Ethics in Business
Class Notes
These class notes should help you isolate key words and ideas from the readings. Please review and/or print these out prior to coming to class. The notes are organized by author's name and page number. Remember that many of our readings are linked online in the syllabus
BIBLE ONLINE
Job
Story of what happens to Job
Key questions: why does God do this to Job? What matters most in life to Job? Why doesn't he renounce God? Is Job better off at the end of the story?
Matthew
This is the "Sermon on the Mount" spoken by Jesus to his followers
Values Jesus advances: meekness, humility, servility to God, holiness
Vs. making oaths, taking revenge, loving only those who are good to you
Riches of the heart vs. riches of the world
Loving money is a spiritual darkness
God will provide so don't stress material goods
AQUINAS ONLINE
Aquinas is medieval philosopher and works in natural law tradition = God has given us certain duties + rights
Format is to ask a question, list objections to it, and then answer objections
At issue in Question 66: is it ok to own property?
References to "the philosopher" = Aristotle, Aquinas's fav greek philosopher
References to Augustine = another Christian philosopher
66 concludes that common ownership is better than private so that we can share, some kind of ownership is natural and necessary in human life
Natural law = God's law; positive law = legal law
It's sin for the rich to use property to prevent to poor from advancing
At issue in Question 77: should you state defects of products?
77 concludes you should if the defects aren't obvious, if they are then there is no need to draw attention to them
Question 77 continued: is a retail markup of any service or product immoral?
Moderate profit is ok, it serves public good, but too much profit is immoral
Natural trade is fine, but trade for profit is only good if profit is used morally
KORAN ONLINE
The Cow
Koran is 7th C. text of what God revealed to prophet Mohammed through an angel
FYI: Islam, Christianity and Judaism have similar value system and shared origins in story of Abraham
Spend money according Allah's wishes and you will be rewarded
Alms giving = charity, section 2.271
Usury = making money off of interest. Trade is different
Usury is uncharitable and Allah wants us to be charitable to each other
Pomeranz
Purpose: explain how Islamic Business Ethics can work in today's world
Shari'ah = Islamic ethical way of life
Share or give away wealth, so as to fairly distribute it to the entire community
Vs. interest: usury goes against a fair distribution of wealth
Dentist house example
Examples of how modern corps. try to meet needs of Muslim customers
KUNG PG. 13-39
Kung comes from natural law (= Christian) tradition but this finds commonality with all religions
Common set of core values in all religions can lead us to better world and individual order
"We are interdependent" is foundation of declaration
Assessment of world situation pg. 17
Spiritual persons base lives on an Ultimate Reality (= God?)
Reference to UN resolution pg. 20-1 (we will read this later on in term)
Improving the world isn't done by governmental, etc. reforms alone but by spiritual reform
'Do unto others' is found in all religions and should be norm for everyone
4 commitments listed pg. 24-34: respect for life, just economics, truthfulness, sex equality
Personal responsibility for improving the world
HUNTINGTON ONLINE
Note that this reading is 11 years old but still applies today
Huntington is contemporary poli scientist, describing world as he sees it
Cold war replaced with new spin on an older conflict: Ortho-Muslim vs. West
History of the West conflict with Islam
Africa and Russia next fronts in this clash
We have economic clash with Japan
Challenge for non-West is to be modern but still keep traditional values
Challenge for West is to accommodate some non-Western values for the sake of peace
KANT ONLINE, "GROUNDWORK OF METAPHYSICS OF MORALS" #1
Kant is 1760s German philosopher, arguing reason itself demands we be moral
The good will as the only intrinsic good
We have to do our duty, that is only way to ensure our actions are morally right
Duty versus inclination
Moral worth from doing the right thing, even when you don't want to
Categorical imperative's 4 examples
Maxim = rule that guides your actions
Ends = valuable by themselves ; means = valuable only for their use
3 versions of the categorical imperative: universalizing maxims, treat people as ends, dictate and obey moral law
BOWIE ONLINE
Kant is relevant to business today
Moral goodness = intention to do duty and respect persons
Any act that puts money on same level as people is wrong
Categorical versus hypothetical imperatives: what we have to do versus what we want to do because it's in our interest
3 versions of categorical imperative
Example of GM and contracts
Kantian open book management
Live by the rules you set for others
Compatible with stakeholder theory of obligations
KANT ONLINE, "PERPETUAL PEACE" #2
Comparison of politics to morality
Cassidy's reader's challenge: replace 'politics' with 'business'!
