Ethical Models, business and finance homework help

User Generated

Puevfgnnnnn

Business Finance

Description

Please read the attached articles debating objectivism and pragmatism.

What sort of changes in the business system would Kantian ethics require? Does Utilitarianism prioritize the quality of life? What would you choose as your ethical model? I have attached the atticles below.

Unformatted Attachment Preview

姝 Academy of Management Learning & Education, 2006, Vol. 5, No. 3, 324 –332. ........................................................................................................................................................................ Business Ethics: A Way Out of the Morass EDWIN A. LOCKE University of Maryland In view of recent scandals (e.g., Enron, Health South, MCI, Tenet), there is no doubt that ethics is something that people in business desperately need (and not only to keep out of jail). But where should people going into business get the needed ethical guidance? Many may hope to get it in business school. Thus, in preparation for this essay, I read a number of current books on business ethics (listed after the references), including textbooks. Here I report the dismaying results of my search and suggest an antidote. ........................................................................................................................................................................ The texts presented (or claimed to present) a variety of ethical theories, including (depending on the book) utilitarianism, Kantian ethics, rights theory (e.g., from John Locke), Rawls’ theory of justice, libertarianism, and Marxism. However, there was never any serious attempt to integrate any of the theories into a coherent whole—and for good reason. The theories are not only flawed, either partially or totally, they are also contradictory (e.g., utilitarianism vs. rights theory; libertarianism vs. Marxism). A surprising omission from the list of theories presented in the texts I read is pragmatism—surprising because this is probably the most prevalent theory “in use” (consciously or subconsciously) by most people in business—not to mention by Americans in general (excepting those who are religious). Pragmatism, originated by William James and John Dewey near the turn of the 20th century, is an early version of postmodern skepticism (Locke, 2003). Pragmatism asserts that there are no absolute principles or standards, no objective truth and no objective reality. “Truth” is simply that which “works” (“works” means attaining any goals you want) or makes one feel better (Rand, 1961). The connection between pragmatism and business executives who try to “get away with something” is obvious. It is also ironic that a theory designed to be “practical” is not practical at all—as many disgraced business executives have found out— because it is, on its own terms, detached from reality. A surprising omission from the list of theories presented in the texts I read is pragmatism—surprising because this is probably the most prevalent theory “in use” (consciously or subconsciously) by most people in business—not to mention by Americans in general (excepting those who are religious). The problem for the business students who read business ethics books and who will presumably someday go into business, is this: “How do they get firm ethical guidance from such a contradictory mish-mash?” Of course, they cannot. Worse yet, they might get the idea that since there is no objectively correct theory, they can switch theories at their convenience or simply become cynical and dispense with ethics in business as a hopeless cause. In such a case, pragmatism (“let’s see what seems to work for me today”), almost of necessity, becomes the default option. I am going to single out four additional aspects of the business ethics texts for discussion here. First, the descriptions of some theories are not accurate or sufficiently complete. Second, the criticisms are often not sufficiently fundamental. Third, most of the theories are based on the assumption, without proof, that acting in one’s own interest is immoral but that working for the collective is moral. Fourth, the arguments offered in favor of morality, including collectivism, are predominantly subjective. I end by offering an antidote to the ethical theory morass. The most glaring problems arise in discussions The author is indebted to Dr. Onkar Ghate for his helpful comments on parts of this manuscript. 324 2006 of Kant. Typically texts will say that the categorical imperative simply refers to the universality principle (viz., that a moral principle had to apply equally to everyone). Second, they claim that Kant champions respect for the individual. And third, they claim that Kant is an advocate of reason. All these claims about Kant may seem superficially true, but, if you look deeper, they are the exact opposite of the truth. Text writers seem to grasp that Kant stood for a duty ethics, but none goes into the ghastly details. Kant is profoundly opposed to the idea of people seeking happiness and caring about their own lives. He views self-love, or more precisely, loving self-love as “the very source of evil.” Love of self is “a radical, innate evil in human nature” (quoted in Peikoff, 1982: 78, 79). Acting out of duty—the only kind of truly moral action for Kant—must be totally divorced from concern for any interest or desire one might hold (including the desire to be moral). But how can you tell whether a man is acting from duty? Kant gives a clear answer. The ideal (moral) man, he says, is “a person who would be willing not merely to discharge all human duties himself . . . but even though tempted by the greatest allurements to take upon himself every affliction, up to the most ignominious death . . .” (quoted in Peikoff, 1982: 80). The truly moral man must suffer, “suffering which the new [moral] man, in becoming dead to the old, must accept throughout life . . .” (quoted in Peikoff, 1982: 80 – 81). Man, because he is never free from guilt “can regard as truly merited the sufferings that may overtake him, by whatever road they come . . . ” (quoted in Peikoff, 1982: 81). Peikoff (1982: 82) summarizes Kant’s ethics as follows: Your desires, regardless of their content, deserve no respect because they are desires. Do your duty, which is yours because you have desires, and which is sublime because, unadulterated by the stigma of any gain, it shines forth unsullied, in loss, pain, conflict, torture. Sacrifice the thing you want, without beneficiaries. . . . sacrifice your values, your self-interest, your happiness, your self, because they are your values, your self-interest, your happiness, your self; sacrifice them to morality. . . . The moral commandment is: thou shalt sacrifice, sacrifice everything, sacrifice for the sake of sacrifice, as an end in itself. This is the full meaning of the categorical imperative. One might ask, given the above, why would Locke 325 anyone want to be moral, especially considering that morality belongs to the noumenal world which is unknowable to man? This says Kant, “is precisely the problem we cannot solve. . . .” it is “a reproach which we must make to human reason generally. . . .” (quoted in Peikoff, 1982: 76). In other words, Kant’s moral system is totally arbitrary. One cannot read this and defend the idea that Kant respected man as an end in himself. In reality, a more profound hatred of man cannot be found in the entire history of philosophy. One more quote should suffice to demonstrate this: It is a duty to preserve one’s life, and moreover everyone has a direct inclination to do so. But for that reason the often anxious care which most men take of it has no intrinsic worth, and the maxim of