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Is it True That Ethics Cannot Exist in the Capitalism and Free Market Trade Social Order?
Started by Petar Ilievski(Marketing&PR Manager of Unreal Estates Ltd. and BICA Ltd.)
Place of discussion LinkedIn Internationalization and Localization, Ethics Forums
Members of the Discussion:
1.Petar Ilievski(Marketing&PR Manager of Unreal Estates Ltd. and BICA Ltd.)
2.Kevin Harville(Founder at Total Success Teams (launching 2009)
3.Chris Bernal(Team Leader at Stillen)
4.Bill Nigh(Information Technology and Services Professional)
5.Steve Stokes(Your Friendly Neighborhood Inventor LIq&a)
6.Rey San Pascual(Global Demand Manager at Abbott Diabetes Care)
7.Kendi Kim(Professional Mom)
8.John Brooks(Business and Technical Solution Manager)
9.Ramesh Manghirmalani(L'Entrepreneur En Residence at Foundation)
10.Josh Chernin(General Manager, Itinerant Writer, and Decent Little League Coach)
11.Earon Davis(Writer, Integrative Bodyworker, Media Advisor, Environmental Policy Analyst and former lawyer)
12.Pieter Dorsman(Business strategist)
13.James Crisp(MILCON Liaison)
14.Jeff Mowatt(Owner, People-Centered Economic Development UK)
15.Ray Miller(Energy expert, educator, award winning sculptor)
16.Colleen Norris(Owner Loving Connections LLC)
17.David Dingley(Consultant on IT for business, sceptical enthusiast for the benefits of technology)
18.James Hayes MBA(Story Teller and Writer...)
19.Susan Shwartz PhD(AVP, Oppenheimer & Co. Inc., financial marketing writer)
Question:
Is it True That Ethics Cannot Exist in the Capitalism and Free Market Trade Social Order?
A brief quotation:
...................................................................................
In the world we live in,producers cannot afford to be moral and ethical.The market does not allow that.If a shoe seller tells you:"my shoes are good,but the ones in the next shop are better!" he/she is doomed to go bankrupt.So he/she cannot afford to be moral,honest or ethical!
It`s insane to think that a company management would think:"yes,we can go in this country,bu t we shouldn`t because we would put small companies out of business!"
Ethics is a thing of the past.Profit is the only incentive that people have!
..............................................................................................
Clarification added 6 days ago:
Just an add-on:
I`m not proposing or stating.I`m simply quoting.
But let`s insert an opinion of mine:If lack of ethics cannot bring success,well,how come food is becoming more and more unfit to eat,due to artificial additives.We cannot deny that!
So,I guess things are black and white.A moral point of view would state,that food should be produced in a way to benefit human health.Does it?
Kevin Harville:
I hate to see people in other countries or our own put out of business, but what happens when in doing so you triple crop production? Many of the workers are better off. This of course must be evaluated on a case-by-case basis and comes with its own closetful of ethical questions.
We all want better lives. I grow potatoes, you grow tomatoes, Bob grows onions, and Tom grows carrots. We trade them at the market. Now we each have stew.
We need to be good and fair negotiators, telling the truth, but not shooting ourselves in the foot either. Steve pointed out that we can honestly sell our lesser quality shoes. And if we really aren't good shoemakers? Then we should work under the tutelage of the other company and seek to buy it some day. OR we should be in a different profession. But we MUST provide value some way if we wish to exchange value.
But when these people in the example above traded their vegetables, all were more significantly better off, because the overhead of growing so many vegetables shrinks. The people only have time to sow one crop, but reap the benefits of 4.
If my potatoes are rotten, people WILL stop trading with me. So ethics ends up eventually enforced. Or if some are not so good I trade 3 potatoes for each carrot.
Capitalism in its truest form is simply a bunch of people providing value and trading it for value, such that the sum is much much greater than the parts.
The flaw, the unethical part, is when parties try to hide truth or to force terms on others. A lot of capitalism is debatable in that the workers really have no choice and the competition is ruthlessless crushed or the products or secretly flawed. This is why monopolies or unregulated capitalism are bad. The parties no longer negotiate on equal terms.
You cannot afford to NOT be at least reasonably moral, for once it is known that you force terms on people or hide the truth, nobody does business with you unless they have to. And eventually they rebel.
Look around you at the hundreds of products and services. 99% were made because people agreed to trade carrots fairly for potatoes.
Commerce should not be an obstacle to making the world better. Commerce often is, and should be, HOW we make the world better. For it is all Joe exchanging the value he provides with Bob and Tom and Fred, such that everyone is better off. And money is simply the abstraction of this value.
If you want a lot of money, provide a lot of value to a lot of people.
Further, there are a lot of ethical principles:
The Golden Rule
The principle of Oneness: what you do to others you essentially do to another part of creation, of which you too are just a part
Self-definition--in your actions you create who you are, do you really want to be a cheater, never able to trust or be trusted?
Creation of Reality: Are you creating a reality you want to live in?
Societal Protection: The whole, society, is justified in protecting itself from the parts, individuals, who work against the greater good for selfish interests--if nothing else by using the same law of self interest that individual held. The rogue individual or business will rightly be crushed.
Anxiety: Who wants to live in constant fear of being found out?