Most people agree what is moral but this morality is impractical when it comes to politics
Act justly no matter how others act, no matter if it is against your political interest
"Political moralist" = crafty leader who only obeys morals when it is in his interest
(Moral) right exists objectively and must always be respected; human rights are holy
Publicity = to test if acts are moral, imagine publicizing you maxims
3 examples of how publicity of right works: state, international, cosmopolitan
Final maxim brings politics to always being moral
UN ONLINE
Written and agreed upon UN General Assembly of 1948
Inherent dignity and unalienable (= un-seperate-able) rights of all human
Overlaps with religious + natural law ethics, and Kant's human rights ethics
Articles 23-25 relate to business ethics
ROBINSON ONLINE
Robinson is UN commissioner on human rights
Mission: make globalization work for everyone by making it more humane
Human rights are the responsibility of individuals, states, and corporations
WTO member states agreed to respect human rights
But what does it mean to practice this?
AIDS example shows how complicated delivering human rights is
UN Global Compact = private corporations make a commitment to human rights
Corporations need to go beyond legal requirements to moral requirements: rights, labor, environment
PLEASE NOTE: THIS READING IS NOT ASSIGNED FOR MINI SUMMER I
NEW YORK TIMES SPECIAL ISSUE (6/6/04) ONLINE
Lewis on "Irresponsible Investor"
Rap sheet on American investors
Google tries to respond to market and not be evil
Investors seem to get off the hook for corporate ills but they are responsible
Prof. McElhaney's research: how do we turn corporate social responsibility into money?
Is corporate social responsibility simply self-interest in fancy dress
Birkenstock example: what does it show?
Dubner and Levitt on "Bagel Man"
Paul F., economist and bagel dude
Surprising findings of who pays what and when
Factors: kind of jobs, employment situation, size of company, etc.
Comparison of taxes to bagels
Would you pay for the bagels?
Walker on "Brewed Awakening"
Fair trade coffee is example of branding plus ethics
Demands to be consistently "good" consumer are hard to meet
Feeling good about what you buy is part of marketing scheme
Is fair trade coffee a first step?
Cassidy's note: the Ramapo cafeteria now sells fair trade coffee!
MILL ONLINE, "UTILITARIANISM" #1
Mill is 1850's English philosopher, arguing that morality is creating general happiness
Utilitarianism = greatest happiness for the greatest number overall
Consequentialism = act to produce best consequences in any situation; one's intention does not matter as much as the results of the action
Happiness (more pleasure than pain) is what we all are after
Higher versus lower pleasures: utilitarianism is not a "doctrine worthy of swine"
Decided preferences: those who know both kinds will prefer higher pleasures overall
Human happiness is the goals of our actions including morality
Utilitarian will sacrifice some of own happiness for greatest happiness overall b/c that in the end will make them happiest
Jesus was a utilitarian
SINGER PG. 1-13 and 43-50
Singer is a contemporary utilitarian philosopher who draws on Mill
Thesis of book: we need to respond to globalization with new ethics for sake of morality and own security
Treaty of Westaphalia gave rise to nation-states having sovereignty within own borders, but this model of nations is outmoded by globalization
Global South (or South) = Third World countries
Bush vs. Singer: Americans first?