doing so has no moral import. They preserve their lives according to duty, but not from duty. But if adversities and hopeless sorrow completely take away the relish for life, if an unfortunate man, strong in soul, is indignant rather than despondent or dejected over his fate and wishes for death, and yet preserves his life without loving it and from neither inclination nor fear but from duty—then his maxim has a moral import (quoted in Rand, 1970: 866). Even the early Christians, though advocating self-sacrifice, permitted man to work toward an ultimate reward: eternal life and happiness in heaven. But this is not permitted as a moral motive by Kant (even though he believed that good people went to heaven). Kant’s contempt for man was not revealed only in his ethics. In epistemology he was the first philosopher in history to totally sever reason from reality. He believed that the real or noumenal world was completely unknowable to man. Man, he argued, could only know the world of appearances, the phenomenal world (for Kant’s view and its refutation, see Ghate, 2003). Kant, following from Hume, started philosophy on its long downhill slide to total skepticism, ending in postmodernism (Locke, 2003). Kant was not an advocate of reason, but its destroyer. He wrote, “I have . . . found it necessary to deny knowledge, in order to make room for faith” (quoted in Peikoff, 1982: 25). I will give one more example of inadequate analysis. This concerns utilitarianism, originated by Bentham and further developed by Mill. The fundamental principle of utilitarian ethics is “the greatest good (or happiness) for the greatest number.” While texts note that there are problems of application (e.g., how do you compare the plea- 326 Academy of Management Learning & Education sures of different people?), they don’t go deep enough. What is utilitarianism fundamentally? Peikoff (1982: 122) writes, “Utilitarianism is a union of hedonism and Christianity. The first teaches man to love pleasure; the second to love his neighbor. The union consists in teaching man to love his neighbor’s pleasure.” Consistent with Kant, Mill writes, “All honor to those who can abnegate for themselves the personal enjoyment of life” Peikoff (1982: 122). Utilitarianism can be justified, therefore, only if one can justify both hedonism and Christianity’s divine command/divine duty theory of morality. The textbooks attempt no such justification. Observe that utilitarianism could readily justify cannibalism or mass enslavement so long as the greatest number got pleasure from it. Only individual rights can protect one from the tyranny of the majority, but, if individuals possess rights, then the entire utilitarian theory is invalidated. This brings us to another feature of ethics texts. Again, consistent with Kant, it is taken as a virtual axiom that selfishness is immoral and that altruism (sacrifice for the sake of others) is moral. The false dichotomy offered is this: the selfish business leader as hedonistic, amoral marauder versus the selfless business leader as steward of “society’s” resources who sacrifices himself for the good of the community. The concept of a rationally selfish, moral business leader who makes an honest profit is never considered. If a businessman makes a good business decision out of self-interest, this automatically takes the decision out of the realm of morality. This brings up the following question, which none of the texts address: “If seeking profits is by definition nonmoral, amoral, or immoral, whereas sacrifice to society is moral, yet incompatible, if practiced consistently, with business success (i.e., profits), then why would anyone want to go into business?” And what would motivate a business executive to want to be moral? ing for the self is considered immoral. The default option is collective subjectivism (an idea that originated with Kant in the realm of cognition). But how do you defend a collectivistically subjective view from the accusation that it is arbitrary? Group feelings are still feelings, not objective fact [s]. All these are problems that a kaleidoscope of invalid and contradictory moral theories cannot resolve. What is needed is a logically consistent, valid ethical theory that is objective. In the remainder of this essay I will offer objectivism, the philosophy of Ayn Rand, as the proper alternative to conventional ethical theories. Before turning to her theory, however, I must point out that objectivism has virtually nothing in common with libertarianism. Libertarians have sometimes used some of Ayn Rand’s ideas (e.g., freedom from government coercion) but without any of the philosophical context needed to validate them (e.g., the nature and role of reason). They claim simply to “want freedom.” Some advocate anarchy; others, amazingly, even reject the concept of individual rights. Libertarians are not advocates of reason but of emotional whim. Ayn Rand called libertarians “hippies of the right” (Binswanger, 1986: 253). Even Nozick, a nonhippie philosophy professor, attempted to defend freedom and capitalism using some of Ayn Rand’s ideas but without grasping her total philosophy—an error which makes his work an easy target of attack. Objectivism For the most systematic presentation and proof of the philosophy of objectivism, see Peikoff (1991; see also Rand, 1992, 1964a, 1991). A valid theory of ethics cannot exist in limbo, apart from a valid foundation in metaphysics and epistemology.1 (And politics, as we will see, depends upon all three.) Ayn Rand wrote (1975:30): The false dichotomy offered is this: the selfish business leader as hedonistic, amoral marauder versus the selfless business leader as steward of “society’s” resources who sacrifices himself for the good of the community. Finally, the texts writers, seeing the problems with extant theories, typically end up viewing morality, in whatever form, as something which is validated consensually, that is, by majority opinion. This implies that all morality is subjective. Individual subjectivism is rejected because work- September In order to live, man must act; in order to act, he must make choices; in order to make choices; he must define a code of values; in order to define a code of values, he must know what he is and where he is—i.e., he must know his own nature (including his means of knowledge) and the nature of the universe in which he acts—i.e., he needs metaphysics, epistemology, ethics, which means: philosophy. 1 I use the male pronoun to refer to all human beings below, following its use by Ayn Rand. 2006 Metaphysics In metaphysics (the branch of philosophy concerned with the nature of the universe as a whole, including man’s nature), objectivism begins with three primary axioms (axioms are truths that are self-evident to direct perception, which form the foundation of all knowledge, and which cannot be contradicted without accepting them in the process). These are existence (reality), identity (everything has a specific nature), and consciousness (consciousness is the faculty for perceiving reality). Contrary to Kant’s view, the possession of a means of awareness, consciousness, does not disqualify us from knowing reality, but rather it is precisely what makes it possible (see Ghate, 2003). In objectivism reality comes first; thus, consciousness is not the creator of reality as the postmodernists claim (Locke, 2003). Manmade facts exist (e.g., television), but to bring meaningful creations into existence, one has to know the laws of reality. A corollary of the axiom of identity is the law of causality. If everything has a specific identity, then it has a specific capacity for action. Thus every entity obeys causal laws (including elementary particles). Epistemology In epistemology (the branch of philosophy