Why Good Business ought to be immoral

© Brian Jonathan Garrett, 2014.

Why “Good” Business “Ought” to be

Unethical1

Abstract: I defend the wisdom in the old joke “business

ethics is an oxymoron”. I offer two related arguments,

the predictive and the normative, to the conclusion

that good business will be unethical and that good

business, economically “ought” to be unethical in a

liberal society.

Introduction

Cynics like to joke that “military intelligence” “honest

spies” “caring bureaucracy” and “ethical business” are

oxymorons. Possibly humorless folk but certainly sober folk

like to reply that no, there are many honest spies, very

smart soldiers, nice helpful bureaucrats and ethical

business people. Sobriety has its virtues, no doubt, but I

guess I shall play the cynic in this paper and take on the

old joke with regard to business ethics. I shall argue that

“ethical business” is something of a joke. But, the wisdom

in a joke is not always evident and often the errors are

more obvious than the wisdom. For it is an obvious truth

that there are smart soldiers, caring bureaucrats, honest1 Thanks to Warren Bourgeois and Bill Barthemely for useful comments on an early draft. No thanks to the Journal of Business Ethics who couldn’t be bothered refuting it.

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spies and ethical business people. If “ethical business is

an oxymoron” is true, and not merely funny, its truth cannot

conflict with the evident facts about many, many individuals

in business. Many never act immorally and their businesses

thrive while behaving ethically. And many of these people

don’t merely behave ethically they behave better than we

might reasonably expect someone to do, and as such, are

worthy of considerable admiration for their superogatory

behavior. But business as an institution will pay little

attention to what is ethical –fads and ads to the contrary

noted.

1. The Target

So what could be the wisdom in the old joke? To get at the

wisdom we need to refine the target and put aside some

misunderstandings that are commonly associated with the

wisdom of the joke, its kernel of truth.

Although I personally find myself more comfortable in

socialist traditions of political thought regarding how

society is to be structured, I also believe that business

activity is a form of human creativity that, in its proper

place and when properly monitored (as all risky activity

must be) is not morally problematic. Indeed it will suit

some people as a manner of flourishing. Being motivated to

increase one’s material well-being by making a profit can

find a place in a healthy society, and its pursuit can lead

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to human flourishing, just as writing poetry, flower

arranging and playing contact sports have a place in a

healthy society and offer its practitioners a sense of

meaning. But the exact role for business activity or profit

making in utopian society is not something that I can defend

here. I just want to come clean about my own predilections.

However, I shan’t attempt any argument from Marxist or

socialist premises – that would leave me with no audience

and no one to convince.

First: the target and its straw men. Individual business

people or businesses are not at issue. If there is a moral

problem with business practice it is not a problem that

qualifies all businesses or business people. If one suspects

that “ethical business” is some subtle contradiction or

confusion this is not equivalent to saying things like “all

businesses are immoral” “all business activity is immoral”.

The wisdom in the joke is more subtle than that. Rather, I

want to argue for two related conclusions.

First, that business, as an institution, or as a type of

activity, is bound to engage in immoral or unethical

behavior. Call that the predictive argument. Second, I shall

argue that it is bad business to avoid immoral behavior. Call

this the normative argument. Thus the wisdom in the joke

that ethical business is an oxymoron is that, when carefully

analyzed, we will realize that business as an institution is

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bound to be immoral and that it is in the very “logic” of

business activity that leads to this immoral behavior.

2. The Whole, not all of its parts

What does it mean to speak of business as an institution

while explicitly denying that all business must succumb to

the problem? Consider for the moment, boxing and ice hockey.

Some boxing is done, by weak and ineffective boxers such

that no one gets injured – their punches are so light they

cause no injury or they often miss their mark. These boxers

are practicing the sport of boxing but no one is injured due

to their light and touch and poor aim. Perhaps they are not

boxing well or competently, but nevertheless, they are

boxing. So it is not true that all boxing leads to injury.

