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P H I L O S O P H Y F O R B U S I N E S S ISSN 2043-0736
http://klempner.freeshell.org/businesspathways/
Issue number 5
7th March 2004
CONTENTS
I. 'The Business Arena' by Geoffrey Klempner
II. 'Evolutionary Psychology and Ethics' by Michael Price
III. 'On Corporations, Globalization and Sweatshops: Response to Stephen Leahy'
by Andre A. Alves
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EDITOR'S NOTE
After much friendly persuasion, I have written an article for the Pathways
business newsletter. The article took shape in my newly relaunched 'Glass House
Philosopher' notebook. In the article, I am seeking the best way to pose the
question of business ethics.
Also in this issue, an essay by Michael Price on the much-debated issue of the
role of evolutionary psychology in ethics, and a response by Andre Azevedo
Alves, an ISFP member from Portugal, to the article by Stephen Leahy reproduced
in the last issue.
Geoffrey Klempner
-=-
I. 'THE BUSINESS ARENA' BY GEOFFREY KLEMPNER
Plato's Philosopher in the Republic escapes the Cave of
illusions, to experience the brilliant Sun, the Good, the
Ultimate Reality, but then goes back to the cave to rescue
the other poor souls who got left behind.
Then he does what? -- teach them metaphysics? are you
kidding??
That was not why Socrates went to the market place, why he
sought to engage anyone and everyone in dialogue,
challenging their prejudices and forcing them to think
about their lives.
The Philosopher teaches the physician to be a good
physician, the statesman to be a good statesman, the
stonemason to be a good stonemason, the motorcycle mechanic
to be a good motorcycle mechanic... the businessman to be a
good business man.
Glass House Philosopher Notebook II, page 5
http://sophist.co.uk/glasshouse/notebook2/page5.html
The phrase 'business arena' might seem a rather quaint metaphor, the sort of
thing you would expect to see in Time magazine in the 50's or 60's. Why is
that? Today, there is no business arena. Business encompasses the world. The
world is the business world. I see this as a retrograde step. It also makes it
harder to understand and appreciate the true nature of business, which I take
to be the central task of a philosophy for business.
The title of this paper was originally going to be, 'What They Didn't Teach Me
At Oxford University' in homage to Mark McCormack's What They Don't Teach You
At Harvard University -- which comes a close second to Robert Pirsig's Zen and
the Art of Motorcycle Maintenance in the list of books that have changed my
life.
I mentioned to a couple of business people that I had read Mark McCormack's
book. The book was a bit dated, they told me. Things have moved on since the
70's, when McCormack founded his sports marketing and management empire.
Cultivating personal relationships is less important today. The predominant
climate is far more 'macho'. The 'money men' are taking over.
As a philosopher, this image of super-toughness is instantly recognizable to me
as ideology -- as a false self-image which holds us captive. However, it is a
waste of words telling that to those who are in the grip of that ideology.
Instead, I shall simply present an alternative view.
In Mark McCormack's world, success in business is about 'getting an edge' --
using psychology to understand more about the person you're dealing with than
they understand about you, projecting an effective 'image' of yourself to the
outside world, catching the other off guard with the unexpected word or action.
Much of what I say and do in business, from a self-effacing
comment to an intentionally provocative one, is designed to
give me a slight psychological edge over others, or to help
me get the most out of others... that is exactly what this
book can teach you -- how to read people, how to influence
their reading of you, and how to apply or customize both to
any likely business situation... Based on my own experiences
and observations I have recommended many specific techniques
which can be directly applied with immediate and tangible
results.
What They Don't Teach At Harvard Business School p. 11
Throughout the book, every observation, every piece of advice is illustrated by
an actual incident from McCormack's business experience. The examples have the
ring of truth. They would pass muster with any professional psychologist.
What's more, McCormack speaks with authority as someone who has been there and
done it all, not merely observed from a safe distance.
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 down 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. (ibid.)
