Without doubt, these situations can and do arise. Sometimes, we are forced to compromise our ethical beliefs, or at least put our serious reservations on hold, on pain of permitting a greater evil. Knowing what ideally would be the right thing to do is no help when we are faced with a real life situation where it seems impossible to 'do the right thing'.

 

The bottom line is that as a business person you are responsible for choosing who you are prepared to deal with, but sometimes there simply is no choice. Do you take your business elsewhere? At what cost? How high a price are you prepared to pay – and make others pay – for upholding your ethical beliefs?

 

The bribe

 

One of my students related to me the following story:

 

Some time ago in Moscow I supervised the delivery of some cargo transported by lorry all across Europe. The charge arrived in the backyard of some ministerial building. It was to be unloaded by a crew of eight people and a supervisor. The crew did not move at all after the lorry had come to rest. The supervisor came up to me and said: 'The men cannot work. They need some provisions.' And he handed me a small list with items covering boxes of different cigarette brands and diverse alcoholic beverages. I was supposed to give him money so that he could send to a store to acquire these goods. Which I did, since otherwise I probably would have lost a day's work. After this the men were able to operate. Was I involved in a corrupt scheme, or was I just adhering to local customs?

 

With the advent of the global marketplace, it has become apparent that in different parts of the world there are widely differing views on what counts as 'a bribe'. In the 60's, where I lived in London, it was customary for the refuse collectors to go round every house at Christmas time for their 'Christmas box'. This was a sum of money, usually not less than £5. You could always say 'no'. But you knew, for certain, what the result would be: during the following year, your refuse bins would be ignored, or knocked over and their contents spilled across the road. Everybody paid. Today, the practice no longer exists. It has been stamped out. Local authorities enforce strict rules against soliciting bribes or 'tips'.

 

To achieve this result requires concerted action. It requires householders and shop keepers to complain, and risk retaliation. It requires local authorities who are prepared to face the threat of strike action in order to push through tougher rules. Yet today, there is still wide agreement that in many other circumstances tipping is perfectly acceptable: you tip your hairdresser, or the taxi driver, or a restaurant waiter. There is a line, although not a very sharp line, between tipping considered as an acceptable 'local custom' and bribery.

 

The real problem, however, is not where exactly to draw the line but what to do faced with an official, or a gang of workers, who demand a bribe. Maybe it is the local custom. But that doesn't make it right. There is a degree of slack that we can allow between different views about acceptable conduct. One should always be cautious in enforcing one's views on others. But the need for tolerance is not an excuse for wholesale ethical relativism.

 

On the face of it, the person who supervised the Moscow delivery had two stark choices: give the bribe, or refuse to give the bribe. In logic, this is known as the Law of Excluded Middle: either P, or not-P, there is no third possibility.

 

Although these may be logically the only alternatives, that doesn't mean that we only have two available courses of action. Each alternative subdivides into different possible actions: for example, you can give the bribe, but you still have the choice whether or not to blow the whistle later and help put an end to this corrupt practice. You can refuse to give the bribe, but you still have the choice of telephoning the intended recipient explaining why you are unable to deliver the goods and offering to make alternative arrangements.

 

There are two points that this example highlights. The first is a point of ethical principle: self-interest counts for something and not nothing. You are not expected to make unlimited sacrifices to your ethical ideals. It is not wrong to pay the bribe, if the price of refusal is too high – if you have, literally or figuratively, a gun pointed at your head or at the heads of your employees. The second, countervailing point belongs to practical ethics: the stark and simple choices that we face are, in real life, rarely so black-and-white as they first appear.

 

The firing squad

 

Here is an example from Bernard Williams' essay, 'A Critique of Utilitarianism':

 

Jim finds himself in the central square of a small South American town. Tied up against the wall are a row of twenty Indians, most terrified, a few defiant, in front of them several armed men in uniform. A heavy man in a sweat-stained khaki shirt turns out to be the captain in charge and, after a good deal of questioning of Jim which establishes that he got there by accident while on a botanical expedition, explains that the Indians are a random group of the inhabitants who, after recent acts of protest against the government, are just about to be killed to remind other possible protestors of the advantages of not protesting. However, since Jim is an honoured visitor from another land, the captain is happy to offer him a guest's privilege of killing on of the Indians himself. If Jim accepts, then as a special mark of the occasion, the other Indians will be let off.

 

Bernard Williams 'A Critique of Utilitarianism'

 

Smart, J.J.C. and Williams, B.Utilitarianism For and Against Cambridge University Press 1973. p.98

 

Williams, while recognizing that Jim's refusal to take the offered pistol would be a 'kind of self-indulgent squeamishness', argues that what this example does not show is that our feelings of loathing or horror at what we are required to do are merely inconvenient obstacles in the way of choosing the action with the best consequences. There are all sorts of reasons why one would not wish to be the kind of person who could coldly calculate that one death was better than twenty and take the offered pistol without any further thought.

 

This illustrates a further aspect of the predicament that we have been considering. The choices that you make are not the only thing that is ethically relevant; it matters how you feel about those choices. Your feelings might not, on this particular occasion, cut any ice. But we are not just looking a particular occasion. We are sketching a picture of the kind of person, or business person, one would ideally like to be, the kind of person who could be relied on to act from principle and with integrity, even though there will always be painful occasions when the real world forces you to compromise.

 

Williams' essay is intended as an attack on utilitarianism – the view that the right action is the one which leads to the 'greatest happiness for the greatest number' – as an ethical theory. In unit 1, we saw that the question whether we can, or would want to have an all-encompassing philosophical view on the nature of ethics, whether it be utilitarianism, or a deontological theory, or virtue theory, is itself questionable: 'Evaluating consequences, identifying principles, promoting virtues are all deeply interconnected parts of a whole which cannot be reduced further.' Each of these is important, but it is not the whole.

 

Utilitarians scoff at the question, 'Does the end justify the means?' pointing out that if we are evaluating 'the end' then we have to include everything, including whatever means we use to get there. In effect, the utilitarian, in calculating the 'best' outcome – the greatest happiness, or the maximization of desire-satisfaction or whatever your favourite flavour – is simply performing a cost-benefit analysis. When put in those terms, it is difficult to see how a cost-benefit analysis can ever be the wrong thing to do.

 

The point highlighted by Williams' example is that one does not want to be the kind of person who, faced with any important decision, would always without fail resort to a cost-benefit analysis. Sometimes, you have to ignore the cost. That is the point of having principles. For the man or woman of principle, there are certain things that one will not do, period.

 

The paradox of principle

 

We have reached an interesting point in the discussion. I have just made a statement which, on the face of it, contradicts a statement I made earlier. First, I said that sometimes one has to compromise on one's principles. Then I said that having principles means that 'there are certain things that one will not do, period.'

 

This is not, in fact, a contradiction although it seems to be. If formal logic says that the two statements are contradictory, then so much the worse for formal logic. As we shall see later, when we look at the case of lying, the concept of principle involves a dialectic, in the Socratic sense of a process of assertion and response, or claim and counter-claim, which never reaches a final conclusion, but rather points to an idea which cannot be literally expressed.

 

It is true, and false to say that principles can be compromised, and it is also false, and true to say that principles cannot be compromised. There is no neat solution to this paradox. For it is not as if we are dealing here, e.g., with a case of simple equivocation – as if one could escape the paradox by just defining two kinds of 'principle', the compromisable kind and the uncompromisable kind.

 

You might indeed think that the only real principles are the uncompromisable kind. Compromisable principles aren't principles at all. However, you would be wrong. Whatever you say, and however carefully you formulate your principle, there are possible circumstances that would force you to go against it.

 

Suppose that as a matter of principle I will never share a public platform with a member of the X Party. Every opportunity that is given to members of the X Party to participate in public debate is exploited ruthlessly to give spurious legitimacy to their cause. While I along with many others are convinced that if the X Party ever came to power, public debate would be suppressed and defenders of democracy persecuted. That is a strong argument in support of my principle, but it would not necessarily be convincing in every case. For example, I am invited to participate in a TV debate, and am informed that if I decline, my place will be taken by a particular individual who has little experience of the devious ways of the X Party and far less skill in responding to their fallacious arguments.

 

Principles are always formulated in general terms; while every situation in which one might apply a principle is particular. It is impossible, logically, to formulate a principle that only applies to one case. However many details you add to your description of the principle, there will still arise the possibility of two situations, at different places or times, which both satisfy that description. In the first situation, the correct action is to conform to the principle, while in the second the correct action is to go against it.

 

This raises anew the question, what is the value of a principle? why do we bother to have principles? why do we associate principles with integrity? what is at stake, when you consider the possibility that you may have to compromise a principle?

 

Principles, rights and integrity

 

Principles have a similar logic to that of rights. Both principles and rights are trumping considerations. Just as in a game of cards, where a trump card of low value can beat a non-trump card of high value, so an argument that appeals to a principle or a right beats an argument which appeals to consequences we like or dislike for any other reasons, however much we like or dislike them.

 

If, as a matter of principle, your company does not do business with companies which exploit third-world labour, then even when presented with powerful market incentives, you will not go back on that principle. If you recognize that male, as well as female workers have a right to 'maternity' leave, then you will go to very great inconvenience, if necessary, to accommodate such requests.

 

However, there is also a striking disanalogy. The rules of card games are designed to give a determinate answer in every case where a legitimate question might be raised. At any given stage in the game of bridge, for example only one of the four suits – spades, clubs, diamonds or hearts – can be trumps. In real life, by contrast, we find that we are sometimes faced with conflicting principles or conflicting rights. We then have no choice but to exercise our judgement and make the best compromise that we can in the circumstances.

 

Why bother, then, to recognize rights or principles? The rights that one recognizes, the principles that one stands by, are definitive of the kind of person one takes oneself to be. They are a statement or expression of our ethical and political beliefs and ideals, recognition of what binds us together with other persons in our community and distinguishes us from persons, or communities, who do not recognize the principles that we recognize. Hence, they are definitive of our personal integrity.

 

That is also why the principles that we hold dear are bound up with emotion, as well as reason. As the philosopher Aristotle observed, the capacity to express anger when anger is required is part of what it takes to be a person of ethical virtue. Ethics is not just a matter of knowing the right thing to do but feeling it, because as a result of one's moral upbringing it has become part of one nature.

 

Companies, like individuals, can have integrity or lack integrity. There are various expressions that one would use to recognize this. For example, one talks of a 'healthy corporate culture', as opposed to an unhealthy corporate culture – or a lack of corporate culture in cases where the culture is so diffuse or amorphous that one doesn't know what the company stands for. Companies, like people, can be happy or unhappy.

 

A complicating factor in the case of companies is that standing for something or having a mission is now recognized as having value in the marketplace. A mission statement is often the first thing you see when you visit a company web site. It is easy to view this cynically as a public relations exercise. However, the point is that we would not be interested in knowing whether a company had a sense of mission or not, or in the quality of its corporate culture, if it were not for the fact that these are factors which have acquired a value in the eyes of many which is independent of economic considerations. 'Superior' business people – to use the term of art coined by Tom Veblen – prefer whenever possible to deal with other superior business people.

 

Principled leadership

 

At the 1980 Conservative Party Conference in Brighton, British Prime Minister Margaret Thatcher coined one of her most famous sound bytes, which has to many been seen as definitive of her leadership. Replying to widespread media speculation of an about turn in the government's anti-inflation policies, Thatcher declared defiantly:

 

To those waiting with bated breath for that favourite media catchphrase, the U-turn, I have only one thing to say: You turn if you want to. The lady's not for turning!

 

To those on the left, this was just further evidence of Thatcher's mulish stubbornness, her determination to go down with the sinking ship. Yet, arguably, the stark evidence of the government's determination to stick to its anti-inflation line no matter what, was one of the main factors in making that policy effective.

 

As we remarked in unit 1, to be consistent, and be seen to be consistent, is one of the main considerations on good leadership. An essential part of what is involved in having principles is that others know what our principles are, and can count on us to behave in accordance with those principles.

 

However, when seen from the point of view of game theory, acting rationally and consistently, acting on principle, is a double-edged weapon. The problem is that not only ones friends, but also ones enemies can predict one's response in a given situation, and use this to manipulate us to their advantage.

 

At the height of the Vietnam war, President Nixon notoriously formulated the 'Madman Theory', as an attempt to gain the upper hand in the fight against Communism. White House Chief of Staff and Watergate conspirator H.R. Haldeman reports in his book The Ends of Power that Nixon once confided to him:

 

I call it the Madman Theory, Bob. I want the North Vietnamese to believe I've reached the point where I might do anything to stop the war. We'll just slip the word to them that, 'for God's sake, you know Nixon is obsessed about Communism. We can't restrain him when he's angry – and he has his hand on the nuclear button' – and Ho Chi Minh himself will be in Paris in two days begging for peace.

 

H.R. Haldeman The Ends of Power Times Books 1978

 

With the wisdom of hindsight, we can see that this was the desperate strategy of a desperate man. To make the Madman strategy work, you have to behave in a way which is consistently – mad. Otherwise, your opponent will simply call your bluff. There is no meaningful way forward from that point. There are no limits to how mad you can become, once you have left the safe haven of rationality behind.

 

However much one recoils from this memory of one of the most sordid eras in American foreign policy, it does illustrate the point that there are perceived dangers in being overly consistent, when dealing with an unscrupulous opponent who is prepared to go to any lengths to use our principles against us. A classic scenario is the terrorist kidnap. Those who uphold the principle of the sanctity of life are always vulnerable to the threat of hostage killing. In vain, governments promulgate the principle of 'no bargain with terrorists' knowing full well that in a case like this the two principles come into direct and tragic conflict.

 

Strategy and tactics

 

Let's say that you have decided along with a group of other business people to form an organization dedicated to combating bribery and corruption in the business world. You have designed a web site, and started a free email newsletter that interested visitors can sign up to. You are in contact with members of the governments in different countries who have pledged support. You have ample funding from donations from both companies and individuals.

 

In the first of a number of planned initiatives, the organization has instituted a well publicized award scheme for individuals who have distinguished themselves by their resourcefulness and bravery in the fight against corruption. There is also a fund to provide living support and pay for legal expenses for individuals who have lost their livelihoods as a result of their refusal to take bribes or be involved in bribery.

 

All this good will must achieve a positive result, or so one would like to think. Certainly, the very fact that you have succeeded in getting like-minded people to act together is a positive achievement. This is the essence of politics, to bring about results through the concerted, organized action of individuals who share a common purpose.

 

Now let us consider a businessman running a small independent company in the UK. The company manufactures spares for tractors and agricultural equipment, which they export around the world. Recently, the financial viability of the company has been put increasingly in doubt, as the result of fierce undercutting competition from the Far East, as well as pressure from the large manufacturers who want to keep the lucrative spares business for themselves. If the spares company has one more bad year, it will have to be wound up.

 

Just when things are looking particularly bleak, a large order comes in from an African country which they have traded with before. From painful experience, the managing director is all-too aware of the fact that one needs to offer 'kickbacks' to get anything done. At every stage of the process of shipping, customs, delivery, money is handed over. The corruption is endemic. It is everywhere, no-one is immune.

 

Suppose that the managing director contacts the anti-bribery web site asking for advice. What advice would you offer?

 

It is a trick question. There is no sensible advice one can give. Whether the business man takes the order, or doesn't take the order, he will regret it. If he takes the order he will be sucked into a cesspool of corruption. If he doesn't take the order, his company will be on the road to bankruptcy.

 

One moral that we might draw from this story is that you can't win every battle. A global strategy for dealing with bribery and corruption is feasible. There are many similar worthy goals being pursued actively at the present time. Individuals will offer help where they can. When they cannot, it is not a defeat for the overall strategy.

 

However, we have already seen that there is also room for tactics. Individuals can make a difference, because even when there are only two alternatives, there are still many possible courses of action. For example, the unhappy businessman's story would make great publicity for the anti-corruption web site. With some inspired PR, it might even get into the national press. In the age of global communication, the worst defeat can be turned into victory with the addition of the factor of public opinion, and its capacity to galvanize a cause.

