The Best WritersLDRS  320    Theories  of  Duties  and  Rights  Page  1  of  26  Theories  of  Consequence  Ethics:  Traditional  Tools  for  Making  Decisions  in  Business  when  the  Ends  Justify  the  Means    Acknowledgements  This  text  is  a  reprint  of  Chapter  3  from  Brusseau  (2011)  The  Business  Ethics  Workshop.  It  is  copied  and  adapted  under  the  terms  of  the  Creative  Commons  Attribution-­‐NonCommercial-­‐ShareAlike  3.0  License.  Brusseau,  J.  (2011).  The  Business  Ethics  Workshop  (1st  ed.).  New  York:  Flat  World  Knowledge.    Chapter  Overview  Chapter  3  “Theories  of  Consequence  Ethics:  Traditional  Tools  for  Making  Decisions  in  Business  when  the  Ends  Justify  the  Means”  examines  some  theories  guiding  ethical  decisions  in  business.  It  considers  ethics  that  focuses  on  the  consequences  of  what  is  done  instead  of  prohibiting  or  allowing  specific  acts.  3.1  What  Is  Consequentialism?  Learning  Objective  1. Define  consequentialism  in  ethics.  Consequentialism  Defined  What’s  more  important  in  ethics—what  you  do  or  what  happens  afterward  because  of  what  you  did?  People  who  believe  ethics  should  be  about  what  happens  afterward  are  labeled  consequentialists.  They  don’t  care  so  much  about  your  act;  they  want  to  know  about  the  consequences.  If  someone  asks,  “Should  I  lie?,”  one  answer  is,  “No,  lying’s  wrong.  We  all  have  a  duty  not  to  lie  and  therefore  you  shouldn’t  do  it,  no  matter  what.”  That’s  not  the  consequentialist  answer,  though.  Consequentialists  will  want  to  know  about  the  effects.  If  the  lie  is  about  Bernie  Madoff  assuring  everyone  that  he’s  investing  clients’  money  in  stocks  when  really  he  plans  to  steal  it,  that’s  wrong.  But  if  a  defrauded,  livid,  and  pistol-­‐waving  client  tracks  Madoff  down  on  a  crowded  street  and  demands  to  know  whether  he’s  Bernie  Madoff,  the  ethically  recommendable  response  might  be,  “People  say  I  look  like  him,  but  really  I’m  Bill  Martin.”  The  question,  finally,  for  a  consequentialist  isn’t  whether  or  not  I  should  lie,  it’s  what  happens  if  I  do  and  if  I  don’t?  LDRS  320    Theories  of  Duties  and  Rights  Page  2  of  26  Since  consequentialists  are  more  worried  about  the  outcome  than  the  action,  the  central  ethical  concern  is  what  kind  of  outcome  should  I  want?  Traditionally,  there  are  three  kinds  of  answers:  the  utilitarian,  the  altruist,  and  the  egoist.  Each  one  will  be  considered  in  this  chapter.  Key  Takeaway  • Consequentialist  ethicists  focus  on  the  results  of  what  you  do,  not  what  you  do.  Review  Questions  1. Under  what  scenario  could  a  consequentialist  defend  the  act  of  stealing?  2. Could  a  consequentialist  recommend  that  a  toy  company  lie  about  the  age  level  a  toy  is  designed  for?  What  would  be  an  example?  3.2  Utilitarianism:  The  Greater  Good  Learning  Objectives  1. Define  utilitarian  ethics.  2. Show  how  utilitarianism  works  in  business.  3. Distinguish  forms  of  utilitarianism.  4. Consider  advantages  and  drawbacks  of  utilitarianism.  The  College  Board  and  Karen  Dillard  “Have  you  seen,”  the  blog  post  reads,  “their  parking  lot  on  a  Saturday?”  [1]  It’s  packed.  The  lot  belongs  to  Karen  Dillard  College  Prep  (KDCP),  a  test-­‐preparation  company  in  Dallas.  Like  the  Princeton  Review,  they  offer  high  schoolers  courses  designed  to  boost  performance  on  the  SAT.  Very  little  real  learning  goes  on  in  these  classrooms;  they’re  more  about  techniques  and  tricks  for  maximizing  scores.  Test  takers  should  know,  for  example,  whether  a  test  penalizes  incorrect  answers.  If  it  doesn’t,  you  should  take  a  few  minutes  at  each  section’s  end  to  go  through  and  just  fill  in  a  random  bubble  for  all  the  questions  you  couldn’t  reach  so  you’ll  get  some  cheap  points.  If  there  is  a  penalty,  though,  then  you  should  use  your  time  to  patiently  work  forward  as  far  as  you  can  go.  Knowing  the  right  strategy  here  can  significantly  boost  your  score.  It’s  a  waste  of  brain  space,  though,  for  anything  else  in  your  life.  Some  participants  in  KDCP—who  paid  as  much  as  $2,300  for  the  lessons—definitely  got  some  score  boosting  for  their  money.  It  was  unfair  boosting,  however;  at  least  that’s  the  charge  of  the  College  Board,  the  company  that  produces  and  administers  the  SAT.  Here’s  what  happened.  