You might think that this is all in the grand tradition of Dale Carnegie How to
Win Friends and Influence People. But that is only half true. This book is about
how to maximize your influence as a business person. In business, one makes
friends for a purpose, with an end in view. With ruthless consistency,
McCormack avoids any discussion of why anyone should seek friendship for its
own sake.
He's right, of course. In a book of advice to would-be business men and women,
the question of the intrinsic value of friendship would be a total irrelevance.
-- We are only concerned with success in business.
As a philosopher looking at objectively at business, I want to know how this
can be possible. How can it be legitimate -- I believe that it is legitimate,
and legitimate in a deep and interesting sense, otherwise I would not be asking
the question -- to conduct oneself in this way? By 'legitimate', I mean 'right',
'decent', 'ethical', whatever your favourite word for of moral approval.
Not long before I came across McCormack's book, I had written:
When the young Marx in his 1844 Manuscripts railed against
the evils of money and the reduction of all forms of value
to exchange value, he not only attacked theories of
capitalist economics that equated rationality with the
pursuit of narrow self-interest, theories in which each
agent ruthlessly pursued his own gain in driving the
hardest bargain for goods or labour. He also went further
in exposing the ideology of capitalist 'morality', whose
main aim was to ensure that the processes of exchange were
governed by rules of fair play, ignoring the huge
inequalities of power between the negotiating parties. The
ethic of charity, or giving something back to the needy --
something we can 'afford', depending on our circumstances
-- was itself fatally polluted in Marx's view by its
implication in a system whose worse effects it sought to
ameliorate.
'The Ethics of Dialogue'
http://klempner.freeshell.org/articles/dialogue.html
From the same article, here is how I contrast moral dialogue with a business
negotiation:
When I engage another person in moral dialogue, there are
not two parallel processes of practical deliberation going
on, his and mine, but only one. (Contrast this with the
case of a 'dialogue' between politicians or traders, where
each is privately deliberating how to gain the upper hand.)
In opening myself up and addressing the other as a thou I am
already committed to the practical consequences of
agreement, of doing the action which, by the combined light
of his valuational perspective and mine is seen as the thing
to be done. (ibid.)
What do the words 'ethics', 'morality' mean? My view is that ethics is about
moral dialogue, the I and thou relationship. In the ethics of dialogue, our
obligation towards others is unlimited, an obligation that goes far beyond what
is theirs 'by right'. This is not a very popular view, especially in the bastion
of capitalism, the United States. Here, I am not seeking to defend my view, but
merely to create the conceptual framework which will allow such a demanding
view of ethics to be considered as possibly true.
Books and articles on business ethics are full of advice about treating
customers, colleagues, employees fairly, being honest, being responsible. In
the eyes of the cynic, all that advice can be recast as advice for keeping up
good business relations and a clean public image. The ultimate appeal is to the
bottom line. I and thou doesn't come into it.
How can you tell when you're dealing with a question of ethics, rather than
merely a question of selfish self-interest? In the Republic Plato sets the
problem of justice as a question of what we would do if we were granted a
magical power of invisibility -- the Ring of Gyges. (There was a film on this
theme recently, The Hollow Man.) Just think what a businessman could accomplish
armed with such a power plus a book of business ethics to remind him how to
behave when the power was temporarily switched off!
Here is an alternative, less cynical interpretation.
The rich canvas of human life encompasses many possibilities. Each of us plays
a multitude of roles. What philosophers writing in business ethics have failed
to grasp is that In some of these roles -- and this list is very specific, very
constrained -- something strange happens. Ethics appears to be suspended. We are
no longer required to consider the interests of others in the way we are
required to do outside those roles.
Or perhaps they see it, but they fail to grasp its 'strangeness', fail to
appreciate the paradoxical, almost self-contradictory way in which human beings
have contrived to switch seemingly effortlessly from one role to another.
One example is sport. (It does not seem to me to be accidental that Mark
McCormack made his fortune in sports management and marketing.) 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.
It would be possible -- and this was the young Marx's vision of a communist
society where everyone lives by the rule of brotherly and sisterly love, just
as Christ preached -- to abolish business, trade and money altogether. Just
because an activity is natural, inevitable does not mean that human cultural
creativity and ingenuity cannot find a way to eliminate it. Should we wish to?