There are questionable exceptions, like the near-monopoly Microsoft. This issue, and life, is complicated. Nevertheless, the key is they provide value.
The Golden Rule evolves in all societies. The alternative is social anarchy. Simply choose the reality you wish to live in, and make it happen, but remember, if you advocate any choice for yourself, you cannot be upset when other people choose the same, or when others or when society goes on the counterattack. Don't be Enron.
Links:
* http://www.thecorporation.com
Clarification added 6 days ago:
How come food is more unfit to eat? How come our lifespans have doubled! There are problems and we must be vigilant, but a doubling of the lifespan pretty much explains it all. We take 2 steps forward, and one back. The additives are perhaps a misguided attempt at providing value. Currently organic food is big business as the market adjusts and the perception of value corrects itself--in the minds of both consumer and producer. We are very very flawed and learn continually, but that does not equal being unethical. It is unethical when you realize the food is bad and continue producing it--or still buying it and feeding it to your family. But it is a continual weighing of pros and cons.
Clarification added 5 days ago:
Petar, I am actually a big critic of capitalism in many cases, because the things you notice do exist. There are definitely abuses. Those abuses come when people remove capitalism from the realm of ethical responsibility. Even when generally ethical, we all make mistakes, including in capitalism, as a matter of balancing our needs with the good of others and society. There is a movement, and a book Redefining the Corporation, that seeks to put ethics back into the very definition of corporation. Currently the definition is basically to profit at any cost. Redefining the Corporation considers the needs of society and all stakeholders--employees, owners, managers, communities. Company success is redefined as being a valuable member of the community, not just a profit-seeking entity. But currently there is value conflict in the very definition of corporation. Still, the more we serve, fairly, the more profit we can make--take care!
Chris Bernal:
That quote is so off the mark that it's difficult to address it in a few sentences. Success in the capitalistic system, in its purest form, it the epitome of ethics. In order for me to succeed financially, I must add value and/or serve others at least as good, if not better, than others. This does not include lying, cheating or stealing. Ethics has always been and will always be the common denominator in a free trade system. Go around the system and it will eventually catch up to you (OK, more often than not, anyway!).
Another quote to consider (via John C. Maxwell): "There is no such thing as business ethics."
Bill Nigh:
What you are not including in your analysis is the social and economic impact that unethical and immoral practices have on the reputation of a company. Once this is made known, the company suffers loss of consumer respect and confidence. The consumer applies the sanction. Granted, this is not always true, but consumers do include 'soft' factors in their purchases; at least enough do this.
The matter of going into a country and putting small companies out of business is a fact of life, but small business can be more nimble and can adjust; again, not perfect, but not a black and white situation as you propose.
Steve Stokes:
Petar,
Not doing to another that which you would not want done to yourself (morality), does not contradict with the free market.
Take your example: All one has to do, is offer their shoes at a price that reflects their quality. Then one can honestly say, "yes there are better shoes in the market, but you will pay more for them: the choice is yours Mr. Customer". Your hypothesis does not take into account all the attributes of a product, it only considers quality. In addition to quality there is price and utility and style, etc.
The free market is the only moral system. The opposite of the free market would have to be some kind of slave market, which ultimately depends on you getting to make others do that which you would not do yourself.
If you have a thing and I have a thing and we want to trade each other for these two things then we ought to be able to (free market), instead of the government confiscating our things and then distributing them to the person that can make the case that they need our things (slave market).
Taking from each according to his abilities, and giving to each according to his needs is at its core immoral. You don't like your stuff taken from you, so you really ought not be trying to take the other guys stuff from him.
Steve
Rey San Pascual:
Actually, capitalism and free market ideas have the underlying assumption that its participants are ethical which provides context for the free flow of goods and trade. If that assumption did not exists, then trading would slow to a crawl because of distrust. Would you seek to trade with unethical people? Of course not, and as other people are reasonable as yourself, the idea than a lack of ethics is the backbone of capitalism will cause them to not participate. What regulations exists in a free market economy is the acknowledgement that not all people are ethical, but that is simply being reasonable.
Even if profit is the only incentive, then once again, the reasonable person would soon realize that long-term overall profits is possible only if coupled with ethics.
Kendi Kim:
This is a "loaded" and completely 'tarded question.
Business Ethics Rule #1: A businessperson should never go in business with a product or service that they don't believe in. If you are in a position, where you are telling others that you don't have the best product or service, then change your product or service so that you CAN say it. Your way of thinking, of trying to KEEP the bad product/service and changing what you SAY about it -- THAT is the unethical part. You need to reword the question -- and by that, I mean, you need to change your thinking approach.
Secondly, "best" is a general word. Let's use your example of shoes.
Some people may say a good shoe is a "fashionable" or "trendy" shoe -- something that looks pretty or chic or modern. Some people may say that a good shoe is a "functionable" shoe -- a shoe that resists acid, oil or has good traction for example. Still yet others would say that a good shoe is a shoe that is comfortable -- you could walk in it all day, stand all hours and feel as though you were walking on air.
Not all shoes can combine all three characteristics, though some may. So the "best" shoe is entirely dependant on the consumer and what their interests are. There is no such thing as a single 'best', because many things are based on the tastes and preferences of people, and there is no such thing as a SUPERIOR or BEST opinion or preference....