that deals with the nature and means of knowledge), objectivism holds that all knowledge comes from the senses and reason which identifies and integrates sensory material. It rejects any form of mysticism or revelation as a source of knowledge; one cannot validate one’s knowledge using nonrational methods. Man’s unique form of awareness is conceptual. (For Ayn Rand’s original theory of objective concept formation, see Rand, 1991.) Two key aspects of reason are that it is fallible and volitional. It is fallible because man’s conceptual reasoning is not automatically correct. That is why a science of epistemology is needed. The key method of reason is logic. For objectivists, logic does not simply mean deduction. It means that all concepts must be formed inductively, based on observation of reality by the senses and then integrated conceptually, and that these concepts be ultimately reducible to the perceptual level. Logic also means that all elements of knowledge must be integrated with all other elements, and there must be no contradictions. Volition (free will) is a corollary of the axiom of consciousness. It means that one can make choices that are not necessitated by prior conditions. One’s most fundamental choice, according to objectiv- Locke 327 ism, is the choice to think or not to think. (Other choices, such as the choice to act, are derivative). It is the rational faculty that is activated and sustained by choice. This can be validated by introspection, by direct observation of one’s consciousness. The antithesis of volition, psychological determinism, leads to self-contradiction, because it would consist of a claim of knowledge from an entity that can only say what it was programmed to say. Such an entity would have no means of validating its knowledge. Volition is not a contradiction of the law of causality but a particular form of it, a form unique to man. Volitional action (thinking) is not uncaused but self-caused. Ethics Objectivist ethics rests on the fact that reality exists, that man gains knowledge of it through reason, and that he possesses volition. If there is no reality, ethics must be a matter of subjective whim. The same holds if reason is invalid. And if man has no choice about how to act, then a science of ethics is useless. Given the foundation, here are four issues that need to be addressed in establishing a code of ethics: 1. Why does one need a code of ethics? 2. What is the ultimate standard in ethics? 3. Who should be the beneficiary of one’s ethical code? 4. What virtues should one practice? Why Does One Need a Code of Ethics? Ayn Rand (1964a) explained that since there is no inborn conceptual knowledge, one has no inborn guidance on how to act. (Physical sensations like pleasure and pain are inborn but are not sufficient to guide one’s long-range choices.) As a volitional being with no inborn knowledge, man needs to acquire a code of values and has the power to choose such a code. (Of course, many people do not choose to think much about ethics, in which case they absorb, more or less at random, some unintegrated conglomeration of parental teachings, peer models and pressures, cultural influences, and subjective feelings.) What Is the Ultimate Standard in Ethics? This is the fundamental question that has stumped moral philosophers throughout the centuries. The standard answer (outside of religion) has been subjective feelings. Ayn Rand was the first to identify an objective standard. She discovered this standard by asking: “What is the root of the concept of value?” She saw that the concept of value presupposed the existence of entities whose life was conditional, that is, living entities. She wrote, “It is 328 Academy of Management Learning & Education only the concept of ‘Life’ that makes the concept of ‘Value’ possible. It is only to a living entity that things can be good or evil” (Rand, 1964a: 15–16). This means that even the lower animals can have values, even though they do not have the capacity to formulate or act on the basis of a moral code (which requires conceptual knowledge). Living organisms continually face the alternative of life or death and must engage in appropriate goal(value) directed action in order to survive. Life (the life of each individual), therefore, is the standard of the good. Thus, that which is pro-life is the good and that which is anti-life is the evil. It is critical to note here that only individuals exist; a group or society is not an entity but a collection of individuals. Thus only individuals are units of moral value. The group as such is not a super entity and has no special or superior moral status. Survival is not a matter of acting on the range of the moment (like animals and pragmatists). One must think in terms of the range of a lifetime. Nor is the good determined by feelings. Feelings (emotions) are important for motivation but are not tools of knowledge. To know what is in one’s interest one must know one’s own nature (e.g., needs) and must engage in rational thinking to decide what action to take. Finally, as a conceptual being, one needs to think and act in terms of principles (Locke, 2002). One cannot act coherently on the basis of an endless series of disconnected facts. Superficially, one might regard Kant’s demand for “universalizability” as advocacy of a principled approach to morality; but for Kant, the “principles” of morality are nonempirical—i.e., divorced from reason and experience—and serve not as an aid but most fundamentally as a hindrance to life. Kant was right, though he did not offer any proof, about the need for principles in morality; his error was to conclude that only a duty ethics would allow for the formulation of such principles. Who Should Be the Beneficiary of One’s Moral Code? As noted earlier, most people take as an axiom of morality (especially since Christianity) that self-sacrifice is the highest virtue. It was August Comte who coined the term altruism, meaning other-ism. According to altruism the good means sacrificing oneself to others. (Altruism does not mean generosity, benevolence, or good will.) No one has ever offered a this-worldly, nonmystical argument for the claim that altruism is good, and, if examined closely, it leads to bizarre contradictions. For example, if it is evil to act in one’s own interests and moral to sacrifice for others, then isn’t it selfish of others to accept the sacrifice? Shouldn’t they in turn sacrifice to others and so on, September so that in the end no one in the world has what he or she wants? If so, why would anyone want to act at all or seek to gain any values? The altruist answer is that you should sacrifice to those “in need,” which usually means those with less than you. The question then arises: “Why do others peoples’ lack of values give them a claim on yours?” Wouldn’t that make those who are able, hardworking, and productive the slaves of those who are not? By what principle can a creator of nonvalue make a moral claim to values created by others? This would mean the more you produce, the less you get, and the less you produce the more you get—a system of justice in reverse—Karl Marx’s communist ideal. We have seen the results of Marx’s philosophy in action. Acted on consistently, altruism is the morality of death. Even taking a bite of food is a selfish act— but what about the starving people in some far off country who need that food? Wouldn’t it be more moral to starve yourself and send your food to others? Of course, if you did not earn money to buy the food, then others would starve anyway. So to be a good altruist you would have to keep producing and then giving almost everything away to others— death by slow torture. Under Kant’s morality, suffering unto death is what morality is all about. Observe that