We skipped: Singer details how carbon pollution (global warming) is causing real harm to people in Global South and evaluate different options to solve problem
Singer's solution: each country get carbon credits by population
A good start: US should sign on to Kyoto Protocol, which limits carbon pollution
MILL ONLINE, "ON LIBERTY" #2
Principle of Liberty: only justified in interfering with others when they are about to harm you
Mill is worried about governmental and social interference with liberties
Each individual is sovereign (= ruler) over his own body and mind, but not so for children
Utility is 'grounded in the permanent interests of man as a progressive being' = greatest happiness demands people have individual liberty
Direct vs. indirect harm
Paragraph 4 lists 3 main domains of liberty
Beginning chapter 5: free trade is part of liberty
Control for the sake of protecting people is ok, but control to inhibit liberty is not
Examples: selling poisons, selling alcholol/drugs
SINGER PG. 51-77 and 96-105
WTO and GATT are designed to encourage world trade; if trade increases, people in general will be better off
What were the protesters in Seattle so upset about?
Four charges made against WTO, see page 55
Charge #1: WTO puts money above people, environment, and other concerns
WTOs official policies at odd with its practices
Process vs. product interpretation of WTO fair trade policy; dolphin-tuna example
Singer: not looking at process of how something is made allows for great environmental or human rights abuses; GATTs article XX is ignored
Charge #2 against WTO: Interferes with national sovereignty
Technically, WTO does not interfere but 1 once you join its hard to quit 2 its hard not to join
Charge #3 against WTO: Undemocratic
WTO works by consensus (veto rule) which is not same as democracy and major powers make all the big decisions anyway
Charge #4 against WTO: Makes poor poorer and rich richer
We skipped: Singer carefully goes over the evidence for and against this claim and finds that the info that would decide this charge (comparisons of household incomes) is not available
Cant tell if charge #4 is true or not
Many poor countries governments are said to be legitimate (in that they control the territory) but are not legit in that they do no reflect will of the people
Singer: only legit governments to be able to sell nonrenewable resources, and international law to make sure this is so
LOCKE ONLINE
Locke is 1670's English philosopher in natural law tradition (see Aquinas)
Background: God made us all free, equal, with common land and endowed with 3 human rights (to life, liberty, and property)
State of Nature = imaginary time before there were any laws or legal authorities
Labor theory of property; this arrangement increases the welfare of mankind
Own as much as you work in state of nature, but it is wrong to hoard food or waste it
Rise of money related to spoilage
Social compact: society based on protection of inalienable rights to life, liberty and property
SMITH ONLINE
Smith is 1770's English economist, who notices rise of middle class in Europe
Division of labor increases productivity and happens organically
Pin example at beginning of chpt. 1
3 advantages of the division of labor
All aspects of common man's life, work, personal effects are produced through social cooperation that is not directed by state, but necessity
Greyhound example at beginning of chpt. 2
People are egoistic (self interested) individuals and a good society is each person looking out for herself
Cooperation is necessary in society but it is produced not out of good will but need
Famous quote about 'butcher, brewer or baker' 2nd para., chpt. 2
Dissimilar talents help mankind overall, without aid of a common director
FRIEDMAN PG. 7-21
Friedman is contemporary economist who draws on Locke and Smith
Vs. view that a socialist economy + political freedom is possible
Economic freedom is end in itself and is means for political freedom
Freedom is freedom, be it econ, religious, poli or personal
Vs. various ways our govt restrict freedom: taxes and professional licenses
History links econ and poli freedom in some cases
Simple trades need freedom: picking our own economic choices reduces the role of government in our lives
Example pg. 16-17 : How would a repressive communist system support political dissent?