 


 


ethical dilemmas unit 5

 

Truth and truthfulness

 

THE application of philosophy to the problems and decisions of our daily lives is nothing other than the injunction to think clearly. But that is often a hard thing to do. For it entails taking full responsibility for one's actions and beliefs instead of appealing to what 'other people think', or to reasons 'for' and 'against' which may be common currency amongst the mass, but which on examination crumble into nothing. Indeed, it entails going against the grain of our everyday thinking which relies so heavily on prejudice and the easy way out, in favour of an ideal of discipline and rigour. However, I believe the alternate to be harder: the alternative is to lie to oneself.

 

I have heard it argued that truthfulness is the one and only principle of business ethics. Only give the principle of truthfulness, and all other ethical principles and considerations follow. If we were totally open with one another, if there was no space in human discourse or negotiation for ruse, deception, secrecy or bluff, then it would be impossible to get away with ethical wrongdoing.

 

The idea of a business arena in which everything was transparent, where there was no room for secrets and no place to hide has a certain seductive appeal. But it is deeply flawed. It is flawed, for the same reason that we find the idea of a 'Big Brother' or total surveillance state repugnant. Every human individual has a right to an area of his or her life that is private and on which no-one may rightfully encroach. The same applies to individuals who band together for a common purpose: they, and they alone have the right to decide who will be invited into the circle and who will remain outside. This is the principle of free association which is the cornerstone of Western democracy. An essential part of belonging to the circle is sharing information that one does not make available to those outside the circle.

 

To take one practical example, keeping trade secrets – concerning methods of manufacture, or the availability of goods, or potential customers – would be impossible in a totally transparent business arena. There would be no point in expending money or effort in acquiring information, or solving problems, or developing techniques if all results of one's inquiries had to be shared for free with anyone who requested the information. There would, in effect, be no basis for competition, no business arena. The ideal of transparency is, in short, self-refuting.

 

My respected competitor does not have the right to know all that I know. What they do have a right to – under ethics and to a considerable extent under the law – is my truthfulness and honesty. It is wrong to tell a lie. No circumstance, no threat or benefit can justify deliberately lying to another person, whether in the private realm or in the business arena.

 

And yet we lie. When we don't lie, we bluff, or spin, or pretend, or masquerade. We tell white lies and grey lies, and when necessary, black lies; shameful, unforgivable lies. The prohibition against lying is a principle that admits of no exceptions. Yet, as we saw in the last unit, ethical principles paradoxically admit of exceptions. And lying is no exception to this rule. – Or is it?

 

Why it is wrong to lie

 

Kant, in his 1797 essay, 'On A Supposed Right to Lie From Altruistic Motives' notoriously argued that lying is wrong, even in the example of the would-be murderer who asks you about the location of his intended victim. In such a circumstance, Kant argues, by telling a lie you are taking on responsibility for all the consequences of the murderer's actions. For example, you might intend to tell a lie about where the victim may be found, not realizing that the victim has, unknown to you, decided to hide himself there. If you hadn't lied, the victim would have lived. So now you must take full responsibility for the victim's death. This hardline and extreme view has been regarded as a reductio ad absurdum of Kant's moral philosophy, while defenders of Kant argue that Kant erred in applying his principle of the Categorical Imperative.

 

I am not interested in defending Kant here. However, I do think that Kant was onto something, a case where the application of the Categorical Imperative – in its first formulation, 'Act only according to that maxim whereby you can at the same time will that it should become a universal law' – yields a unique result. This is the case of lying. To assert that it is sometimes right, or even acceptable to tell a lie is to assert something that is incoherent and self-contradictory.

 

We gain an inking of this if we consider the seemingly innocuous statement, 'I sometimes tell a lie when I'm in a tight spot.' What exactly does this mean? If I say this to you, then you are to understand that if I am ever in a tight spot, my words are not to be believed. But in that case, I cannot lie to you when I am in a tight spot, because a necessary condition for successfully lying is that one's words are believed by the person lied to. The only time I can successfully lie to you is when I am not in a tight spot, because then you are not expecting me to tell a lie.

 

Let's consider now a variation on this scenario. 'I nearly always tell the truth, and only lie when I am in a very tight spot.' Even in a tight spot, I will tell the truth and face the adverse consequences, but in a very tight spot I will lie. (For the purposes of this argument we can assume a common understanding concerning what constitutes the difference between a 'tight spot' or a 'very tight spot', and when either situation obtains.)

 

By making this statement, I have effectively devalued my word. I might still think that I can still get away with lying in a tight spot. However, you are now justified in reasoning as follows: as I can no longer get away with lying when I am in a very tight spot, the tightest spot where I can successfully lie is a tight spot. So you will not believe me in this case either. Nor, repeating the same reasoning, will you have any reason to believe me when I am in a slightly tight spot. Generalizing from this example, to admit that one sometimes lies, to gain any advantage whatsoever, is logically self-defeating.

 

This argument shows that it is self-defeating to own up to lying. You might think that this is still different from saying that it is wrong to tell a lie. Obviously, if you're going to gain an advantage by lying, the best strategy is to present oneself as someone who is totally honest and trustworthy.

 

That may very well be so. But the point remains that whenever we discover that someone has lied, we have no choice but to condemn the action. If I discover that X lied to get out of a tight spot, and I excuse the action on that account, then that is tantamount to my saying that I believe that it is acceptable to lie in those particular circumstances. That's what I would do in that person's shoes. And now I am in exactly the same situation that I was in before, when I admitted that I sometimes lie to get out of a tight spot. An action that we will never freely admit to and always condemn, is by definition always wrong.

 

Business bluffing

 

The preceding argument is based on an assumption that language would be unusable, if truthfulness was not universally recognized as the norm. The very means of words as a medium of communication depends on their having a currency that is not devalued. That is indeed what Kant believed, and that assumption forms the basis for Kant's argument that telling lies is inconsistent with the Categorical Imperative. As we have seen, once one takes the first step towards devaluation, there is no stopping place.

 

But is that necessarily the case, with any possible language? Could there not be a language – or 'language game' to use Wittgenstein's suggestive terminology – where it was understood from the start that words are uttered, not with the intention of conveying truth but rather as having a certain probability of acceptance – neither too high, nor too low – such that each piece of putative information could be evaluated on the basis that it was probably informative but possibly disinformative? In that case, words might still be usable as a means of negotiation or conveying information, in the absence of an ethical norm of truthfulness.

 

In his article 'Is Business Bluffing Ethical?' in Harvard Business Review Albert Carr put the case for an affirmative answer to the question he had posed, arguing that the only requirement for the acceptable conduct of business is conformity to the law. If you can get away with a telling a lie without breaking the law, then by all means do so. As in poker, where bluffing is recognized as an intrinsic part of the game, the skilled business negotiator knows when is a good time to bluff, and also how to spot when his opponent is bluffing. Hiding a card up one's sleeve – in other words, breaking the law – is not acceptable because it is not permitted by the rules of the game:

 

A respected businessman with whom I discussed the theme of this article remarked with some heat, 'You mean to say you're going to encourage men to bluff? Why, bluffing is nothing more than a form of lying! You're advising them to lie!'

 

I agreed that the basis of private morality is a respect for truth and that the closer a businessman comes to the truth, the more he deserves respect. At the same time, I suggested that most bluffing in business might be regarded simply as game strategy – much like bluffing in poker, which does not reflect on the morality of the bluffer.

 

I quoted Henry Taylor, the British statesman who pointed out that 'falsehood ceases to be falsehood when it is understood on all sides that the truth is not expected to be spoken' – an exact description of bluffing in poker, diplomacy, and business.

 

Albert Carr 'Is Business Bluffing Ethical?'

 

Harvard Business Review 46, Jan-Feb 1968, pp. 143-53

 

If Carr is right, then this has far-reaching effects on our conception of the very nature of the language that one uses in the business arena. In Carr's picture, businessmen and women are not persons who communicate but rather players who make moves. A linguistic act is not an assertion aimed at truth, but rather a move whose aim is to increase the player's chance of winning.

 

Carr seems to have been only dimly aware of the Pandora's box that he was opening. He doesn't consider what it would mean, from a logical standpoint, to abandon totally the norm of truthfulness in favour of legitimate bluff. But that is just what one would have to do. It seems that there can be no half-way stage. Either lying is acceptable or not. If lying is acceptable, if 'it is understood on all sides that the truth is not expected to be spoken' – then we are in a different game altogether.

 

When I make a move in the business bluffing game, I have no right to expect you to grant me the respect of 'believing' what I say. My intention is merely to cause you to act in a manner favourable to me, on the basis of your assessment of the significance of my linguistic action. The more successfully I 'read' you, the more likely it is that I will gain the advantage; while the more successfully you read my reading of you, and use this information to manipulate how I interpret your words and actions, the more likely it is that you will gain the advantage.

 

Them and Us

 

Is business bluffing a playable game? Or, if not, can the rules be tweaked in order to make the game playable, without destroying the point of the game?

 

It is one thing to describe the rules of a game and possible moves within the game. It is quite another thing to determine whether the game can be played consistently within those rules. The 'game' of noughts and crosses or tic-tac-toe is amusing enough for children, but it is not a playable game in this sense because the player who has the first move cannot lose. In order to be playable, participating players must have a chance of winning, and there must be a way to decide who is winning or in the lead.

 

The first objection will have occurred to the reader pretty quickly: the successful running of a company depends on mutual trust. To allow the board of directors play the bluffing game with one another, or the board with the management team, or the managers with one another is a recipe for disaster. In order to successfully conspire to play the bluffing game against other competing companies, the conspirators must be able to count on one another's word. That is not to say that in a real life situation there will not be some game playing and jockeying for position. What there cannot be is a situation where, 'it is understood on all sides that the truth is not expected to be spoken'.

 

Consider the following scenario. A publishing company is in the process of negotiating a takeover by a multinational which has offered a generous package to the two joint CEOs of the company, valuing their shares at 200 million, considerably higher than the current market value. Between them, the partners own 60 per cent of the shares. The multinational, meanwhile, has quietly accumulated 25 per cent. So the negotiators from the multinational only need to persuade one of the CEOs to sell.

 

One morning, as negotiations are proceeding, each partner receives a phone call. 'If you sell your shares at the agreed rate, we will give you a bonus of 20 million.' Each partner now faces a decision. They can contemptuously reject the offer, on the assumption that the other partner will also refuse. Then they both succeed in selling their shares and enjoy a happy retirement. If one partner accepts the extra cash, then the other partner is left out of the deal. Neither needs the bonus – the offer on the table is generous enough – but how can either partner be sure that the other partner will not be tempted by greed?

 

What we have described is a variation of the classic situation of the 'Prisoners Dilemma'. There is no theoretical solution to the Prisoners Dilemma but only a practical one: the business partners will obtain the outcome that they both want only if they can be sure that they can trust one another. In other words, in order to succeed, each partners must be sure that the other partner will be true to their word. If either suspects that the other might be bluffing then the game is up.

 

In the business world, treachery does happen. But it is necessarily the exception rather than the norm. If it was the norm, co-operation between business partners or colleagues would be impossible.

 

We have discovered our first 'tweak'. In order to play business bluffing as a team game, the team members must not play the bluffing game with one another. The resulting game is more complex than the game we originally envisaged: one might call it the game of Them and Us. So far as we are concerned, bluffing is lying and it is always wrong to lie. But when we are dealing with them, no such agreement or implicit understanding exists. Words are tools, moves in bluffing game designed to gain victory for our side.

 

Honesty as a policy

 

So far, what we have discovered may be seen as a vindication of Carr's view. The choice between honesty and bluffing is not simply all-or-nothing, as I originally suggested, but rather determines how each of us views our situation in relation to 'them' and 'us'. This is not the crude distinction one sometimes hears between people who ethically 'count' and people who do not 'count'. On the contrary, we ethically respect our competitors and expect them to respect us. We recognize ethical rules which regulate how the game is to be played. But truthfulness is not one of those rules.

 

This still sounds rather strange. The picture which this paints of the business arena is one of all-out war, where the only area for co-operation is amongst the soldiers in each of the battling armies. Carr evidently believed that his readers back in 1968 would find his examples sufficiently familiar as a realistic portrait of the atmosphere amongst those in the know – as opposed to the non-players on the sidelines who, as Carr thought, merely deluded themselves into thinking that they occupied some imaginary moral high ground.

 

Now in the USA there is the Sarbanes-Oxley Act, which some will see as a chilling realization of Carr's prophesy: a state where the law legislates for business ethics, and by implication anything outside the law is also outside ethics. Providing that you're legal, you're covered. Indeed, it is now much more difficult to legally 'bluff'.

 

But this is to digress. The question before us is whether in fact the business bluffing game is, or has ever been played as Carr believed, and, to the extent that the game is played, whether this is something that we should embrace or reject, as something that a wise judge in matters of business ethics would engage in with a clear conscience.

 

Consider again why it is considered wrong to tell a lie: the judgement that it is acceptable to lie, in any circumstance where some advantage is to be gained by lying, can never be made. It is always wrong to tell a lie. (We have yet to ask the question how it is that, despite this, we sometimes lie.) In the bluffing game, it is not wrong to lie. And yet, there still is a patent need for reliable information and something which is not exactly ethical 'trust' but analogous to trust: the ability to predict with some degree of accuracy what another player will do on the basis of what they say.

 

By consistently demonstrating the example of a reliable co-ordination between my words and deeds, I increase the confidence of other players that I will reliably do as I say. It is a well-founded judgement of probability. Nevertheless, when push comes to shove I am fully prepared to break this understanding, and they know this too.

 

There is a strategic board game called Diplomacy, said to have been very popular with John F. Kennedy and also Henry Kissinger. Each of the seven players is in charge of the armies and fleets belonging to one of the powers that existed prior to the First World War. The aim is world dominance, which can only be achieved by negotiating treaties with the other players, treaties that are destined eventually to be broken. Each turn is made by all players simultaneously, reading out their prepared moves. This army advances; that army stands and defends. I remember once, as Italy, negotiating a non-invasion pact with three countries and breaking all three pacts in one single move, doubling my strength overnight. This caused uproar amongst the other players. In vain, I pleaded that my action was perfectly within the rules!

 

It is a pity that as a result of the acrimony the game was never finished. Italy, in its strategically and militarily superior position was yet fatally weakened because no-one would trust her to form an alliance. Yet there was still something to play for, and perhaps a sufficiently tempting offer would have saved the day for the perfidious Italians.

 

In the business bluffing game, there is a surrogate for 'honesty' that coincides with the trustworthiness of the Diplomacy player. Every alliance depends on the continuing perception from both sides that it is to their mutual advantage, yet any alliance can be broken when the need arises, and both sides know this too. Telling the truth and keeping to agreements is the best way to make progress in the game, so long as you remember to cash in your advantage when a sufficiently lucrative offer comes along.

 

White lies

 

Is this what we want? Suitably tweaked, is the business bluffing game a game that we want to play? Do we in fact have a choice? What would a wise judge in matters of business ethics say?

 

There is no simple answer to that question. For the choice is not between ethics and the absence of ethics, but rather between two games, both of which recognize the role of ethical considerations. However, it is still legitimate for the business ethicist to ask whether a willingness to play the business bluffing game is necessary in order to create a business arena.

 

Evidently, it is not, at least on the view we took at the start of this program. The creation of a framework within which competition is freely allowed to take place – where there are 'winners' and 'losers' and no obligation to correct the inequalities that arise as a natural consequence of the good or bad, lucky or unlucky choices that the players freely make – is consistent both with the truth game and with the bluffing game. If it had been Carr's intention to analyse the essential nature of the business arena then he did not succeed in that aim. At best, he succeeded in describing how business was conducted in the USA in the late 60's, a matter on which I will leave others better qualified to judge.

 

There does seem to be a growing consensus that a lie is a lie, whether told inside or outside the business arena. Bluffing, or the real life equivalent of the game Diplomacy, if it ever was respectable, is not considered today to be a correct way of conducting oneself as a business person. To play games with the other person rather than being upfront and saying what is on your mind, is considered a mark of disrespect.

 

This conclusion, however, merely serves to sharpen the sense of paradox arising from the widespread belief that sometimes, you just have to tell a lie, there is no alternative.

 

We have already encountered this paradox, when we considered in the last unit the broader question of how it comes about that an ethical principle does, and yet does not, permit of exceptions. By definition, a principle cannot be compromised: yet sometimes we have to compromise our principles.