So, a shoe store COULD say that we have the best looking shoes, but if the customer were looking for the most comfortable shoes, you might suggest the shoe store next door -- and it wouldn't be UNETHICAL at all.
If you want to tell people that you are wearing clean underwear, then you should wear clean underwear FIRST then tell people about it. If you are wearing dirty underwear, but would like to TELL people that you are wearing CLEAN underwear, instead of saying, "I cannot be moral, honest or ethical by lying about wearing clean underwear!", just put on some clean ones, or don't wear any at all, or don't talk about it!
If you're not wearing clean underwear, and must deny it to "compete", then don't complain about the system -- the problem isn't the system, it's your underwear.
I said the same thing in 3 different ways just now, didn't I? doh!
Business Ethics Rule #2: There can be more than one winner. Business is about win-win, not win-lose. You're not trying to "put one on" the customer. You're not trying to monopolize the market and rule the world. What you're trying to do, is to supply a solution to a demand or need.
In response to your proposal, the problem isn't in capitalism and free-market. The problem is in the way of thinking. Knowing you are providing goods/services that may be harmful is unethical to begin with, and it would serve that company well to go bankrupt.
Now if you're offering a quality product/service and the people don't want it, then that is the way it is. V8 is certainly "good" for you, but not everyone likes the taste of it.
The original quote is a ridiculous one at best. It sounds like this person is complaining about telling the truth, rather than changing the truth itself so that it's something they can live with.
John Brooks:
The free market and morals and not mutually exclusive by deinfition. Any free agent in the free market makes a choice whether to behave ethically or not. There is no reason why a second rate shoe-seller couldn't succeed with a very honest approach of seeling his shoe cheaper (at their true value).
The problem is when you start talking about corporations (other than sole proprietor). Corporations exist for the sole purpose of making profit. ANY "ethical actions" need to be justified against the bottom line. No one in a corporation has the right to place ethics before profit unless all (100%) shareholders agree that they want to move in that direction.
"Corporate ethics" is an oxymoron.
Ramesh Manghirmalani:
The name reminds us of a period when the great gurus of the Western world thought they could set the rules of the global economy, right down to the exchange rates between major currencies. Now, as many of the same nations prepare for a sequel to the conference in 1944, it’s worth asking what the goals should be.
Even before the financial crisis, there were issues waiting to be resolved. The International Monetary Fund and the World Bank, institutions set up as a result of Bretton Woods, had lost their way in recent years and were already involved in lengthy, yet not notably productive, internal reviews. There were huge imbalances in trade and investment, mostly between the United States and the rest of the world. Exchange rate policies had become extremely controversial, nowhere moreso than in the up-and-coming economies of Asia.
Things have changed a lot since 1944. Back then, the word “derivative” was mostly heard in high school calculus classes. Now, even the well-publicized problems above may end up on the back burner as governments drive for international regulation of derivative securities and the entities that rate and trade them. Also, in an era where floating exchange rates have become an economic seal of approval, it’s hard to imagine a return to a Bretton-Woods-style system. Yet even after 64 years, no government of a major economy is pushing to impose severe reform on the International Monetary Fund and the World Bank.
If these factors limit the summit’s level of ambition, the possibilities for action will be further curtailed by the fact that the United States will be represented by a lame duck president. But that doesn’t diminish the importance of the issues on the table. In this setting, what should the governments focus on first?
ramesh.manghirmalani@gmail.com
Clarification added 6 days ago:
The world's richest countries have exhibited enormous myopia throughout this crisis - originally scurrying for ad hoc individual "solutions" that worsened the collective mess. Less than two weeks ago, Washington and Brussels allowed Iceland to go bust.As the world's financial powers struggle to contain the disaster, they should not lose sight of its effect on other countries. Every economy for itself makes no sense - and could prove highly dangerous - in today's interconnected world.
Josh Chernin:
Golly, I hope not. Please understand that the vast majority of those of us who work in a capitalistic society (and enjoy it) are, I believe, highly ethical.
Earon Davis:
First, I don't believe that there is just one "right" way to live. Ethics are a complex process and people often have very different perspectives, leading them to have different takes on what is "ethical" and what is not. Ethics would not seem to have much to do with one's economic system. I believe that a communist system, for example, is not inherently more ethical than a capitalist system.
So, the real question is not an absolute as to whether ethical behavior is greater in one system rather than another, but whether there exists a culture that places value in compassionate and sustainable behavior - and whether individuals have the information they need to make intelligent, sustainable decisions. Before the 1980's, in the US, our culture was very different than it has become. Before the "Reagan Revolution" we knew that there was a need to regulate the economy and that government had an important role in creating an ethical culture. However, there were of course excesses in regulation and these were manipulated into an anti-government pro-business religion that seemed to run amok, resulting in CEO salaries growing astronomically compared to the average worker. Balance was lost and there was a feeding frenzy of ill-considered credit and investment practices. Greed trumped ethics and corporate america felt relieved of all loyalty to its employees, consumers and the US.
We're now having an economic correction, which is terribly destructive and unnecessary, but which provides an opportunity to return to the basic sense of ethics, decency and compassion that became mere slogans for the past couple of decades. This isn't about "good" or "bad" or about religion. It is about moving away from ideologies and religious dogmas and returning to simple kindness and decency, in a diverse world.