altruism contradicts the very purpose of morality—to guide your choices and actions so that you may live happily and successfully on earth. Altruism, in effect, says you need a moral code to live; therefore, act in such a way that will make you suffer and die. Observe also that, as long as you live, altruism cannot be practiced consistently. If you smuggle even a little self-interest into your life in order to get some minimal pleasure, you are morally guilty—and death is your only permanent escape from the contradiction. Objectivism totally rejects altruism as a moral code; it is anti-life and therefore not just mistaken but evil. Given that life is the standard, objectivism holds that each individual should be the beneficiary of his moral code, and therefore, it advocates rational self-interest (i.e., rational egoism) as moral. (As we will see, self-interest does not necessarily preclude helping others.) People who rationally pursue and achieve their own goals and values through honest means are not evil, or at best morally neutral, but positively good. They are living by a pro-life morality. For objectivists, achieving one’s own happiness in life (which requires thinking) is one’s highest moral purpose. What Virtues Should One Practice? It is not enough for a moral theory to argue that one must pursue one’s rational self-interest. It also has to indicate how one does it; it has to identify how to act. This 2006 requires the identification of pro-life virtues. Rationality is the core virtue in objectivism. If one gains knowledge by means of reason (applied to sensory data) and if knowledge is needed in order to live, then rationality is primary. Being rational includes taking reality (facts) seriously, exerting mental effort, integrating one’s knowledge, not allowing contradictions, thinking long range, and projecting the consequences of one’s actions. Being irrational (e.g., evading facts) means being anti-reality, which means acting against your life. I personally believe that the refusal to take facts seriously is the single-most frequent cause of poor managerial decision making. Most typically in such cases, facts are replaced by wishes. All the other virtues are aspects of rationality and, like rationality, all pertain to the relationship between consciousness and existence. Honesty means the refusal to fake reality. Deceiving others or oneself means trying to make reality unreal. Dishonesty sabotages one’s rational faculty and makes it a faculty for not perceiving what is but for perceiving what isn’t. It turns your consciousness into your enemy. In a business context, the present author believes that dishonesty in an organization should virtually always lead to termination. Dishonesty is such a basic breach of morality that it could take years before one could be certain that a person has reformed. Furthermore, allowing dishonest people to remain in a company risks (if not guarantees) that the whole culture will eventually become dishonest—leading eventually to disaster. (It is not that dishonesty needs to be singled out, since all the virtues are interconnected, Peikoff, 1982, but this vice is the one most frequently publicized in the business world and is most directly connected with business fraud.) Integrity means loyalty to one’s rational convictions in action. Rational convictions are not the same as feelings. Acting simply on feelings is amoral hedonism. Integrity requires action. Claiming “X is true” and then not acting on that conviction when action is called for is, again, to sabotage your mind. Moral compromise is one example of a breach of integrity (supporting or sanctioning what you know to be immoral). Refusing such compromises, for example, courage in the face of threat, upholds integrity. Independence refers to the responsibility of using your own rational judgment in every issue of your life. Its antithesis is dependence, which means blindly following the dictates of others. (Nor does independence refer to blindly acting on emotions.) Only individuals have minds, so there is no Locke 329 way that other people can do your thinking for you. Even if they provide you with ideas, you have to understand them and judge their validity for yourself. Defaulting on the responsibility of thinking for yourself means relinquishing your rational faculty, and therefore, losing control of your own life. Independence in action includes taking responsibility for supporting your own life, for example, earning a living. A person who advocates egoism cannot, in principle, ask others to sacrifice their earnings for his sake. (In business this means not asking for government favors, e.g., subsidies, legal protection, such as tariffs, against honest competitors.) Productivity means creating (directly or obtaining through trade) the material values your life requires. Man is not a ghost but a unity of mind and body. He needs material values not only to survive, but also to help him enjoy life (e.g., nice clothes, TVs, automobiles). Productive work, such as that accomplished by people in business, is not the product of some lower and corrupt (e.g., “materialistic”) part of the self. Creating (as contrasted to looting) wealth requires rational thinking, including creativity, planning, coordinating the efforts of others, studying markets, cost control, financing, making contracts, looking at the environment, buying or renting property, promoting sales, and hundreds of other activities. If one’s consciousness is one’s spirit, then successful production, including honest profit making, is a profound spiritual achievement. Justice. Justice is rationality applied to the evaluation of and actions toward other people. It means looking at the facts of others’ character and achievements and judging them objectively. It means integrating all the relevant facts and holding the full context of your knowledge about others. It means acting toward people in accordance with your honest judgment. In business this means rewarding those who deserve it and not those who do not. Since only individuals exist, it means evaluating people only as individuals and according to their character and actions and never according to what ethnic or gender group they belong to. Forgiveness as such in objectivism is not a virtue as in religion. Forgiveness may be just, but only under certain circumstances (e.g., the breach of morality was not too severe, the perpetrator has sincerely apologized and made amends, there is clear evidence that the individual has reformed, not just in word but in deed). It should be noted that John Rawls’ theory of justice, also frequently presented in ethics texts, is the complete antithesis of the objectivist view. Rawls’ thesis (insofar as his theory can even be understood) seems to be that some men are “un- 330 Academy of Management Learning & Education fairly” advantaged at birth with talent or good families (evading the fact that the concept of justice does not apply to attributes or conditions over which you have no choice). Therefore such people can only be allowed to function if it results in the benefit of the least advantaged. In other words, the competent are to be punished for their competence by being made, at least in part, servants of the incompetent so that everyone will share each other’s fate. A more grotesque example of injustice, obviously motivated by altruism, can hardly be imagined (Rand, 1973.) Pride. In objectivism, earned pride (which does not refer to boasting or fake self-esteem) is a virtue not a vice. Pride is earned by what Ayn Rand called moral ambitiousness— by working to perfect one’s moral character. Unlike in the case of altruism, it is possible to practice the objectivist virtues consistently (i.e., to be morally perfect), because the virtues are