 

What is unique about the principle of truthfulness is that it is not based merely on the recognized importance for our sense of identity or self-worth, nor our sense of community with those who share our beliefs and ideals, but rather arises through recognition of the sheer incoherence of the alternative. The existence of the bluffing game can only ever be parasitic on the truth game. It is persons, who are ethically bound to be truthful towards one another as a condition on the very possibility of speaking a common language, who decide, either for fun or for some practical purpose, to adopt the personae of players in the bluffing game.

 

The conclusion seems inescapable that, faced with a messy, chaotic world which is very far from the utopian Kingdom of Ends that Kant envisaged as the ultimate expression of our moral autonomy, we are required to engage in a necessary double-think, defending lies on the grounds that there was 'no other choice', while at the very same time asserting that we would 'never do' such a thing – or never do it again.

 

I confide in you, Y, that I have lied to X, stating as my reason considerations which – if one only took a few moments to reflect on it – could just as easily lead me to lie to you, were your situation and X's to be reversed. And yet I expect you, as my dearest friend, to believe me. Indeed, the very fact that I have offered this confidence is sign and proof of my sincere friendship. How can we be so opaque to ourselves? so self-contradictory?

 

One could be forgiven for thinking that giving up the principle of truthfulness would be a welcome relief from a life of hopeless and ineffectual compromise. Perhaps that is why we enjoy playing bluffing games. Perhaps too, that is the source of the sneaking admiration that we hold for those who play the business bluffing game successfully, even while we roundly condemn them.

 


 


ethical dilemmas unit 6

 

Permissible lies?

 

WHEN, if ever, are lies permissible? Is there ever any excuse for lying? The argument we gave last time for the view that it is always wrong to tell a lie is not based on mere consideration of the possible harm caused by lies. If it were, then we could compare the harm done by a lie on a particular occasion with the harm or bad consequences that the lie avoids and decide in this case that the lie was justified. It was right to tell a lie, given that the consequences of not lying would have been worse.

 

However, as we have seen, that line of reasoning is inherently flawed. Any attempt to rationally justify lying in any circumstances whatsoever is self-defeating. Excusing a lie on the grounds of its supposed benefits, to oneself or others – or even negatively as the 'lesser of two evils' – only succeeds in raising the stakes. In order to gain the same benefit or avoid the same harm next time in similar circumstances, one must tell a bigger lie. You want to own up to a lie, and yet you want your words to be treated as the truth. Maybe you're lying now. How can you ask someone to believe you when you admit that you are prepared to tell a lie as and when you deem it necessary? – One doesn't need to have read Kant or even studied philosophy to appreciate the intuitive force of that argument.

 

We concluded that, 'To assert that it is sometimes right, or even acceptable to tell a lie is to assert something which is incoherent and self-contradictory... An action which we will never freely admit to and always condemn, is by definition always wrong.'

 

And yet, despite all this, we lie. Most would accept that there are circumstances sufficiently extreme which would leave us no other choice. Make this occurrence as rare as you like; from the standpoint of logic it makes no difference. To admit a single lie contradicts the argument that it is always wrong to lie.

 

This is paradoxical, in a similar way to the more general claim that 'one must never compromise one's principles' examined in unit 4, although not just because of that. Sometimes, we are forced to compromise our principles and sometimes we are forced to lie. The point, however, is that in neither case can one draw the conclusion – which on the face of it seems warranted – that it is therefore sometimes 'right' to lie or 'right' to compromise a principle.

 

Lying is indeed more paradoxical – if there can be degrees of paradox – because as I have argued we don't have the luxury of choosing to adopt the principle of truthfulness, as we have in adopting certain other principles. When it comes to lies, there is no meaningful choice.

 

One possible reaction to the paradox would be that there are limits to reason which human beings sometimes have to go beyond. In the vacuum that exists outside the realm of reason and logic there might yet be methods for deciding when and how to lie, but at best these can only be useful rules of thumb. Or you might conclude that the world is not yet ready (and perhaps never will be) for ethics in the truest sense, Kant's vision of a 'kingdom of ends' where all human actions are ruled by reason. We have to face up to the world as we find it, and not as we would wish it to be; and that means do the best we can, even if this necessarily falls short of our moral ideals.

 

Between bluffing and lying

 

Our conclusion, difficult as it is, is complicated still further by the suggestion that one might give up the principle of truthfulness and play an alternative language game, where, in the words of salesman Henry Taylor – quoted approvingly by Albert Carr – 'It is understood on all sides that the truth is not expected to be spoken.' The view that we took was that although this game is playable, it is not necessary to play the game in order to create a business arena where normal ethics are suspended in favour of rules which allow for competition, for winning and losing. By the criterion of 'what is necessary for creating a business arena', there is no necessity for a rule that permits lying. A rule that is not necessary is at best superfluous, and at worst an obstacle to carrying out the activity in question. We can compete vigorously in the business arena, using all our resourcefulness and skill, without needing to use the additional weapon of 'permissible lies'.

 

One can go further and state that there are in fact strong positive reasons for applying the prohibition against lying across the board, both within and outside the business arena. Life in the business arena is part of life. It is not just a game. The hurt and affront caused by a lie is a real hurt and a real affront – as anyone who has been on the receiving end will testify – unlike board or card games where deceit is accepted as a matter of course; at least, when played by adults who are fully conversant with the point of the game. In a game of poker, friendly or otherwise, the angry complaint 'How could you have bluffed me?' would be perceived as absurd. At best, it can be taken as a jest. Bluffing is what the game of poker is about, what makes it so enjoyable and gripping.

 

But is all bluffing lying? Part of the initial attractiveness, I suspect, of Carr's thesis derives from the fact that we do not regard bluffing as necessarily as bad as lying. In fact, there are degrees of bluffing which do not correspond to degrees of lying:

 

A businessman down on his luck who goes into an important meeting dressed in expensive looking but tasteful clothes which are in fact loaned for the day from a men's clothes-hire shop. This is a kind of bluff, but it is an acceptable bluff. In the business world, like it or not, you are judged mercilessly on first appearances. What else can he do? If you discovered the truth – that the businessman owns one thread-bare pinstripe suit – you might raise a wry smile but you could hardly criticize him for putting his best face forward despite adverse circumstances.

 

A multi-national technology conglomerate is launching a new games console whose specifications are shrouded in secrecy. To put competitors off the scent, for months they have been singing the praises of the current model, despite that fact that it is common knowledge that their console has been increasingly losing market share to its more powerful rival. Their plan is to convey the misleading impression that the new product will be a mere improvement of the current design, whereas in reality the console is a quantum leap ahead of the opposition. When the new model is finally unveiled it creates a sensation, and the competitors are wrong-footed.

 

In a fierce takeover battle for a supermarket chain taking place in the full glare of publicity, every bid by company A is swiftly matched by a higher bid by company B. Company A finally throw in the towel as Company B have given every impression that they have sufficient finances to continue upping the ante indefinitely. What only the members of the Board of Company B know is that, in reality, their last bid stretched their available loan capital to the limit. In effect, they won through a successful bluff. You can only admire their ability to hold their nerve.

 

These are examples where most persons would not think that any wrongdoing has occurred. In two of the three cases – the business meeting and the takeover bid – there is a perception that when your back is up against the wall, you don't have to let on to others how difficult your circumstances are. All that is relevant is how good you are, how well you play your hand, whether indeed you are true to your word. That's fair. In the remaining case, the product launch, the principle is essentially the same as the one we looked at last time regarding trade secrets. Your competitors should be spending less time watching you and more time pushing ahead with their own R and D.

 

Other examples of bluffing, by contrast, are less acceptable:

 

Ordering stock which you don't have the money to pay for, in the hope that when the time comes to pay you will be able to cover the cost through increased sales is universally regarded as bad trading practice, even if you never actually stated that you had sufficient funds. The deception results in your trusting supplier taking a financial risk which they would not have taken had they known your true situation.

 

Threatening legal action when you know that your case would never stand up in a court of law is a bullying bluff which brings the law itself into disrepute. The offence is usually compounded by the inequality of power between the bully and the bullied: the prohibitive cost of going to law for the threatened party outweighs knowledge that if the case ever came to court you would probably win. The risk is still too great.

 

A company spokesman who refuses point blank to respond to justified questions raised at a shareholders' meeting to which they know the answer is bluffing, in a manner that is tantamount to a lie. Sooner or later, whether at another meeting or in response to questioning from a persistent reporter – or possibly the police – some answer will have to be given. Then the deception can only be maintained by telling a barefaced lie.

 

Taxonomy of lies

 

Are there different kinds of lie, some of which are more acceptable than others? Before we can answer that question, we need to get a better hold on the kinds of thing that might be considered to be a lie. As we have seen, some bluffs are close to if not equivalent to lies while others are not. What makes the difference?

 

The traditional view – before Kant came and changed the ethical landscape forever – was that there are lies of every shade, from white to black. St Augustine, in his book, Of Lying distinguishes between eight distinct levels of lying, the most severe being 'Lies told in religious teaching' while the least severe is 'Lies that harm no-one and save someone's purity.'

 

However, this kind of hair-splitting categorization is totally upstaged by the recognition that you can't justify a lie by its consequences. Nor is there anything 'worse' than a lie, although a lie can be compounded with other offences, such as betrayal of someone who trusts you, or forcing someone else to lie on your behalf.

 

What we have seen, however, is that not every successful case of deception involves a lie. The expensively dressed businessman, the game console maker, the company who made the successful takeover bid practised acceptable deception. We are not required to show all our cards to anyone who cares to look. The test of an admissible deception, admittedly rough and ready, is how, as someone on the receiving end of the deception, one would respond if one learned the truth – whether they primarily blame themself for drawing the wrong conclusions, or blame you for deliberately pulling the wool over their eyes.

 

Of course, one's response to a deception depends on one's expectations. If like Carr you don't expect to be told the truth then you will be less surprised and hurt when the lie is uncovered. But at least it is a prima facie consideration. Can we say more than this?

 

In Kantian terms – following the final formulation of the Categorical Imperative according to which one should never use someone 'merely as a means' – you can bring it about that someone is deceived without it being the case that they have been used in an egregious sense. Their own free actions and unforced judgement played the main role. They second-guessed you, and as it happens guessed wrongly. One draws all sorts of conclusions from appearances, nor are we always responsible for the way our actions appear to others. By contrast, in a lie, you deprive the other person of their freedom of action by presenting false information as if it were true, effectively making the other person into a mere tool for your own ends. As Kant argued, the very possibility of language as a means of communication is based on the ability to trust someone's word.

 

Bullshit and spin

 

Apart from lying and bluffing, there are a variety of labels which we use for obscuring the truth, more or less implying censure. Of these, the most notable were both invented in the 20th century: the terms, 'bullshit' and 'spin'. Time and again, one hears how people are 'tired of all the spin and bullshit', both in the world of business and in politics. But how bad are spin and bullshit, really? Both involve a kind of deception, yet it is not immediately clear that this is always a bad kind of deception, or even if it is, that it is necessarily as bad as telling a lie.

 

As these words are generally understood, bullshit seeks to confuse and complicate matters, refusing to answer the question directly and substituting obfuscating rhetoric, while spin selectively emphasises the positive aspects of something whose virtues you are seeking to promote, while underplaying or hiding the negative. Let's look at each of these notions in turn.

 

No-one likes to 'be bullshitted'. Yet there are circumstances where we are required to bullshit. For example, the last thing the shy and not very skilled apprentice needs is criticism. So you offer fulsome praise, underlining the successful results that they have so far achieved, even though the praise is not fully merited. Objectivity is the last thing they need. Anyone listening would know that what you're saying contains an element of bullshit. Perhaps even the apprentice sees this too. But the real point is not what you said but the fact that you took the trouble to offer words of encouragement.

 

Just as words of encouragement go a long way, even when they are not merited, so a defiant response to a serious threat is not required to be objectively true. With the wisdom of hindsight, Winston Churchill can be seen as one of the greatest all-time masters of bullshit. For a period early on in the Second World War, bullshit was Britain's strongest weapon. 'We will fight them on the beaches.' With what? When you run out of bullets you wave the skull and crossbones, or let off firecrackers. (The Royal Air Force didn't have enough real aeroplanes so they built runways with mock fighters made out of cardboard which looked sufficiently real from the air.) At least, there is a chance you will give the enemy a scare, or introduce just enough doubt to confuse their calculations – as arguably proved to be the case.

 

To be on the receiving end of bullshit is not necessarily the same as being 'used'. A company on the ropes needs bucketloads of bullshit to keep up the spirits of the workforce and prevent despondency, as well as keeping ravening press reporters at bay. The workers want to see evidence of how much you care. Words alone are not enough, but they are something. Of course, along with the bullshit you have to be willing to tell the truth as it is, as and where necessary. If anyone needs the truth, straight up, then you will tell them. But in stressful times the unvarnished truth isn't always what people want, or need to hear.

 

The same principle applies to the marketplace. If your product is not as good as the other company's product and everyone knows this, still you don't own up to that fact. Make a joke of it. Even if the design of the other product is better, your product is cooler. 'We're number 2, so we try harder,' was the famous response by Avis to Hertz's dominance of the care hire market in the early 60's. The idea that Avis were only number 2, therefore they always tried harder to please the customer was a breathtaking non-sequitur, or in other words, sheer bullshit.

 

'Spin' is a more recent notion. The 1950's 'spin doctors', the original American radio DJ's, told their audiences what to listen for in the latest pop record. As any advertiser knows, you can't make someone like something just by shouting loudly enough how great it is. There has to be something worth calling attention to. Yet there is all the world of difference between spinning judgements of quality – which is what the DJ's were doing – and spinning facts. Between those who loved pop music and those who heard it as an ugly barrage of noise there was no 'truth' of the matter. The objectivity of aesthetic judgement does not imply the necessity for universal acceptance. Yet this is how we think of factual truth. The truth about the current state of the economy – such as whether or not we are really on the cusp of a recession – is the truth, whether you like it or not, whether the message is one you wanted to hear or didn't want to hear.

 

Spin doctoring has come in for some bad press, especially in the wake of the successive publicity fiascos of the British Labour Party under Tony Blair's leadership. The truth is that politicians have always spinned. But there is a fine line that is easy to cross. In Labour's case, there was a justified desire for seeking to redress the imbalance of a hostile press that had traditionally always been seen to favour the Tories over Labour. However, fighting fire with fire is not always the best strategy, and not a few fingers got scorched.

 

The main part of the business of politics is getting people to pull together. Merciless self-examination is not generally the best way to do this – although on occasion a self-deprecating willingness to own up to one's faults can work well in garnering sympathetic support. More significant in politics is the phenomenon of the self-fulfilling prophecy. If you say you are succeeding with the policy, even if there hasn't been much success of late, you are objectively more likely to succeed. Your eyes, and the eyes of your party are commendably fixed on the goal ahead. While, understandably, political commentators are more interested in taking the magnifying glass to every crack and fault.

 

However, there is one respect in which the world of business diverges significantly from politics. As in a court of law, political life is essentially adversarial. Whichever party is in opposition will try to put a negative spin on the latest economic reports or opinion polls while the government counter this with a positive spin. To expect that this will happen is not cynicism. Whichever party you support, you expect the leader to make the best possible case for what they believe. By contrast, the end of year Company Chairman's report should be objective and judicious, and we are rightfully offended when (unfortunately, as all-too often proves to be the case) spin has gained the upper hand over truthfulness.

 

Lies, damn lies and advertising

 

PR and advertising raise some of the most difficult ethical issues to do with truth and truthfulness. We have already looked two contentious aspects of PR in examining the notions of bullshit and spin. However, when all is said and done most professional public relations is, and has to be factually based. Media editors are wise to all the tricks. The problem for PR departments is that the news outlets are deluged with just too many 'facts'. If your story, worthy though it may be isn't newsworthy then it will never see the light of day. Finding a good news angle – in a way that doesn't require offensive bullshit or spin – is the real skill of the accomplished PR consultant.