Pieter Dorsman:
Dear Petar,
The key here is the private ownership of capital goods and competition governing price and distribution. The question would then be: is it possible to survive by not lying and cheating in a free economy with severe competition.
If you are incompetent: no. In any other circumstance: yes. Apart from that, the people motivated by greed often show an amazing level of creativity when it comes to redefining their ethics. Principles are, in general, as expensive as pride.
James Crisp:
Petar,
Ethical behavior, as indicated by Mr. Pascual, is absolutely fundamental to the operation of the free market system. Another fundamental assumption is that the capitalists are operating under a government that does not overtly or inadvertantly provide incentive for illegal and unethical behavior. If governments are not performing their role in society, then the otherwise legal and ethical businesses may indeed operate at a competitive disadvantage. ~this is how crises and black markets are born.
Using the context of your example: The shoe seller has an obligation to sell HIS shoes, not his competitors. As such, he must provide information regarding his products...and do so in a way that demonstrates a material and monetary advantage to the customer....such that the customer will purchase his product NOT his competitors. The Austrian Economists (i.e. von Mises) provide useful insight in this field.
Your mention of food additives involves a complicated answer. Additives do not necessarily make food unfit. If the additive is urea, melamime, or cardboard (as in some recent cases in China) then we are dealing with cases of fraud (illegal and unethical). Those involved attempts to falsefy volume or protein levels in bread and dairy products. However, if we are talking about simple additives like vitamins, coloring and preservatives... these add value. They make the food more fit for longer periods of time. Food additives, as with many specialized products, have to be measured by their value added.
Finally, if "profit" is the "only" incentive, then Productive Farmers, Manufacturers and Businessmen would seem to be on the same ethical, moral and legal level as Bank Robbers. I'm sure that you would also think this to be absurd.
Jeff Mowatt:
It can, but all to often needs to be enforced by law or more recently contrived in terms of CSR showcasing.
John Spedan Lewis, founder of the employee owned John Lewis Partnership, a highly successful retailer, spoke of capitalism having done enormous good and yet that it was "all wrong to have millionaires while there were still slums" for example.
In 1996 my (now) colleague pitched a paper for a more inclusive capitalism for the information age at President Clinton's re-election committee, a critique of free market economics and proposal for an alternative to replace the combination of trickle down development and nonprofit adjustment in a people-centered community enterprise model.
We have been working together since 2004 when this model was first applied in the UK. More recently similar concepts have arrived in the concept of the Community Interest Company (UK), B Corporations (USA) and Creative Capitalism (Gates).
So, to follow on to the question clarification. Yes, not only should food production be for the benefit of human health, but all business is first and foremost about people as stakeholders.
In our founding principles we suggest that:
"Economics, and indeed human civilization, can only be measured and calibrated in terms of human beings. Everything in economics has to be adjusted for people, first, and abandoning the illusory numerical analyses that inevitably put numbers ahead of people, capitalism ahead of democracy, and degradation ahead of compassion."
Links:
* http://www.johnlewispartnership.co.uk/Display.aspx?MasterId=d749663......
* http://www.p-ced.com/about/history/
* http://www.p-ced.com/projects/ukraine/national/
Ray Miller:
I can say that in my experience ethics is key to longevity. Lack of ethics or integrity will be exposed, sooner or later.
Colleen Norris:
Petar,
Interesting quote. I believe just the opposite is true we cannot afford to have a business without morals and ethics. If I am not producing the best product, perhaps it is time for me to be out of business. It is in the pursuit of excellence and becoming that best that true success is measured not in how much money lines the pockets. As the song says..."money can't by you love". I get to look every day in that mirror and I prefer to love what I see! In business it is the survial of the "fittest". Those that continue to grow and improve. Right now we are in a gleaning period and it is only those that are willing to give their best that will survive.
With my whole heart,
Colleen
David Dingley:
The universe is self-balancing. If you lie/cheat/distort you may gain in the short term, but in the long term it WILL catch up on you because the "market" (that might be real buying and selling or merely the market of personal interactions) will judge that dealing with you is not a good idea.
Ethical behaviours happen not just because people believe them to be right, but because they also know there is a pretty good chance of being caught out if you don't behave that way - and that when you are it will be to your disadvantage.
This is true in ANY system of interaction between people. Any claim implicit in your question that the attempts at non-capitalist systems have been models of ethical behaviour is laughable. (As it happens they have failed in lots of other ways as well and more spectacularly than capitalism.)
You seek a black and white answer that does not exist with your example of "food additives". Without ANY food additives it would be hard to feed as many people as we do as well as we do. Does that mean that all food additives are beneficial to all people in all circumstances - no, of course not. Some food additives are there with good intent, but may also produce a negative result despite that, some are simply there to cheat (recent unfortunate incidents with baby milk in China. Not a criticism of China, but a comment on the unscrupulous and callous individuals involved.)
Like many things, food additives are a balance of benefits and disadvantages about which there will be varying opinions. Pretty much how life works!
James Hayes MBA :
Peter stop, think about what you are asking...
james
books@jameshayes.ie
Links:
* http://www.jameshayes.ie
Susan Shwartz PhD:
Is this one of those questions where, if you answer "wrong," you're condemned as having no Social Conscience?
If it is, it's pretty poorly loaded.
