Do Ethics in Business Matter? (Aren’t the Bad Guys Winning?)
Question: I am in an argument with some friends who say that getting rich doesn’t require ethical behavior. On the contrary, they say, ethics get in the way of profits. They quote Donald Trump, Milton Friedman, Russ Limbaugh, and Adam Smith, and I’m at a loss as to how to counter their arguments without sounding like a spiritual Pollyanna. In my heart, I know that love wins and ethics matter, but now my head is not so sure. Can you give me some thoughtful evidence that ethics really matter?
Paul Sutherland: I was raised to believe that “you do what is right because it is right,” and I have lived in that Pollyanna world where doing the right thing for society, people, animals, and our earth really matters in business. So I believe that if your friends are willing to screw their employees, their suppliers, their customers, and the earth to make a buck—then you might simply wish to find some new friends. My sense, however, is that you are looking for hard facts to help bring your friends into a world of responsibility. Instead, I would start with a few questions:
- Would you rather be respected or rich?
- Do you believe Buddha, Jesus, Moses, Gandhi, and Mohammed were wise and thoughtful about how we should live and conduct our business affairs?
- Do you agree with Groucho Marx, who said, “Why should I care about future generations? What have they ever done for me?”
Let your friends wrestle with these questions and listen carefully to their answers. Adam Smith was a moral realist and believed in the individual’s right to “do as he pleases,” but Smith assumed that people on the whole would be moral and ethical in their behaviors. His writings on moral philosophy champion the belief that we should endeavor to do the right thing, to cooperate with the sacred or God, and to adopt behaviors that are virtuous, moral, and champion character. Read Adam Smiths’s The Theory of Moral Sentiments, if you would like more fodder for your arguments.
Gandhi’s Seven Social Sins
- Wealth without work
- Pleasure without conscience
- Knowledge without character
- Commerce without morality
- Science without humanity
- Worship without sacrifice
- Politics without principle
- Gandhi’s grandson, Arun, added: Rights without responsibilities.
One thing I know for sure is that trust makes everything happen faster and more smoothly. Business literally grows at the speed of trust, which in turn is built on ethical behavior. The more people choose to cooperate with each other and the more we trust one another, the faster a business and an economy grows—for everyone. As we become more aware of the harms caused by things like global warming, trust expands to include trusting one another not to hurt the earth. That takes time, but it’s happening. Corrupt societies tend to be propped up by such things as oil or mineral reserves, and such places rise and fail with the price of those commodities, but cooperative societies have the ability to keep growing. Ethical, cooperative societies will prevail.
The unfortunate irony of a trusting society is that it sets the stage for a few people like Trump to make lots of money by gaming the system or cheating. Trump started out rich and his “success” is made possible by the fact that his bad behavior is fairly rare. A lot of good, honest people work very hard to be taken advantage of by a few Trumps. Since a cooperative society will always leave room for a few to succeed by cheating others, you have to ask yourself, Is that the sort of person I want to be?
Finally, I would just ask your friends why they chose to listen to morally vacant and abusive people like Limbaugh and Trump over people who champion ethics and values. The Caux Round Table, a multinational group based in Switzerland, has the goal of creating “a free, fair, and prosperous global society built on the twin pillars of moral capitalism and responsible government.” On their website, cauxroundtable.org, you’ll find a list of books that demonstrate the importance and practice of responsible capitalism.
Perhaps you were also raised to do what is right because it is right. Maybe that is why you are also are perplexed by those who seem indifferent to the suffering of others and the misuse of capital. Some wealthy people forget the deep truth imbedded in the Biblical quote; “Unto whomsoever much is given, of him shall be much required.” If all else fails, I would rip out this column and give it to your friends. Ask them to read Gandhi’s Seven Social Sins, and listen to how they respond.