But despite these examples, it is fair to say that the

institution of boxing as it is currently structured,

refereed or policed, leads to injury. The exception doesn’t

prove the rule here but the exceptions are also no objection

to the claim. If we like, we may say that boxing raises the

frequency and likelihood of injury. Because of that the

sport is a concern for Parents. Children that wish to box

are likely to be injured. The same is true of hockey. Hockey

as it is currently structured, financed and especially as it

is currently policed, leads to fighting in the rink. It’s

not good hockey to avoid fighting, as the main promoters and

players of hockey know all too well. More people tune in, or

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fail to tune out, when a fight breaks out on the ice. The

fights sell tickets or gain audiences and they entertain the

crowds. Players that don’t fight will not do so well (of

course this also depends on the position they play). Some

get the label of “enforces” in popular discussions. But

“everyone wins”, apparently, for all the relevant

stakeholders (players, audiences, owners) are happy with

hockey fights. But even if we agree with this

characterization of boxing and hockey as institutions we can

also agree that it doesn’t always happen in every game or

every match. Some Hockey games lack fights and in some

boxing bouts no one is injured.

I am not merely urging an empirical prediction. I shall also

argue that good business, considered as an institution or

way of behaving, will not avoid unethical behavior. That

claim is not an empirical prediction but a comment about the

internal logic or rationale of business activity. It is a

normative claim. It says that business that avoids unethical

behavior will count as poor business, and everyone in

business believes “poor” is a bad thing. Just as a

mathematician who cannot add or subtract is rightly judged a

poor mathematician, business as an institution, were it to

avoid unethical behavior, would rightly be considered poor

business. Poor business is business that ought to be

avoided. Good business is business one ought to pursue from

the businessperson’s point of view. So I claim that good

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business is business that will eventually take up immoral

activity and ought to do so.

To say that good business ought to do something is to make a

comment about the rational principles that make sense of the

activity for those who take up the role. The “ought to do”

makes sense given their assumed role and the “telos” or

goals assumed to be appropriate for that role. When I claim

that good business as an institution ought to be immoral the

“ought” is not a moral “ought”. I am not saying that as a

matter of morality business ought to be immoral! That borders

on a contradiction. Rather, I am arguing that given the

economic goals of business, business ought to be immoral.

I fear these remarks will be taken out of context and used

against me, for although good business ought to be immoral I

am not endorsing “good” business. Given that the “ought” in

“good business ought to be immoral” is not the “ought” of

morality, we may ethically denounce this fact about business

if we wish. Compare: good spying will penetrate your email,

telephone calls and text messaging. Good spies will tap into

fiber-optic cables, intercept radio signals and open your

snail-mail correspondence. But I do not endorse good spying.

Good spying may well be unethical. Or perhaps this captures

the point about the “internal logic” of an activity or

institution better: A good thief (and a good spy?) is one

who is able to break the laws of property without getting

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caught. But I do not endorse breaking the law so I do not

endorse good thieves. So even though I believe good business

ought to be immoral I do not endorse good business for I do

not endorse immorality.

3. Contingency and Context

What upsets some of the very, very older generations who

love their hockey is that it didn’t used to be that way

(apparently) and that it need not be that way. This is an

important point about contingency. Even if hockey as it is

currently structured and enjoyed leads to fights, it is not

a necessary feature of hockey, as if the Platonic form of

hockey includes within it a predisposition to fighting. It

is not an eternal or necessary truth that hockey leads to

fights.

Such admissions don’t conflict with the claim that, as it is

currently practiced and policed, hockey leads to fights. Nor

does it conflict with the normative or evaluative claim that

it would be bad hockey (today) to avoid the fights. We can

imagine hockey not tolerating any fights, just as other

sports and activities do not tolerate fights. Imagine

policing tennis, writing poetry, or playing chess such that

fights was tolerated by their practitioners. It could

happen, but it doesn’t have to. We can also imagine hockey

without the fights and boxing without the injuries. These

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are historically contingent features of these activities. 2

They need not be there and the sentimental among us like to

remember a time when they were allegedly absent.

What this point about contingency and history tells us is

that when we accuse an institution of wrong doing, or when

one accuses a person of wrongdoing, we must specify the

context and not pretend that in all contexts no matter what,

the institution or person’s actions will count as immoral.

In making my case that business leads to unethical behavior

and that good business will not avoid immorality, I do not

intend to imply that it is impossible for business to be

ethical and to refrain from immoral activity. Indeed, we

have already agreed that some individual business people and

their activities are not unethical, in our current context,

so it seems quite possible that business as an institution

could, somehow, avoid unethical behavior.