Ethics are worth having. I work with ethical people in a capitalist enterprise. They've got my back. I've got theirs. That may change. Those are the rules of the game.
What would you LIKE me to say?
Place of discussion LinkedIn Internationalization and Localization, Ethics Forums
Members of the Discussion:
1.Petar Ilievski(Marketing&PR Manager of Unreal Estates Ltd. and BICA Ltd.)
2.Kevin Harville(Founder at Total Success Teams (launching 2009)
3.Chris Bernal(Team Leader at Stillen)
4.Bill Nigh(Information Technology and Services Professional)
5.Steve Stokes(Your Friendly Neighborhood Inventor LIq&a)
6.Rey San Pascual(Global Demand Manager at Abbott Diabetes Care)
7.Kendi Kim(Professional Mom)
8.John Brooks(Business and Technical Solution Manager)
9.Ramesh Manghirmalani(L'Entrepreneur En Residence at Foundation)
10.Josh Chernin(General Manager, Itinerant Writer, and Decent Little League Coach)
11.Earon Davis(Writer, Integrative Bodyworker, Media Advisor, Environmental Policy Analyst and former lawyer)
12.Pieter Dorsman(Business strategist)
13.James Crisp(MILCON Liaison)
14.Jeff Mowatt(Owner, People-Centered Economic Development UK)
15.Ray Miller(Energy expert, educator, award winning sculptor)
16.Colleen Norris(Owner Loving Connections LLC)
17.David Dingley(Consultant on IT for business, sceptical enthusiast for the benefits of technology)
18.James Hayes MBA(Story Teller and Writer...)
19.Susan Shwartz PhD(AVP, Oppenheimer & Co. Inc., financial marketing writer)
Question:
Is it True That Ethics Cannot Exist in the Capitalism and Free Market Trade Social Order?
A brief quotation:
...................................................................................
In the world we live in,producers cannot afford to be moral and ethical.The market does not allow that.If a shoe seller tells you:"my shoes are good,but the ones in the next shop are better!" he/she is doomed to go bankrupt.So he/she cannot afford to be moral,honest or ethical!
It`s insane to think that a company management would think:"yes,we can go in this country,bu t we shouldn`t because we would put small companies out of business!"
Ethics is a thing of the past.Profit is the only incentive that people have!
..............................................................................................
Clarification added 6 days ago:
Just an add-on:
I`m not proposing or stating.I`m simply quoting.
But let`s insert an opinion of mine:If lack of ethics cannot bring success,well,how come food is becoming more and more unfit to eat,due to artificial additives.We cannot deny that!
So,I guess things are black and white.A moral point of view would state,that food should be produced in a way to benefit human health.Does it?
Kevin Harville:
I hate to see people in other countries or our own put out of business, but what happens when in doing so you triple crop production? Many of the workers are better off. This of course must be evaluated on a case-by-case basis and comes with its own closetful of ethical questions.
We all want better lives. I grow potatoes, you grow tomatoes, Bob grows onions, and Tom grows carrots. We trade them at the market. Now we each have stew.
We need to be good and fair negotiators, telling the truth, but not shooting ourselves in the foot either. Steve pointed out that we can honestly sell our lesser quality shoes. And if we really aren't good shoemakers? Then we should work under the tutelage of the other company and seek to buy it some day. OR we should be in a different profession. But we MUST provide value some way if we wish to exchange value.
But when these people in the example above traded their vegetables, all were more significantly better off, because the overhead of growing so many vegetables shrinks. The people only have time to sow one crop, but reap the benefits of 4.
If my potatoes are rotten, people WILL stop trading with me. So ethics ends up eventually enforced. Or if some are not so good I trade 3 potatoes for each carrot.
Capitalism in its truest form is simply a bunch of people providing value and trading it for value, such that the sum is much much greater than the parts.
The flaw, the unethical part, is when parties try to hide truth or to force terms on others. A lot of capitalism is debatable in that the workers really have no choice and the competition is ruthlessless crushed or the products or secretly flawed. This is why monopolies or unregulated capitalism are bad. The parties no longer negotiate on equal terms.
You cannot afford to NOT be at least reasonably moral, for once it is known that you force terms on people or hide the truth, nobody does business with you unless they have to. And eventually they rebel.
Look around you at the hundreds of products and services. 99% were made because people agreed to trade carrots fairly for potatoes.
Commerce should not be an obstacle to making the world better. Commerce often is, and should be, HOW we make the world better. For it is all Joe exchanging the value he provides with Bob and Tom and Fred, such that everyone is better off. And money is simply the abstraction of this value.
If you want a lot of money, provide a lot of value to a lot of people.
Further, there are a lot of ethical principles:
The Golden Rule
The principle of Oneness: what you do to others you essentially do to another part of creation, of which you too are just a part
Self-definition--in your actions you create who you are, do you really want to be a cheater, never able to trust or be trusted?
Creation of Reality: Are you creating a reality you want to live in?
Societal Protection: The whole, society, is justified in protecting itself from the parts, individuals, who work against the greater good for selfish interests--if nothing else by using the same law of self interest that individual held. The rogue individual or business will rightly be crushed.
Anxiety: Who wants to live in constant fear of being found out?
There are questionable exceptions, like the near-monopoly Microsoft. This issue, and life, is complicated. Nevertheless, the key is they provide value.