A  KDCP  employee’s  brother  was  a  high  school  principal,  and  he  was  there  when  the  SATs  were  administered.  At  the  end  of  those  tests,  everyone  knows  what  test  takers  are  instructed  to  do:  stack  the  bubble  sheets  in  one  pile  and  the  test  booklets  in  the  other  and  leave.  The  administrators  then  wrap  everything  up  and  send  both  the  answer  LDRS  320    Theories  of  Duties  and  Rights  Page  3  of  26  sheets  and  the  booklets  back  to  the  College  Board  for  scoring.  The  principal,  though,  was  pulling  a  few  test  booklets  out  of  the  stack  and  sending  them  over  to  his  brother’s  company,  KDCP.  As  it  turns  out,  some  of  these  pilfered  tests  were  “live”—that  is,  sections  of  them  were  going  to  be  used  again  in  future  tests.  Now,  you  can  see  how  getting  a  look  at  those  booklets  would  be  helpful  for  someone  taking  those  future  tests.  Other  stolen  booklets  had  been  “retired,”  meaning  the  specific  questions  inside  were  on  their  final  application  the  day  the  principal  grabbed  them.  So  at  least  in  these  cases,  students  taking  the  test-­‐prep  course  couldn’t  count  on  seeing  the  very  same  questions  come  exam  day.  Even  so,  the  College  Board  didn’t  like  this  theft  much  better  because  they  sell  those  retired  tests  to  prep  companies  for  good  money.  When  the  College  Board  discovered  the  light-­‐fingered  principal  and  the  KDCP  advantage,  they  launched  a  lawsuit  for  infringement  of  copyright.  Probably  figuring  they  had  nothing  to  lose,  KDCP  sued  back.  [2]  College  Board  also  threatened—and  this  is  what  produced  headlines  in  the  local  newspaper—to  cancel  the  scores  of  the  students  who  they  determined  had  received  an  unfair  advantage  from  the  KDCP  course.  As  Denton  Record-­‐Chronicle  reported  (and  as  you  can  imagine),  the  students  and  their  families  freaked  out.  [3]  The  scores  and  full  application  packages  had  already  been  delivered  to  colleges  across  the  country,  and  score  cancellation  would  have  amounted  to  application  cancellation.  And  since  many  of  the  students  applied  only  to  schools  requiring  the  SAT,  the  threat  amounted  to  at  least  temporary  college  cancellation.  “I  hope  the  College  Board  thinks  this  through,”  said  David  Miller,  a  Plano  attorney  whose  son  was  apparently  on  the  blacklist.  “If  they  have  a  problem  with  Karen  Dillard,  that’s  one  thing.  But  I  hope  they  don’t  punish  kids  who  wanted  to  work  hard.”  Predictably,  the  episode  crescendoed  with  everyone  lawyered  up  and  suits  threatened  in  all  directions.  In  the  end,  the  scores  weren’t  canceled.  KDCP  accepted  a  settlement  calling  for  them  to  pay  $600,000  directly  to  the  College  Board  and  provide  $400,000  in  free  classes  for  high  schoolers  who’d  otherwise  be  unable  to  afford  the  service.  As  for  the  principal  who’d  been  lifting  the  test  booklets,  he  got  to  keep  his  job,  which  pays  about  $87,000  a  year.  The  CEO  of  College  Board,  by  the  way,  gets  around  $830,000.  [4]  KDCP  is  a  private  company,  so  we  don’t  know  how  much  Karen  Dillard  or  her  employees  make.  We  do  know  they  could  absorb  a  million-­‐dollar  lawsuit  without  going  into  bankruptcy.  Finally,  the  Plano  school  district  in  Texas—a  well-­‐to-­‐do  suburb  north  of  Dallas—continues  to  produce  some  of  the  nation’s  highest  SAT  score  averages.  One  Thief,  Three  Verdicts  Utilitarianism  is  a  consequentialist  ethics—the  outcome  matters,  not  the  act.  Among  those  who  focus  on  outcomes,  the  utilitarians’  distinguishing  belief  is  that  we  should  pursue  the  greatest  good  for  the  greatest  number.  So  we  can  act  in  whatever  way  we  choose—we  can  be  generous  or  miserly,  honest  or  dishonest—but  whatever  we  do,  to  get  the  utilitarian’s  approval,  the  result  should  be  more  people  happier.  If  that  is  the  result,  then  the  utilitarian  needs  to  know  nothing  more  to  label  the  act  ethically  recommendable.  (Note:  Utility  is  a  general  term  for  usefulness  and  benefit,  thus  the  theory’s  name.  In  everyday  language,  however,  we  don’t  talk  about  creating  a  greater  utility  but  instead  a  greater  good  or  happiness.)  LDRS  320    Theories  of  Duties  and  Rights  Page  4  of  26  In  rudimentary  terms,  utilitarianism  is  a  happiness  calculation.  When  you’re  considering  doing  something,  you  take  each  person  who’ll  be  affected  and  ask  whether  they’ll  end  up  happier,  sadder,  or  it  won’t  make  any  difference.  