But context is crucially important for understanding the

effects and rationale behind an activity or institution.

Different contexts, such as different historical

circumstances and distinct cultural systems will lead to

different effects. In distinct contexts or societies,

different and distinct reasons may be required to make the2 It is a fascinating exercise in philosophical imagination to see how far one can go. An old episode of StarTrek attempted to imagine wars without bombs, without the destruction of property or culture, and to include only deaths that were in some freely accepted and suicidal rather than at the hands of the enemy! War can be like nothing we have experienced.

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activity reasonable or unreasonable. Any accusation should

make the context clear for no institution “lives” in a

vacuum and no person is an island.

So if business as an institution in our current society, in

its current state, “inevitably” leads to immoral activity

and it would be bad business to refrain from immoral

activity; this does not commit us to the absurd claim that

in all contexts, under all conceivable structures and

policing would it lead to immoral activity. Like any other

moral judgment we make, the context of the activity must be

clearly articulated and we must leave open the possibility

that in a distinct context with a modified structure and

policing, regulation or monitoring, the activity may not be

rightfully accused.

As I present my arguments and defend the premises, I shall

discuss how we might avoid the consequences of the argument.

If we make changes - deep changes to society or business –

then we will be able to transform the institution of

business from one that leads to unethical behavior to one

that does not. If we make changes to business then good

business will avoid unethical behavior. I shall suggest two

ways this may be done. The first is internal and the second

is external. If we change business internally then we change

the “Telos” of business, its internal goals that rationalize

business activity. If we “change” the institution

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externally, then we change the social and legal framework in

which business-activity functions. Both approaches yield

possible solutions i.e., they may lead to business avoiding

unethical behavior. If we make these changes then “good

business” can avoid unethical behavior.

But these changes are not here yet. Our context is rather

different. Business as an institution in its current form

and context leads to unethical behavior and “good business”

must do so too. Furthermore, although there are internal or

external changes that we can make to avoid the problem, not

all these possible changes are welcome. Indeed, at least one

is more morally objectionable than having an institution

that leads inevitably to unethical behavior and whose

internal logic supports unethical behavior. I’d rather have

the status quo than make that change. I’ll turn to these

points later. However, I won’t be able to argue for which

solution is the best, for that would take us too far afield.

We would have to solve some nasty problems in political

theory that I can’t consider here. I will, however, indicate

my current preferences for the record.

More often than not, the context is assumed known and

understood and its nature agreed upon, so more often than

not we forget to make the context of the activity or

institution explicit. Most Canadians (and Americans), for

example, reasonably believe that physically fighting with

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the police is an immoral activity, but that is because they

assume a Canadian context for their claim. They assume that

the Canadian context is one in which the police are not

corrupt instruments of repression. They assume that the

police are not themselves committing crimes and that

citizens therefore ought not to perform a citizen’s arrest

upon the police. But this is not true of other countries in

which the police torture and oppress their citizens.

(Mistaking one’s context is, of course, a very common

problem.) So we must be clear what the context of the

institution is in which it is accused of leading to

unethical behavior. We must specify the context under which

we claim that it would be bad business for business as an

institution to avoid unethical activity. Our context is

liberalism.

The next thing I need to do is specify how we understand the

institution in question. We require an accurate account of

what business as an institution is or what counts as

business activity. But we also need to specify the “internal

logic” of business activity as it is currently construed.

This is not to specify what business activity is, exactly,

but how “ideal” business activity is, or what business ought

to be, given our current context.

But the internal logic of business – what makes business

activity reasonable from the point of view of business – is

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not itself the essence of business: some universal or

necessary feature. It may capture the “essence” of business

as it is currently conceived and practiced in our context.

Although the internal goals or Telos of an activity are

often taken to be essential to an activity I do not think

this is correct. The goal of sweeping the floor for most

people is to have a clean floor and good sweeping results in

a clean floor. But sweeping the floor could also have the

internal goal of getting a person exercise and good sweeping

is sweeping that makes one fit, never mind the mess.

Changing the goals internal to an activity seems quite

possible – although there may be limits. Changing the goals

might be a good thing.