The Golden Rule evolves in all societies. The alternative is social anarchy. Simply choose the reality you wish to live in, and make it happen, but remember, if you advocate any choice for yourself, you cannot be upset when other people choose the same, or when others or when society goes on the counterattack. Don't be Enron.
Links:
* http://www.thecorporation.com
Clarification added 6 days ago:
How come food is more unfit to eat? How come our lifespans have doubled! There are problems and we must be vigilant, but a doubling of the lifespan pretty much explains it all. We take 2 steps forward, and one back. The additives are perhaps a misguided attempt at providing value. Currently organic food is big business as the market adjusts and the perception of value corrects itself--in the minds of both consumer and producer. We are very very flawed and learn continually, but that does not equal being unethical. It is unethical when you realize the food is bad and continue producing it--or still buying it and feeding it to your family. But it is a continual weighing of pros and cons.
Clarification added 5 days ago:
Petar, I am actually a big critic of capitalism in many cases, because the things you notice do exist. There are definitely abuses. Those abuses come when people remove capitalism from the realm of ethical responsibility. Even when generally ethical, we all make mistakes, including in capitalism, as a matter of balancing our needs with the good of others and society. There is a movement, and a book Redefining the Corporation, that seeks to put ethics back into the very definition of corporation. Currently the definition is basically to profit at any cost. Redefining the Corporation considers the needs of society and all stakeholders--employees, owners, managers, communities. Company success is redefined as being a valuable member of the community, not just a profit-seeking entity. But currently there is value conflict in the very definition of corporation. Still, the more we serve, fairly, the more profit we can make--take care!
Chris Bernal:
That quote is so off the mark that it's difficult to address it in a few sentences. Success in the capitalistic system, in its purest form, it the epitome of ethics. In order for me to succeed financially, I must add value and/or serve others at least as good, if not better, than others. This does not include lying, cheating or stealing. Ethics has always been and will always be the common denominator in a free trade system. Go around the system and it will eventually catch up to you (OK, more often than not, anyway!).
Another quote to consider (via John C. Maxwell): "There is no such thing as business ethics."
Bill Nigh:
What you are not including in your analysis is the social and economic impact that unethical and immoral practices have on the reputation of a company. Once this is made known, the company suffers loss of consumer respect and confidence. The consumer applies the sanction. Granted, this is not always true, but consumers do include 'soft' factors in their purchases; at least enough do this.
The matter of going into a country and putting small companies out of business is a fact of life, but small business can be more nimble and can adjust; again, not perfect, but not a black and white situation as you propose.
Steve Stokes:
Petar,
Not doing to another that which you would not want done to yourself (morality), does not contradict with the free market.
Take your example: All one has to do, is offer their shoes at a price that reflects their quality. Then one can honestly say, "yes there are better shoes in the market, but you will pay more for them: the choice is yours Mr. Customer". Your hypothesis does not take into account all the attributes of a product, it only considers quality. In addition to quality there is price and utility and style, etc.
The free market is the only moral system. The opposite of the free market would have to be some kind of slave market, which ultimately depends on you getting to make others do that which you would not do yourself.
If you have a thing and I have a thing and we want to trade each other for these two things then we ought to be able to (free market), instead of the government confiscating our things and then distributing them to the person that can make the case that they need our things (slave market).
Taking from each according to his abilities, and giving to each according to his needs is at its core immoral. You don't like your stuff taken from you, so you really ought not be trying to take the other guys stuff from him.
Steve
Rey San Pascual:
Actually, capitalism and free market ideas have the underlying assumption that its participants are ethical which provides context for the free flow of goods and trade. If that assumption did not exists, then trading would slow to a crawl because of distrust. Would you seek to trade with unethical people? Of course not, and as other people are reasonable as yourself, the idea than a lack of ethics is the backbone of capitalism will cause them to not participate. What regulations exists in a free market economy is the acknowledgement that not all people are ethical, but that is simply being reasonable.
Even if profit is the only incentive, then once again, the reasonable person would soon realize that long-term overall profits is possible only if coupled with ethics.
Kendi Kim:
This is a "loaded" and completely 'tarded question.
Business Ethics Rule #1: A businessperson should never go in business with a product or service that they don't believe in. If you are in a position, where you are telling others that you don't have the best product or service, then change your product or service so that you CAN say it. Your way of thinking, of trying to KEEP the bad product/service and changing what you SAY about it -- THAT is the unethical part. You need to reword the question -- and by that, I mean, you need to change your thinking approach.
Secondly, "best" is a general word. Let's use your example of shoes.
Some people may say a good shoe is a "fashionable" or "trendy" shoe -- something that looks pretty or chic or modern. Some people may say that a good shoe is a "functionable" shoe -- a shoe that resists acid, oil or has good traction for example. Still yet others would say that a good shoe is a shoe that is comfortable -- you could walk in it all day, stand all hours and feel as though you were walking on air.
Not all shoes can combine all three characteristics, though some may. So the "best" shoe is entirely dependant on the consumer and what their interests are. There is no such thing as a single 'best', because many things are based on the tastes and preferences of people, and there is no such thing as a SUPERIOR or BEST opinion or preference....
So, a shoe store COULD say that we have the best looking shoes, but if the customer were looking for the most comfortable shoes, you might suggest the shoe store next door -- and it wouldn't be UNETHICAL at all.