Now,  those  who  won’t  change  don’t  need  to  be  counted.  Next,  for  each  person  who’s  happier,  ask,  how  much  happier?  Put  that  amount  on  one  side.  For  each  who’s  sadder,  ask,  how  much  sadder?  That  amount  goes  on  the  other  side.  Finally,  add  up  each  column  and  the  greater  sum  indicates  the  ethically  recommendable  decision.  Utilitarian  ethics  function  especially  well  in  cases  like  this:  You’re  on  the  way  to  take  the  SAT,  which  will  determine  how  the  college  application  process  goes  (and,  it  feels  like,  more  or  less  your  entire  life).  Your  car  breaks  down  and  you  get  there  very  late  and  the  monitor  is  closing  the  door  and  you  remember  that…you  forgot  your  required  number  2  pencils.  On  a  desk  in  the  hall  you  notice  a  pencil.  It’s  gnawed  and  abandoned  but  not  yours.  Do  you  steal  it?  Someone  who  believes  it’s  an  ethical  duty  to  not  steal  will  hesitate.  But  if  you’re  a  utilitarian  you’ll  ask:  Does  taking  it  serve  the  greater  good?  It  definitely  helps  you  a  lot,  so  there’s  positive  happiness  accumulated  on  that  side.  What  about  the  victim?  Probably  whoever  owns  it  doesn’t  care  too  much.  Might  not  even  notice  it’s  gone.  Regardless,  if  you  put  your  increased  happiness  on  one  side  and  weigh  it  against  the  victim’s  hurt  on  the  other,  the  end  result  is  almost  certainly  a  net  happiness  gain.  So  with  a  clean  conscience  you  grab  it  and  dash  into  the  testing  room.  According  to  utilitarian  reasoning,  you’ve  done  the  right  thing  ethically  (assuming  the  pencil’s  true  owner  isn’t  coming  up  behind  you  in  the  same  predicament).  Pushing  this  theory  into  the  KDCP  case,  one  tense  ethical  location  is  the  principal  lifting  test  booklets  and  sending  them  over  to  his  brother  at  the  test-­‐prep  center.  Everything  begins  with  a  theft.  The  booklets  do  in  fact  belong  to  the  College  Board;  they’re  sent  around  for  schools  to  use  during  testing  and  are  meant  to  be  returned  afterward.  So  here  there’s  already  the  possibility  of  stopping  and  concluding  that  the  principal’s  act  is  wrong  simply  because  stealing  is  wrong.  Utilitarians,  however,  don’t  want  to  move  so  quickly.  They  want  to  see  the  outcome  before  making  an  ethical  judgment.  On  that  front,  there  are  two  distinct  outcomes:  one  covering  the  live  tests,  and  the  other  the  retired  ones.  Live  tests  were  those  with  sections  that  may  appear  again.  When  students  at  KDCP  received  them  for  practice,  they  were  essentially  receiving  cheat  sheets.  Now  for  a  utilitarian,  the  question  is,  does  the  situation  serve  the  general  good?  When  the  testing’s  done,  the  scores  are  reported,  and  the  college  admissions  decisions  made,  will  there  be  more  overall  happiness  then  there  would’ve  been  had  the  tests  not  been  stolen?  It  seems  like  the  answer  has  to  be  no.  Obviously  those  with  great  scores  will  be  smiling,  but  many,  many  others  will  see  their  scores  drop  (since  SATs  are  graded  on  a  curve,  or  as  a  percentile).  So  there’s  some  major  happiness  for  a  few  on  one  side  balanced  by  unhappiness  for  many  on  the  other.  Then  things  get  worse.  When  the  cheating  gets  revealed,  the  vast  majority  of  test  takers  who  didn’t  get  the  edge  are  going  to  be  irritated,  mad,  or  furious.  Their  parents  too.  Remember,  it’s  not  only  admission  that’s  at  stake  here  but  also  financial  aid,  so  the  students  who  didn’t  get  the  KDCP  edge  worry  not  only  that  maybe  they  should’ve  gotten  into  a  better  school  but  also  that  they  end  up  paying  more  too.  Finally,  the  colleges  will  register  a  net  loss:  all  their  work  in  trying  to  admit  students  on  the  basis  of  fair,  equal  evaluations  gets  thrown  into  question.  LDRS  320    Theories  of  Duties  and  Rights  Page  5  of  26  Conclusion.  The  theft  of  live  tests  fails  the  utilitarian  test.  While  a  few  students  may  come  out  better  off  and  happier,  the  vast  majority  more  than  balances  the  effect  with  disappointment  and  anger.  The  greater  good  isn’t  served.  In  the  case  of  the  theft  of  “retired”  tests  where  the  principal  forwarded  to  KDCP  test  questions  that  won’t  reappear  on  future  exams,  it  remains  true  that  the  tests  were  lifted  from  the  College  Board  and  it  remains  true  that  students  who  took  the  KDCP  prep  course  will  receive  an  advantage  because  they’re  practicing  the  SAT.  