Next week I start again my Business
Ethics classes at the university, and I’ve used the summer recess to get up to
date in the literature on the subject, surveying the materials other teachers
use to impart the key contents of the discipline in the impressionable heads of
their entrusted students, and boy, am I disappointed! Not necessarily with the
books and articles I’ve read (although many of them were just a collection of
bromides and thinly-veiled magical thinking, more on that in a moment, in fairness
I have to say that in some -sadly rare- cases they achieved through sheer
effort a status of “almost-readability”), but with the discipline of business
ethics itself, which I cannot avoid but seeing as teetering on the brink of
moral bankruptcy (but hasn’t it been in such state since its very inception?).
And the problems of the discipline are highly illustrative of the problems of
the whole system of highest learning (universities and associated
institutions), which in turn are but another manifestation of the malaise that
affects our whole society, trapped by what I have in many other occasions
called a “toxic” dominant reason. To put it in a simplified way that my readers
can easily grasp, the causal chain would flow as follows (causes to the left of
the arrows, consequences to the right):
Dominant reason (desiderative) ->
sick social system -> corrupted forms of transmitting most advanced knowledge
(university) -> incoherent, inequality-perpetuating discipline (Economics
and Business Administration) -> despicable self-serving, injustice-legitimating
subdiscipline (business ethics).
So yep, given the world we live in,
what else could we expect? The poor, sad subject that I happen to teach is but
another exponent of a social system gone awry, as it couldn’t help doing given
the contradictions and false premises on which it is predicated. And, if that
were the case, there is not much to do but either fold and leave the table or
play by the rules and step up the ante. And I’m not a quitter, and I still see
the opportunity to positively influence the lives of the bunch of young persons
I teach each year as an invaluable gift, so of course I’ll keep at it as long
as I can, trying to raise the bar within my limited possibilities, and not
falling in what I see as the deadening complacency of the field (‘cuz, man, is
the field complacent to the bone!)
And such raising the bar requires a
clear-eyed criticism of the things I don’t like in the current books that are
used to teach the poor kids, so that’s what I intend to do in this post. Now a
word of caution is convenient, as I wouldn’t want to convey the impression that
everything that has been written until now is utter crap (which having one book
authored by me in its final pre-printing stage, could be construed as the
crassest & crappiest product-placement ever!). What I will be criticizing
is frequent enough and widely accepted enough, but not all the books containing
“Business Ethics” in their titles commit all the sins, and some of them are
more considered and better thought out, better executed and probably better
intentioned also, than others. I will not be naming names (no need to create
enemies and no use in singling out the most egregious malfeasants…) but I hope
to offer my readership enough criteria to judge by themselves, if they ever
come across such texts, to what extent they partake of the denounced defects.
Defects that we can group under the following headings:
·
Acritical
(many times unacknowledged) acceptance of the current social arrangement
(post-industrial, globalized, short-term oriented capitalism)
·
Exclusive
focus on a slice of human life (salaried employment) that, when taken in
isolation, can only be very problematic from an ethical standpoint
·
Disregard
for the tradition (let’s call it “non-business ethics”) of the preexisting
field it should have arisen from
·
Underlying
assumption (sadly, not borne enough by the facts) that being ethically good
helps the business earn more money
·
Excessive
emphasis on recent articles, normally very shallow and of little originality,
at the price of ignorance of deeper and more difficult primary sources (books)
·
Lack
of commitment to any kind of “substantive” values (so old-fashioned!) other,
that is, than a facile hyper-individualism of the utilitarian stripe (everybody
should be maximally free to do his or her own thing, as long as he doesn’t harm
others… of course not helping and not caring cannot be strictly considered
harms, so all is good if we each pursue our own egoistic interests) shorn of
every commitment to previous traditions or social bonds
Hmmmm… I wonder if I will be able to
cover all of them in a single post, let’s proceed and decide based on how long
each mini-rant turns out to be, as you are about to find that the tone is,
indeed, quite “ranty”.
1.