If you want to tell people that you are wearing clean underwear, then you should wear clean underwear FIRST then tell people about it. If you are wearing dirty underwear, but would like to TELL people that you are wearing CLEAN underwear, instead of saying, "I cannot be moral, honest or ethical by lying about wearing clean underwear!", just put on some clean ones, or don't wear any at all, or don't talk about it!
If you're not wearing clean underwear, and must deny it to "compete", then don't complain about the system -- the problem isn't the system, it's your underwear.
I said the same thing in 3 different ways just now, didn't I? doh!
Business Ethics Rule #2: There can be more than one winner. Business is about win-win, not win-lose. You're not trying to "put one on" the customer. You're not trying to monopolize the market and rule the world. What you're trying to do, is to supply a solution to a demand or need.
In response to your proposal, the problem isn't in capitalism and free-market. The problem is in the way of thinking. Knowing you are providing goods/services that may be harmful is unethical to begin with, and it would serve that company well to go bankrupt.
Now if you're offering a quality product/service and the people don't want it, then that is the way it is. V8 is certainly "good" for you, but not everyone likes the taste of it.
The original quote is a ridiculous one at best. It sounds like this person is complaining about telling the truth, rather than changing the truth itself so that it's something they can live with.
John Brooks:
The free market and morals and not mutually exclusive by deinfition. Any free agent in the free market makes a choice whether to behave ethically or not. There is no reason why a second rate shoe-seller couldn't succeed with a very honest approach of seeling his shoe cheaper (at their true value).
The problem is when you start talking about corporations (other than sole proprietor). Corporations exist for the sole purpose of making profit. ANY "ethical actions" need to be justified against the bottom line. No one in a corporation has the right to place ethics before profit unless all (100%) shareholders agree that they want to move in that direction.
"Corporate ethics" is an oxymoron.
Ramesh Manghirmalani:
The name reminds us of a period when the great gurus of the Western world thought they could set the rules of the global economy, right down to the exchange rates between major currencies. Now, as many of the same nations prepare for a sequel to the conference in 1944, it’s worth asking what the goals should be.
Even before the financial crisis, there were issues waiting to be resolved. The International Monetary Fund and the World Bank, institutions set up as a result of Bretton Woods, had lost their way in recent years and were already involved in lengthy, yet not notably productive, internal reviews. There were huge imbalances in trade and investment, mostly between the United States and the rest of the world. Exchange rate policies had become extremely controversial, nowhere moreso than in the up-and-coming economies of Asia.
Things have changed a lot since 1944. Back then, the word “derivative” was mostly heard in high school calculus classes. Now, even the well-publicized problems above may end up on the back burner as governments drive for international regulation of derivative securities and the entities that rate and trade them. Also, in an era where floating exchange rates have become an economic seal of approval, it’s hard to imagine a return to a Bretton-Woods-style system. Yet even after 64 years, no government of a major economy is pushing to impose severe reform on the International Monetary Fund and the World Bank.
If these factors limit the summit’s level of ambition, the possibilities for action will be further curtailed by the fact that the United States will be represented by a lame duck president. But that doesn’t diminish the importance of the issues on the table. In this setting, what should the governments focus on first?
ramesh.manghirmalani@gmail.com
Clarification added 6 days ago:
The world's richest countries have exhibited enormous myopia throughout this crisis - originally scurrying for ad hoc individual "solutions" that worsened the collective mess. Less than two weeks ago, Washington and Brussels allowed Iceland to go bust.As the world's financial powers struggle to contain the disaster, they should not lose sight of its effect on other countries. Every economy for itself makes no sense - and could prove highly dangerous - in today's interconnected world.
Josh Chernin:
Golly, I hope not. Please understand that the vast majority of those of us who work in a capitalistic society (and enjoy it) are, I believe, highly ethical.
Earon Davis:
First, I don't believe that there is just one "right" way to live. Ethics are a complex process and people often have very different perspectives, leading them to have different takes on what is "ethical" and what is not. Ethics would not seem to have much to do with one's economic system. I believe that a communist system, for example, is not inherently more ethical than a capitalist system.
So, the real question is not an absolute as to whether ethical behavior is greater in one system rather than another, but whether there exists a culture that places value in compassionate and sustainable behavior - and whether individuals have the information they need to make intelligent, sustainable decisions. Before the 1980's, in the US, our culture was very different than it has become. Before the "Reagan Revolution" we knew that there was a need to regulate the economy and that government had an important role in creating an ethical culture. However, there were of course excesses in regulation and these were manipulated into an anti-government pro-business religion that seemed to run amok, resulting in CEO salaries growing astronomically compared to the average worker. Balance was lost and there was a feeding frenzy of ill-considered credit and investment practices. Greed trumped ethics and corporate america felt relieved of all loyalty to its employees, consumers and the US.
We're now having an economic correction, which is terribly destructive and unnecessary, but which provides an opportunity to return to the basic sense of ethics, decency and compassion that became mere slogans for the past couple of decades. This isn't about "good" or "bad" or about religion. It is about moving away from ideologies and religious dogmas and returning to simple kindness and decency, in a diverse world.
Pieter Dorsman:
Dear Petar,
The key here is the private ownership of capital goods and competition governing price and distribution. The question would then be: is it possible to survive by not lying and cheating in a free economy with severe competition.
