Can We Morally Assess Business?

Not so. Businesses are clearly immoral at times, sometimes grievously so. But they should not be singled out as especially bad or evil. Among other reasons, it is governments, not businesses, that have killed over a hundred million people in the past century.

Many firms do mistreat their employees or communities or act in other morally objectionable ways. But what do we mean by “many”? There are over 300 million firms in the world today. If 100,000 firms, say, are “bad,” is that many? Suppose there is incontrovertible evidence of their bad activity and character. Does this impugn business as such? Does it put in doubt the moral character of even the whole global system of firms?

Considering that we are discussing 0.03% of firms, the answer must be no.

Firms—or, more strictly, a subset of their members—do make employees work long and difficult hours sans moral justification. Firms do control employees’ lives outside of work, destroy the environment, manipulatively advertise products, and much else besides. Concerning commercial activity is, however, nothing new. People in commercial societies have been mistreating each other as long as societies with firms have existed.

But suppose we could arrive at a general moral verdict on the longstanding, pervasive human phenomenon known as “business.” If we could, we presumably would need to understand all of the key plusses and minuses of business in full relevant detail.

Society-wide wealth increases are a major plus of “business” that are of recent vintage, following the development of industrial capitalism: a system of decentralized markets with profit-seeking firms that are hierarchically structured and privately owned (see Gaus 2009). Jason Brennan (2014: 3-4) observes that,

• Many accept a common historical account: In the 20th century, the world experimented with two great social systems. The countries that tried different forms of capitalism—the United States, Denmark, Sweden, Australia, Japan, Singapore, Hong Kong, and South Korea—became rich. In contrast, the countries that tried socialism, the Soviet Union, China, Cuba, Vietnam, Cambodia, and North Korea—were hellholes. Socialist governments murdered about 100 million (and perhaps many more) of their own citizens.

When markets and the firms within capitalism were busy enriching, including—and, in many cases, especially—the least well-off, socialist governments were wreaking havoc in the lives of innocent citizens. “What is striking” here, says Gerald Gaus (2009: 86, italics mine) on this massive increase in human prosperity, “is not simply the difference in the absolute level of wealth, but in the range of options—the jobs one can perform, the goods one can consume, the lives one can have.”

Despite the fact that business in this political-economic system has made possible such an explosion of wealth, many scholars recommend that we deviate considerably, even radically, by trying different forms of economic systems or substituting the judgments of “expert” bureaucrats for the judgments of millions of decentralized market actors who usually know their own situations best. Perhaps the idea is that if we can keep markets in place, but “discipline” or “temper” or “supplement” or “restrain” them, then we can preserve their core benefits while avoiding their costs. On first glance, this sounds eminently reasonable. For perhaps we could then prevent the rather unfortunate worker abuse and other objectionable features of some businesses while still enabling millions of people to reach prosperity or at least avoid the evil of poverty.

I like the idea, but there is a problem. The problem concerns our reasoning. How can we reason well about a whole system of political economy when making such recommendations?

Critics of markets and the firms that partly constitute them have long argued for sweeping assessments of “business” under capitalistic political economy. Elizabeth Anderson (2017: 37-38), for instance, objects to U.S.-style capitalism as such. She claims that corporations, like communist dictatorships, include

• … a government that assigns almost everyone a superior whom they must obey. Although superiors give most inferiors a routine to follow, there is no rule of law. Orders may be arbitrary and can change any time, with- out prior notice or opportunity to appeal. Superiors are unaccountable to those they order around. They are neither elected nor removable by their inferiors. Inferiors have no right to complain in court about how they are being treated, except in a few narrowly defined cases…. The most highly ranked individual takes no orders but issues many. The lowest-ranked may have their bodily movements and speech minutely regulated for most of the day…. This government does not recognize a personal or private sphere of autonomy free from sanction.

Similarly, G. A. Cohen (2009: 44-45) claims that,

• … motivation in market exchange consists largely of greed and fear, a person typically does not care fundamentally, within market interaction, about how well or badly anyone other than herself fares.

We have, here and elsewhere, claims about corporations as such and market exchange as such. Yet there is a real question of whether any of these claims is based on a sufficient sample of business activity that could justify moral verdicts about business as such or a whole system of political economy.

To begin with, we abstractly represent “business” like we do “government” or “religion.” Think, though, about the innumerable and varied forms each of these takes. Think of the seemingly countless cultures and eras in which businesses, governments, and religions have been active. Abstraction helps us to arrive at generalized judgments about activities and structures of various forms.

But abstraction can be both a blessing and a curse.