But  the  advantage  doesn’t  seem  any  greater  than  the  one  enjoyed  by  students  all  around  the  nation  who  purchased  prep  materials  directly  from  the  College  Board  and  practiced  for  the  exam  by  taking  old  tests.  More—and  this  was  a  point  KDCP  made  in  their  countersuit  against  the  College  Board—stealing  the  exams  was  the  ethically  right  thing  to  do  because  it  assured  that  students  taking  the  KDCP  prep  course  got  the  same  level  of  practice  and  expertise  as  those  using  official  College  Board  materials.  If  the  tests  hadn’t  been  stolen,  then  wouldn’t  KDCP  kids  be  at  an  unfair  disadvantage  when  compared  with  others  because  their  test  practices  hadn’t  been  as  close  to  the  real  thing  as  others  got?  In  the  end,  the  argument  goes,  stealing  the  tests  assured  that  as  many  people  as  possible  who  took  prep  courses  got  to  practice  on  real  exams.  Conclusion.  The  theft  of  the  exams  by  the  high  school  principal  may  conceivably  be  congratulated  by  a  utilitarian  because  it  increases  general  happiness.  The  students  who  practiced  on  old  exams  purchased  from  the  College  Board  can’t  complain.  And  as  for  those  students  at  KDCP,  their  happiness  increases  since  they  can  be  confident  that  they’ve  prepared  as  well  as  possible  for  the  SAT.  The  fact  that  a  utilitarian  argument  can  be  used  to  justify  the  theft  of  test  booklets,  at  least  retired  ones,  doesn’t  end  the  debate,  however.  Since  the  focus  is  on  outcomes,  all  of  them  have  to  be  considered.  And  one  outcome  that  might  occur  if  the  theft  is  allowed  is,  obviously,  that  maybe  other  people  will  start  thinking  stealing  exam  books  isn’t  such  a  bad  idea.  If  they  do—if  everyone  decides  to  start  stealing—it’s  hard  to  see  how  anything  could  follow  but  chaos,  anger,  and  definitely  not  happiness.  This  discussion  could  continue  as  more  people  and  consequences  are  factored  in,  but  what  won’t  change  is  the  basic  utilitarian  rule.  What  ought  to  be  done  is  determined  by  looking  at  the  big  picture  and  deciding  which  acts  increase  total  happiness  at  the  end  of  the  day  when  everyone  is  taken  into  account.  Should  the  Scores  Be  Canceled?  After  it  was  discovered  that  KDCP  students  got  to  practice  for  the  SATs  with  live  exams,  the  hardest  question  facing  the  College  Board  was,  should  their  scores  be  canceled?  The  utilitarian  argument  for  not  canceling  is  straightforward.  Those  with  no  scores  may  not  go  to  college  at  all  next  year.  This  is  real  suffering,  and  if  your  aim  is  to  increase  happiness,  then  counting  the  exams  is  one  step  in  that  direction.  It’s  not  the  last  step,  though,  because  utilitarians  at  the  College  Board  need  to  ask  about  everyone  else’s  happiness  too:  what’s  the  situation  for  all  the  others  who  took  the  exam  but  have  never  heard  of  KDCP?  Unfortunately,  letting  the  scores  be  counted  is  going  to  subtract  from  their  happiness  because  the  SAT  is  graded  comparatively:  one  person  doing  well  means  everyone  getting  fewer  correct  answers  sees  their  score  drop,  along  with  college  choices  and  financial  aid  possibilities.  LDRS  320    Theories  of  Duties  and  Rights  Page  6  of  26  Certainly  it’s  true  that  each  of  these  decreases  will  be  small  since  there  were  only  a  handful  of  suspect  tests.  Still,  a  descent,  no  matter  how  tiny,  is  a  descent,  and  all  the  little  bits  add  up.  What’s  most  notable,  finally,  about  this  decision  is  the  imbalance.  Including  the  scores  of  KDCP  students  will  weigh  a  tremendous  increase  in  happiness  for  a  very  few  against  a  slight  decrease  for  very  many.  Conversely,  a  few  will  be  left  very  sad,  and  many  slightly  happier.  So  for  a  utilitarian,  which  is  it?  It’s  hard  to  say.  It  is  clear,  however,  that  this  uncertainty  represents  a  serious  practical  problem  with  the  ethical  theory.  In  some  situations  you  can  imagine  yourself  in  the  shoes  of  the  different  people  involved  and,  using  your  own  experience  and  knowledge,  estimate  which  decision  will  yield  the  most  total  happiness.  In  this  situation,  though,  it  seems  almost  impossible  because  there  are  so  many  people  mixed  up  in  the  question.  Then  things  get  still  more  difficult.  