pro-life and consistent with reason and man’s nature. The above are the key objectivist virtues. It is important to note that objectivism is not deontological. Virtue is not a duty, not an end in itself, and not its own reward. The reward of virtue is to place oneself on the path to live successfully on earth and achieve one’s own long-range happiness. (Obviously, factors outside the realm of morality can affect one’s well-being, such as accidents, crime, illness, war, or dictatorship. For a detailed discussion of Ayn Rand’s ethics, see Smith, 2006.) Nor does objectivism accept any dichotomy between the moral and the practical. Its code of morality is practical, because its virtues are pro-life. Honesty, for example, is in one’s rational self-interest (Locke & Woiceshyn, 1995). It is true that dishonesty (or the breach of any virtue) might give you some type of short-term “gain” (e.g., cheating your customers). If there were no such “gain,” people would not act immorally. But in the long term and in the fundamental sense, immorality acts against your self-interest. The “gain” is illusory, because you have sabotaged your own consciousness, undermined your own pride, and opened yourself up to the risk of harm (e.g., lawsuits, loss of job, loss of reputation, jail). Note that the above list of objectivist virtues does not include traits that many people view as virtues. For example, since objectivism advocates egoism, what is its view toward helping others? Obviously helping others is not a duty. But it can be a selfish value. Ayn Rand writes, “Love and friendship are profoundly personal, selfish values . . . Concern for the welfare of those one loves is a rational part of one’s selfish interests” (Rand, September 1963: 5). An egoist would properly help a friend in need or even risk his life for a loved one if life would have no meaning without that person. Such actions are expressions of integrity. What of helping strangers? Ayn Rand’s view is that it is proper to help strangers in an emergency— both out of good will and because one knows the value of human life—as long as the risk to one’s life is minimal and one can afford to help. However, this does not give everyone in need a claim upon one’s life. That would be altruism. (For a discussion of generosity, charity and kindness, see Smith, 2006.) The Vice of Initiating Physical Force. If man lives by reason, it means he needs to be able to be free to think and to act on the basis of his rational judgment. Physical force and reason are opposites. Faced with a gun, your only choice is to obey or die. Thus force negates your means of survival; thus the initiation of physical force is anti-life, and therefore evil. (The use of force in retaliation against those who start it will be discussed below.) Politics Objectivist politics rests on the foundation provided by metaphysics, epistemology, and ethics. If the world is real and obeys causal laws, if man’s means of knowledge and thus of survival is reason, and if egoism (and its associated virtues) is morally good, then what are the proper terms under which men should form a society? The proper role of government is to protect men from the initiation of physical force by others (including by the government) and thereby leave them free to pursue their own interests. The concept that does this is that of individual rights. To quote Ayn Rand (1964a: 92): “Rights” are a moral concept—the concept that provides a logical transition from the principles guiding an individual’s actions to the principles guiding his relationship with others—the concept that preserves and protects individual morality in a social context— the link between the moral code of a man and the legal code of a society, between ethics and politics. Individual rights are the means of subordinating society to moral law. Given that rights are based on egoism, any attempt by Kant to advocate rights at the political level is a contradiction. Rights are moral principles that protect the individual’s ability to pursue his own life and happiness. They have no meaning in a duty or altruist ethics, which banishes concern 2006 for one’s own life and happiness from morality. Men whose moral code demands sacrifice do not need rights and could not benefit from them. Why would you need to be protected by the right to immolate yourself? John Locke’s concept of rights was basically correct, but certain flaws made his theory vulnerable to attack. Among these flaws were mixing rational arguments with religious arguments, not having a valid epistemology (e.g., a valid theory of concepts), and not having an objective theory of ethics. One consequence of not having an airtight case was that eventually the concept of “rights” itself became perverted. The objective concept of rights is entirely negative: It prohibits certain actions (initiating force) to members of society and its institutions, so that men are left free to act in their self-interest. Negative rights allow freedom of action, but they do not guarantee that you will succeed in getting what you want (e.g., wealth, property, happiness). But eventually intellectuals began to posit “positive rights,” the rights to certain objects such as food, housing, clothing, medical care, and a minimum wage. Observe that the concept of “positive rights” totally negates negative rights. If men have a right to housing, medical care, and the like, then certain people must be forced to provide them, which means they lose their rights to freedom of action and to the fruits of their efforts (e.g., property). “Positive rights,” of course, are based on altruism. In politics this means collectivism, the theory that men are not sovereign entities but exist to serve the group (e.g., the party, the state). In effect, rights, in this view, belong to society. In contrast, objectivism upholds individualism in every branch of philosophy. Why? Because only individual human beings exist; only individual minds exist; and thus only the individual is the unit of moral value. Only individuals possess rights. Groups are not an entity but an abstraction referring to a collection of individuals. It is important to note that in objectivism the term coercion refers only to physical force. Being threatened with loss of a job for not doing what the boss wants is not, therefore, actual coercion. Economic power, the power of trade, is not the same as political power (Binswanger, 1983). A dollar is not a gun. The application of individual rights to economics leads to laissez faire capitalism. This means that the only role of government in the economy and society at large would be to prevent the initiation of force, including fraud. The government would consist of the police, the armed forces, the courts and elected officials (e.g., Congress). The Locke 331 use of physical force, consistent with objective law, in retaliation against criminals is morally justified because it protects rights and is therefore pro-life. Fraud is a form of force in that it means you are making a trade without your consent because of being given false information. Under objectivism all the company executives recently convicted of or prosecuted for fraud would still be convicted or prosecuted. Similarly, factories would not be allowed to release poisonous gasses or chemicals into the air, ground, or water that could be objectively proven to harm others, because that would involve initiating force. (The standards here have to be rational; to close all factories and return society to the middle ages because closing factories that released small amounts of particulate matter would violate everyone’s right to life.) Fraud is a form of force in that it means you are making a trade without your consent because of being given false information. Under objectivism