The strict utilitarian would argue that it is the consequences of an action

that matter, not the content. I don't entirely accept this argument but I am
not entirely clear about why I hold that belief. I believe for example that
business and personal life should be governed by the same ethical
principles, but that isn't a position universally accepted or if accepted,
practiced. Are moral principles indivisible? Should we apply the same
principles we adopt in our personal relationships to our economic life?
What follows is an incomplete exploration of the issues this question
raises. Being neither an economist nor a philosopher by trade, I am doing
this almost from first principles. While this is no bad thing, it almost
certainly means I am going to get out of my depth. It also means I will no
doubt be rehashing questions others have already dealt with much more
effectively and in more depth than I can. Even so, I think it a worthwhile
exercise - if only as an exercise in thinking philosophically.
In our relationships one with another we all have some standards by which
we judge our own behaviour and that of others. I don’t intend to consider
here what those standards should be, only how the existence of such a
standard should affect our behaviour as 'free individuals' on the one hand
and as 'business people' on the other.
This appears to be what underpins arguments that the economic benefits
of an enterprise outweigh any loss to individuals and so justify any
different treatment – even though those on the receiving end may
perceive my behaviour as at best uncharitable. Strictly speaking this is not
applying different standards because of course utilitarianism is not about
absolute ethical standards. I don't however intend to deal with strict
utilitarianism, a system with which most of us are instinctively
uncomfortable since it can be used to justify any behaviour, however
extreme that behaviour might appear. My primary concern is with other
views of morality based not on the consequences of our actions but on the
actions themselves.
Within any organisation, the business of that organisation will be
transacted by a series of relationships between individuals. Similarly,
relationships between businesses or between businesses and customers
can be reduced to relationships between individuals. Consistency would
therefore suggest that these relationships should be conducted according
to the same ethical principles we use in our personal life. Dishonest
behaviour by a business implies dishonest behaviour by individuals acting
on behalf of that company. For this not to be the case, some extra
principle must be established to explain or justify the application of
different standards in business life than in our personal relationships.
Thus if I act on behalf of a business, I am responsible for my actions and
for their outcomes. I cannot argue that economic expediency gives me
license as a business for behaviour that would be unacceptable as an
individual. I cannot logically separate my behaviour as an independent
individual from my behaviour as a representative of a business.
I want to look at how this could affect business behaviour in two areas
where economic expediency is commonly cited - pollution controls and
payment of minimum wage.
If as an individual I knowingly or negligently dump waste material into
your water supply leading to you or your family falling ill or dying, or if I
knowingly or negligently sell you a product which is unsafe and causes you
harm, then in both cases I have surely committed an act which could be
described as unethical. This applies whether my actions are as an
individual or on behalf of a business.
In cases like Minamata, the pollution issue seems straightforward. Surely
no civilised society can accept the outcomes so movingly documented by
Eugene Smith. (Although even this would not necessarily be accepted as
true by the strict utilitarian) However, in cases where controls already
exist and are for the sake of argument followed, Minamata
notwithstanding, but government – or those on the receiving end of
polluting activity – desire greater stringency, the position appears more
complex. In the end however, assuming that the damage caused by the
pollution is real, arguments against tighter controls boil down in the end to
a utilitarian calculation of the costs to humans (or other sentients) as
against the benefits to the business from not having to spend on pollution
controls.
[UPDATE - it occurs to me that Ursula Le Guin's story, 'The ones who walk
away from Omelas' is about making a moral judgement in the face of such
arguments]
For this calculation to be valid some mechanism for distributing those
benefits must exist. It is however difficult to conceive of a situation where
damage to human health is acceptable simply to enrich a limited number
of shareholders. A strict utilitarian assessment would presumably however
accept apposition where a few shareholders benefited by huge amounts
but not minor sums – a position which seems counter intuitive.
In the case of minimum wages, the argument is that economic damage
would ensue by forcing payment of a minimum wage. What considerations
should apply in reaching a decision? One consideration would appear to be
that recipients of a wage should be getting enough money to live on
without needing to have recourse to charity or other public benefits.
Where this is not the case and society – either in the guide of charity or
public welfare payments funded by government – makes up the deficit, it
could be argued that the business concerned has externalised some of its
own costs by offloading them to others.
Ii may be possible to argue that this should not happen, but is there an
ethical issue? There are in practice two components to this question – the
wage level and the making up of the wage by third parties.
Taking the wage level first, the ethical issue appears to be whether anyone
should be employed at less than a subsistence level. (I don't intend to deal
here with the wider question of inequalities in the distribution of wealth).
Bearing in mind the argument that all business transactions are in the end
reducable to transactions between individuals, is there any obligation on
me – or you – as an individual to help someone in poverty?
If such help would simply transfer the poverty from the donor to the
recipient, there would presumably, in the absence of any religious
imperative, be no duty to offer assistance. In utilitarian terms we would
argue that a transfer of benefit is irrelevant since there is no net increase
in welfare. Passing over part of my income to place us both in poverty
would moreover lead to a reduction in net welfare.
If however, by transferring some of my income or capital to another and so
lifting them from poverty while still keeping me out of poverty would lead
to a net increase in welfare and so the transfer should presumably take
place.
Transferring this to the business context, it is clear that there are no longer
just two parties involved, since customers of the business also have an
interest. The managers/owners of a business would presumably argue that
the wage levels they are paying are the maximum possible without
increasing the price customers would be willing to pay. This assumes that
the balance between costs and prices is correctly calculated. It ignores
whether it would be possible to raise wages without increasing prices. It
may for example be possible to accept a lower profit margin or it may be
possible to redistribute the wage bill – after all in some companies the
ratio of the highest to lowest salary/wage levels is very high (the so-called
'fat-cat' argument).
If none of these are possible, then the only option to meet an increased
wage bill may be to raise prices. Depending on the nature of the product
this could also have consequences for others who purchase it, perhaps to
the extent of driving them below the poverty level.
At this point I begin to run out of steam and I am going have to think
further. It seems to me however that a moral case can be made for setting
a minimum wage level, especially since there seems no strong economic
argument against it. In the case of pollution, there seems no argument but
that the sort of polluting behaviour represented by the Minamata case is
unacceptable on any argument, although I am less clear about the
arguments for tightening controls – or more specifically about how to
establish the acceptable levels, This appears to me to be a clear technical
matter, but nevertheless one which arouses huge dispute on non-technical
premises. The arguments over Kyoto and climate change are a classic
case, where the scientific debate is buried in a morass of insult and ad
hominem attacks.