To me, that's a meaningless question. Because (contrary to what the older Marx
of Capital thought and generations of Socialist governments have taken on
trust) we have not the slightest clue how that end state would be achieved. We
have no conception of the price that would have to be paid in permanently
altering human culture and behaviour in order to reach that idyllic end state.
Just as there are certain moral virtues which we readily recognize as the
virtues of the good boxer so there are moral virtues which we associate with
the good businessman. In both cases, I am using the adjective 'good' in the
attributive sense. I don't just mean 'good and a boxer' or 'good and a
businessman'. I mean good as a boxer, or as a businessman.
In the business arena, we are the players and also the audience, continually
monitoring one another's performance. The object of the exercise is more than
its stated aim, more than just making a successful deal or winning a contract.
One cares about how the deal is done, or how the contract is won. It is a
matter of pride. Of course, I am not saying that there are not those who take
pride in being underhand, ruthless, cold-hearted, merciless. The gangster world
has some features in common with the business world. Perhaps this is the
dangerous direction in which the 'macho' business culture is heading.
In his article, 'A Brief on Business Ethics' (Philosophy for Business Issue 1)
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.
My point, however, is that this is not ethics.
The gap between the practice of the Aristotelian virtues and ethics in the full
sense is explicitly recognized in Christian teaching, with its emphasis on the
virtues faith, hope and love.
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.
I therefore put forward the following as a prolegomenon to a philosophy for
business:
Business and commerce take place in a frame, an arena
defined by unwritten rules.
Within the business arena, normal ethics is suspended.
The aim of a philosophy for business is to understand the
rules that define the business arena, in other words, to
grasp from an ethical perspective how business is possible.
It is important in philosophy to be aware when you have a theory, and when you
haven't yet got a theory, but have merely succeeded in formulating a question.
That is all I am claiming here.
(c) Geoffrey Klempner 2004
E-mail: klempner@fastmail.net
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II. 'EVOLUTIONARY PSYCHOLOGY AND ETHICS' BY MICHAEL PRICE
I. Evolutionary Psychology
Evolutionary psychology is the study of human behavior from an evolutionary
biological perspective. It is a relatively new approach to understanding human
behavior that is rapidly gaining influence within the social sciences. The
field is also of interest to a more non-academic audience: well-known
popularizations include Matt RidleyÕs The Red Queen (1993) and Genome (2000),
Robert WrightÕs The Moral Animal (1994), Dan DennettÕs DarwinÕs Dangerous Idea
(1995), and Steven PinkerÕs How the Mind Works (1997) and The Blank Slate
(2002). Advances in evolutionary psychology are having an important impact on
the ways in which we understand the nature of human ethical systems. The
purpose of this article is to introduce the reader to the emerging field of
evolutionary psychology, and to discuss the fieldÕs implications for the study
of ethics.
II. Selfish Genes
If Individual A of Species X possesses a trait that allows it to reproduce more
successfully than Individual B of the same species, than A is said to have a
higher fitness than B. Because A leaves more descendants than B, AÕs
fitness-enhancing trait will begin to spread throughout the population, until
it becomes species-typical. This is how natural selection causes the evolution
of functional adaptations that enhance fitness, and it is why evolutionary
psychologists expect for adaptations to fulfill tasks that would have been
fitness-enhancing for individuals in the evolutionary past. Complex adaptations
evolved in the deep past, so the best way to understand their design is to
understand how they functioned in these ancestral environments.
If the human mind evolved to solve problems that enhanced the fitness of human
ancestors, however, then this implies that human nature is in an evolutionary
sense Òself-interested.Ó Fitness is enhanced at the individual level. Any trait
that Individual X has that enhances his or her own fitness, even at the expense
of the fitness of Individual Y, will evolve. If XÕs trait harms XÕs own fitness
but enhances the fitness of Y, this trait will get selected against. Behaviors
which are too altruistic, i.e., which enhance the beneficiaryÕs fitness but
which do not ultimately benefit the fitness of the altruist, will be unlikely
to evolve.