all the company executives recently convicted of or prosecuted for fraud would still be convicted or prosecuted. Under objectivism there would be no central bank (and all banks would most likely be on the gold standard), no anti-trust laws, no minimum wage laws, no protection of endangered species (except by your choice on your own property) and, in general, no business regulation that did not involve preventing force or fraud. (For how a truly free country would raise money to support the government, see Rand, 1964b.) There would be no mixed economy, and the result would be less inflation, less unemployment, and far greater economic prosperity. Observe, in contrast to conservatism (e.g., Adam Smith, Herbert Spencer, and others), that objectivism does not defend capitalism because it leads to the greater good for the greatest number or benefits society as a whole (although it does, in fact, benefit society). It advocates capitalism, because it is the only system consistent with man’s rational faculty and because it is the only moral system—it is based on man’s right to his own life. Objectivism (though I have only given a brief summary here) is a complete, totally integrated philosophic system. (It includes esthetics which I have not discussed, but see Rand, 1975.) Before Ayn Rand, there had been only three major systems of philosophy: Plato’s, Aristotle’s, and Kant’s. Ayn Rand’s only intellectual debt was to Aristotle, but 332 Academy of Management Learning & Education all three previous systems suffered from fatal flaws, especially Plato and Kant (see Ghate, 2003; Rand, 1961). In closing, one might ask if such a philosophy can be successfully applied by a business. The answer is yes. One example is BB&T, an Atlantic coast, 100billion dollar banking company, which promotes objectivism’s virtues as the core of its value system. The company has grown steadily for many years, has given an outstanding return to stockholders, has been consistently rated as one of the best banks in the U.S. and also one of the best companies (see Thomas, 2006); it has been totally scandal free. Virtue pays—if you choose the right ones. REFERENCES Binswanger, H. 1983. The dollar and the gun. The Objectivist Forum, June, New York: TOF Publications. Binswanger, H. 1986. The Ayn Rand Lexicon. New York: New American Library. Ghate, O. 2003. Postmodernism’s Kantian roots. In. E. Locke (Ed.) Postmodernism and management: Pros, cons and the alternative. New York: JAI (Elsevier). September (9 –11), reprinted in: New York: The Intellectual Activist:163– 176. Rand, A. 1975. The romantic manifesto. New York: Signet. Rand, A. 1991. Introduction to Objectivist epistemology. New York: NAL Books. Rand, A. 1992. Atlas shrugged. New York: Signet (Originally published in 1957) Smith, T. 2006. Ayn Rand’s normative ethics: The virtuous egoist. Cambridge, UK: Cambridge Press. Thomas, M. 2006. The complete CEO. Chichester, UK: Capstone. Business Ethics Texts Boatwright, J. R. 2003. Ethics and the conduct of business. Upper Saddle River, NY: Prentice Hall. Ciulla, J. B. 2004. Ethics, the heart of leadership. Westport, CT: Praeger. Harvard business review on corporate ethics. 2003. Cambridge, MA: Harvard Business School Press. Locke, E. 2002. The epistemological side of teaching management: Teaching through principles. Academy of Management Learning and Education, 1: 195–205. Jennings, M. M. 2003. Business ethics. Mason, OH: Thomson (West Legal Studies). Locke, E. 2003. Postmodernism and management: Pros, cons and the alternative. New York: JAI (Elsevier) Richardson, J. E. 2004. Business ethics, 7th ed. Dubuque, IA: McGraw Hill/Dushkin. Locke, E., & Woiceshyn, J. 1995. Why businessmen should be honest: The argument from rational egoism. Journal of Organizational Behavior, 16: 405– 414. Peikoff, L. 1982. The ominous parallels: The end of freedom in America. New York: Stein & Day. Velasquez, M. G. 2002. Business ethics, 5th ed. Upper Saddle River, NJ: Prentice Hall. Peikoff, L. 1991. Objectivism: The philosophy of Ayn Rand. New York: Dutton. Rand, A. 1961. For the new intellectual. New York: Signet Rand, A. 1963. The ethics of emergencies. The Objectivist Newsletter, February, 2: 5ff. Rand, A. 1964a. The virtue of selfishness. New York: Signet. Rand, A. 1964b. What would be the proper method of financing the government in a fully free society? The Objectivist Newsletter, February, 3: 7–9. Rand, A. 1967. Capitalism: The unknown ideal. New York: Signet. Rand, A. 1970. Causality vs. duty. The Objectivist, July 1970, reprinted in New York: The Intellectual Activist: 865– 870. Rand, A. 1973. An untitled letter (3 parts). The Ayn Rand letter, 2 Edwin A. Locke received his PhD from Cornell University in 1964. He is Dean’s Professor (emeritus) of Leadership and Motivation at the R.H. Smith School of Business, University of Maryland. His research interests include motivation, job satisfaction, goal setting and the philosophy of science. He has published widely in his field. 姝 Academy of Management Learning & Education, 2009, Vol. 8, No. 2, 259 –262. ........................................................................................................................................................................ Dialogue on Locke’s Business Ethics DAVID C. JACOBS Morgan State University Edwin Locke’s essay, “Business Ethics: A Way Out of the Morass” is a brief for a business ethics founded on objectivism and formulated for management education. While Locke’s argument is provocative and impressive in scope, he misconceives and caricatures the arguments of leading philosophers in order to elevate the work of Ayn Rand. His approach disserves both management education and practice. ........................................................................................................................................................................ I read the September 2006 AMLE with interest. Edwin Locke’s essay, “Business Ethics: A Way Out of the Morass” (Locke, 2006), is a provocative review of business ethics texts and brief for an objectivist alternative. However, it is deficient in its characterization of pragmatism, Kantian ethics, and utilitarianism, among other philosophies. Locke’s errors in interpretation stem from the objectivist lens through which he views the history of ideas. [S]tudents and practitioners benefit when they understand the social and historic context of ideas, whether ideas in theory or ideas for practice. Of course, one should not adopt uncritically the theories of McGregor, the social criticism of Thomas Paine, the ethics of Aristotle, or any other historic perspective. Rather, I believe that a “decent respect for the opinions of mankind,” construed across the ages as well as across the globe, widens the span of experience under consideration and inspires a helpful humility. Similarly, an appreciation of context for contemporary thinkers and practitioners helps us better assess their work. I must admit that my embrace of a history of ideas framework has a basis in philosophical pragmatism. The pragmatists’ rejection of absolute truth leads to enhanced respect for provisional truths—whether historic or contemporary. However, this insight does not make William James or John Dewey an indispensable thinker. They were not alone in their contextual understanding of truth. Martin Heidegger and Dewey are sometimes compared with regard to their rejection of the notion of fixed foundations for knowledge (Abrams, 2002). Similar ideas emerge within different traditions and arguments, as the concept of “equifinality” would suggest. (See Katz & Kahn, 1978: 30, for their discussion of equifinality.) John Rawls proposed a respectful contextual review of historical works. He argued that philosophers’ arguments should