 

By contrast, advertising does not suffer this constraint. Even if the law requires adverts to be 'decent' and 'truthful', these are matters over which there can be a great deal of subjective disagreement. Most often, the deciding factor determining restrictions is now many people object to an advert or advertising campaign. If the ad is funny, entertaining or cute you can get away with outrageous claims. Hyperbole is the norm. You don't take the car or DVD player you just purchased back because after trying it out you decided that it isn't the 'best in the world'. With the exception of a few brave examples like Avis, it is axiomatic that any product you are selling is 'the best', or at least, 'best at the price'.

 

Where legislation does bite is over testable factual claims. If you claim that your tanning lotion is safe to use on sensitive skin, it better had be. These days, even if you make the commendably modest claim, 'Guinness is Good For You', you have to be able to offer scientific evidence that your brew is indeed beneficial to health, or else pull the ad (as happened with this famous billboard advertisement.). Such evidence is hard to come by, notwithstanding the tens of thousands of Guinness drinkers who would swear it does them a power of good.

 

In my article 'Ethics and Advertising', I considered three main charges laid against advertisers:

 

They sell us dreams, entice us into confusing dreams with reality.

 

They pander to our desires for things that are bad for us.

 

They manipulate us into wanting things we don't really need.

 

All this can be summed up in the popular sentiment that advertisers cynically use a world of fantasy and illusion in an attempt to control us.

 

Most people who express this sentiment, however, would add that the attempt doesn't succeed. We see through the ruse. (Or, at least, it is always other people who seem to have the wool pulled over their eyes, never ourselves.) That's a claim to take with a big pinch of salt.

 

Geoffrey Klempner 'Ethics and Advertising'

 

Philosophy for Business Issue 9

 

https://isfp.co.uk/businesspathways/issue9.html

 

In that article, I claim that none of these three indictments – selling dreams, pandering and manipulating – is in fact as clear-cut as it first appears. It is not necessarily wrong to be sold dreams, because what is human life if we never get the chance to dream? 'Hope in a jar' is real hope, and not merely the illusion of hope. Some things may indeed be bad for us, but we are not helplessly in thrall to adverts to the point of not being able to exercise our own judgement. The question of what a person 'really needs' – as opposed to what they 'merely want' – and who has the right to make that judgement is especially problematic.

 

I concluded:

 

The stark truth is that manufacturers and advertisers are as much controlled by the fickle consumer as in control. Rules can be set down concerning what is factually truthful, decent and fair. It is not the advertiser's job to make people better than they are, or want better things than they want. That is the work for politicians and preachers, or, possibly, philosophers.

 

(ibid.)

 

What is notable about the three charges I considered is that, on the face of it, none concerns the question of literal truthfulness. That is not how ads work, or what makes them so powerful. You can sell dreams, pander or manipulate without stooping to lie, at least in the literal sense of the word. A photograph of a cool sexy young couple zooming around the Sahara Desert in their hot hatchback is not a lie, just because most of the people buying the car are far less attractive, or never get the chance to drive their car around the Sahara Desert. But isn't it still somehow lying?

 

The real question is whether we really want advertising in its present form. One should not take it for granted that a defence of the business arena and all that a business arena necessarily involves – the guiding thread for our investigation – will also be a defence of the status quo. Do we really need advertising in its present form? Wouldn't we be better if adverts were subject to far more vigorous control?

 

What is truth? What is the 'truth' about a motor car, for example? To a converted non-car owner, the motor car appears as a 'glorified invalid carriage running on smelly petrol'. From the perspective of a growing awareness of the danger of eco-catastrophe, surely this is closer to what the motor car is, in its essence, and indeed most true of that epitome of wasteful excess, the sports car (how ironic that the driver lies back, legs stretched out in front). One could run through a gamut of products, from deodorants to digicams, ticking off the attributes that are excessive or appeal to our illusory pretensions to life styles of excitement and glamour. But then, you would have to sell the contrary ideas of virtuous utility and parsimony.

 

My own feeling – despite my considerable sympathy for the perspective of the principled non-car owner – is that this attitude is excessively paternalistic, in the sense decried by J.S. Mill, the great defender of the principles of liberalism. By all means tell anyone who cares to listen how great it would be if we were less materialistic and obsessed with surface appearances. That is what philosophers have been doing for the last 2500 years. Perhaps, things will have to get worse before the idea finally cottons on. Until then, the ethical company must still compete in a marketplace where materialist values for the most part prevail.

 


 


ethical dilemmas unit 7

 

Theft and giving in the business arena

 

ONE of the ground rules without which the business arena would not function is that you do not take what is not yours to take. If I want something then I must be prepared to pay, or else trade something of equivalent value. If there were no need to strike a bargain, if one could just take the thing anyway, then the very possibility of trade is undermined and all meaningful business activity would cease. It is a rule which we honour in the breach – for example, when we boast about paying much less than the market value of a particular item, or selling it for much more than it is 'worth'.

 

However, the idea that it is wrong to take a thing unless you pay for it does not go without saying. It begs the question: Why would anyone want to take something that didn't belong to them against the owner's wishes? Why do we need the commandment, 'Do not steal?'

 

In the festival of the potlatch, once widely practised by indigenous American peoples along the North Pacific Coast, prominent families who hosted the sacred ceremonies competed with one another to show who could give away more of their goods and wealth. The practice was considered by nineteenth century Canadian missionaries so contrary to Christian values that they successfully sought to have it banned by legal statute. Yet the idea of competing to 'give the most' is not unknown amongst business people. Consider for example the charity luncheon, where rich guests take turns to announce proudly the value of the cheque that they are donating to the worthy cause.

 

What a strange inversion of the business arena it would be, if the aim of trade was to give as much as possible with the aim of receiving as little as possible in return! Yet it is worth while asking why we are so keen to ensure that trade is equitable. Where did the idea arise of economic thinking, where each party in a negotiation seeks to gain their objective with the least investment of money, time or effort? Is this an essential part of human rationality as some would claim it to be? To what extent is economic thinking the sine qua non of the business arena?

 

However much we may prize economic thinking as the model of rationality – or at least one of the basic forms of rationality, if one also grants the rationality of ethical thinking – it is widely recognized that unforced generosity oils the machinery of the business arena. Reformers who seek to have the practice of giving gifts curtailed or even banned miss the obvious point that giving – not only of one's time or expertise or resources but personal gifts to those with whom you have formed a close business or working relationship – helps to create an atmosphere of optimism and good will. Who doesn't love receiving a gift? When you give praise, that costs something too. But you don't normally stop to ask – unless you are someone who is highly manipulative – how much you had to pay, or whether the 'deal' was worth it.

 

The difficulty, of course, in the case of material gifts is distinguishing a genuine gift from a bribe which is a form of illicit trade, the very opposite of gift giving. That is not something we will be looking at here. The point to remember is that in the interest of rooting out bribery and corruption, we should not get so carried away that we view all gift giving in the business arena with a jaundiced eye.

 

But what about theft? Before we can define theft, we first need to grasp the nature of property. The aim of a definition of property is not a defence of the institution of private property – as Locke famously attempted – nor indeed is it an attack, as in Marx's critique of private property. We need to be clear from the start that any such analysis – supposing this to be possible, which as we will see is very much a matter of debate – must be ideologically neutral. To understand what it is to possess property, to own an object is in principle neither to approve nor criticize.

 

Varieties of ownership

 

People love their possessions. This is a remarkable fact about the natural history of human beings that requires not a little explanation:

 

Philosophers, so quick to analyse, look at an object as a mere bearer of physical properties, or as a tool with a function, or, possibly, one of those rare objects that attains the status of a 'work of art', a bearer of sheer disinterested aesthetic value. None of these ways of analysing an object explain why we love things. All parents know how children lust for toys. We grow up. We put away childish things. We do not lose that lust, we merely look for different things to attach ourselves to, to project our emotions onto. This is normal, not pathological behaviour.

 

Object-love is one of the most profound facts about our human relation to the world. That is something Freud saw.

 

Geoffrey Klempner 'Ethics and Advertising'

 

Philosophy for Business Issue 9

 

https://isfp.co.uk/businesspathways/issue9.html

 

Theft and property are not simply correlative notions. For example, suppose I have my favourite place at the conference table. A newcomer unknowingly sits down in my place. This is perceived, not as taking away something that is my 'property', something I own, but more like (although by no means equivalent to) a disconcerting invasion of my personal space, albeit innocent and unintentional.

 

While the denotation of the term, 'property' shades in to that of personal space, at the other end of the spectrum, the idea of what is my property shades in to what is physically part of me, a limb for example. Yet we also identify certain precious or indispensable objects as 'part of us', and when these are taken we feel a special sense of grief or loss. This applies not just to objects of sentimental value – which have an essential reference to others and in particular those we love – but also the possessions that in some sense shape our sense of who and what we are. The conscientious workman loves his tools.

 

Not all the things that are mine are my property. My wife and my child, for example. A kidnapper might take my family and hold them captive. They would then be in the possession of the kidnapper. But they would not thereby become the kidnapper's 'wife' and 'child'.

 

To lose one's reputation and good name can be a great loss. Yet the person who takes them – through libel or slander – does not thereby acquire them. On the other hand, the successful impersonator acquires – as it were, through illicitly borrowing – a reputation and a name that nonetheless remain wholly mine, not theirs.

 

There are many things I own whose value to me is purely functional, a matter of convenience. Yet the seemingly neutral term 'convenience' speaks volumes. My old PDA, with all extra data and software which I have uploaded over many months would cost a great deal of effort to replace, even though the thief is unlikely to get much money for it. I can buy another identical PDA cheaply on eBay, but nothing will make up for the time that I spent in customizing it, or the aggravation of having to search for the various disparate bits of information which I had so carefully gathered together.

 

Defining 'property'

 

I am walking through the woods with a party of hikers and come across a broken bare tree branch that is perfect for a walking stick. After we have stopped a while for a rest, one of the members of the party, too lazy to find a walking stick of his own, cheekily picks up the walking stick intending to use it. When I protest that it's 'mine', the lazy hiker replies that the stick was lying there on the path. Anyone could have picked it up. 'But I was the one who picked it up not you!'

 

What mistake is the lazy hiker making? It seems clear from this example that at least in some cases, finding an object that doesn't belong to anyone is sufficient to make it yours. 'Finders keepers.' I didn't have to 'work' to find the stick or make it usable (as in Locke's paradigm of private property as an object with which I have 'mixed my labour'). It was just lying there, no-one's, ready to be used. Now the stick is mine, to keep or to give away as I see fit.

 

To nudge our intuitions the other way, let's say I make a living selling coloured stones and sea shells which I find in a secluded cove. One day, I find another swimmer scuba diving in 'my' cove. Do I have any valid basis for protest? 'Go find your own cove!'? But suppose there was just one, and I was the one lucky to find it. That doesn't make it mine. It ceased to be mine the moment my secret was discovered.

 

After a heavy thunderstorm, a racing pigeon with a tag on its leg lands on your lawn and after two or three days still shows no interest in flying away. The bird is clearly lost. Is the pigeon now yours? A household being 'adopted' by an absent neighbour's neglected cat is a familiar enough phenomenon. But the cases are not the same. If you don't make an effort to find the pigeon's owner – for example, by contacting a national racing pigeon association – then your inaction is tantamount to theft, whatever the law may say. This is something you would know, if you knew about the sport of pigeon racing.

 

It should be clear by now that usage and custom play a significant role in determining whether something is someone's 'property'. Here is an example that is especially relevant to the business world: A busker will get very aggravated if you 'steal my pitch'. Lucrative pitches in the centres of big cities are shared by the street musicians on a strict schedule while newcomers are often harassed and excluded. There is no legal or ethical basis for this practice. In the UK, unlicensed busking is illegal anyway. And yet we can clearly perceive the point of the practice. Without a negotiated agreement there would be war on the streets.

 

In a not dissimilar way, companies will honour implicit or explicit agreements not to trespass on one another's turf or 'steal' their customers. These agreements, which have no legal force and which at the limit effectively become price fixing hardly seem in the interests of the customer. The companies would argue that they have a right to survive. In a price undercutting war the consumer wins, but they lose. The clinching argument, however, is that if no company finds it profitable to trade, then everyone loses.

 

If we accept the clinching argument, at least in certain circumscribed cases, does it follow that a company in some sense 'owns' their customer base? If two companies have made an agreement not to poach one another's customers then this defines a form of 'ownership', based on a written or unwritten contract. On the other hand, to the extent to which the location of potential customers is knowledge which one has researched or paid for, it comes under the heading of trade secrets. In unit 5 I argued that, 'keeping trade secrets – concerning methods of manufacture, or the availability of goods, or potential customers – would be impossible in a totally transparent business arena.'

 

As the example of the secluded cove demonstrates, knowledge can make all the difference to ownership. If I am the only one who knows about the location of a company or individual who is willing to buy my product, then that customer is 'mine' and I am not required to divulge my knowledge. But once the knowledge is out in the open – by whatever means the information got there – then I have to work as hard as my competitors are prepared to work in order to keep that customer's business to myself.

 

Stealing and lying

 

One question we need ask is whether the injunction, 'Do not steal' has the same unequivocal force as the injunction, 'Do not lie.' We have seen that a lie can never be justified (notwithstanding the paradoxical admission that we are sometimes 'forced to tell a lie'). Can the same be said about theft? Can theft ever be justified in a way that lying cannot? Is it just something that is bad to do, all things considered, or is the traditional view – expressed in the eighth commandment – correct: it is always and without exception wrong to steal?

 

The complexity of the notions of 'property' and 'possession' belie any such claim, at least in its strongest sense. The possibility of telling a lie is linked in the most direct way to the very notion of assertion and our implicit trust in the language we use to communicate with one another. That is why the argument for the claim that it is always wrong to tell a lie is so unequivocal. By contrast, if the notions of 'property' and 'possession' are complex, then we should expect the considerations on theft to be no less complex. That is not to say that there is not, at bottom, any principle at stake here. Only, if there is a principle, it is one that is far more difficult to state clearly, without hedging or qualification.

 

Ethics and the law have different things to say about theft. The law encapsulates our ethical view of theft on the basis of what is reasonably enforceable in a free society. In the case of physical items, 'possession is nine points the law', although there are recognized grounds on which this can be contested; e.g. if you can prove that you had the item first and it was taken from you.

 

In the case of intellectual property, there is a widely recognized prohibition in the academic world against plagiarism, where this is well defined – by those who have the expertise to recognize it – yet by no means legally enforceable. I can't be prosecuted for writing an article presenting your idea or concept as if I were the one who had thought it up, yet there are sufficiently strong sanctions within the academic world against this practice which obviate the need to go to law.

 

Other examples of intellectual property which have the full sanction of law – for example, using melodic elements from another musical composer's song – can often raise difficult questions of what is legitimate influence or inspiration as opposed to illicit copying, as the famous law suit over George Harrison's 1970 release, 'My Sweet Lord' demonstrates. Two of the main melodic themes of the song were strongly reminiscent of the 1962 Chiffons hit, 'He's So Fine', even though Harrison's song also contained original, and very beautiful, melodic elements of its own. Harrison was eventually found to have infringed copyright through 'subconscious plagiarism'. The subsequent legal dispute over damages dragged on for over twenty years.

 

In the software industry, reverse engineering software in order to illicitly use the source code for one's own software product is illegal, yet reverse engineering in order merely to study the source code can be perfectly within the law. (The principle is the same as taking a manufactured item apart to see how it is made.) But what if in the process of 'studying' the code you discover a solution to a problem that you have been working on for a long time? This is one of the ways in which programmers develop their knowledge and skills. There is not always a sharp dividing line between illicitly using someone else's fragment of code and merely 'learning' from it.

 

The upshot is that we can only be clear about whether an action is theft in cases where a sufficiently compelling case has been made for prior ownership. By contrast with the case of telling a lie, there is a significantly large area of differing shades of grey where there simply is no answer to the question whether a person 'owns' an item as their 'property' or not, and consequently whether taking it was indeed a case of theft.

 

Theft, punishment and self-protection

 

The crime of theft calls up deep emotions. It may seem incredible to us now that at the time of Dickens a child could be hanged for stealing a loaf of bread. Today, we express righteous condemnation of the use of the death penalty in China for a wide range of crimes – including common theft – which in other countries would receive a much lesser punishment. In Dickens' day, the baker felt it was right and proper that this attack on his livelihood should be paid for with the young culprit's life. It is a debatable question to what extent what seems to us the disproportionate use of capital punishment is merely ruthless expediency, or is viewed by the state and judiciary as justly deserved.