This principle of genetic self-interest was made famous by Richard Dawkins in
his 1976 book The Selfish Gene. But do if human genes are selfish, does this
mean that human individuals must be selfish too? Not necessarily. For the past
few decades, evolutionary biologists have worked on understanding how
cooperation could have evolved, given the selfishness of genes. Cooperation is,
after all, fairly common among animals. Two widely-accepted solutions to the
problem of cooperation have emerged.
III. The evolution of cooperation
The first solution that emerged, called kin selection, was made famous in the
1960Õs by William Hamilton. This theory utilized the observation that two
individuals who are close genetic kin will be more likely to have a given gene
in common, compared to two unrelated individuals. The theory of kin selection
says that if Gene A caused Individual X to behave so as to help enhance the
fitness of other Individuals who contained Gene A (i.e., Individual XÕs close
genetic kin), then Gene A could spread in the population. In other words, a
gene that causes altruism towards exact copies of itself can evolve. This
theory explains altruism between close relatives, e.g. it predicts that
altruism will be twice as likely to occur between full siblings than it will
between non-relatives. It does not predict altruism between individuals who are
genetically ÒsimilarÓ in some ways but who are not close kin (e.g., between two
randomly chosen members of the same ethnic group).
The second solution is called reciprocal altruism, made famous in the 1970Õs by
Robert Trivers. This theory states if Individual A does something to benefit the
fitness of Individual B at one time, and then B repays the favor to A at a later
time, this favor-trading can be mutually fitness-enhancing to both A and B.
Kin altruism and reciprocal altruism are currently the two most widely-accepted
explanations for how altruistic predispositions might be a component of evolved
human nature. The study of the evolution of cooperation, however, is still in
its infancy, and more solutions are sure to emerge. In particular, many
researchers are currently investigating the evolution of collective action,
defined as two or more individuals jointly producing a resource that they plan
to share equally among themselves. Ultimately, research on collective action
and on other kind of cooperation may reveal that even if human genes are
selfish, human nature is more altruistic than many researchers expected.
(c) Michael Price 2004
Michael Price, PhD
Indiana University Workshop in Political Theory
and Policy Analysis and The Santa Fe Institute
E-mail: mieprice@indiana.edu
-=-
III. 'ON CORPORATIONS, GLOBALIZATION AND SWEATSHOPS: RESPONSE TO STEPHEN LEAHY'
BY ANDRE A. ALVES
18 February, 2004
Dear Professor Geoffrey Klempner,
First of all I would like to thank you and confirm the
reception of the ISFP card.
I decided to join the ISFP after reading some of the
Philosophy Pathways and Philosophy for Business back issues
on a suggestion from Professor Jose Manuel Moreira, probably
Portugal's leading scholar in business ethics, with whom
I've had the opportunity to work in the last year or so.
My expectation is to follow, and perhaps occasionally take
part, in the interesting intellectual discussion promoted
through the various ISFP initiatives and joining a network of
people interested in discussing philosophy in general,
and issues related to business ethics and philosophy for
business in particular.
As an attachment, I take the liberty of submitting an
article for possible publication in the Philosophy for
Business electronic newsletter. If you find it suitable for
publication but believe it requires adjustments in matters
of content please tell me so. Also, in terms of English,
I've tried to review it as thoroughly as possible but since
English is only my second language, it is highly likely
that it contains some errors which I hope can be
corrected.
Thank you for your attention.
Best regards,
Andre Azevedo Alves
---
On Corporations, Globalization and Sweatshops: Response to Stephen Leahy
After reading with interest Stephen Leahy's article (in Philosophy for Business
Issue 4, 8th February 2004) in which he favorably comments on a Canadian
documentary that reportedly demonstrates that corporations are 'inherently
amoral, callous and deceitful', I believe some comments may be in order.
First of all, I agree that the issue of limited liability for corporations
owners and shareholders may be considered problematic, both from an ethical and
a legal point of view. Although it is certainly true that limited liability is
beneficial in providing incentives for entrepreneurship and investment that
might not otherwise take place, these clear economic benefits do not rule out
the need for discussion of possible ethical and juridical shortcomings of this
concept.
