Thursday, 5 January 2017

Ayn Rand and Contemporary Business Ethics

Ayn Rand and Contemporary Business Ethics
Stephen Hicks

This interesting essay by Stephen Hicks is aimed at recasting the current business ethics which holds that business is, in principle, amoral or immoral, and defending the idea that business depends on egoism and is moral.

The fundamental elements of business are production and trade. Production is the consequence of people taking responsibility for their own lives and making rational decisions to achieve their goals. Trade is the consequence of people voluntarily cooperating and entering into transactions.

Hicks points out that “these principles—responsibility, rationality, cooperation—are core principles in any healthy moral system, and form the core principles of the business world.”

Many intellectuals oppose business because they accept the anti-self interest ethic. They hold that the moral considerations are unrelated to the considerations that drive business—for them the separation between ethics and self-interest is axiomatic. A businessman is regarded as amoral or immoral because he is motivated by self-interest and profits.

In the context of history of ethics it is not surprising that the intellectuals are biased against business. Plato had a low opinion of business, and so did the relatively recent philosophers like Immanuel Kant and John Stuart Mill. The religions and communism preach that morality is impossible when people are motivated by self-interest. When such ethical theories are dominant, a negative view of business among the intellectuals is inevitable.

To make the case that business is moral, Hicks turns to Ayn Rand, the champion of self-interest.

“[Ayn Rand] rejects the belief that ethics starts by taking conflicts of interest as fundamental. She rejects the view that ethics starts by reacting to scarce resources; she rejects the view that ethics starts by reacting to the nasty things some people want to do to each other; and she rejects the view that ethics starts by asking what to do about the poor and unable.”

Hicks summarizes Ayn Rand’s ethics in four points:

1. Life depends on values.
2. Values depend on production.
3. Production depends on knowledge.
4. Knowledge depends on thinking.

Rand held that reason plays a fundamental role in human life. Reflecting on Rand’s ideas, Hicks says: “Reason makes possible science and production, long-term planning, and living by principle. It is these that make individuals flourish, and it is these that eliminate the idea that there are fundamental conflicts of interests among individuals.”

The 40-page essay by Hicks makes good use of Ayn Rand ethical theory to show that business is moral. He ends the thesis by pointing out that “only a moral defense of self-interest, combined with an understanding of free market economics and classical liberal politics, will advance the free society and business, its economic engine.” 

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