So I need to make two things clear in order to make a

successful case. I need to specify the relevant properties

of the context and I need to specify the relevant internal

logic or “telos” of business as an institution or type of

behavior. To do this I shall present the arguments in

question and attempt to defend the premises.

Now, given the contingency of the properties of business and

its context, it will turn out that the objections that come

most readily to mind are also what I have called

“solutions”. That is, one might object that my premises are

not true. I shall attempt to argue that they are true, but

because they are not necessarily true, the objection is often

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best understood as a way of solving the problem; a way of

avoiding an activity that leads to immorality and that

delivers the normative claim that good business will be

immoral.

4. The Predictive Argument

I am making two arguments one that I call predictive and the

other normative. The first makes a prediction and as such is

vulnerable to empirical refutation. Many philosophers don’t

wish to make such arguments due to this risk of empirical

refutation, but, frankly, there are few arguments left over

to muse upon, if one makes that restriction. And those that

are left over look suspiciously verbal and irrelevant to the

practical concerns of living people – although perhaps the

platonic forms and gods appreciate them3.

I begin with the predictive argument and some general

remarks.

The predictive and normative arguments I offer have three

premises in common. The predictive argument has one further

premise not possessed by the normative argument. Given their

overlap I can kill two birds with one stone in my defense of3 I indulge and defend arguments that are considered metaphysical. Arguments in metaphysics are often conceived as arguments that can’t have empirical refutation and so I am not saying they aren’t possible. But a philosopher who makes an argument that could or might be refuted empiricallyshouldn’t be embarrassed, for the majority of other excellent inquiry is like that.

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the premises. But one can’t get a normative conclusion from

non-normative premises so both arguments begin with a

rational (not ethical) normative claim about “good

business”.

The shorter, normative argument is to my mind the more deep

and penetrating argument since it defends a normative

conclusion: “good business will be unethical”. It captures

something that makes business activity quite distinct from

other human activities.

The predictive argument

[EC] It is not good business to ignore a legal and

profitable market [Normative

Principle of Economic Rationality]

[RM] All things being equal, business people will pursue

what they judge to be good business [Principle of Rational

Motivation]

[L] In liberal societies some immoral behavior is legal,

i.e. the law does not attempt to be coextensive with

morality, i.e. there are activities that are agreed to be

immoral and are legally permissible [Liberal principle]

[EF] There are legal but immoral activities which are also

profitable markets [Empirical Fact]

Therefore:

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All things being equal, business will pursue legal but immoral

business activities

The Predictive argument is, I believe, easy to understand

and immediately attractive. If good business requires us to

make a legal profit and there is a way to do that then

reasonable business people in the relevant business will

pursue profit making in those markets. But if liberalism

leaves many unethical practices legal and if these are

activities that are profitable markets, then reasonable

business people will be motivated to engage in these

activities. Thus, business will pursue such legal,

profitable but immoral activities. I turn now to some

discussion and explanation of the premises.

Premise one, what I call the normative principle of economic

rationality or EC, states that it is not good business to

avoid legal and profitable markets. “Legality” is important

here. Many very cynical thinkers like to assert that it is

good business or reasonable for business to pursue

profitable markets that are illegal. Illegal behavior is

certainly found in the business world but its rationality is

far from obvious. The rationality in question is that we

find intrinsic to current business activity in our current

society: making a profit. If we assume that the internal

goal of business is to make a profit (I shall return to this

later) then we might rashly conclude that it is also

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profitable and hence reasonable for business to pursue

illegal activity that is profitable.

But this is not obvious. It is not obvious for a number of

reasons. First, there are clear economic risks involved in

acting illegally. Acting illegally is risky and expensive –

one has to pay people to remain quiet – more than one does

if they are not acting illegally. Furthermore, one will

likely need to pay people who are not officially employed

with the company to keep quiet, thus involving other people

who are not respectful of the law and who might not be

easily controlled. They might not be trustworthy, unless

their involvement is as deep as those in the company

benefiting from the illegality. Second, the risks of a

whistleblower revealing one’s criminality will rise as the

illegal activity becomes more widespread and more

outrageous. Companies engaged in such behavior should expect

that it is only a matter of time before someone motivated by

their morality reveals the deal to the public.