Abstraction is not only a crucial epistemic capacity but also a way of moving an evaluation along too quickly—often without one’s realizing it. Ask a chemist about the value or disvalue of profitable business or religion, and she might consider it abstractly and say: “It’s a key part of civilization!” or “Oh, the problem is…!” Ask the proverbial man on the street about government, and he might say: “Look, what we (government) should do is…!” Ask me, a philosopher, about a car problem, and I might say too confidently, “Well it’s probably the…!” Epistemic dangers pervade such thinking seemingly at every turn. We need clarifications. Does abstraction really let all people talk in depth and well about nearly all governments and businesses and religions? Does it enable people with training and deep expertise in subject A (e.g., chemistry) reliably to opine on subject B (business or religion), or experts in B reliably to opine on A?

There is an acute difficulty that besets understanding business in particular, infecting much thinking in the related fields of political economy and business ethics. This problem is the pattern of speaking about what “the” firm should do. What, exactly, is the referent? Is it not better to ask, indexically, what these firms, or those firms, or this firm, should do? If it is better, notice this: We then find ourselves needing to select among millions of firms in our speech (e.g., the over 30 million firms in the United States today). We then need to discuss some particular subset of those businesses, and it is unclear that we can select the right number and kind of businesses to justify a general conclusion about “business.”

At bottom, though, if we want to understand and morally assess business or firms, it is crucial to ask whether there is something stable and fundamental in all firms—from small bakeries to massive oil companies. Otherwise, we are left trying to apply a property “do X” (e.g., maximize shareholder value or benefit all stakeholders) to a potentially ever-fluid target: firms that make different things in different cultures for different people at different times and for different reasons.

I suggest that if we are to evaluate “business,” we must start with businesspeople and their nature as individual persons. But what is a person? Why do persons form businesses? What ought businesspeople to do and avoid doing qua persons? What kinds of persons should businesspeople aspire to be on the job?

The answers, I suspect, are at once stunningly complicated and arrestingly simple. Human societies are rather complex because individual human beings are very complex. But perhaps we all want one thing, to unite ourselves to the good. And, in our lives, perhaps it is part of our nature to flourish if we do this well and languish if we do not. If so, the question how to assess businesses becomes a question of how and how much businesses advance the good, if at all. Do they help people lead better lives? What counts as “better”?

When important scholars such as Anderson and others explore arguments about whole political-economic systems of firms, they make judgments about millions of firms—and many more persons—all at once. The answers to the above queries seem, however, to be more likely a matter of the particular circumstances of firms and their treatment of all affected parties. The answers should perhaps focus less on firms as such, as if firms, which are artifacts with different forms rather than natural kinds with stable structures, were morally assessable as such.

We understandably wish to assess business via that stunning tool we call abstract reasoning. But we should avoid being misled by easy abstraction to assume that we can generalize about millions of human communities (e.g., firms) just by thinking hard about even many particular cases of bad business activity. If “many” cases here means 1,000, this is 1,000 cases of worker treatment relative to many millions of firms and many more instances of such mistreatment. Even the lamentable occurrence of mistreatment does not entitle us to infer that capitalistic firms are morally objectionable as such.

The point, then, is not that businesses are morally pristine—far from it. The point is that to impugn either business as such or a whole system of political economy, we need to reason carefully and comprehensively about many more facts than commentators often realize. In fact, the very idea of understanding business as such is even itself a bit mystifying. We are often opaque to ourselves and do not fully understand our local communities, much less our nation-states. How, then, can we understand well, and morally assess, an entire commercial system of many millions of firms that spans many cultures, continents, and eras?

Of course, to say it is hard to object to business as such is not to say that businesses are unobjectionable or provide all key human goods. In fact, focusing too much on one’s role as consumer, income earner, or employee can distract one from what matters most.

We should be willing to call out bad behaviors by firms and other human communities when we see them, as, alas, we inevitably will. But we should also have epistemic humility when trying to morally assess “business” as such on the basis of cases of unethical business practices. Our assessment risks systematically overlooking a real danger of selection bias. After all, news media, Hollywood, and the like, as well as some scholarly business journals, usually say comparatively little about the millions of businesses that are consistently doing good in the world. This omission is understandable at times insofar as it makes sense to prioritize identifying and fixing problem cases. But it is an omission we should be aware of, one that cannot be overlooked in any justified moral assessment of “business.”

References

Anderson, E. (2017). Private government: How employers rule our lives (and why we don’t talk about it). Princeton University Press.

Brennan, J. (2014). Why not capitalism? New York: Routledge.

Gaus, G. (2009). “The idea and ideal of capitalism.” In G. George (Ed.), The Oxford handbook of business ethics (pp. 73–99). Oxford University Press.

Otteson, James R. (2019). Honorable business: a framework for business in a just and humane society. Oxford University Press.

Robson, Gregory. (2019). “To profit maximize, or not to profit maximize?: For Firms, this is a valid question.” Economics & Philosophy, 35 (2019), 307–320.

Robson, Gregory. “How to Object to the Profit System (and How Not To).” Journal of Business Ethics, vol. 188 (2023): 205-219.

Robson, Gregory. “The Profit System: How (and Why) to Deflect the Radical Critique.” Constitutional Political Economy, vol. 35 (2024): 109-122.