Essay on "Ethical Egoism in Business"

Essay 10 pages (3116 words) Sources: 13

[EXCERPT] . . . .

Ethical Egoism in Business

Is ethical egoism the only credible ethical project for individuals and businesses in contemporary times? Answer: Yes.

The rise of anti-globalization movements and the appeal of socialism in Latin American countries show that laissez-faire capitalism has recently come under serious criticism. Some of the criticisms are legitimate since capitalism has not solved such pressing problems as global poverty or the gap between the rich and the poor. To the contrary, the gap in the last several decades has widened, both within developed countries and in the global arena between the rich countries and the poor countries. Moreover, some multi-national business companies have come under heavy criticism because of their inability to treat their employees and workers in the developing countries with the kind of sensitivity expected from them. Because of these recent developments, words like "corporation" or "economic globalization" have become dirty words and terms such as "business ethics" and "business morality" are viewed as oxymoronic in some circles. Under these conditions, the only way to conduct a credible business project for individuals and organizations in contemporary times is ethical egoism.

The purpose of this paper is to argue that ethical egoism is a legitimate and morally justifiable theory and those who do business by following the tenets and principles of ethical egoism are ethical human beings whose behavior is morally justifiable. In order to make this point, this paper discusses the meaning of ethical egoism as a concept, both from philosophical and business standpoints. After that, the paper discusses business ethics and its importance as well as the role of ethical egoism in formulating business ethics. The importance of business ethics as a different kind of ethics, operating within the context of business rather than being subjugated to the morals of philosophy, religion, or law, is also discussed. The last part of the paper synthesizes major points and argues for the validity of ethical egoism.

Any dictionary of egoism refers to it as selfishness, exclusive concern with satisfying one's own desires and wants, and placing one's own interests above everybody else's. Some people, looking at it from a psychological perspective, argue that we are all selfish and that it is natural. So, there is nothing morally objectionable in egoism. Building upon this view, as well as upon the principle of "invisible hand," propagated by Adam Smith, American economist Milton Friedman (1976) has argued that "every individual serves his own private interest . . . . The great Saints of history have served their 'private interest' just as the most money grubbing miser has served his interest. The private interest is whatever it is that drives an individual" (p. 11, emphasis original). For example, while there is enormous difference between St. Francis who advocated distributing one's wealth among the poor and John D. Rockefeller who based his business ethics upon the principle that profit maximization is the ultimate goal, there is a crucial similarity between the two: both pursued their private interests. St. Francis' private interest was to satisfy his religious moral consciousness, while Rockefeller's was to accumulate material wealth and all the benefits emanating from it. Moreover, one may argue that people like St. Francis today virtually do not exist, so in today's world of competition, the need for survival through pursuit of selfish interests is morally justified -- especially in business where the principle upon which St. Francis acted does not work.

The rules and regulations in the world are not defined by the philosophy of business alone, and many in the field of metaphysics -- that is, philosophers -- have described egoism as antithetical to ethics. These philosophers argue that "ethical egoism" is an oxymoron, since it suggests that "each and every man ought to look out for himself alone" (Emmons, 1969, p. 311; Rachels, 1974, p. 297). Ethical egoism is, however, more complex than that and does not necessarily ignore moral dimensions of human behavior (Rand, 1964; Regis, 1979; Regis, 1980; Machan, 1979; Chong, 1992). While it is true that ethical egoism maintains that "basic principles of human conduct must always be related . . . To some benefit for the agent," one's private interests can be pursued with the aid of a moral outlook. The prime virtue of ethical egoism is the Aristotelian understanding of rationality. This view suggests that self-love can motivate a good human being who pursues his or her interests in a rational way, as a moral human being (Machan, 1979, pp. 1 and 4). "A narrowly self-centered egoist" without a sense of moral outlook, as Regis (1979) argues, "would, for example, be prohibited from experiencing the valuable pleasures of love, friendship, fellow feeling, and community." In this sense, an ethical egoist can live "a more fulfilling and enjoyable life by engaging in such sympathetic relationships, they are wholly justified and supported from an egoistic point-of-view" (pp. 51 and 53).

Critics of ethical egoism charge that ethical egoism sanctions self-interested conduct. The charge is a weak one since there is no universal doctrine which does not sanction self-interested conduct, and absolute altruism does not exist. In fact, self-interested conduct is every person's fundamental right, affirming our right to private autonomy and independence. Critics also assert that ethical egoism is logically impossible. For example, critics say, according to ethical egoism, every person wants to be on top (in business, sports, lifestyles), and this is logically impossible since only one person can be on top and that entails denying others the same right one claims for him/herself. But the essence of ethical egoism is not that everyone must be on top; rather every person attempts "to do so" (Regis, 1979, p. 57). If applied in business, this is actually good for the society, and thus ethically justifiable. For example, if we take Yahoo, Hotmail, and Gmail e-mail services, each of them want to be on top of e-mail servicing. In their attempt to do so, they try to be innovative, provide better services to consumers, and behave in a more ethical manner because they care for their public reputation. Though each e-mailing service acts in a self-centered manner, they end up serving the consumers and the society at large more responsibly and ethically. If serving the society better cannot be justified on moral grounds, what can be?

"An important point to consider here," as Chong (1992) argues, "is that the ethical egoist can accept that morality, as ordinarily conceived, is something he cannot do without" (p. 29). Morality, as classically defined by Frankena (1963), is a "social enterprise," and is "an instrument of society as a whole for the guidance of individuals and smaller groups." "Like one's language, state, or church," Frankena further states, "it exists before the individual, who is inducted into it and becomes more or less of a participant in it, and it goes on existing after him" (pp. 5-7). Defined as such, morality is fully compatible with the actions of Yahoo, Hotmail, and Google, who follow the guidance shaped by the society; they have become participants in extending the benefits of a social enterprise, i.e. morality, to a larger society. And an important fact is that these providers of e-mail servicing act based on self-interested and self-centered concerns, but their self-interestedness and self-centeredness lead to an outcome that is morally justifiable since it benefits the society.

Ethical egoism is not the only theory that is criticized as inconsistent and self-contradictory. Many people argue that business as an enterprise is antithetical to ethics. These critics argue "that business is a 'game,' and hence the ordinary constraints of morality do not apply, and that one cannot survive in business if one is too 'ethical'" (Beverslius, 1987, p. 81). In market society, therefore, where rules involve competition (like in boxing or basketball) and profit maximization, ordinary ethical rules are not applicable. But just like any game (boxing, basketball, etc.), business operates within a set of rules and regulations set out by the society. But there is a crucial difference between a sports gaming and business, since the former is a voluntary enterprise, while every person, for the purpose of survival, has to participate in business, and the ethical question becomes more important in shaping the rules and regulations of business. For these reasons, critics of the concept of business ethics who argue that business cannot work if one is too "ethical," propose the following set of arguments:

(1) We all have a right to economic survival, i.e., a right to survive in business.

(2) This right implies that we have no obligation to do anything that is incompatible with surviving in business.

(3) One cannot survive in business if one is ethical, i.e., if one takes everyday senses of honesty, law-abidingness, fair-play, etc. into one's business dealings; one has to "play the game."

(4) Therefore if by "business ethics" we mean taking everyday sense of honesty, law-abidingness, fair-play, etc., into business dealing, we have no obligation to do so, and hence there is "no such thing as business ethics."… READ MORE

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