Acritical
acceptance of current capitalism
Well, a book needs to share some essential
tenets with its readers in order to be of some use to them, shouldn’t it? Let’s
not forget the discipline of Business Ethics was born in the nineteen seventies
in American universities (but not in philosophy, or cultural studies
departments, which were a hotbed of radicalism, apparently) catering to
students of Economics and BA, not marked back then by their enthusiastic
endorsement of alternative lifestyles or countercultural sympathies. Also, in
those seminal days, the world was split between two warring doctrines,
capitalism and communism, and a good fraction of the intelligentsia (more in
Europe than in the USA), many of them leading voices in moral philosophy, was
unashamedly aligned with the latter against the former. So it may have made
sense then to make the moral case for free markets and the private enterprise
as the most efficient way to produce and distribute goods, and by such
production and distribution, to distinctly contribute to the well-being of the
human beings that constitute society. But nowadays, to repeat how wonderful
unfettered capitalism is, to (mostly) ignore or, at most, pay lip service to
the existence of market failures (treating them as an odd and infrequent
exception, and not the almost universal rule they are), to leave aside whole
areas of the economy that may be best served by non-market arrangements, sounds
at best disingenuous, at worst manipulative.
And redundant to the bone, as the
line about “the free play of supply and demand in perfectly competitive markets
guarantees (almost a tautology, as I’ve incessantly repeated in this blog) that
the maximum of individual needs are met with the minimum of inputs, and thus
with maximum efficiency” has been drilled in the minds of the gullible students
a gazillion times when they arrive to their business ethics class, so they are
convinced enough of it. It is not bad (but not something I see done frequently
enough, or ever, really) to remind them that such lofty statement has the
extraordinary merit of being, in addition to a tautology, profoundly false
(counterintuitive as it may sound) and profoundly irrelevant, as there are
almost no perfectly competitive markets to begin with, and trying to make the
actually existing ones more so has historically caused as much harm as good (if
not more).
2.
Unhealthy
focus on productive activities
I know it makes prima facie sense that something called “Business Ethics” busies
itself, mainly (even exclusively) with what businesses do, and thus analyzes
and considers the myriad ethical conundrums that may be experienced in the
course of professional activity. But there is both something defensible and
something fishy about such delineation of interests. First with the defensible:
it is fully justified to single out areas of ethical reflection, as the field
of ethics has become so vast, so sprawling (although, as in so many other
areas, covering a vast area normally comes at the expense of doing it in a very
shallow and superficial way) as to demand more than a normal human’s lifespan
to survey in tis entirety. Such singling out has been successfully done in the
field of life sciences (“bioethics”, which is kind of the ur-precursor of any
applied ethics, requiring the mastery of a lot of knowledge from the object
field: a bioethicist must previously know a lot about of complex biological systems
and medical procedures in order to be able to give an informed opinion about
their ethical implications) and even of religious studies (from moral theology
to dogmatic ethics, although their relationship with secular ethics is at best “problematic”),
so why couldn’t it be done for business? Isn’t business, after all, a separate
area of human activity, with its own and distinct dilemmas and rules to be scrutinized?
Well, not really. And because it is
so integral a part of everybody’s life, traditional ethics has dealt with
business activity intensively: Plato, in his Republic forbade the Philosopher Kings and the Guardians of the
ideal city to own gold or to get involved in commerce. Aristotle railed against
lending money with interest (a professional activity; well, he actually railed
against any professional activity, as
the ideal life was for him that devoted to abstract contemplation and
reflection, bios theoretikos), Kant
used extensively the example of the shopkeeper that charged the right price for
the wrong reason… all of them would have been baffled by the suggestion that
they were trespassing on the realm of a distinct discipline, which was in
charge of defining “how things should be” in the conduct of professional activities.