Cynics will say that the cost-benefit analysis is not so

clear-cut and if profit is the main motivation for business

then sometimes the risks will be worth the prize. This is

likely to be true of those in control of large businesses

who stand directly to make huge personal profits. (Hence

these folk should always be on law-enforcement’s “radar” and

they should be the first suspected of any wrongdoing.) But

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it will be less true of anyone who is not directly

benefiting from the illegal activity and who is contributing

to the illegal activity while being paid a miserable wage.

Indeed, as the gap between rich and poor within business and

society increases I suspect there will be more

whistleblowers and more corrupt people “at the top”. This is

because the risks may well be worth the profit for those in

power but the loss of a job that pays poorly may not be so

difficult for those already living so poorly. (Assuming

there are other jobs for them to move to.) The risks

therefore are considerable, so it may not make economic

business sense to behave illegally.

But regardless of the risks and cost-benefit analysis we may

insist that the internal goal – even if it is not always the

practice – of business, is to fit in with society at large

and to make a profit. We need not attribute the goal of

“making a profit at any cost” to current business. Business,

as an activity that occurs within a social structure will

rationally have goals consistent with that social structure,

not contrary to it. That is, it is reasonable for business

to have such a goal even if there are “free-riders” whose

illegal behavior relies on the majority assuming everyone is

acting within the law. It is reasonable because those in

business wish it to survive and going contrary to the laws

and norms of society threatens its existence.

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Finally, few business people today in Canada, U.S.A and

Europe (our social context) never publically advocate

illegality as a method to obtain a profit and to advance

their companies. Perhaps their commitment to legality is

insincere, but this seems rather unlikely. The vast majority

of business activity is, in fact, mundane and legal. (We buy

groceries and the company doesn’t steal from our bank

accounts when we do. Such mundane transactions are in the

vast majority.) Perhaps I am wrong or naïve to think that

current business goals include only legal ways to make a

profit. But given that the defenders of business assume that

legality is expected of their activity and their defenses of

business typically assumes that the activity is legal in the

society it occurs, it may count as a straw man to go after

business defined as “making a profit, no matter the law”.

The stated goal of business leaders and defenders is legal

profit-making not profit making despite the law. We should

accept the stated goal until we have overwhelming evidence

of the insincerity of the defenders of business. We do not

have overwhelming evidence of this.

But is EC true? I have already stated that I don’t intend to

imply that each and every business is condemned by my

conclusion. Thus we may note that EC has some exceptions and

curiously, these exceptions are also possible solutions to

the “problem”. It may rightly be pointed out that there are

many nonprofit businesses. Non-profit businesses are big

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business and so we may doubt that the economic rationality

of business is to make a legal profit. Plenty of

organizations do not aim at profit making but in improving

services to their cliental and maintaining their activities.

Indeed, many activities in society are best suited to be

nonprofit businesses, if businesses at all. Things as

different as nuclear waste disposal, prisons, and looking

after the elderly or vulnerable people, if not the

responsibility of governments, would likely be best

performed by nonprofit businesses. The demands of profit

making in a competitive environment leads business to take

up familiar strategies to stay competitive and to increase

profits: cutting back on staff, (hence safety) increasing

their sales (encouraging the state to imprison more people,

or to make more nuclear waste), outsourcing to dubiously

regulated companies in other countries, (lower safety

standards for consumer and employee) etc. If legal profit

making governs these industries or services then I suspect

we have some nasty future social problems forthcoming.

But, be that as it may, today nonprofit business does not

dominate the “logic” or ideology of business, nor are the

nonprofit businesses anywhere close to being in the

majority. The institution of business as we currently

possess it is decidedly not “nonprofit business” nor is

making a legal profit a marginal or unusual activity. The

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exact reverse seems pretty clearly true: legal profit making

dominates the ideology and practice of current business.

But notice that the option is there. If one wishes to avoid

the conclusion of the predictive and normative arguments (I

shall return to this point) then one way to do so is to make

premise [1] false. If the internal goal of business can change

such that “good business” is not aimed at making a legal

profit then we may be able to prevent the conclusion that

good business will be unethical and prevent the conclusion

that reasonable business people will pursue unethical

behavior. I personally like this idea. Since I care to rid

business of its unethical behavior and I am somewhat

concerned by the fact that “good business” should be

unethical, I’d like to change the current situation.