For  the  utilitarian,  it’s  not  enough  to  just  decide  what  brings  the  most  happiness  to  the  most  individuals  right  now;  the  future  needs  to  be  accounted  for  too.  Utilitarianism  is  a  true  global  ethics;  you’re  required  to  weigh  everyone’s  happiness  and  weigh  it  as  best  as  you  can  as  far  into  the  future  as  possible.  So  if  the  deciders  at  the  College  Board  follow  a  utilitarian  route  in  opting  to  include  (or  cancel)  the  scores,  they  need  to  ask  themselves—if  we  do,  how  will  things  be  in  ten  years?  In  fifty?  Again,  these  are  hard  questions  but  they  don’t  change  anything  fundamental.  For  the  utilitarian,  making  the  right  decision  continues  to  be  about  attempting  to  predict  which  choice  will  maximize  happiness.  Utilitarianism  and  the  Ethics  of  Salaries  When  he  wasn’t  stealing  test  booklets  and  passing  them  on  to  KDCP,  the  principal  in  the  elite  Plano  school  district  was  dedicated  to  his  main  job:  making  sure  students  in  his  building  receive  an  education  qualifying  them  to  do  college-­‐level  work.  Over  at  the  College  Board,  the  company’s  CEO  leads  a  complementary  effort:  producing  tests  to  measure  the  quality  of  that  preparation  and  consequently  determine  students’  scholastic  aptitude.  The  principal,  in  other  words,  is  paid  to  make  sure  high  schoolers  get  an  excellent  education,  and  the  CEO  is  paid  to  measure  how  excellent  (or  not)  the  education  is.  Just  from  the  job  descriptions,  who  should  get  the  higher  salary?  It’s  tempting  to  say  the  principal.  Doesn’t  educating  children  have  to  be  more  important  than  measuring  how  well  they’re  educated?  Wouldn’t  we  all  rather  be  well  educated  and  not  know  it  than  poorly  educated  and  painfully  aware  of  the  fact?  Regardless,  what’s  striking  about  the  salary  that  each  of  these  two  actually  receives  isn’t  who  gets  more;  it’s  how  much.  The  difference  is  almost  ten  times:  $87,000  for  the  principal  versus  the  CEO’s  $830,000.  Within  the  doctrine  of  utilitarianism,  can  such  a  divergence  be  justified?  Yes,  but  only  if  we  can  show  that  this  particular  salary  structure  brings  about  the  greatest  good,  the  highest  level  of  happiness  for  everyone  considered  as  a  collective.  It  may  be,  for  example,  that  objectively  measuring  student  ability,  even  though  it’s  less  important  than  instilling  ability,  is  also  much  harder.  In  that  case,  a  dramatically  higher  salary  may  be  necessary  in  order  to  lure  high-­‐quality  measuring  talent.  From  there,  it’s  not  difficult  to  fill  LDRS  320    Theories  of  Duties  and  Rights  Page  7  of  26  out  a  utilitarian  justification  for  the  pay  divergence.  It  could  be  that  inaccurate  testing  would  cause  large  amounts  of  unhappiness:  students  who  worked  hard  for  years  would  be  frustrated  when  they  were  bettered  by  slackers  who  really  didn’t  know  much  but  managed  to  score  well  on  a  test.  To  broaden  the  point,  if  tremendous  disparities  in  salary  end  up  making  people  happier,  then  the  disparities  are  ethical.  Period.  If  they  don’t,  however,  then  they  can  no  longer  be  defended.  This  differs  from  what  a  libertarian  rights  theorist  might  say  here.  For  a  libertarian—someone  who  believes  individuals  have  an  undeniable  right  to  make  and  keep  whatever  they  can  in  the  world,  regardless  of  how  rich  or  poor  anyone  else  may  be—the  response  to  the  CEO’s  mammoth  salary  is  that  he  found  a  way  to  earn  it  fair  and  square,  and  everyone  should  quit  complaining  about  it.  Generalized  happiness  doesn’t  matter,  only  the  individual’s  right  to  try  to  earn  and  keep  as  much  as  he  or  she  can.  Can  Money  Buy  Utilitarian  Happiness?  The  Ford  Pinto  Case  Basic  questions  in  business  tend  to  be  quantitative,  and  money  is  frequently  the  bottom  line:  How  many  dollars  is  it  worth?  What’s  my  salary?  What’s  the  company’s  profit?  The  basic  question  of  utilitarianism  is  qualitative:  how  much  happiness  and  sadness  is  there?  Inevitably,  it’s  going  to  be  difficult  when  businesses  accustomed  to  bottom-­‐line  number  decisions  are  forced  to  cross  over  and  decide  about  general  happiness.  One  of  the  most  famous  attempts  to  make  the  transition  easier  occurred  back  in  the  1970s.  With  gas  prices  on  the  rise,  American  car  buyers  were  looking  for  smaller,  more  efficient  models  than  Detroit  was  manufacturing.  