be construed in the most favorable light and understood in the context of their times: HISTORY OF IDEAS My AMLE essay on “Critical Biography and Management Education” (Jacobs, 2007) introduces a “history of ideas-based” approach to management education. By this I mean a framework that situates both theory and practice in social and historical context. I believe that students and practitioners benefit when they understand the social and historic context of ideas, whether ideas in theory or ideas for practice. While contemporary debates about theory and practice are obviously worthy of students’ attention, even classic arguments are instructive once we take context into account. The management theories of Frederick Taylor and Douglas McGregor, for example, should be understood as interventions in the contested workplaces of their respective eras. Despite vast differences in technology, language, and culture, there are enduring issues of social relations: the relations of subordinate and superior, men and women, young and old, rich and poor, human and animal, and the like, that are reflected in classic scholarship. The author thanks Neal Ashkanasy for his kind stewardship of this project. 259 Copyright of the Academy of Management, all rights reserved. Contents may not be copied, emailed, posted to a listserv, or otherwise transmitted without the copyright holder’s express written permission. Users may print, download or email articles for individual use only. 260 Academy of Management Learning & Education When lecturing, say, on Locke, Rousseau, Kant, or J. S. Mill, I always tried to do two things especially. One was to pose their problems as they themselves saw them, given what their understanding of these problems was in their own time. . . . The second thing I tried to do was to present each writer’s thoughts in what I took to be its strongest form (Rawls, 2000: xvi). This does not mean, of course, that Rawls was necessarily right in his interpretations, as will be evident below. Despite his errors, he embraced an honest and transparent approach to the classics. He clearly admitted his role as interpreter. While it is difficult, the best stance for the contemporary thinker is to seek to find value in historic works, to treat them with respect, to excavate useful insights, and to adopt some ideas while rejecting others, rather than to simplify or distort works as a means to an end. Perhaps this is a Kantian lens for scholarship: treating thinkers as ends in themselves, not exclusively as means for one’s own arguments. Unfortunately, in his 2006 AMLE business ethics essay, Locke is cavalier with the history of ideas and invokes caricatures of Kant, Dewey, and James Mill based on the analysis of hostile interlocutors. He fails to engage directly with these philosophers. Rather, he cites Leonard Peikoff’s and Onkar Ghate’s summaries and interpretations. While Peikoff is recognized as a leading objectivist, he is not an authority on Kant or James Mill. The result of this indirect assessment of classic works is an account that treats centuries of argument as merely a prelude to the arrival of Ayn Rand. In fact, Locke insists that there were only three major systems of philosophy before Rand’s arrival, those provided by Plato, Aristotle, and Kant. The result of this indirect assessment of classic works is an account that treats centuries of argument as merely a prelude to the arrival of Ayn Rand. On the other hand, Locke is right in his charge that ethics texts frequently present a truncated version of Kantian, utilitarian, and other ethical models. Textbook writers are perhaps more concerned with deriving heuristics from classic philosophical arguments than with constructing nuanced analyses. These heuristics emerge from a process of distillation and vast oversimplification to enhance the practicality and managerial orientation of the June texts. For example, Hartman and Desjardins (2008: 67), like Locke and many others, explain utilitarianism in a way that blurs the distinct formulations offered by Jeremy Bentham and the Mills. (John Stuart Mill’s version stresses the quality, not just the quantity, of happiness, and introduces conceptions of social welfare. See Kurer, 1999.) The sheer volume of Kant’s and others’ works helps explain but does not excuse the omissions and possible distortions. The simplistic presentations of textbook authors surely are not undone by a hostile reading of the classics. Students and scholars alike benefit from honest engagement with the important philosophical debates. PRAGMATISM Locke begins with a striking misrepresentation of pragmatism. It is not a justification of “attaining any goal that you want . . . or makes [you] feel better” (Locke, 2006: 324). William James and John Dewey agreed that truth is provisional but differed in the interpretation of the decisive consequences. James stressed consequences for the individual in the quality of life led, not material gain or personal expediency. His classic The Will to Believe (James, 1899) explored the personal impact of religious faith. Dewey stressed social consequences. His Liberalism and Social Action (Dewey, 1935) was a powerful indictment of the coercive powers of the corporation in Depression Era America. Neither James nor Dewey had any interest in defending the self-dealing that has corrupted many historic and modern enterprises (Kuklick, 2001: 164, 196; Jacobs, 2004). Pragmatists do not deny the existence of facts, of empirical data. Rather, they argue that facts must be interpreted (and reinterpreted) in order to provide models of reality. The practice of peer review in academic journals has in common with pragmatism the assumption that knowledge is not inert personal property but emerges from a social process of argument and validation. KANT AND RAWLS Locke’s critique of Kant relies upon a mixture of Peikoff’s, Ghate’s, and Ayn Rand’s selective quotations and builds to an astonishing and misguided declaration: that there is no greater hatred of man in the entire history of philosophy (Locke, 2006: 325). Locke argues that ethics texts provide a sketchy summary of Kant, emphasizing the universality principle and asserting that Kant respects the individual and embraces reason. Locke denies that Kant values the individual or reason. In fact, he 2009 Jacobs insists that Kant’s conception of duty negates any personal interests or desires. Certainly Kant’s formulation of duty places his philosophy at odds with self-interest and liberty as understood by Ayn Rand. However, it is quite a stretch to construe universalistic formulations of duty to others as a “hatred of humanity.” Those to whom duties are owed may find their lives enriched. Reciprocity of duty provides personal benefit even as it exacts a cost. In The Conflict of the Faculties (Kant, 1798/1992: 69 –70) Kant wrote: Now the critique of reason has appeared and determined the human being to a thoroughly active place in the world. The human being itself is the original creator of all its representations and concepts and ought to be the sole author of all its actions. Indeed, Kantian ethics bring human autonomy and reason to the fore. These elements cannot be easily squared with Locke’s interpretation. Although Kant’s claim to build the categorical imperative from pure synthetic a priori reason merits skepticism (I find Dewey more persuasive in his experience-derived ethics), and Kantian duty may appear to be a difficult standard, Kantian appeals to autonomy and reason cannot summarily be denied. In fact, Kantian duty is rigorous and not easily reconciled with modern capitalism. Bowie thinks he can do so, partly by positing service to stockholders as a duty, coexisting with obligations to employers and community (Bowie, 1999). Rawls quite decisively severs the categorical imperative from Kant’s a priori logic and ultimately substitutes his own “original position” argument (incorporating an empirical component) in order to rebuild a universalistic ethical model. Rawls writes: I conclude these remarks by saying that in presenting Kant’s moral philosophy, I have played down the role of the a priori and the formal. . . . These things I have done because I believe that the downplayed elements are not the heart of his doctrine. Emphasizing them easily leads to empty and arid formalities . . . (Rawls, 2000: 275; see also Budde, 2007). Although Rawls may go too far in this deemphasis of Kantian metaphysics, he is not wrong to seek to build on a portion and not the whole of the Kantian edifice. 