I'm also pleased to learn that the documentary's authors have found it wise not
to replicate Michael Moore's antics in 'Bowling for Columbine' and have tried,
at least to some extent, to show views contrary to their own by interviewing
corporate CEO's and representatives of classical liberal organizations such as
Canada's Fraser Institute.
I find it difficult, however, to see on what grounds might corporations
possibly be characterized as 'psychopathic', unless, perhaps, we adopt the view
that business and commercial activities are necessarily exploitative. While
corruption and disrespect for legal standards undoubtedly exist in the business
world (as also happens in every other field of human action), to take the view
that corporations have, by their own institutional nature, an inherent tendency
to behave immorally or illegally is hardly justifiable.
In effect, such a view would deny all possibility of business ethics, since, by
their own existence, corporations would tend to promote behavior that violates
legal and social standards to "get its way". But what is 'getting its way' for
a corporation? Presumably, we are talking of the profit motive, frequently
considered almost as if it were the root of all evil. However, as Tibor Machan
eloquently explains, business and commerce in general do strive to fulfill a
good [1]. The virtue of prudence, requiring that we take reasonably good care
of ourselves is necessarily associated with the effort to prosper and therefore
with the much maligned profit motive.
An unprofitable corporation is not creating wealth and is consequently being a
poor steward of the scarce resources at its disposal. In addition to that,
without profits, in the long run, the corporation will necessarily cease to
exist, and so will no longer be a source of income to all the individuals
associated with it. The primary social responsibility of a corporation is
therefore to be profitable, and if a business enterprise does not fulfill that
condition then its existence is indefensible, not only from an economic, but
also from an ethical point of view.
The now fashionable notion of 'Corporate Social Responsibility', in some of its
incarnations, seeks precisely to overturn the primary social responsibility of
the corporation which, as we have just argued, is to be profitable, in favor of
pursuing other goals. These doctrines, even if they appear at a first glance to
be quite reasonable, are often founded on distorted views of economic
relationships and ill-conceived ideas and prejudices about the functioning of
trade, and carry with them the very real threat of undermining the market
economy [2].
Another of my difficulties with Stephen Leahy's article is his apparent
objection to globalization and, in particular, to the so-called 'sweatshops'.
It is undeniable that working conditions in sweatshops are undesirable, when
compared with the standards which nowadays prevail in the more developed
countries. It is also understandable that descriptions of sweatshops tend to
generate an emotional response of strong aversion. However, I fail to
understand how people in a bad situation would see their situation improved if
they ceased to have at their disposal the most favorable of a series of
undesirable options [3].
Those who favor boycotts and legal restrictions who would hamper the operation
of sweatshops in developing countries will end up, in the cases where they are
successful, depriving entire communities of the best alternative at their
disposal for raising their living standards. Political action and agitation can
always change things, but not necessarily for the better.
On a final note, and considering Leahy's reference to how Noam Chomsky mentions
that "people who work for corporations, and even those who run them, are often
very nice people". While tracing the source of the problem to the corporation
as an institution, I would perhaps suggest that we can apply Chomsky's line of
thought in a different way. I have no doubt that a great number of those who
express concern for what they see as undesirable effects of globalization or
the general conduct of corporations are very nice people who mean to do well.
The same could be said of many supporters of totalitarian regimes. Prejudices
against free trade and the profit motive -- not the people -- are the problem,
I would argue.
FOOTNOTES
[1] See Tibor R. Machan, "A Brief on Business Ethics", 'Philosophy for
Business' Issue 1, (2003).
[2] For more on this subject, see David Henderson, 'Misguided Virtue. False
Notions of Corporate Social Responsibility' (London: The Institute of Economic
Affairs, 2001).
[3] This judgement obviously assumes that the situation is not one of slave
labor. It only applies to those cases where, however bad the options, people
are not compelled by force to work in a given 'sweatshop'.
(c) Andre A. Alves 2004
E-mail: azevedoalves@yahoo.com
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