Japanese  automakers  were  experts  in  just  those  kinds  of  vehicles  and  they  were  seizing  market  share  at  an  alarming  rate.  Lee  Iaccoca,  Ford’s  president,  wanted  to  rush  a  car  into  production  to  compete.  His  model  was  the  Pinto.  [5]  A  gas  sipper  slated  to  cost  $2,000  (about  $12,000  today),  Ford  rushed  the  machine  through  early  production  and  testing.  Along  the  way,  unfortunately,  they  noticed  a  design  problem:  the  gas  tank’s  positioning  in  the  car’s  rump  left  it  vulnerable  to  rear-­‐end  collisions.  In  fact,  when  the  rear-­‐end  hit  came  faster  than  twenty  miles  per  hour,  not  only  might  the  tank  break,  but  gasoline  could  be  splattered  all  the  way  up  to  the  driver’s  compartment.  Fire,  that  meant,  ignited  by  sparks  or  anything  else  could  engulf  those  inside.  No  car  is  perfectly  safe,  but  this  very  scary  vulnerability  raised  eyebrows.  At  Ford,  a  debate  erupted  about  going  ahead  with  the  vehicle.  On  the  legal  end,  the  company  stood  on  solid  ground:  government  regulation  at  the  time  only  required  gas  tanks  to  remain  intact  at  collisions  under  twenty  miles  per  hour.  What  about  the  ethics,  though?  The  question  about  whether  it  was  right  to  charge  forward  was  unavoidable  because  rear-­‐end  accidents  at  speeds  greater  than  twenty  miles  per  hour  happen—every  day.  The  decision  was  finally  made  in  utilitarian  terms.  On  one  side,  the  company  totaled  up  the  dollar  cost  of  redesigning  the  car’s  gas  tank.  They  calculated  • 12.5  million  automobiles  would  eventually  be  sold,  • eleven  dollars  would  be  the  final  cost  per  car  to  implement  the  redesign.  LDRS  320    Theories  of  Duties  and  Rights  Page  8  of  26  Added  up,  that’s  $137  million  total,  with  the  money  coming  out  of  Pinto  buyers’  pockets  since  the  added  production  costs  would  get  tacked  onto  the  price  tag.  It’s  a  big  number  but  it’s  not  that  much  per  person:  $11  is  about  $70  today.  In  this  way,  the  Pinto  situation  faced  by  Ford  executives  is  similar  to  the  test  cancellation  question  for  the  College  Board:  one  option  means  only  a  little  bit  of  suffering  for  specific  individuals,  but  there  are  a  lot  of  them.  On  the  other  side  of  the  Pinto  question—and,  again,  this  resembles  the  College  Board  predicament—if  the  decision  is  made  to  go  ahead  without  the  fix,  there’s  going  to  be  a  lot  of  suffering  but  only  for  a  very  few  people.  Ford  predicted  the  damage  done  to  those  few  people  in  the  following  ways:  • Death  by  burning  for  180  buyers  • Serious  burn  injuries  for  another  180  buyers  • Twenty-­‐one  hundred  vehicles  burned  beyond  all  repair  That’s  a  lot  of  damage,  but  how  do  you  measure  it?  How  do  you  compare  it  with  the  hike  in  the  price  tag?  More  generally,  from  a  utilitarian  perspective,  is  it  better  for  a  lot  of  people  to  suffer  a  little  or  for  a  few  people  to  suffer  a  lot?  Ford  answered  both  questions  by  directly  attaching  monetary  values  to  each  of  the  injuries  and  damages  suffered:  • At  the  time,  1970,  US  Government  regulatory  agencies  officially  valued  a  human  life  at  $200,000.  (That  would  be  about  $1.2  million  today  if  the  government  still  kept  this  problematic  measure.)  • Insurance  companies  valued  a  serious  burn  at  $67,000.  • The  average  resale  value  on  subcompacts  like  the  Pinto  was  $700,  which  set  that  as  the  amount  lost  after  a  complete  burnout.  The  math  coming  out  from  this  is  (180  deaths  ×  $200,000)  +  (180  injuries  ×  $67,000)  +  (2,100  burned-­‐out  cars  ×  $700)  =  $49  million.  The  result  here  is  $137  million  worth  of  suffering  for  Pinto  drivers  if  the  car  is  redesigned  and  only  $49  million  if  it  goes  to  the  streets  as  is.  Ford  sent  the  Pinto  out.  Over  the  next  decade,  according  to  Ford  estimates,  at  least  60  people  died  in  fiery  accidents  and  at  least  120  got  seriously  burned  (skin-­‐graft-­‐level  burns).  No  attempt  was  made  to  calculate  the  total  number  of  burned  vehicles.  Shortly  thereafter,  the  Pinto  was  phased  out.  No  one  has  final  numbers,  but  if  the  first  decade  is  any  indication,  then  the  total  cost  came  in  under  the  original  $49  million  estimate.  According  to  a  utilitarian  argument,  and  assuming  the  premises  concerning  dollar  values  are  accepted,  Ford  made  the  right  decision  back  in  1970.  