 

Is it wrong to steal a paperclip? (cf. the case of 'Margaret the unrepentant thief' in unit 3). The simple example of a paperclip is a good way to open up the question of theft. Consider an analogous case with lying: Is it wrong to tell a little lie? Yes. There is no lie that is so small as to be inconsequential. (I am not talking about so-called 'white lies' intended for the benefit of the recipient, although I would argue the conclusion must ultimately be the same.) If you tell me an untruth, where truth was indeed expected – whatever benefit you may gain, or even none, then you have used me. It is equivalent to a slap in the face, an aggravated insult.

 

But isn't it the same with a paperclip? If I don't mind your taking paperclips from my desk then it isn't theft. But if I do mind, then what you did was wrong. But, then, under what circumstances do I have a right to mind – isn't that the question? With lying my right to be told the truth does not need to be defended, whereas in the case of the paperclip more justification is needed before we can say that the action was definitely a wrong thing to do.

 

In order to get the paperclip, you had to go to my desk. That is potentially an egregious invasion of my personal space. There is no telling what personal items you might have come across rifling through my drawers. On the other hand, if the paperclip was on the desk, in a large transparent plastic pot labelled 'paperclips' it is difficult to see how I could reasonably object. If I didn't want anyone to take any of my paperclips I should have put them away in the drawer!

 

Today, millions download music and films illegally according to the letter of the law, convinced that they are 'doing nothing wrong'. Are they deceiving themselves? Have they just failed to think their actions through? Or is there any plausible case for saying that the claims by the 'injured' parties have been overstated and that the law should be more lenient?

 

All theft is not ethically the same. Our intuitions tell us that taking something you need or covet for your own personal use is not the same as stealing in order to profit from the sale of the stolen item. It is true that the tenth commandment says, 'Thou shalt not covet' so it would seem that in the former case, two offences are committed – theft and coveting – rather than only one. Yet we readily understand that it is a natural human emotion to be envious of another person's possessions, whereas the professional thief who steals in order to sell does so cold-bloodedly – viewing the victim as nothing more than a resource to use and plunder – and that is the source of the victim's resentment.

 

The emotive aspect of theft goes some way to accounting for the unnecessary lengths that both individuals and companies go to in order to protect their property. It seems clear in many cases that the deterrent effect of countermeasures goes well beyond what would be required from a purely pragmatic point of view. It is in the gap between reasonable and prudent protection and the vengeful desire to pay the thief back for arrogantly daring to take what is not theirs that there is genuine room for ethical debate over what is a reasonable punishment or indeed what are acceptable measures for self-protection.

 

It was not until 1861 that the British government passed the Offences Against the Person Act which prohibited what up until that time had been the common practice of landowners protecting their property from poachers by setting hidden spring-loaded ankle traps or 'man traps' which caused serious injury to any poacher unlucky enough to be caught by them, not to mention those who died of exposure before they could be released. Another item that the Act chillingly mentions is the 'spring-loaded gun' designed to go off automatically when a hidden lever or wire is tripped.

 

Today, we flatter ourselves that we no longer engage in such primitive practices, yet companies employ armies of wheel clampers, as well as guard dogs bred for their ferocity often with the full blessing of the law, indifferent to the inconvenience or harm caused to persons who are innocent of any crime.

 

Software and drugs corporations are two examples of companies who are widely perceived – correctly or incorrectly – to hike their prices far beyond what is a reasonable return on their investment in development. In the case of software, this is the most frequently given excuse for piracy and illegal downloading. Yet the measures taken against piracy often cause considerable inconvenience to innocent consumers – for example, lengthy and sometimes unreliable online registration processes, or the need to repurchase the software when your computer breaks down or needs replacing which many would regard as contrary to common sense.

 

Spreading the wealth

 

Yet the pain could be so easily avoided, as Sun Microsystems has shown: they make their proprietary operating system 'Solaris' freely available, but charge business users for support packages. There are a number of other creative solutions arrived at by the more progressive software companies; the most simple being to allow those who are unwilling to pay for the latest upgrade to freely download obsolete versions. Of course, as always, there are marketing considerations to take into account. But in most cases, companies know that they would still make a healthy profit from purchasers of the latest upgrade.

 

'It's ours, therefore you must pay,' is an outmoded, reactionary concept in a world where so much of the available wealth, in the form of information and expertise is shared not owned. We all benefit from spreading the wealth, not only the consumers but also the producers. It is not charity, but foresight and prudence to cast your bread upon the waters.

 

One of the most striking examples of this phenomenon are the rock bands who make their recordings available free for download. Traditional popular music marketing would view this as a wasted opportunity; but in reality this turns out to be a far more effective way of getting their work known and building a following than the traditional methods of paying for advertisements in the music press or trying to persuade DJ's to play the group's latest offering.

 

By contrast, potentially one of the greatest boons to mankind – the genetic engineering of crops to create strains which produce higher yields or which survive in conditions where existing crops fail – has become a new instrument of commercial imperialism, with Western companies denying customers in the third world who have purchased their designer seeds the right to sow the very seeds that their crop has produced. Repugnant as it seems to all notions of fairness, the practice is simply a logical consequence of the idea of intellectual property, no less than in the case of resentful purchasers of software who are legally barred from using their CDs to install the software on a replacement machine.

 

Like the drugs companies who defend their high prices on the grounds that they need to recoup their heavy investment, the genetic engineering companies argue that if they are denied the opportunity to make sufficient profit from the sale of their seeds then there would be no incentive to do the research in the first place. If the farmers become self-sufficient with the second crop then the seeds can only be sold once. This is a short-sighted view, which is sadly out of touch with contemporary notions of justice and fair play.

 

In poorer countries, where the cost of original software is light years ahead of what users can afford, it is common knowledge hat 'illegal' copying and downloading is practised as a matter of course, as indeed is the production of generic medications with the same chemical composition as the much more expensive original product. It is a matter of sheer survival. The continued insistence by producers that they are still searching for ways to enforce their 'legal right' is hypocrisy on a truly massive scale.

 

Companies need to bring in revenue. That is their raison d'etre. But there are two points that are easily overlooked. The first is that there are many more ways of bringing in revenue than the traditional, 'We make the product, you pay for it' model. When the 'product' in question is so easily reproducible, it makes far more sense to develop the service side, where the investment in time and human resources corresponds more equitably to the revenue brought in. The spectacular growth of the internet has shown how many unforeseen ways there can be to generate revenue from web sites which apparently give so much away for free.

 

The second point may require a certain amount of biting the bullet, because it seems to go against the grain of economic rationality, yet it is indeed a fact as opposed to mere ideology – what most companies actually practice contrary to the belligerent capitalist propaganda: that enough profit is enough.

 


 


ethical dilemmas unit 8

 

Competing for profit

 

THE idea that conducting business is, or can be an ethical activity faces two serious obstacles which, if not overcome, would ruin any chance for a meaningful business ethics. These challenges arise naturally through our social conscience, and indeed seem to come from ethics itself.

 

The first obstacle is the thought that there is something intrinsically wrong with human beings selfishly competing for gain – when ethics teaches that we should rather be helping one another and co-operating to make the world a better place. Critics who voice this objection do not usually have problems with the idea of competing for athletic or sports trophies, or indeed for literary or scientific prizes. When you lose a game, or fail to win a prize that may be a blow to your self-esteem but that is (usually) the full extent of the damage. Whereas companies that lose out in the competition for customers go bankrupt, and their workforce face the spectre of redundancy. Our social conscience tells us that we ought to offer succour and support to those in need, and avoid actions that might lead to others being worse off as the result of our gains.

 

I have argued that there is only way to face up to this challenge: that is to accept fully and without any reservation the implication that in order for there to be a business arena there have to be losers as well as winners. We can seek to ameliorate the damage, provide economic or moral support for workers who have lost their jobs or directors who have lost their companies. But risk is the essence of business. If you don't have an appetite for risk, there are many other professions to choose from, where the right qualifications are a virtual guarantee of a secure income. If you win the contract, you don't feel guilty because someone else lost. On the contrary, you deserve to be congratulated – provided that you did win fair and square and not by cheating or foul play.

 

It has long been a bone of contention that the many – indeed the majority – who are not in business or the professions do not have this choice. While business magnates take the risks, they face the consequences. This does indeed place a burden of responsibility on both the state and business, one of the issues that we will be looking at in the next unit. The admission of a dimension of social responsibility not accounted for by the strict rules of fair play complicates our view of the business arena but does not alter its basic structure.

 

There is a saying, 'All is fair in love and war.' Some critics would cynically add 'business' to this list. Yet even war is governed by agreed conventions. If we could miraculously succeed in making wars a thing of the past, so long as human beings survive there will still be competition in the search for a mate. This recalcitrant fact so appalled some nineteenth century socialists that they advocated the abolition of marriage and the establishment of communes where men and women would exchange partners freely, casting aside the bourgeois constraints of jealousy and possessiveness. The more acute Marx saw this as nothing more than a feckless attempt to overcome the marriage market under capitalism – a form of 'prostitution' in Marx's eyes – by replacing it with 'universal prostitution'. Even in a Marxist utopia, there will always be winners and losers in the competition for love.

 

How much profit does a person need?

 

What about the desire for profit? Is any amount of profit 'too much'? It is by no means clear that the term 'fair' is being used in the same sense when we talk of 'fair competition' or 'fair profit'. Competition is fair when the participants observe the agreed ground rules, don't lie or cheat, and keep their promises. Whereas, the assumption is that in pursuing profit we are seeking maximum return on our investment – the maximum profit obtainable – whether that investment take the form of our money, our time, or our creativity.

 

Skill in playing the business game, the conditions of the market and luck determine how much profit one makes. The traditional view is that provided that you have competed fairly, there is no limit on what counts as 'fair profit' – unless it is a limit imported from outside the business arena, imposed on the participants as a result of government policy.

 

What limits, if any, should be placed on business activity is a matter for political debate. There are fundamental issues in political philosophy at stake: such as the question whether the government has a duty or even the right to use taxation to redistribute wealth. However, it is generally accepted by all but extreme libertarian hardliners that market forces are not a magic guarantee of the optimal outcome. Governments have a duty to ensure that allowing free competition in the business arena serves the national interest and does not just benefit the winners. Once this point is accepted, the extent to which one relies on government intervention or the 'invisible hand' of the market are matters of detail which are best approached with a pragmatic attitude.

 

As I write, oil prices are soaring through the roof, crippling world economies. Even though there are grounds for worry about maintaining supplies, the rise is out of all proportion to what would be justified by a clear-headed global assessment of supply and demand. It is a market phenomenon. One commentator has suggested that anyone who wants to buy and sell oil should be required by law to take delivery of their oil and store it. That is hardly a practical idea, but we are urgently in need of an idea for putting a lid on the oil market that is workable and effective.

 

For the wise judge of business ethics, as we have already observed, 'enough profit is enough'. We compete because we have to, not for the sheer sake of competing. We seek to make a profit because we want to earn a living from the work that we do. The prime imperative of any company is to survive.

 

Periodically in the British press there have been controversial reports over so-called 'fat cats', CEOs hired to turn round the fortunes of large public companies, attracted by lucrative compensation packages. If you deserve a six figure salary – if you are that good – then you have every right to demand it. But why keep the money? Give your children a chance to make their way in the world through their own efforts rather than leading a spoiled and pampered life – is a commendable philosophy.

 

The rules of competition

 

Before we consider the rules of competition from an ethical perspective, it would be useful to remind ourselves how rules for war and the Geneva Convention came about. One would have thought that of all human activities, all-out war is the one activity where there can be no agreed rules. Yet, the historical facts show otherwise. A convention that benefits both parties – for example, the ban on the use of nerve gas or biological weapons – is supported by mutual fear of reprisal. Both Hitler and the Allies knew from their experience of the First World War the dire consequences of taking poison gas onto the battlefield. Despite many deadly conflicts over the last sixty years since Hiroshima, no country has yet pushed the nuclear button.

 

One obvious difference between waging war and conducting business is that in the business arena there are laws enforced by the state. Untangling the strands of the legal and ethical from the merely conventional is by no means an easy matter, however. If you break a convention, even if it is not an ethically grounded convention, is that not in itself an unethical thing to do? Consider, for example, the gentlemen's agreement, 'We will not poach your customers provided that you don't poach ours.' It could be argued that there is nothing ethical or unethical here, but merely the question of whether upholding the convention continues to be to the parties' mutual advantage.

 

On the face of it, it seems that the only question one needs to consider is, are you prepared for tit-for-tat reprisal if you break the agreement? If a customer is sufficiently worth poaching, the answer to that question might well be 'yes'.

 

On the other hand, consider the following scenario. A company aggressively headhunting for executive talent hatches the novel idea of offering to defray the full legal costs of executives who break their employment contracts in order to join them. One would have thought that there ought to be a law against this. But let us assume that you are acting on the best legal advice, and that you have taken great care to ensure that you do not contravene the law of the land. Is your idea unethical? or just sharp game play?

 

One response to this challenge is to up the stakes: make the penalties of breaking a contract increasingly severe. But this has limits too. A contract to the effect that you forfeit your house and all your possessions if you break the terms of your employment would not be upheld in any court of law – or, at least, one hopes that it would not be. Why indeed stop there? Suppose the rival company offered to pay for the house and everything else. Then the next logical step is to demand limb amputation as a penalty for contract breaking.

 

In the world of professional sport, for example the British Football League, recognition that individual star players have immense value for the sporting and financial fortunes of a club – measured in many millions – would have quickly got out of hand were it not for the rules enforced by the Football League which has the power to ban players from appearing for a set number of league games, or seasons – or in the most severe cases, for life. No business association or league has that power to remove an individual completely from the arena in that way. In business, the most that can happen is that you get expelled from your professional or trade association – or the stock exchange – and are forced to move into a different line of work.

 

In the absence of sufficient legal sanctions, or a body with the draconian powers of the Football League, there has to be an ethical dimension, a basis for deciding the limits of acceptable behaviour. But what possible basis can this have? The point of arguing over hard cases in business ethics is to provide a rational justification for our ethical intuitions; for saying, 'such-and-such, but no more, is the limit of what we are prepared to accept.' Otherwise our intuitions are nothing more than our own fallible subjective view.

 

Deals and contracts

 

A business ethics that consisted merely of conventions adopted for prudential motives – like the conventions of war – would not be worthy of the name. But how can we show that there is more to the rules that govern the business arena than the merely conventional? One eminent example would be the idea of the contract. In the case of two or more parties entering into a contract, what is at stake is more than any convention, however such a convention might be enforced. A contract is a promise. And it is wrong to break a promise, in the same sense that it is wrong to tell a lie. Not wrong just because it has bad consequences, but simply by virtue of the fact that it is unethical.

 

In Oxford in the 1950's under the influence of J.L. Austin, philosophers turned their attention to the way in which we perform actions by means of uttering words. The traditional idea that the central purpose of language is to describe the world – to make statements, true or false – overlooks the performative dimension. If I give the order, 'Fire!' I have performed an action, no less than if I pulled the trigger myself. The groom who says, 'I do' at the alter is not describing his positive state of mind but making a commitment – equivalent to signing a contract – to love, honour and cherish. Yet there is still a lot of confusion about what it means to make a promise, or what constitutes a contract or deal.

 

'I thought we had a deal!' is the eternal complaint of the disappointed business person who took their associate's statement of intention for a promise. A statement of intention can be truthful or untruthful. If I say that I intend to do such-and-such, when I have no intention of doing such-and-such, then I have lied to you, no less than if I make a factual statement which I know to be untrue. It is wrong to lie. But I haven't 'broken my promise' because I didn't make one. Nor, if at the time I did honestly intend to do such-and-such, can you accuse me of 'breaking my promise' or 'going against the deal' if I later change my mind. Of course, we don't like to have dealings with people who are unreliable. Leaving aside sexist jokes about a 'woman's prerogative', it is a defect in character – a ground for personal criticism – that an individual repeatedly forms all sorts of plans with the best of intentions which he or she does not carry through.