Changing the internal goals of business activity from legal

profit making to legal nonprofit making, seems to be a very

attractive solution, despite the enormous changes it would

require to current society. Making nonprofit businesses the

stereotype and statistical norm for society would, I

suspect, avoid the unethical consequences of current

business. But I can’t defend this solution here; only mark

my approval4. 4 Bill Barthemely notes that other solutions might also work, e.g. constraining business to act morally while leaving indidivuals to live within a liberal context where they have the right to behave unethically. I am not however trying to defend a solution in this paper, but it is worth remarking that this is another possible solution worth

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Premise two. The principle of rational motivation tells us

that what is judged to be good business will be pursued by

reasonable business people. There is a great deal of debate

just to how reasonable people really are and whether people

really do pursue their stated goals. But it is one of the

planks of economic theory as it still dominates today that

people are, all things being equal, reasonable, and that

they pursue their goals reasonably. This assumption does not

seem far-fetched. Naturally, we are familiar with the

exceptions in which some people refuse to enter a legal

profitable market due to their background religious or moral

beliefs. Nationalism, racism, sexism and even sentimentality

may also contribute to someone refusing to enter a legal

market that is profitable for their business. But the most

common response to those who do refuse is an argument that

attempts to reinforce the irrationality of these attitudes

or refusals: “If you don’t do it, someone else will”. What

this old chestnut implies is that we do expect people to

pursue the legal profitable market and that it would be bad

business not to, since one cannot satisfy one’s desires

whether one does, or does not, enter that market. Those that

do not will be left behind and their desires frustrated by

others who will perform the activity in question. “If you

don’t, someone else will” is not an argument that will move

someone motivated by ethical concerns, of course. They will

considering.

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correctly reply that whether others do it or not, this

doesn’t effect the morality of whether they should do it. But

in competitive business this does not seem to be true.

Whether competitors take up a market also available to

oneself is directly relevant to the profitability of one’s

company. If one’s competitors make huge profits from a

market that one has not tapped into then one puts one’s own

profit making at risk. (They may use their new profits from

the “new” market to subsidize their activities in the “old”

market and thus undercut their competitors.)

Although I am appreciative of the idea that humans, like so

many other mammals, are ”herd animals” and that that can

lead to irrational group behavior, arguably what marks us

out as distinct from other animals is that our herd

mentality is guided by what we judge to be reasonable.

Perhaps human behavior in groups isn’t that reasonable and we

have deep troubles following, as a group, what we, as a

group, judge to be reasonable. But it still seems true of

individuals that they will follow the judgments they take to

be reasonable. Group behavior requires special bonds and

motives for the individuals within the group to “act as one”

which individuals alone do not face. “All things being

equal, business people will pursue what they judge to be

good business” seems true, even if, as a group, we are

unable to do this. Those that do not follow through on their

judgments of what count as good business (legal profit-

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making) because of their commitment to other goals, might

well admit that they are not really good business people.

They may insist they are ethical people who have therefore

declined to pursue the goals of good business. But not

buying into the game doesn’t show that people do not pursue

what they judge to be a good way to play the game.

Premise three: liberalism. I do not have a complete account

of what liberalism is supposed to be and I don’t really need

one to make my point. If someone objects that, according to

their favored view of liberalism, I am mistaken about the

separation of law and morality in liberalism, then we may

drop the reference to liberalism altogether. But I take it

that a liberal society does not attempt to make what is

legal the same as what is considered moral. Perhaps

emphasizing the negative is more useful. A liberal society

will not attempt to make what is generally considered

immoral, to be illegal. For example, it is generally

considered true that infidelity in a relationship or

marriage is immoral, but Liberal societies do not attempt to

make infidelity illegal. It is generally considered immoral

for a person to take revenge upon their former lovers just

because the former lover no longer wishes to continue the

relationship. But such nastiness is not made illegal. In

liberal societies respect for freedom of speech can allow

people to hurt others’ feelings, including their religious

sentiments, political and social sensibilities. Many people

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consider making such hurtful comments to be immoral