If you are incompetent: no. In any other circumstance: yes. Apart from that, the people motivated by greed often show an amazing level of creativity when it comes to redefining their ethics. Principles are, in general, as expensive as pride.
James Crisp:
Petar,
Ethical behavior, as indicated by Mr. Pascual, is absolutely fundamental to the operation of the free market system. Another fundamental assumption is that the capitalists are operating under a government that does not overtly or inadvertantly provide incentive for illegal and unethical behavior. If governments are not performing their role in society, then the otherwise legal and ethical businesses may indeed operate at a competitive disadvantage. ~this is how crises and black markets are born.
Using the context of your example: The shoe seller has an obligation to sell HIS shoes, not his competitors. As such, he must provide information regarding his products...and do so in a way that demonstrates a material and monetary advantage to the customer....such that the customer will purchase his product NOT his competitors. The Austrian Economists (i.e. von Mises) provide useful insight in this field.
Your mention of food additives involves a complicated answer. Additives do not necessarily make food unfit. If the additive is urea, melamime, or cardboard (as in some recent cases in China) then we are dealing with cases of fraud (illegal and unethical). Those involved attempts to falsefy volume or protein levels in bread and dairy products. However, if we are talking about simple additives like vitamins, coloring and preservatives... these add value. They make the food more fit for longer periods of time. Food additives, as with many specialized products, have to be measured by their value added.
Finally, if "profit" is the "only" incentive, then Productive Farmers, Manufacturers and Businessmen would seem to be on the same ethical, moral and legal level as Bank Robbers. I'm sure that you would also think this to be absurd.
Jeff Mowatt:
It can, but all to often needs to be enforced by law or more recently contrived in terms of CSR showcasing.
John Spedan Lewis, founder of the employee owned John Lewis Partnership, a highly successful retailer, spoke of capitalism having done enormous good and yet that it was "all wrong to have millionaires while there were still slums" for example.
In 1996 my (now) colleague pitched a paper for a more inclusive capitalism for the information age at President Clinton's re-election committee, a critique of free market economics and proposal for an alternative to replace the combination of trickle down development and nonprofit adjustment in a people-centered community enterprise model.
We have been working together since 2004 when this model was first applied in the UK. More recently similar concepts have arrived in the concept of the Community Interest Company (UK), B Corporations (USA) and Creative Capitalism (Gates).
So, to follow on to the question clarification. Yes, not only should food production be for the benefit of human health, but all business is first and foremost about people as stakeholders.
In our founding principles we suggest that:
"Economics, and indeed human civilization, can only be measured and calibrated in terms of human beings. Everything in economics has to be adjusted for people, first, and abandoning the illusory numerical analyses that inevitably put numbers ahead of people, capitalism ahead of democracy, and degradation ahead of compassion."
Links:
* http://www.johnlewispartnership.co.uk/Display.aspx?MasterId=d749663......
* http://www.p-ced.com/about/history/
* http://www.p-ced.com/projects/ukraine/national/
Ray Miller:
I can say that in my experience ethics is key to longevity. Lack of ethics or integrity will be exposed, sooner or later.
Colleen Norris:
Petar,
Interesting quote. I believe just the opposite is true we cannot afford to have a business without morals and ethics. If I am not producing the best product, perhaps it is time for me to be out of business. It is in the pursuit of excellence and becoming that best that true success is measured not in how much money lines the pockets. As the song says..."money can't by you love". I get to look every day in that mirror and I prefer to love what I see! In business it is the survial of the "fittest". Those that continue to grow and improve. Right now we are in a gleaning period and it is only those that are willing to give their best that will survive.
With my whole heart,
Colleen
David Dingley:
The universe is self-balancing. If you lie/cheat/distort you may gain in the short term, but in the long term it WILL catch up on you because the "market" (that might be real buying and selling or merely the market of personal interactions) will judge that dealing with you is not a good idea.
Ethical behaviours happen not just because people believe them to be right, but because they also know there is a pretty good chance of being caught out if you don't behave that way - and that when you are it will be to your disadvantage.
This is true in ANY system of interaction between people. Any claim implicit in your question that the attempts at non-capitalist systems have been models of ethical behaviour is laughable. (As it happens they have failed in lots of other ways as well and more spectacularly than capitalism.)
You seek a black and white answer that does not exist with your example of "food additives". Without ANY food additives it would be hard to feed as many people as we do as well as we do. Does that mean that all food additives are beneficial to all people in all circumstances - no, of course not. Some food additives are there with good intent, but may also produce a negative result despite that, some are simply there to cheat (recent unfortunate incidents with baby milk in China. Not a criticism of China, but a comment on the unscrupulous and callous individuals involved.)
Like many things, food additives are a balance of benefits and disadvantages about which there will be varying opinions. Pretty much how life works!
James Hayes MBA :
Peter stop, think about what you are asking...
james
books@jameshayes.ie
Links:
* http://www.jameshayes.ie
Susan Shwartz PhD:
Is this one of those questions where, if you answer "wrong," you're condemned as having no Social Conscience?
If it is, it's pretty poorly loaded.
Ethics are worth having. I work with ethical people in a capitalist enterprise. They've got my back. I've got theirs. That may change. Those are the rules of the game.
What would you LIKE me to say?
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