 

It certainly shows a lack of self-knowledge, to say the least, that a person honestly believes that they will carry out the course of action that they intended, and time and again fails to do so. We have already examined in unit 3 the variety of ways in which we fail to carry out actions which we have been convinced are the right thing to do, as a result of so-called 'weakness of will'. How more easy is it to change your mind, when changes in circumstances make the plan less appealing? That is precisely why we have an institution of promising, and the concept of a legally binding contract.

 

It is not for nothing that when business people make a deal, even if nothing is put in writing, they perform a ritual action such as shaking hands to signify that they have indeed promised, and not just stated their sincere intentions. When a deal is done, it's done. You had the chance to change your mind right up to the moment when you shook hands, but at that precise moment you voluntarily surrendered that option.

 

Yet, despite the importance of the distinction between a promise and a statement of intention, there are still grounds for saying that a declaration of intention, in circumstances where you know that other persons will commit themselves to a particular course of action on the assumption that you intend to carry out what you intended, does leave you potentially open to ethical criticism, and not just criticism of your unreliability or lack of decisiveness. There are circumstances where it is wrong to mislead, even if you did not deliberately intend this at the time. You should have taken more care to qualify your statement. The law has nothing to say about this. You haven't broken any promise or contract, but you still bear a portion of ethical responsibility for the consequences, and at the very least you owe the other party a sincere apology.

 

Professional foul

 

In unit 5, I described the Sarbanes-Oxley Act, as 'a chilling realization of Carr's prophesy: a state where the law legislates for business ethics, and by implication anything outside the law is also outside ethics.' In the light of consideration of such a simple but fundamental thing as shaking hands on a deal, it should be clear that the law can never legislate adequately for ethics. One can only hope that more enlightened companies will realize this, and continue to take advice from experts on business ethics and not just rely on their corporate lawyers.

 

There is another, deeper criticism of the idea that one can legislate for ethics. This can be formulated in terms of a further objection to Albert Carr's thesis that in the business arena, any action within the law is acceptable. As we saw in unit 5, Carr likens the business 'game' to poker, where bluffing is an accepted and indeed essential part of the game. If one is being strictly accurate, however, players do not actually tell lies in poker; they merely perform actions which imply that they have certain beliefs – e.g. that one holds a good hand – actions which are designed purposefully to deceive. However, this is merely a minor point of detail. There are other card games (such as 'Blagger', or 'Bull' as it is sometimes known) where players explicitly state that they hold certain cards and these statements can be true or false.

 

But why stop there? Here is a description of how the locals in Marseilles play the game of Belotte, from retired English professor and Pathways student David Faber:

 

Belotte... is also very popular in Marseilles, I'm told – a sort of street-theatre. Wizened old life-long cheats commonly seen expostulating, scandalised at their opponents' cheating, standing up as if they're about to walk away in disgust, and even starting to walk away, having carefully laid their cards face-down on the table (they know they'll be back), and probably having taken the opportunity to drop one on the ground, so that when the round comes to an end they'll be found to have been dealt one card short, and there'll have to be a re-deal. Appalling to your average Englishman.

 

Geoffrey Klempner 'Corporate Social Responsibility and Ethical Dialogue', Philosophy for Business Issue 19

 

https://isfp.co.uk/businesspathways/issue19.html

 

In the aforementioned article, I go on to remark that one could make the case that,

 

the practice of not a few corporations and businesses is closer to belotte than poker. The rule is not, 'Do anything within the letter of the law,' but rather, 'Break the law whenever you can get away with it, or whenever the consequences of getting caught are sufficiently minor as to be outweighed by the benefits obtained from your misdemeanour.'

 

In football, the latter is known as a 'professional foul'. As fast as football governing bodies – or government committees – patch up the rules to make it harder to gain any advantage from a professional foul, new forms of professional foul appear which aren't covered by the rules.

 

(ibid.)

 

Sarbanes-Oxley has a sharp response to the practice of professional foul. Forget about paying fines. If you break the law that governs business ethics, you risk going to jail. Despite this acknowledged fact, so long as we are only talking about risk, then it remains open to the business person looking at all the angles to consider whether in a particular case breaking the law is worth the risk. It's just another part of the game, which adds the spice of danger, as well as the promise of great rewards for the individual who knows how to play the business game as it should be played – no holds barred.

 

In unit 5, I argued that Carr had failed to make the case that permitting the practice of bluffing is 'necessary in order to create a business arena'. However, a defender of Carr could reply that this still leaves open a loophole: bluffing may not be necessary but it is still possible. In Carr's scarier version of the business arena, the gameplay is more dynamic, more attractive – albeit more risky.

 

The most effective criticism of Carr's view is that it is logically unstable. Carr would like to abandon worries about ethics and occupy the narrow plateau of legality. But to the unethical business person, 'legality' is just another word for 'bad consequences if you get caught'. In other words, it is a matter of sheer prudence, not ethics. You can't defend legality, as Carr wishes to do, if you are not prepared to harness ethical arguments. In the absence of ethics, anything goes.

 

Taking fair advantage

 

Breaking contracts and agreements is one of many ways in which competitors seek to gain unfair advantage. Yet there are many ways of gaining a fair advantage. Gaining and keeping an edge over your opponent is what competition is all about.

 

It goes without saying that there are many situations where it is not necessary to compete, where the outcome is a 'win-win' situation. Not every business deal is a zero sum game. Co-operation is no less important in business than competition. We understandably place great value on a kind of deal where both parties feel that they have benefited to the maximum extent possible, where both 'come out on top'. But this is a case where what happens sometimes could not happen always, so long as human beings are allowed the freedom to pursue their own interests and aims. Human beings don't all want the same things, we don't all see things the same way. Or, alternatively, we do want the same thing but one party's gaining that thing – that prize or objective – is necessarily the other's loss, their failure to gain it.

 

In my article, 'Taking Fair Advantage', I consider the various ways in which a buyer can gain an advantage through exploiting a seller's lack of knowledge, as a result of which the buyer pays less than they would have done otherwise, or less than the going market rate.

 

I have heard it said that the ideal outcome of any sale is one where no-one 'loses' and buyer and seller are equally happy. That may well be so. But the point is that such an outcome cannot be guaranteed or enforced. The price of making 'equal gain' a necessary condition for taking part in the game of buying and selling would make the game impossible to play.

 

Geoffrey Klempner 'Taking Fair Advantage'

 

Philosophy for Business Issue 39

 

https://isfp.co.uk/businesspathways/issue39.html

 

Of course, a seller can be 'happy' in their ignorance. But we are not talking about this. We are considering whether, in fact, the buyer and seller have benefited equally from the deal regardless of whether the seller is aware of this or not. In the case where the canny buyer takes fair advantage over a less canny seller, the seller would be less happy on discovering this fact than they were before. However, for players in the business arena this should not be a cause for resentment, any more than in the case of the sports person who recognizes that they have been beaten fair and square. (In the article I make an exception for the case where a professional buyer takes advantage of an amateur seller's trust – the world of antique dealing is one notorious example.)

 

It is interesting to investigate why our intuitions see the reverse situation – where a seller takes advantage of a buyer – somewhat differently. While getting a bargain is regarded as something to be proud of, we are generally critical of sellers who overcharge for an item. Companies who take advantage of scarcity to put excessive markups on their products are accused of 'profiteering', or even 'racketeering'. But how exactly is this unethical? Why the disparity?

 

One of the main reasons arises through the perceived inequality of power between companies – especially large companies – and individual consumers. Consumer associations exist partly to reduce this inequality but they cannot remove it completely.

 

For example, you always have the choice to refuse to pay for a new Apple laptop and go for a cheap PC instead. But if you want Apple, then you have to pay Apple prices. Apple would argue that they have invested heavily in promoting the Apple brand over many years, and have acquired a deserved reputation for the quality of their products as well as praise for their designs. However, the main reason why Apple are able to maintain the large markup in the personal computer and laptop market is their long-time policy of refusal to license their operating system to other manufacturers (apart from one brief period where Apple 'clones' appeared). In the past, this marketing decision cost the company dear in their competition with Microsoft. Now Apple, bouyed by the success of the iPod, are belatedly reaping the rewards.

 

There is a world of difference between the high profit margins of companies marketing prestige brands, and the profits made by the slum landlord, or food suppliers who take advantage of scarcity to hike their prices. But, once again, is this really a question of business ethics? We have said that 'enough profit is enough'. But what is enough? And how are we going to enforce our view of what is 'enough' against competing views?

 

If you are an individual or a company, you have the ethical right to sell an item at greater than the market rate just as you have the right to purchase an item at less than the market rate. From the point of view of logic, there is no difference here between the two cases. However, what we do with 'right' is not always commendable or praiseworthy. There are plenty of cases where very bad things are done within the letter of the law. The problem for business ethics here is that we are not dealing – as in the case of truthfulness or promising – with a case of principle but rather with a matter of judgement. There is no precise point where greediness for profit shades into racketeering, or whether excessive zeal in pursuit of profit shades into greed. Yet we all know a case of racketeering when we encounter one.

 

What these considerations show is that in laying the foundations for business ethics we need to reckon with a broader notion of responsibility, based on an evaluation of the consequences of ones actions. It is an area which governments have a duty to take the lead for the very reason that where there is no identifiable point of principle, we need an authority to set acceptable standards and enforce them.

 

It is often quite clear when someone has broken a contract, and the party with whom they had the contract can go to law in order to seek compensation. In a case like rent racketeering, on the other hand, something more elaborate is needed: such as in the UK which has a system of rent tribunals and fair rent officers backed with the sanction of law. As we shall see in the next unit, the umbrella of ethical 'responsibility' is very wide, including all the issues covered by the terms 'corporate social responsibility', 'corporate citizenship' and environmentalism: all questions which governments need to show leadership in developing an effective framework for compliance.

 


 


ethical dilemmas unit 9

 

Social responsibility as an ethical dilemma

 

THE idea that companies should strive to be socially responsible has generated huge debate, yet with very little movement from entrenched positions. When approached from the point of view of the study of ethical dilemmas, it is not difficult to see why. We are, at one and the same time, ethical beings and players in the business arena. There is no logical reason why the duties and responsibilities of a citizen, spouse, parent, or friend should always be consistent with the duties and responsibilities of a director, manager, board member or employee. While most of the time in our day-to-day activities we may not experience any conflict between these different roles – indeed one hopes there would not be a clash otherwise the simplest decisions would become impossible – in a complex, imperfect world such conflict is inevitable and unavoidable.

 

We saw back in unit 2 how, faced with the challenge of ethical dilemmas, there is a strong temptation to believe that every ethical question must, in principle, have a definitive answer, even if we do not yet know what that answer is. Convinced that all we need to find the answer is the right tools, we are then tempted to think along the following lines. Since the solution to our problem has eluded us despite our best efforts, what that shows is that we need a better, more effective ethical theory, one which will yield a reliable method or recipe for resolving any ethical question, and thus lead us to the answer which we seek. – The more one learns about the sheer variety and complexity of ethical dilemmas, the less plausible that line of thought appears.

 

The alternative view, which we have consistently argued for here, is that there is no single 'right' answer to an ethical dilemma. Undoubtedly, some people are better at grappling with ethical dilemmas than others, but this is a talent, native or acquired – one aspect of what we term 'wisdom'. To say, however, that there is no definitive resolution of an ethical dilemma is not to say that any decision that we reach is merely subjective, or that we do not have a responsibility to make the best choice that we can, given the circumstances. The reasons that motivate our final decision are reasons which we could present to others, if asked to do so, and if necessary defend with arguments; even though by the nature of the case such arguments will be less than conclusive. There is generally a time limit on ethical deliberation; when the time limit runs out, you have to make your judgement call, and act.

 

Let us now see how the question of social responsibility first appears from the point of view of the business arena. When you are making decisions that involve other people's money – people who have invested in your company and entrusted you with the stewardship of their funds – the decision to use that money for anything other than generating a profit, with the aim of gaining the maxim return on investment, is tantamount to theft. Unless you can present an effective business case for doing what your conscience or your feelings tell you is the right thing to do, such action is ethically prohibited. You would be no better than Robin Hood stealing from one group of persons to give to another.

 

But now let us look at the other side of the argument. If you have good reason to believe that the activities of your company have resulted or will result in serious damage to the environment, or unjust treatment of employees, or the destruction of local communities, or long term health hazards to consumers then regardless of the risk of negative impact on profit, as an ethical individual you have to do the right thing. You cannot allow the bad situation to continue unchecked, so long as you are in a position to do something about it.

 

An argument such as the one we have presented to the effect that you cannot do XYZ, and yet you must do XYZ has all the hallmarks of a classic ethical dilemma. To merely state that observation is not of course to solve the problem. What it does do, is help to clarify the debate. You can't do justice to an ethical dilemma if you adopt the blinkered policy of always choosing one side of the argument, regardless of the particular circumstances. That is what the defenders of entrenched positions over social responsibility effectively do. On the contrary, the circumstances always matter. There is no easy let-off from engaging in the nitty-gritty of ethical debate, and making an ethical decision which inevitably will not please everyone but which you and your company are prepared to stand up for. That is what ethics demands. Business ethics – if indeed it deserves the name – cannot require anything less.

 

Business case for social responsibility

 

Is there a business case for social responsibility? Increasingly many companies believe that there is, and have acted on that belief. There is now a burgeoning literature on the business case for social responsibility. Many case studies have proved beyond doubt that social responsibility can and does pay. Then why doesn't everyone do it? Is it ignorance? or does a socially responsible company policy work for some, but not others? – From the point of view of logic, one cannot assume that an effective business case can always be made for socially responsible action. The empirical evidence that social responsibility pays – for example, increasing ethical awareness of consumers who prefer goods from socially responsible companies, favourable publicity and the generation of good will – does not and cannot show that social responsibility always pays, regardless of the particular circumstances.

 

The debate, indeed, is no different from the question first raised by Socrates and Plato two and a half thousand years ago over the connection between virtue and happiness. Suppose that what Socrates and Plato believed is empirically true: when you study human behaviour you find that, by and large, and for the most part, those who are ethically virtuous lead better, happier lives. Despite this evidence, we all know that sometimes, inevitably, doing the right thing entails a degree of sacrifice: there will be occasions when you are required to pursue an outcome which is less favourable to yourself for the sake of the greater good.

 

Even so, the debate is by no means done with, for the supporters of the business case will argue that if you take a sufficiently long view, the benefits of socially responsible action will always outweigh the costs. However, one is justified in asking, what is the hard evidence for that belief? Such a claim appears to be held as a mere article of faith. It looks like either propaganda or wishful thinking. If the propaganda succeeds, then it might indeed prove to be an example of a self-fulfilling prophecy. Suppose it were true that all businesses would benefit if they acted in unison and universally embraced the ideal of social responsibility, just as the human race would be better off if we all behaved ethically. In the face of scepticism, that is as weak an argument for corporate social responsibility in this world as it is an argument for ethics. Those individuals and companies who succeed in resisting the propaganda and continue recklessly to break the rules, profit from the secure knowledge that the majority can always be relied upon to toe the line.

 

A variation on this theme is the idea that companies whose primary aim is profit do less well than companies who aim to do worthy things – build a better mousetrap, cater to their customers' needs, develop a good management-employee relationship – things which, or so we are led to believe, naturally lead to increased profitability and success in the marketplace, just as human happiness is best achieved not by pursuing it consciously but rather by engaging in activities which increase the quality of a person's life and consequently lead to happiness. The analogy fails, if only for the reason that there is a wealth of knowledge about precise and actionable ways of increasing company profit, if that is really all one cares about, whereas human happiness is, as it has always been, elusive and difficult to predict or quantify.

 

Another variation on the theme is the increasingly talked about notion of sustainability, which manages to embrace ideas of long-term company survival and profitability, protection of the sources of raw materials, care for the environment, social responsibility and much more. The sheer breadth of the term raises a question about its utility, not to mention the risk of equivocation. From the point of view of generating profit in the long term, it could indeed be argued that it is not always a good thing to keep a company or a brand going indefinitely. Companies, like people, have a natural lifespan. There is nothing more unseemly than a company on a life support machine, kept alive by taxpayers' money. In a thriving economy, the most important factor is not longevity of existing companies but the number of new companies entering the marketplace. The desire to see your company flag flying in fifty years time is sentimentality, not sound business sense.