behavior, even if it is not as serious as stealing or

assault etc. Thus we have people insulting the poor as lazy,

claiming women are inferior, marking out immigrants as

criminals and stereotyping religious folk as fanatics. If

this hurts someone’s feelings we may consider it a wrong

done, but they are legally permitted to do so. Breaking

someone’s trust is generally considered immoral (unless it

somehow brings about a great good) and this is legally

permitted in Liberal society. We may lie about a lot of

things, legally, and we may break our promises to people

quite legally. (I lie to someone about why I won’t go out

for dinner, I tell everyone the secret that I was asked to

keep.) Except for those unusual circumstances where doing so

is for a much greater good, most people agree that such

behavior is immoral. In Liberal societies property-rights

are often construed to allow for what many may think is

immoral activity. When there is a housing shortage for the

poor, rich people who own more than one residence are not

legally obliged to surrender their houses, nor are they

compelled to rent them out. Instead they may let their

houses fall into ruin unoccupied, even if the general

population is in desperate need. Some people find such a

waste of resources when others are in need to be immoral.

But it is legal.

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In Liberal societies individual rights are often instituted.

But rights are often constraints on utility and thus

conflict with the utilitarian view that it is wrong to

refuse to do what will make the majority better off when

that option is available. This tension between rights and

utility can open up a space for immoral but legal activity.

It may be immoral to turn someone away from a dinner party

upon discovering his race, gender, religion or political

views. Such discrimination may have been made illegal in the

public domain, but it is perfectly legal in a typical

liberal society when it comes to dinner parties at one’s own

home. Racist, sexist and homophobic behavior can be

considered immoral but even if it amounts to insults,

avoidance or even ostracism in the “private domain”, in a

liberal society it will be legally permitted. My dinner

parties are not open to everyone and I cannot be legally

compelled to accept someone even though I reject them for

immoral reasons.

And perhaps these activities should be legal. Perhaps we

need the “legal space” to experiment with such behavior.

Perhaps it is necessary for a healthy society to legally

allow such immoral behavior. Perhaps allowing it to be legal

is necessary for us to learn to refrain and to become

sincerely moral people. Perhaps we need to be able to make

moral mistakes in order to develop as beings committed to

morality. Such sentiments might be part of a defense of

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liberalism but they don’t conflict with the idea that

liberalism legally permits such immoral behavior.

One way to prevent business from pursuing immoral behavior

would be to change the external context of business. We saw

above that by changing the internal goals of business, from

legal profit making to the goals of nonprofit business, we

might prevent business from pursuing immoral activities. If

we remove business from a liberal context – keeping in mind

that all I intend by “liberal” is that there is a gap

between what is illegal and what is immoral – we may prevent

business from pursuing immorality. This ‘solution” is not

one I favor. I do not think we should attempt to construct a

society where everything generally considered immoral should

be made illegal. That, I believe, has disastrous

consequences as we see in religious and totalitarian

societies that attempt it. I don’t believe, for a minute,

that adultery is morally acceptable but I also don’t believe

it should be illegal. Countries that attempt to enforce

standards of morality appear to be very unhappy and do not

appear to be flourishing. But this is not my topic. I cannot

defend my preferred society here. Nevertheless, closing the

gap between immorality and illegality might be a “solution”

that would prevent business from being immoral. It is not,

on careful thought, a good solution.

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Finally, premise four. There are many legal profitable

markets that involve immoral activity. I am loath to mention

any that haven’t yet been exploited since I would rather

they were not exploited. But they exist. Here’s one that,

as I write, has been in the news. Some websites cater to men

who wish to get revenge on their past girlfriends. For a fee

they can upload and share their intimate photographs of

their former lovers for other men to see. The business is

very lucrative but it is premised on revenge and the attempt

to humiliate women. There’s nothing morally worthwhile in

any of it, but the demand for the activity exists and those

providing the service have made enormous profits. There are

also websites that cater for married people to secretly

cheat on their partners. Since infidelity is an admitted

immoral activity, encouraging and enabling such behavior is

also immoral. But it is legal and very profitable. Those

offering such services may well say, indignantly, “I’m not

cheating on anyone and I’m not doing anything that isn’t

permitted.” If all they mean to say is that they are not

breaking the law, then of course that is quite true.

Business will pursue legal and immoral activity. But of

course, they are promoting their service, as good business

people will. They will attempt to increase the number of

customers to increase their profits. But advocating,

encouraging and providing the means for people to do cheat

and get revenge is also immoral. I won’t go on. Examples are

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legion. But given that these are legal and profitable

markets, business will pursue them.