Which takes us, naturally, into the
fishy part of such separation. Karl Polanyi chronicled in his The Great Transformation (and I have incorporated
much of that chronicle in my own account of how current dominant reason came to
be: Short summary of dissertation: how western dominant reason came to be) how modernity has separated a
distinct realm of thought and activity, called “the market”, from the rest of
social life, providing it with special rules and procedures that, in the end,
benefitted a few and damaged many. The successful societies that out-produced
their competitors (and thus out-gunned them in the battlefield, and imposed
their set of values on them) have elevated precisely the production of material
goods, and its subsequent exchange and eventual enjoyment, to the ultimate goal
of life, never mind such enjoyment necessarily had to be concentrated between
fewer and fewer of them. That means that the lot of the majority of humankind
under our current social arrangement is to produce for a diminishing number of
ultra-rich plutocrats that already own more than could be properly enjoyed in a
hundred of lifetimes. Not a very enticing prospect. And traditional ethics,
that intends to put all of human life under its magnifying glass, could not
fail to notice the abhorrence of such a state of affairs. A state of affairs
legitimized by a dominant reason I have called “toxic”, and that certainly is
incompatible with a life well lived, as the lives both of the plutocrats, of
the toiling masses and of the swelling non-toiling ones are sadly stunted and
robbed of much of their potential by such arrangement.
So, the logical response (without
any supremely evil intelligence having to formulate and implement it) is not to
try to improve the damaging social arrangement (too complicated!) but to do
away with such annoying, Jiminy-cricket-like discipline entirely, and convince
people that just a fraction of it is enough. Not to live well, of course (any
discipline that taught how to live well would be ultra-dangerous to today’s
hypercompetitive capitalism), but at least to produce well. A sad, “short-winged”
(the unforgettable words of the recently departed Javier Muguerza)
justification for a sad, short-winged subset of activities that would have no
place in any reasonable life plan.
3.
Disregard
for non-business ethics
Of course, we may start by asking
ourselves “does it really make sense to define a “Business Ethics” in the first
place, as separate from old, unadulterated, no-qualification-needed, Ethics?” Come
to think about it, businessmen need more than a smattering of mathematics, and
nobody ever came up with the idea of carving a separate “business mathematics”
to teach Econ and BA students how to add, multiply, subtract and divide (which
is typically more than enough for 99.9% of what they actually do in their
professional lives). With the ability to gather and process greater amounts of
data than ever before, statistics (a branch of maths, I know, but bear with me)
has become a very useful tool in the conduct of businesses. But again, nobody
(yet) has come out proclaiming the need to create a separate discipline, “Business
Statistics”, to sort out the specificities of applying the knowledge of the
field to the business world, without minding with all the annoying theoretical
baggage statisticians have developed during centuries. We do teach statistics
to students, to the level we consider may be beneficial and useful for them,
even if that means repeating a lot of what students of mathematics will find in
their first year of statistical training.
But not so in business ethics,
where, with some honorable exceptions, twenty five centuries of ethical discussion
are entirely and conspicuously absent. If they are mentioned at all, they are
dispatched in a few pages, in a highly bastardized form (something along the
lines of “there are three traditions: virtue ethics, utilitarianism and
deontology; all are similarly impractical and unintelligible, and they were
never able to agree on anything, so let’s not lose more time considering them
and go back to discuss how bad Enron was and how lying and cheating will make
you earn less money on the long term”). And I think there are a couple of
reasons for that. The first one is that, under that apparent equanimity, business
ethics is already profoundly identified with only one of the traditions it
purports to evaluate so dispassionately: namely, with utilitarianism, as that
is what permeates all of the theoretical framework of economics, since its
modern inception (from Adam Smith to the Austrian school, including marginalists,
welfarists, Keynesians -starting, of course, with Keynes himself, neokeynesians,
Fisherians, neofisherians, monetarists, supply-siders and whatnot, all avowedly
utilitarian to the bone), so they just can’t see the point in discussing, or
taking seriously anything else.