Other exs of government repression: Churchill, Hollywood blacklist, McCarthyism
Assumes people make choices based on econ self-interest
HENDERSON ONLINE
Henderson is contemporary economist who defends Friedman
CSR = a doctrine that corporations have econ, enviorn, and social duties to non-share holding parties
Vs. CSR as a belief system for 2 reasons: distorts reality, bad consequences
Popularity of CSR doesn't make it right
Vs. global salvationism: dispute that globalization needs to be softened by corporations
CSR disputes fundamentals of capitalism
CSR raises costs, stifled competition, and invites overregulating
FRIEDMAN PG.119-136
Monopoly: control over good or service that can determine others' access to it
2 problems: limits on exchange and raises issue of social responsibility
3 kinds of monopoly: industry, labor, government (note: much of his data is outdated)
People overestimate and worry about industrial monopoly too much
Labor unions are an unchecked example of labor monopoly (vs. labor unions)
Government licensure is government example (vs. government); taxi example
His position: curb any kind of monopoly that interferes with individual liberty
Pay special attention to pgs. 133-6 - this is what he is most famous for!
Vs. social responsibility of corps or unions, only responsibility is to make money for its shareholders
Social responsibility doctrine hinders free society and confuses role of business with role of charity
PLEASE NOTE: THIS READING IS NOT ASSIGNED FOR MINI SUMMER I
T. FRIEDMAN ONLINE
· Friedman is contemporary journalist who thinks
globalization can be good overall
· Lexus (technology and prosperity) vs. olive tree (roots and sense of identity)
· Premise: cold war is replaced with globalization, but there are growing pains
· Electronic herd at Davor Forum; backlash fights against Golden Straightjacket
of globalization
· Rainforest example: fast world vs. turtles
· Who fights against globalization: the used to bes in the industrialized world
· Backlash against globalization: 3rd world (including Baltimore!) cant catch
up
· Other backlash against cultural globalization: homogenizes people
· Irrational exuberance: why Friedman is optimistic pg. 298-303
· Things we have here other countries dont: good geography, multicultural,
markets, honest government, easy bankruptcy, immigrants, flexible politics,
flexible labor, etc.
MARX ONLINE
Marx is 1850's German/English philosopher reacting to his age of globalization and labor strikes
Bourgeoisie (capitalist owners) vs. proletariat (workers) is age-old conflict of have and have-nots
Bourgeoisie turn every place into a market and everything into a commodity
Bourgeoisie are a productive forces (wealth) and destructive force (man and nature)
Commodification of labor in industrialized capitalism
Alienation of laborer from his labor
Capitalism turns average worker into mind-numbed drone
Need to abolish private property so that people own what they work on and have a say in their own work-live
PLEASE NOTE: THIS READING IS NOT ASSIGNED FOR MINI SUMMER I
BAUDRILLARD ONLINE
Baudrillard is contemporary French philosopher - not a communist per se, but like Marx is critical of capitalism
Modern society is not by, for, and about objects - not nature or people
Accumulation and collection are carefully designed to manipulate people into consumer behaviors
Drug store = mall, mini-malls, CVSs, Targets, and any similar type of shopping enviorn
Homo economicus = economic man; a fictional man who operates according to 2 assumptions
Econ man model assumes that satisfaction of artificially created consumer wants = happiness
Disneyworld is becoming the model of not just business but our entire lives
Disney obliterates real/virtual, fact/fantasy, info/advert, etc. distinctions
LASN PG. 37-41 + 65-96
Lasn is contemporary Canadian who used to work in ads and media
This is a polemic, an impassioned speech that is not meant to be objective
Lasn, like Baudrillard, wants us to challenge consumer culture
Manchurian candidate comparison to US consumerism
History of American economics: Santa Clara vs. Southern Pacific decision pg. 68
pg. 73-4 exs. of Janet, Matt, Sarah, Randy: recognize anyone you know?
Expansionist vs. ecological views on economy pg. 86-90
LASN PG. 144-183
Culture jammer: someone who rebels in big or small ways against consumer culture
Culture jamming will reclaim self-rule (sovereignty) from big corporations
Put corporations on alert by revoking their public charters, begin ad campaigns to that effect
Uncooling is de-marketing, this is another way to regain sovereignty
Uncooling examples of food, fashion, autos, etc.