The premises of the predictive argument appear true. In a

liberal society business will, because of its goals to make

a legal profit, pursue immoral activities.

Before turning to normative argument (which will require

very little defense) one objection needs to be examined. The

worry is that the argument given does not mark out business

activity from other activities. If most human activities in

liberal societies will lead to immoral behavior we may think

that this isn’t any special condemnation of business. It’s

just like all other human activities so it is rather

unremarkable or uninteresting. If business is as bad as

everything else we do, then it isn’t really that bad, one

might think.

Now I don’t really think that if this situation is

generalisable to other activities then it is somehow of no

interest. Nor do I think that because it is generalizable

that it would show that we should be complacent and make no

attempt to change the circumstance. If other institutions

also pursue legal but immoral activities in liberal society

that may still require a solution. I do wish to avoid

immoral activity and I want others to do so also. There’s a

problem that needs to be solved. If the problem also affects

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other institutions this doesn’t let business off the hook,

far from it.

But is the complaint a good one? Do other institutions

suffer the same fate? To make this complaint plausible we

have a “formula” provided by the argument I have given. We

need to show that given the internal goals of the activity

and the gap between immorality and illegality, immoral

activity will be pursued. If one can satisfy one’s goals by

immoral but legal activity then those activities possessing

those goals will indeed lead to immoral activity.

Back to Hockey. It is currently permitted by the practice,

economics and policing of hockey, to have fights in the game

and to physically hurt the other players. Legally permitted

contact between players may hurt one of the players a great

deal; even break limbs or cause serious life threatening

concussions. But many of these are permitted by the rules –

the player was just unfortunate and those who (legally)

pushed him into the boards, say, was just far bigger and

heavier. It is permitted and encouraged, but you might well

agree that physical fighting isn’t morally acceptable. Thus,

hockey will pursue immoral activities. On the other hand,

when everyone agrees to the fighting, as in boxing, it is hard to

see it as immoral. So hockey is not a great example to make

the point that business is not alone, since there seems to

be a general consensus among the stakeholders that adult

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hockey should be played this way. Everyone appears to agree

to the risks and the violence. No one is compelled. Although

my imagination may fail me, I can’t think of other human

activities or institutions that in a liberal society will

pursue immoral activity. The goals of other activities and

institutions are not in any tension with the refusal to

pursue immoral activities. But this is not true for the goal

of legal profit making. One ignores a legal profitable

market that involves immoral behavior only if one is not

trying to be good at business. One ignores such a market at

one’s economic peril. Such is the nature of financial

competition.

5. Concluding with The Normative Argument

The normative argument is one premise shorter than the

predictive argument. So far I have argued that business will

pursue immoral activity. I have relied on economic normative

claim that good business will pursue legal and profitable

markets and the claim that generally people pursue what they

judge to be correct. The normative argument ignores this

latter claim and goes straight to the normative conclusion

regarding what good business must be in liberal society.

The Normative Argument

[EC] It is not good business to ignore a legal and

profitable market [Principle of

Economic Rationality]

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[L] In Liberal societies some immoral behavior is legal,

i.e. the law does not attempt to be coextensive with

morality, i.e. there are activities that are agreed to be

immoral and are legally permissible [Liberal principle]

[ER] There are legal but immoral activities which are also

profitable markets [Empirical Fact]

Therefore:

It is not good business to ignore markets that are

profitable, legal and involve immoral activities, i.e. Good

business should act immorally.

Since the premises of this argument have already been

defended I have little more to say. It isn’t good business,

according to the standards of current business to ignore a

legal and profitable market, so a good businessperson ought

not to do so. Since there are markets involving legal,

profitable and immoral activities, good business ought to

pursue those markets. To ignore them would be bad business

and business people ought not to be bad at what they do.

Given the goals of business, only poor and badly run

businesses would avoid such activities.

However, as I noted above, if we care about morality we should

look for a solution to this problem. I have noted my

preferences for changing the business model from legal

profit making into a legal nonprofit making activity model.

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But defending this business model on other grounds has not

been attempted. But if one wishes to avoid immoral activity

in business then transforming the business model for a liberal

society may well be the only solution.

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Why Good Business ought to be immoral

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