The other reason, of course, is that
such consideration of what is good for the human being is profoundly
anti-humanistic, and profoundly inimical to human flourishing. But, coming from
the intellectual milieu of economics, they have already been taught that the
world (both the natural and the social) is just a set of finite resources that
admit of different uses (taken almost verbatim of Lionel Robbins’ definition of
the field), and their distinctive know-how is to find rules to determine the “best”
use of those resources, the one that “maximizes satisfaction” (which is but a synonym
for “utility”… see how an economist cannot but be utilitarian through and
through?), or the kind of satisfaction for which consumers express their
preferences. Doesn’t matter if those “resources” are barrels of oil, tons of
iron ore, square meters of land, pieces of machinery (lathes, presses, blast
furnaces), meters of optic fiber, lines of code of computer programs or… hours
of human beings! At its core, the economic outlook sees people’s time as one
interchangeable resource more, which admits of alternative uses all the same,
and which can be entered in an equation with all the previously stated
numerical quantities to define a “best possible outcome” to be maximized. But
let us remember what that old fart, Kant, had to say about lumping together
human mind and other “resources” (page 48-49 of my edition of the Foundations of the Metaphysic of Morals):
In the realm of ends everything has either a price or dignity. Whatever has a price can be replaced by an equivalent, while whatever is above
price has dignity. […] there is something that comprises the precondition
whereby something can have its purpose in itself alone. This does not have a
relative value – a price – but rather an intrinsic value – dignity
Powerful stuff. Which kind of throws
a wrench into the whole of economic thinking, because if there is something
(uses of human minds, with all their ingenuity, but also variance and
unpredictability and quirky behavior) that cannot be measured and compared with
all the other resources, and requires some “spooky stuff” type of consideration
(what’s that “dignity” thing about, anyhow?) all the maximization and
legitimation of our current business practices (from outsourcing to countries with
laxer labor standards to slashing social benefits of employees and pushing
environmental standards to the bare minimum) becomes automatically suspect,
when not outright indefensible.
So yep, in that sense it becomes
fully understandable that business ethics texts don’t busy themselves too much
with old mushy ethical traditions. Nobody likes being told that their whole
world outlook maybe, regardless from how they style to call them themselves,
entirely incompatible with the good life and how a fully human being should live…
4.
Assumption
that being good = earning more money
I have to confess this is the one
that most annoys me. Although, given the previously exposed paucity of their
intellectual underpinning, it is also wholly understandable. If you cannot
ground your appeals to moral behavior in any respectable tradition (that, in
the end, presupposes certain metaphysical commitments that may not be everybody’s
cup of tea), what do you have left? You try to take advantage of the naivete
and lack of life experience of your students, and shove down their throats the
lie that, in the long run, “acting good” is the best course of action for the
bottom line. That being moral is the most astute and savvy business decisions
they can make, as the press, full of shenanigans and malfeasance being
punished, amply attest. Aaaaaaagh! Where to start debunking this?
Let’s start with the flimsy
empirical base. When you see lots of cockroaches in a house, and you smash
them, you don’t conclude that the house is probably clean, because all the
cockroaches you saw in the last couple of hours are dead. You conclude (correctly)
that the house is still full of cockroaches because for every one you have
seen, there are probably thirty (or forty, or one hundred) that you are not
seeing. So the fact of Enron, and Siemens, and McKinsey in South Africa, and
Cambridge Analytica being brought to light and prosecuted doesn’t mean there is
a strong enough incentive for companies in general to behave ethically, it only
means there is a strong incentive for companies not to be caught! Some authors
realize that the amount of bad press of certain corporate actors is a poor
index of the ethical compliance (or lack thereof), so they have attempted to “scientifically”
measure the (purported) correlation between ethical excellence and shareholder
value, conveniently forgetting that the first one is nigh impossible to
accurately measure, and producing an interesting subset of the literature
devoted to “demonstrate” (the conclusion being preordained there are few
surprises in the results achieved) how the most ethical companies see their
stock raise more than their less scrupled competitors, and even suggesting a causal
mechanism for such discrepancy (companies that behave more ethically and spend
more on signaling their virtue are more reliable, more trustworthy, and thus
can reduce their transaction costs with suppliers and exact a higher price for
their products or services from customers)…
As I’m running out of time (have to
run back home to my second son’s birthday!), and there are so many elements of awful
reasoning in this line of thinking, I will leave the completion of its
debunking for a following post, along with the remaining two areas of
discrepancy