261 A BOUNDED ALTRUISM Kant, Dewey, and many other philosophers have in common a commitment to the importance of altruism, and this is entirely inconsistent with objectivist thinking. Locke singles out Kant, Dewey, and Rawls because each makes reason and inquiry a social process. Note that, contrary to Locke’s assertion that altruism is necessarily equivalent to selfsacrifice and self-destruction, Kant specifically identifies limits to beneficence: I ought to sacrifice a part of my welfare to others without hope of return, because this is a duty, and it is impossible to assign determinate limits to the extent of this sacrifice. How far it should extend depends, in large part, on what each person’s true needs are in view of his sensibilities, and it must be left to each to decide this for himself (Kant, 1996: 393). Locke is not persuasive in his argument that altruism admits of no limits. Consider the famous saying of the Hebrew philosopher Hillel: “If I am not for myself, who will be? If I am only for myself, what am I? And if not now, when?” It would appear that a bounded self-interest and a bounded altruism need not be contradictory. A contradiction emerges only when altruism is defined so as to require surrender and self-destruction. An altruist who disregards self in service to others may not live to serve again. Altruism appears to be an enduring element in the life of families and communities (see Mauss, 2002). Locke specifically criticizes Rawls, this time citing neither an objectivist interpreter nor Rawls himself. He misconstrues the “difference principle,” which directs institutional design to the benefit of the least advantaged. Locke equates the difference principle to the punishment of the competent, because he rejects any form of altruism and questions the concept of disadvantage. Locke notes a false dichotomy in ethics texts but misses his own. He protests the false choices of the hedonistic, amoral business leader versus the selfless business leader as a steward of society’s resources. He is right to note the omission of rational self-interest from this framing, which is not attributed to any author in particular and represents his own distinctive reading of ethics texts. There is surely an important place for rational self-regard in business, but there is probably also a place for a balanced altruism. There is another false dichotomy, between the individual and social, which is fundamental to 262 Academy of Management Learning & Education Locke’s thinking. Corporations are not the instruments of individuals; they are inherently social bodies. Conceptions of individual self-interest are not sufficient to explain the behavior of these complex social institutions. Management education benefits from attention to the ideas of great philosophers like Kant, James, and Dewey in part because they address enduring problems of social life and social justice. We owe them something more than idiosyncratic and inappropriate representations of their ideas, and we certainly owe them much more than the assignment of minor status in the story of objectivism. June Kant, I. 1996. The doctrine of virtue. In M. Gregor, (Ed. and Trans.), The metaphysics of morals. New York: Cambridge University Press. (Original work published 1797) Katz, D., & Kahn, R. L. 1978. The social psychology of organizations. NY: Wiley. Kuklick, B. 2001. A history of philosophy in America, 1720 –2000. Oxford: Clarendon Press, 2001. Kurer, O. 1999. John Stuart Mill: Liberal or utilitarian? European Journal of the History of Economic Thought, 6: 200 –215. Locke, E. 2006. Business ethics: A way out of the morass. Academy of Management Learning & Education, 5: 324 –332. Mauss, M. 2002. The gift: The form and reason for exchange in archaic societies. New York: Routledge. Rawls. J. 2000. Lectures on the history of moral philosophy. Cambridge: Harvard University Press. REFERENCES Abrams, J. 2002. Philosophy after the mirror of nature: Rorty, Dewey, and Peirce on pragmatism and metaphor. Metaphor and Symbol, 17: 227–242. Bowie, N. 1999. Business ethics: A Kantian perspective. Malden, MA, and Oxford, UK: Blackwell. Budde, K. 20007. Rawls on Kant: Is Rawls a Kantian or Kant a Rawlsian? European Journal of Political Theory, 6: 339 –358. Dewey, J. 1935. Liberalism and social action. New York: G. P. Putnam. Hartman, L., & Desjardins, J. 2008. Business ethics: Decisionmaking for personal integrity & social responsibility. New York: McGraw-Hill Irwin. Jacobs, D. 2004. A pragmatist approach to integrity in business ethics. Journal of Management Inquiry, 13: 215–223. Jacobs, D. 2007. Critical biography and management education. Academy of Management Learning & Education, 6: 104 –110. James, W. 1899. The will to believe and other essays in popular philosophy. New York: Longmans, Green, and Company. Kant, I. 1992. In M. Gregor, (Ed. and Trans.), The conflict of the faculties. Lincoln: University of Nebraska Press. (Original work published 1798) David C. Jacobs (dc.david. jacobs@gmail.com) is associate professor of labor, business, and society at the Earl Graves School of Business and Management at Morgan State University. Jacobs’ work focuses on the role of altruism and self-interest in decision making by business, labor, and other stakeholders. His most recent book, coauthored with Joel Yudken, The Internet, Organizational Change, and Labor, explores promise and peril in the effects of the Internet on organizations. Jacobs has also published books on social security and employee benefits, business lobbies, and bargaining as an instrument of social change. His articles appear in The Academy of Management Review, Journal of Management Inquiry, Negotiation Journal, Labor Studies Journal, Advances in Industrial and Labor Relations, Labor Law Journal, Academy of Management Learning & Education, Ephemera, etc. He has contributed chapters to research volumes on labor history and has edited symposia for Perpectives on Work.
Purchase answer to see full attachment
User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.

Explanation & Answer

Attached.

Running head: ETHICAL MODELS

1

Ethical Models
Student Name:
Institution:
Course:
Date:

ETHICAL MODELS

2

Ethical Models
Category of Business Changes Kantian Ethics Requires
In the business system, Kantian ethics will need several changes that include having good
will. It is argued that something that is good has good will. Similarly, in line with having good
will, Kantian’s ethics require that one does performs duties as required in a sense that the duties
are accomplished in a perfect way.
Whether Utilitarianism Prioritize the Quality Of Life
Utilitarianism prioritize the quality of life in a sense that based its principle, it defines
aspects of human life that touches on the quality with which human life is affected by actions
taken. Based on its principle, utilitarianism describes the way human happiness can be ...


Anonymous
Really great stuff, couldn't ask for more.

Studypool
4.7
Trustpilot
4.5
Sitejabber
4.4

Related Tags