 

Anyone arguing for social responsibility who relies on the business case is therefore doing their cause a disservice. They are sacrificing facts for the sake of ideology. Or, in plain terms, they are peddling lies. Any company with a clear vision of why it is there in the marketplace knows this. Business people will be only too willing to embrace the hard-headed conclusion that so long as responsible action, whether towards the environment, local communities, ones customers or employees, pays, it is worth pursuing, but not otherwise. When responsibility ceases to pay – especially when a perceived short term advantage is so great as to outweigh any possible long term considerations – it is irrational to continue to insist on the socially responsible option.

 

Ethical case for social responsibility

 

What about the ethical case? 'Self-sacrifice' is an emotive term, and it is not difficult to see why philosophies that denigrate the very idea of altruism or self-sacrifice have become popular in the business world. Ayn Rand's Virtue of Selfishness has always retained a devoted hard core of followers. Back in unit 1, when we discussed the 19th century moral philosopher Henry Sidgwick's pessimistic view of the clash between morality and self-interest, we concluded that any sensible approach to ethics must allow for a component of healthy self-interest: 'we have to recognize there is such a thing as ethical judgement, which takes considerations of altruism and self-interest, together with the minimum required standards of behaviour, and makes a balanced decision.' To say that it is legitimate to factor in considerations of self-interest is clearly different from claiming that ethics can be reduced to self-interest, and different again from the exhortation to abandon traditional ethics altogether and make a 'virtue' out of selfishness.

 

Putting aside such radical views, it should be clear that the ethical case for social responsibility does not, in fact, need to be made. To be socially responsible is the ethical thing to do, full stop. You either care about ethics or you don't. To ask for an ethical reason for being ethical – given the insufficiency of self-interested reasons – is to embark on a vicious regress. What does need to be argued for, however, is the relevance of ethical argument in the context of the business arena. Why should we go beyond questions of profitability and survival and get ourselves entangled in the thickets of ethics, when following the path of self-interest is so much easier and clearer?

 

The rules for behaviour within the business arena are not the rules for behaviour outside the business arena: that is a point that we have repeated time and again. However, a point we have also emphasized is that when you enter the business arena you do not leave the world. You are, at one and the same time an ethical being and a player in the business arena; every decision you make has to reckon with that fact. You may not acknowledge the fact, but you are ethically responsible all the same. The rules may be different in the business arena, but they do not grant immunity from ethical challenge as and when it arises.

 

If there is an 'ethical case' to answer, it can therefore only be a case for how much concern, how much of one's time, energy and financial resources are channelled into pursuing socially responsible policies where these outstrip – or at least are not known to coincide with – the demands of self-interest. In plain terms, in every company there is an imperative for ethical debate. The business imperative, to survive and make a profit, has to be balanced with the ethical imperative to behave responsibility and take account of the effects of one's actions and decisions on society at large. How exactly one adjusts that balance is something that each individual, each company has to decide for themself, or itself.

 

There is no need to make invidious judgements or comparisons. A company which idealistically puts its priority on promoting social benefits is no better or worse, in itself, than a company which benefits society by concentrating its energy on creating wealth and providing employment through the pursuit of profitable activities. It suffices that the ethical imperative is acknowledged, that there is genuine ethical debate within the company. In a similar way you can be an ethical person and pursue a life of service to the community, or be an ethical person and devote yourself to self-improvement and self-fulfilment, and pursuing your own personal goals and projects.

 

Defending the term 'CSR'

 

It is a standard move in philosophical debate to challenge the use of a term, to claim that it is incoherent or embodies conflicting beliefs or theories. In recent times, the term 'corporate social responsibility' – first coined in the 1930's by two Harvard professors – has fared particularly badly in this respect. 'We uphold the principles of corporate responsibility; we don't understand what is meant by corporate social responsibility,' is a typical claim one hears from company spokespersons and public relations departments.

 

In reality, with the word 'social' removed, the term 'corporate responsibility' can denote anything you like. All ethics is concerned with responsibility. To assert, as a company or an individual business person that you are 'responsible' conveys no information over and above the statement that you observe the minimum ethical standards required of a player in the business arena. But we have already seen that that is not enough. It is not enough to play by the rules, to keep your promises and not lie or cheat. Of course, every player is responsible for their behaviour in this sense. The question at issue, however, concerns the good or bad consequences of decisions that you make, decisions that in themselves may be fully within the strict 'rules of the game'. To assert that you are responsible for your actions, but not responsible for any of the consequences of your actions is double-talk.

 

What the term 'social' denotes is that the responsibility in question is for the consequences of ones actions, the impact of decisions made, on society at large. In making this bold claim, we are not arguing for the ethical theory of consequentialism, according to which the right action is one which weights up all the consequences of one's actions, selecting the one which leads to the 'greatest happiness for the greatest number', or 'maximization of desire satisfaction' or whatever your favourite flavour of utilitarian ethics. As we saw in unit 4, when we looked at Bernard Williams' critique of utilitarianism, what utilitarians fail to acknowledge is the importance of the individual perspective: to quote Williams' phrase, human beings are not just 'self-sacrificing cogs in the utility machine'. Self-interest, personal integrity, loyalties, principles are all factors to take into account alongside consideration of the consequences of one's actions. The result may indeed be complex and messy, involving difficult decisions and compromise. But that, as we have argued, is the nature of ethics and equally business ethics.

 

Most importantly, from our perspective, the term 'social' denotes our recognition of the artificial, but very real boundary line between the business arena and the wider society in which that arena exists. We ourselves constructed that arena; it exists with our continued support and blessing. Indeed, it is hardly possible to conceive of life without it. The business arena is not an autonomous entity cut off from the rest of the world. Whatever happens within the business arena, so far as it affects those outside, has to be considered from that wider perspective. That is the true meaning of social responsibility within a business context.

 

Importance of praxis

 

It might seem that we have achieved a lot. We have carved out a logical space within which there can be meaningful ethical discussion around the responsibilities of companies and individual business people in relation to society at large, resisting the temptation to adopt extreme positions and putting the case for patience and compromise, a willingness to consider each question on its merit, to always take into account the particular circumstances of the case. To assert, however, that there is no way to avoid the hard work of 'getting down into the nitty-gritty of ethical debate' in itself accomplishes little. It sounds like just another abstract formula. The formula still doesn't give any guidance over what to do when we actually face a real-life ethical decision.

 

In defence of this approach, one could argue that our concern is only to pursue a philosophical investigation into the foundations of business ethics. It is not our job to produce an ethical training manual for company directors and business executives. But that is too easy a let out. A critic could point out that there is no reason to believe, on the basis of what has been said so far, that the kinds of ethical judgement called for are within the capacities of ordinary mortals, that is to say, decisions no doubt requiring a modicum of experience and wisdom, but not the judgement of Solomon. Given that pursuing a policy of social responsibility entails grappling with difficult ethical dilemmas, what has not yet been shown is that these dilemmas do not outstrip the capacities of ordinary people for making rational choices. In forming ethical judgements we are not shooting in the dark. We can take honest, practical decisions on questions of ethics and social responsibility, and, most importantly, gain support from others for those decisions.

 

It is true that, in a sense, we do not need to learn the skills of ethical judgement afresh when we enter the business arena. We brought those skills with us. An ability to make ethical judgements is something we all have, at least those who have been brought up in human society. Maybe, somewhere in the galaxy, there exist alien beings who lack the capacity to understand what ethics is about; maybe there are human beings brought up by bears or wolves who have never learned to be 'human', but these extreme cases apart, we do know what to do when faced with an ethical dilemma. We may not always do it very well, we may feel on occasions in need of guidance from someone wiser and more experienced, but even then we grant ourselves the ability to judge that the advice proffered is sound and worth following. You need a basic understanding of ethics in order to benefit from ethical advice.

 

Training manuals can be useful, in a context where a large number of people need to be inducted into the 'company philosophy'. I would argue that, far more importantly, what every company needs to do is create a forum for ethical debate. Even with all the talk of philosophies and codes of conduct, this is not something that one sees that often. Ethics should be on the agenda, at every level from the boardroom down to the shop floor. A company should be prepared to defend its ethical policy, not just in the boardroom or at AGMs, but in regular question and answer sessions, staff magazines, perhaps even the setting of a friendly debate where motions are argued for and against, and voted on. All these things can contribute to creating an atmosphere that fosters good ethical decision making and a healthy corporate culture.

 

It is a tried and tested wisdom that a company needs to remind itself, again and again, what it stands for. Human memory is a fragile thing. We all-too easily get distracted from the main issue: remembering why we are here. This is the polar opposite of social responsibility as a PR exercise, where nicely worded mission statements, grandiose ethical claims and impressive lists of socially responsible projects are loudly trumpeted to the press and the outside world. All too often, such claims are seen for what they are: a mere fig-leaf.

 

Fighting the system

 

But there is something else we need to consider. This is perhaps the real core of resistance to the idea of social responsibility in the business world. We have been talking as if the only thing that counts are the deliberations of individuals or groups of individuals, who are free to make any decision their conscience dictates. The reality is that an organization or a business is a human creation which, once put in motion, gains a powerful life of its own. All the more is this true of the business arena itself. It may not be true to say that human beings are mere 'slaves to their own creation', but neither are we its lord and master. We exert influence where we can, resigning ourselves to the inevitable consequences when our interventions prove ineffective.

 

The system may be difficult to change. But then again, one wouldn't want it to be too easy. We rely on the massive inertia of the system to keep things running smoothly. If you want to make changes, you have to plan ahead. Just as when steering a super-tanker, you know that it will take a mile or two of water before the ship responds to a touch on the tiller.

 

What exactly is 'the system'? The system is not just companies and what they do. It is as much we ourselves, the consumers, whose loves and hates, passions, enthusiasms and appetites are the ultimate fuel for the market economy. In 'Ethics and Advertising', I concluded,

 

The stark truth is that manufacturers and advertisers are as much controlled by the fickle consumer as in control. Rules can be set down concerning what is factually truthful, decent and fair. It is not the advertiser's job to make people better than they are, or want better things than they want.

 

Geoffrey Klempner 'Ethics and Advertising'

 

Philosophy for Business Issue 9, 13th June 2004

 

https://isfp.co.uk/businesspathways/issue9.html

 

That said, we may not all be aware of the full spectrum of possibilities of a meaningful human existence, but we are not just helpless victims of consumerist brainwashing either. We have the power to bring about change, if only we were prepared to use it.

 

As a moral philosopher, of course one would indeed like to make people 'want better things than they want'. You have to believe that every effort counts for something. If people want cheap trainers, then someone has to manufacture them at a low enough price. If more and more people want to drive their own car, then someone has to drill the oil and refine the petrol. It would be the height of hypocrisy to expect better ethical standards from companies than consumers themselves are willing to exhibit. On the other hand, as noted previously, there is strong evidence of increasing consumer awareness of ethical issues, to the extent that companies are now actively marketing for this preference.

 

That is one aspect of the equation. Another, equally important side is the role of investors. As is well known, a large proportion of the shareholders of the large public companies consist of insurance companies whose primary obligation is to the thousands of individual holders of life insurance policies who are looking to be provided for in their retirement. The ethics of the companies in which they invest come in a poor second. In time, investors will become ethically more aware. In that case, once again, the pressure for change will come from below rather than above.

 

It is true that as individuals, much of the time, we don't have a clear enough view of what is possible. We only know what we want, or the latest thing that happens to prick our consciences. But even when we do get a clear enough view, one faces the perennial problem of politics itself: getting individuals and organizations to co-ordinate their actions, on the assumption that everyone is willing to play their part in the effort.

 

The impossibility of co-ordinating human actions in a scenario where no-one can be 100 per cent certain that the other person will not take advantage of their trust was the basis for Hobbes' argument, in Leviathan, that the problem of politics can only be solved by having a sovereign with absolute power to impose laws and make decisions: a single captain for the ship. Until a captain comes along, business ethics will remain vitally important not only as a guide to the actions of business people and companies, but also because in this age of globalization the political process is no longer just in the hands of politicians. National governments have a duty to show leadership, but so indeed do company boards and CEOs.


 


ethical dilemmas unit 10

 

Prospect for a business ethics

 

IT is over 25 years since Peter Drucker wrote his famous tirade against Business Ethics, describing it as nothing more than politicized casuistry ('What is "Business Ethics"?' Public Interest 63 Spring 1981: 18–36). According to Drucker, there is no such thing as business ethics; there is only ethics, which applies equally to everyone.

 

We have argued, on the contrary, that the roles and responsibilities that one assumes when one enters the business arena create ethical dilemmas that would not have arisen otherwise. Ethics is only ethics. But that does not excuse us from acknowledging the fact of business as a domain which overpowers all our lives, giving rise to questions and demands which no-one can ignore. The aim of business ethics is to find a rational way to reckon with the ethical consequences of that massive fact, just as the aim of political philosophy is to find a rational way to reckon with the fact of the state.

 

Our working assumption has been that the primary aim of philosophy is indeed to understand the world, not to change it. Any perceived necessity for change can arise legitimately only through understanding. It doesn't require understanding to throw a brick through a window. Effective action can only come from a knowledge of underlying causes. In the case of the business world, the fact, as we have discovered, has a logic and the logic dictates the essential structures of power and responsibility, what can be effectively changed and what cannot.

 

The view that we have argued for is that there is not, and can never be a theory of business ethics, in the true sense. There is no generally accepted, articulated body of principles and rules that tell you how to behave in business. Manuals of business ethics are useful as a source of problems and examples, to stimulate thinking about ethical questions. They are not moral recipe books or reliable guides to action in every conceivable circumstance. That is because ethics itself is not a body of knowledge but a process. It resides in people and their capacity for rational judgement, rather than in books or on tablets of stone. Ethical judgement is a skill we all must acquire on pain of not being human.

 

However, there is wide recognition that ethical judgement in business requires something more, for the very reason that the problems and challenges that arise in the business arena are not part of the practical training we received in school or at our mother's knee. That is why we study business ethics.

 

To understand business ethics you have to understand business. One of the most significant obstacles to progress in this field is that not everyone does know what business is about. I suspect that this is what lies behind Drucker's impatience with the general public and with legislators making unreasonable demands based on prejudice or ignorance, or seeking to exercise undue political influence on the decisions that companies make. Having said that, it is also true, in a deeper sense, that business people themselves do not always understand business. They do not fully grasp, from a philosophical perspective, what they are or what they do. A business ethics can be no more, or less, than a philosophy of business.

 

The limits of ethics

 

We set out on this investigation with the question, What is it to be a wise judge in matters of business ethics? We have learned a great deal about what a wise judge is not. But what about the positive things that can be said, that would enable a business person, earnestly seeking knowledge and enlightenment, to acquire wisdom?

 

Any book of business ethics will teach you that it is wrong to lie or steal, that you must keep your promises and your contracts, that you should not betray confidences, that you should act responsibly with other people's money, that you should not take unfair advantage of your position, or act against the interests of your employers or shareholders. Yet we have discovered in studying ethical dilemmas that arise in business that one will inevitably encounter situations where we are forced, in one way or another, to compromise our principles; or where we cannot do 'the right thing'; or where – with the best will in the world – we cannot find a way to decide what is the right thing to do.

 

One of my students remarked that the difficulty in grasping the idea that not all ethical questions are capable of a single unequivocal answer may in fact be culturally determined:

 

For some cultural /physiological reason our minds seem to be set up in such a way that unique and unequivocal answers to problems, dilemmas etc. are required to maintain our mental balance; this is particular obvious in occidental thinking. It seems that oriental people have developed a reasoning that allows one to accept even contradicting lines of thought side by side without having to necessity to resolve the differences straight away.

 

The Chinese philosopher Lao Tzu's classic work Tao Te Ching is perhaps the best – certainly the most quoted – example of the style of thinking which accepts the notion of 'contradicting lines of thought side by side' without attempting to resolve them. The author shows an exquisite sense of how our rough language is far too imperfect a tool for addressing the most profound questions of conduct or the nature of existence.

 

It was indeed Aristotle, one of the founders of Western Philosophy who first formulated the logical law known as the 'law of non-contradiction'. The philosopher Hegel, described in popular histories of philosophy as having 'put into question' the law of non-contradiction, merely refined that law as a tool of reasoning. When you are faced with the apparent dilemma: 'Choose P, or choose not-P,' be aware that more than one possibility may be encompassed by the broad alternatives: 'P, not-P'. That is all that the 'Hegelian dialectic' amounts to. Human knowledge is refined through a succession of 'either-ors'. Each time we make the cut, each time we roughly sort the alternatives into those that seem to fall under the concept 'P' and those that seem to fall under the concept 'not-P', other unthought of possibilities reveal themselves which put into question that very conceptual classification.

 

That may be true of metaphysics, or even science, but that is not what we discover in ethics. There is no answer 'in reality' to a true ethical dilemma, no clever way of thinking it through logically or dialectically until one reaches a satisfactory conclusion, agreeable to all. Ethical dilemmas are without answers, in a profound sense. Suppose that there were someone up there watching over us: an all-knowing God or recording angel; it is idle to speculate on whether or not they know the answer, because even if they did, they would not be able to explain their reasoning to us mere mortals.

 

How, knowing and believing this, can you still go ahead and make an ethical decision? What Promethean audacity does it take to assume responsibility for the benefits or harms accruing to other human beings as a result of one's actions? What it takes, is courage. Not the courage of conviction, where one acts in the smug belief that one is in the right and one's actions cannot be criticized, but rather the courage to face up to the unknown and the unknowable; the courage to be judged and found wanting even though one's conscience appears to be in the clear.

 

The French philosopher Emmanuel Levinas writes somewhere that the starting point for ethics is the realization that our very being in the world is a net deficit so far as the rest of the human race is concerned, a deficit which we have a permanent obligation to make good. The food that you eat, is food unavailable to satisfy another person's hunger. The very space that you occupy, cannot be occupied by another person. In short, we are all called upon to justify our very existence through ethical action. That does not necessarily imply an ethics of total self-sacrifice. Right from the start, we have accepted that self-interest has a rightful claim alongside ethics. There may indeed be no limit to ethical obligation, once you start looking for it; but there is no legitimate demand that one should keep looking forever. Courage is required, not only to be ethical, but also to know when to say, 'enough is enough'.

 

The focus on persons

 

To pose the question, 'What is a wise judge in matters of business ethics?' is to shift the focus from individual acts to persons. Even if we cannot say, for certain, whether or not a particular action is ethically right, there is much that we can say about what makes a person good, or wise, or – to use the jargon increasingly favoured by contemporary ethicists – what is it to 'possess a virtue'.

 

Virtue ethics traces its lineage back to the Ancient Greek philosophers, and in particular Aristotle. Alasdair MacIntyre in his seminal work After Virtue names Nietzsche, diligent student of Aristotle, as one of the foremost philosophers of virtue ethics. Nietzsche, who abominated talk of 'morality', who argued ceaselessly against the idea of a Kantian Categorical Imperative and pithily described the Platonic concept of the Good (in his brilliant short book Twilight of the Idols) as 'the last fumes of evaporating reality' seems a strange choice for an ethical authority. It is not coincidental that Nietzsche's thought is also held to be one the influences on Ayn Rand's 'virtue of selfishness'.

 

In business ethics, those of a more conservative inclination have latched onto the idea of the 'virtues of the business person' as somehow offering a justification and vindication of business activity – as if one were needed. The business ethicist Tibor Machan has offered the suggestion that the primary 'virtue' of the business person is the virtue of prudence (Tibor Machan, 'A Brief on Business Ethics', Philosophy for Business Issue 1, 2 November 2003). In my article 'The Business Arena' I remark:

 

Tibor Machan argues the case that the good which commerce strives to fulfil 'is the virtue of prudence, which requires of us all to take reasonably good care of ourselves in life.' This seems to me a rather narrow and instrumentalist view. The business arena provides the opportunity to practice all the Aristotelian virtues -- including temperance, justice, courage and magnanimity.

 

Geoffrey Klempner 'The Business Arena'

 

Philosophy for Business Issue 5, 7th March 2004

 

https://isfp.co.uk/businesspathways/issue5.html

 

However, I then go on to contrast the Aristotelian virtues with 'ethics in the full sense':

 

Ethics, as I understand it, is based on the I and thou relationship, on unlimited obligation and unconditional love and respect for the other. This tension cannot be resolved by attempting to cobble together a 'business ethics' in the accepted sense of this term. There can be no compromise between unconditional obligation and the limited obligations that hold between players in the business arena.

 

That hasn't stopped philosophers from trying anyway. The only result that can be achieved by adopting this muddle-headed strategy is an ethics which is too demanding for the business arena, and insufficiently demanding outside that arena. While those who have seen clearly that compromise is impossible have either gone the hopeless way of Karl Marx -- or, at the opposite extreme, Ayn Rand.

 

(ibid.)

 

The point here is not to contrast the self-interest of the player in the business arena with the alleged 'altruism' of the non-player. We all have the right to be self-interested, regardless of whether or not we regard ourselves as players in the business arena. In any case, we are all players to some extent, simply by virtue of the fact that by accepting gainful employment or making purchases for our needs we recognize the institution of money, and all that that implies.

 

Nevertheless, it remains the case that ethics is unlimited, while the ethics of the business arena is limited by the boundary line that we ourselves have created in order to make the activity of business possible. You can't do business – any more than you can participate in a sport – unless you are prepared to accept the possibility of victory or defeat, and all that victory or defeat brings. The essence of business is contest: to the winner go the spoils. In the business arena there is no room for saints – only for heroes.

 

Skills and virtues

 

In standard texts on ethics, the category of 'saints and heroes' falls under the heading, supererogatory actions, actions which are not required as a moral duty but which show exceptional moral virtue. As the above remark about saints and heroes implies, there is scope for acting 'above and beyond the call of duty' both outside and inside the business arena. Whether you find yourself on the outside or on the inside, there are opportunities to demonstrate exceptional virtue by your actions. But on an everyday level, how important are virtues in the business arena, really?

 

It is prudent to realize that sometimes you have to do things which you don't like or which you find unpleasant in order, in Tibor Machan's words, to 'take reasonably good care of ourselves in life'. It is prudence which reminds us to visit the dentist for our routine checkup, or which prevents us from splurging on an expensive consumer item while the gas and electricity bills remain unpaid. Entering into business is a way of making a living, because everyone needs money to live. In these terms, the prudent choice when deciding between a well-paid position in business and a badly paid position doing work that you enjoy is to bite the bullet and choose the well-paid job.

 

It would seem to follow from this reasoning, that the best that can be said of the business arena is that it is a necessary evil. Is that true? Or can there be such a thing as a vocation to be a business person?

 

The truth is, that both attitudes are equally possible. You can enter the business arena reluctantly and stoically, or gladly and enthusiastically. There is no common denominator. And for whatever reasons that you find yourself there, you will encounter the same ethical dilemmas. You will be judged – and, if you care, you will judge yourself – on your ethical performance as well as your financial success or contribution to the financial success of your company.

 

This tells us something. Being a good negotiator or communicator, being an effective organizer, being an inspirational team leader, knowing how to win the confidence of a potential customer or how to close a sale are all valuable attributes of a business person. Relatively few persons have them all, but thanks to the division of labour one solid business attribute is enough to enable you find your niche. They are skills and accomplishments to take pride in. But they are not in and by themselves ethical 'virtues'.

 

Curiously, the very same alternative – or dilemma – can be found in those called upon to fight for their country. You can join the armed forces as a conscript or as a volunteer. It is tempting to go so far as to say: in both arenas, business and war, you can be good at what you do and yet lack the attributes of a wise ethical decision maker.

 

On second thoughts, surely not. So long as what you do includes making ethical decisions, you can't do your job well if you fail ethically. It is not as if being a good soldier is just being good with a bayonet or a gun. The primary imperative of the soldier, as one British General bluntly put it, is to offer yourself up to be killed, to put yourself in the line of fire for the sake of what you believe. Courage, stoicism, temperance, obedience, loyalty are essential to good soldiering. Of course, possessing these ethical virtues is not sufficient. You need some skill as well. – The same can be said, mutatis mutandis, about those who choose to join battle the business arena and place themselves in the firing line.

 

The business virtues

 

We have leaned rather heavily on the analogy between conducting business and soldiering. But are there any distinctive business virtues? I said that the skills and accomplishments listed above – negotiating, communicating, organizing, leading, winning confidence, selling – are not 'in and by themselves' ethical virtues. Yet they all have a prominent factor in common: they are all people skills.

 

You can display the virtues of a soldier in isolation from the rest of humanity – as the stories of Japanese soldiers stranded on Pacific islands for years after the end of World War II testify. Isolated from human contact, you can still display a soldier's courage in surviving against the elements. You can keep a diligent watch for the enemy, even if no enemy is in fact there. But you can't be a business person on a desert island, at least, not without a Man Friday.

 

The people skills may not themselves be virtues, but they connect directly to virtues. If you are an effective communicator, you can use that power of communication to tell the truth or spread lying propaganda. You can win a person's deserved confidence, or you can play the confidence trickster to your benefit and their detriment. Even this does not tell the whole story, because it can be argued that the ability to relate effectively to other people, even if it does not logically imply ethics, is greatly facilitated by the capacity for entering into ethical relationship. It is much harder, other things being equal, to set out ruthlessly to use people and succeed in doing so, than it is to set out to treat people ethically. Most of the time, and in most situations, human beings have a finely tuned capacity for detecting when they are being exploited or used.

 

Mark McCormack in his best-selling book What They Don't Teach You At Harvard Business School makes a powerful case that business is about people:

 

Whether it is a matter of closing a deal or asking for a raise, of motivating a salesforce of 5000 or negotiating one-to-one, of buying a new company or turning around an old one, business situations almost always come round to people situations. And it is those executives with a finely tuned people sense, and an awareness of how to apply it, who invariably take the edge.

 

Mark McCormack, What They Don't Teach You At Harvard Business School, p. 11

 

Though McCormack consistently advocates the view that success goes hand in hand with treating others ethically, we have already conceded that the truth is that success does not always go to the ethically virtuous. There are unethical ways to 'gain the edge' as well as ethical ways. The gangsters of the business world continue to prosper. But the point is, we don't have to be like them.

 

The debate between the advocates of 'virtue pays' and 'virtue for its own sake' is beautifully illustrated in the 1996 film Jerry Maguire. Tom Cruise plays the idealistic sports agent fired from his firm for daring to circulate a memo urging his colleagues to be 'more honest' in their dealings with their clients. Thrown out in the cold and reduced to representing one client, a difficult, argumentative American football player under threat of being dropped by his team, Maguire is determined to succeed the ethical way. And he does.

 

McCormack started out as a sports agent in the 60's. His first client was the star golfer Arnold Palmer. McCormack's business grew into the major international sports and entertainment empire IMG as the result, he argues, of practising the principles of honesty and respect towards all those he did business with. The sports men and women he represented knew that he would never act against their best interests for the sake a quick profit. (There has been some speculation as to whether the fictional character of Jerry Maguire was in fact inspired by McCormack himself, although McCormack denies any knowledge of this, and was not consulted at any stage during the making of the film.)

 

Jerry Maguire is heart-warming and also inspiring because we all like to believe that the business person who accepts the challenge of ethical relationship – who sees the people they collaborate with, compete with, sell to as real individuals worthy of respect rather than mere objects to be manipulated – will succeed in the long run. Outside of Hollywood, sadly this does not always happen. Virtue doesn't always pay. Nevertheless, a lot of the time, enough of the time, it does. If you are determined to succeed the ethical way, you have a good shot at success. Surely, that is sufficient motivation.

 

Business ethics for ordinary people

 

Nietzsche would have looked askance at the democratic and egalitarian spirit of modern business. In our defence, we could point out that the egalitarianism is largely based on pragmatic considerations rather than the ideology of 'herd morality'. Meritocracy is a better, more efficient system for generating profits than aristocracy. Indeed, in recent times business people have become increasingly obsessed with performance evaluation. Those who know and those who only think they know are quickly sorted out. The dead wood is thrown overboard. The high performers are rewarded strictly according to results.

 

This is cruel in a different way from Medieval times, when the lowly born lived a life that was indeed, 'nasty, brutish and short'. The serfs who worked the land were slaves to their occupation. But at least they knew they would eat, so long as the corn grew in the fields. Now we have mortgages and wage slavery, and flustered managers struggling to achieve performance targets.

 

Life is cruel. The gifted and talented get struck down with cancer, or mugged in the street. There is no antidote or cure for the brute fact of luck, which decides the success or failure of many a business venture, which governs the distribution of natural talents, and which ambushes us when we least expect it just when everything was going so well – or badly.

 

Ethics is for all. And business ethics – ethics as applied to the business arena – is for all business people. Most of those striving to carve out a career in business will never make it to the top, or anywhere near the top. The chances for great virtue in the Nietzschean or Aristotelian sense are not that frequent. But it is the small virtues that determine the atmosphere of day-to-day business life: treating people decently and with due consideration, being generous with your time and your advice, patience when others less skilled than you make mistakes, a preparedness to tolerate people whose attitudes you dislike but whom you must get on with in order to get the job done.

 

Not because it is efficient, although it may well be; but because it is right. When the lives of human beings are involved, it is against the spirit of business ethics to strive for efficiency at all costs. For all that means is that nothing ultimately has any value for you or your company except making a profit. Economic thinking is always important and indeed indispensable, but it is not the be-all and end-all. Enough profit is enough.

 

The rewards are not just financial. Earlier, I somewhat rashly remarked that the 'prudent' thing to do is choose a well-paid job over an badly-paid job that you enjoy. But that begs the question how important happiness in your work is to your sense of well-being. If gaining enjoyment and a sense of fulfilment from what you do is very important to you, then consulting prudence in the widest sense you will not go for the money.

 

Loyalty is one of the business virtues, but we have a duty to remain loyal to our friends and colleagues, no less than to our company. Many business people make life-time friends through their work. Accept, then, as a necessary consequence of this fact that sometimes your loyalties will be split, and there is no magic solution which will get you out of that fix.

 

We are all decision makers, even if our decisions have relatively minor repercussions compared to decisions made in the Board room. Minor they may be, but in our world and from our perspective they are significant for us. There is no walking away. If it is your bad luck to be faced with a dilemma then accept that you are being put to the test and make your best judgement – or, failing that, your best guess.

 

It is a gift to be able to discern the simple structures underlying the appearance of complexity. I have argued that ethics is complex in reality and not just appearance, yet it is complex in a way which does not put it beyond the comprehension of ordinary people. We don't need ethical authorities to hand down rules or codes of conduct from on high. We have it within ourselves to act and judge things from an ethical point of view, to strive to be good in business.

 

– END –

 


 


About the author

 

Born in London in 1951, Geoffrey Klempner attended University College School 1964-69. During 1970-71 he worked as a photographer's assistant, followed by a brief spell on Fleet Street at Barratt's Photo-Press.

In 1976, he gained a First Class Honours BA in Philosophy from Birkbeck College London. He went on to University College Oxford, where he gained his B.Phil in Philosophy in 1978, followed by a D.Phil in 1982.

He moved to Sheffield in 1985, where he did a period of part-time teaching for the University of Sheffield, Rotherham College and the WEA.

In 1994, his book Naive Metaphysics was published by Avebury. Professor D.W. Hamlyn, Editor of Mind 1972-84, described it as "a work of very considerable originality, not easy perhaps but one of unmistakable importance and standing."

In 1995 he founded Pathways to Philosophy, which has attracted students from over 90 countries, including students taking the BA (Hons) in Philosophy through the University of London International Programme.

In 2003 he launched the electronic journal Philosophy for Business at https://isfp.co.uk/businesspathways/. Material for this book originally appeared as articles by Geoffrey Klempner in that journal.

He has authored numerous blogs including ‘Glass House Philosopher’, ‘Sophist’ and ‘Hedgehog Philosopher’. His most recent article is ‘Philosophy, Ethics and Dialogue’ which appeared in the Journal of Dialogue Studies in 2014.

He is widowed, with three daughters.