If  every  Pinto  purchaser  had  been  approached  the  day  after  buying  the  car,  told  the  whole  Ford  story,  and  been  offered  to  change  their  car  along  with  eleven  dollars  for  another  one  without  the  gas  tank  problem,  how  many  would’ve  handed  the  money  over  to  avoid  the  long-­‐shot  risk?  The  number  might’ve  been  very  high,  but  that  doesn’t  sway  a  utilitarian  conclusion.  The  theory  demands  that  decision  makers  stubbornly  keep  their  eye  on  overall  happiness  no  matter  how  much  pain  a  decision  might  cause  certain  individuals.  LDRS  320    Theories  of  Duties  and  Rights  Page  9  of  26  Versions  of  Utilitarian  Happiness  Monetized  utilitarianism  attempts  to  measure  happiness,  to  the  extent  possible,  in  terms  of  money.  As  the  Ford  Pinto  case  demonstrated,  the  advantage  here  is  that  it  allows  decisions  about  the  greater  good  to  be  made  in  clear,  objective  terms.  You  add  up  the  money  on  one  side  and  the  money  on  the  other  and  the  decision  follows  automatically.  This  is  a  very  attractive  benefit,  especially  when  you’re  dealing  with  large  numbers  of  individuals  or  complex  situations.  Monetized  utilitarianism  allows  you  to  keep  your  happiness  calculations  straight.  Two  further  varieties  of  utilitarianism  are  hedonistic  and  idealistic.  Both  seek  to  maximize  human  happiness,  but  their  definitions  of  happiness  differ.  Hedonistic  utilitarians  trace  back  to  Jeremy  Bentham  (England,  around  1800).  Bentham  was  a  wealthy  and  odd  man  who  left  his  fortune  to  the  University  College  of  London  along  with  the  stipulation  that  his  mummified  body  be  dressed  and  present  at  the  institution.  It  remains  there  today.  He  sits  in  a  wooden  cabinet  in  the  main  building,  though  his  head  has  been  replaced  by  a  wax  model  after  pranking  students  repeatedly  stole  the  real  one.  Bentham  believed  that  pleasure  and  happiness  are  ultimately  synonymous.  Ethics,  this  means,  seeks  to  maximize  the  pleasures—just  about  any  sensation  of  pleasure—felt  by  individuals.  But  before  dropping  everything  and  heading  out  to  the  bars,  it  should  be  remembered  that  even  the  most  hedonistic  of  the  utilitarians  believe  that  getting  pleasure  right  now  is  good  but  not  as  good  as  maximizing  the  feeling  over  the  long  term.  (Going  out  for  drinks,  in  others  words,  instead  of  going  to  the  library  isn’t  recommendable  on  the  evening  before  midterms.)  A  contemporary  of  Bentham,  John  Stuart  Mill,  basically  agreed  that  ethics  is  about  maximizing  pleasure,  but  his  more  idealistic  utilitarianism  distinguished  low  and  highbrow  sensations.  The  kinds  of  raw,  good  feelings  that  both  we  and  animals  can  find,  according  to  Mill,  are  second-­‐rate  pleasures.  Pleasures  with  higher  and  more  real  value  include  learning  and  learnedness.  These  aren’t  physical  joys  so  much  as  the  delights  of  the  mind  and  the  imagination.  For  Mill,  consequently,  libraries  and  museums  are  scenes  of  abundant  pleasure,  much  more  than  any  bar.  This  idealistic  notion  of  utilitarianism  fits  quite  well  with  the  College  Board’s  response  to  the  KDCP  episode.  First,  deciding  against  canceling  student  scores  seems  like  a  way  of  keeping  people  on  track  to  college  and  headed  toward  the  kind  of  learning  that  rewards  our  cerebral  inclinations.  Further,  awarding  free  prep  classes  to  those  unable  to  pay  seems  like  another  step  in  that  direction,  at  least  if  it  helps  get  them  into  college.  Versions  of  Utilitarian  Regulation  A  narrow  distinction  with  far-­‐reaching  effects  divides  soft  from  hard  utilitarianism.  Soft  utilitarianism  is  the  standard  version;  when  people  talk  about  a  utilitarian  ethics,  that’s  generally  what  they  mean.  As  a  theory,  soft  utilitarianism  is  pretty  laid  back:  an  act  is  good  if  the  outcome  is  more  happiness  in  the  world  than  we  had  before.  Hard  utilitarianism,  on  the  other  hand,  demands  more:  an  act  is  ethically  recommendable  only  if  the  total  benefits  for  everyone  are  greater  than  those  produced  by  any  other  act.  LDRS  320    Theories  of  Duties  and  Rights  Page  10  of  26  According  to  the  hard  version,  it’s  not  enough  to  do  good;  you  must  do  the  most  good  possible.  As  an  example,  think  about  the  test-­‐prep  company  KDCP  under  the  microscope  of  utilitarian  examination.  • When  a  soft  utilitarian  looks  at  KDCP,  the  company  comes  out  just  fine.  High  schoolers  are  learning  test-­‐taking  skills  and  tricks  that  they’ll  only  use  once  but  will  help  in  achieving  a  better  score  and  leave  behind  a  sense  that  they’ve  done  all  they  can  to  reach  their  college  goals.  That  means  the  general  happiness  level  probably  goes  up—or  at  worst  holds  steady—because  places  like  KDCP  are  out  there.  • When  a  hard  utilitarian  looks  at  KDCP,  however,  the  company  doesn’t  come  off  so  well.  Can  we  really  say  that  this  enterprise’s  educational  subject—test  taking—is  the  very  best  use  of  teaching  resources  in  terms  of  general  welfare  and  happiness?  And  what  about  the  money?  Is  SAT  prep  really  the  best  way  for  society  to  spend  its  dollars?  Wouldn’t  a  hard  utilitarian  have  to  recommend  that  the  tuition  money  collected  by  the  test-­‐prep  company  get  siphoned  off  to  pay  for,  say,  college  tuition  for  students  who  otherwise  wouldn’t  be  able  to  continue  their  studies  at  all?  If  decisions  about  businesses  are  totally  governed  by  the  need  to  create  the  most  happiness  possible,  then  companies  like  KDCP  that  don’t  contribute  much  to  social  well-­‐being  will  quickly  become  endangered.  The  demands  of  hard  utilitarianism  can  be  layered  onto  the  ethical  decision  faced  by  the  College  Board  in  their  courtroom  battle  with  KDCP.  Ultimately,  the  College  Board  opted  to  penalize  the  test-­‐prep  company  by  forcing  it  to  offer  some  free  classes  for  underprivileged  students.  Probably,  the  result  was  a  bit  more  happiness  in  the  world.  The  result  wasn’t,  however,  the  most  happiness  possible.  If  hard  utilitarianism  had  driven  the  decision,  then  the  College  Board  would’ve  been  forced  to  go  for  the  jugular  against  KDCP,  strip  away  all  the  money  they  could,  and  then  use  it  to  do  the  most  good  possible,  which  might  have  meant  setting  up  a  scholarship  fund  or  something  similar.  That’s  just  a  start,  though.  Next,  to  be  true  to  hard  utilitarianism,  the  College  Board  would  need  to  focus  on  itself  with  hard  questions.  The  costs  of  creating  and  applying  tests  including  the  SAT  are  tremendous,  which  makes  it  difficult  to  avoid  this  question:  wouldn’t  society  as  a  whole  be  better  off  if  the  College  Board  were  to  be  canceled  and  all  their  resources  dedicated  to,  for  example,  creating  a  new  university  for  students  with  learning  disabilities?  Going  beyond  KDCP  and  the  College  Board,  wouldn’t  almost  any  private  company  fall  under  the  threat  of  appropriation  if  hard  utilitarians  ran  the  world?  While  it’s  true,  for  example,  that  the  money  spent  on  steak  and  wine  at  expensive  Las  Vegas  restaurants  probably  increases  happiness  a  bit,  couldn’t  that  same  cash  do  a  lot  more  for  the  general  welfare  of  people  whose  income  makes  Las  Vegas  an  impossibly  expensive  dream?  If  it  could,  then  the  hard  utilitarian  will  propose  zipping  up  Las  Vegas  and  rededicating  the  money.  Finally,  since  utilitarianism  is  about  everyone’s  total  happiness,  don’t  hard  questions  start  coming  up  about  world  conditions?  Is  it  possible  to  defend  the  existence  of  McDonald’s  in  the  United  States  while  people  are  starving  in  other  countries?  Conclusion.  In  theory,  there’s  not  much  divergence  between  soft  and  hard  utilitarianism.  But  in  terms  of  what  actually  happens  out  in  the  world  when  the  theory  gets  applied,  that’s  a  big  difference.  For  private  companies,  it’s  also  a  dangerous  one.  LDRS  320    Theories  of  Duties  and  Rights  Page  11  of  26  Two  further  versions  of  utilitarian  regulation  are  act  and  rule.  Act  utilitarianism  affirms  that  a  specific  action  is  recommended  if  it  increases  happiness.  This  is  the  default  form  of  utilitarianism,  and  what  people  usually  mean  when  they  talk  about  the  theory.  The  separate  rule-­‐based  version  asserts  that  an  action  is  morally  right  if  it  follows  a  rule  that,  when  applied  to  everyone,  increases  general  happiness.  The  rule  utilitarian  asks  whether  we’d  all  be  benefitted  if  everyone  obeyed  a  rule  such  as  “don’t  steal.”  If  we  would—if  the  general  happiness  level  increases  because  the  rule  is  there—then  the  rule  utilitarian  proposes  that  we  all  adhere  to  it.  It’s  important  to  note  that  rule  utilitarians  aren’t  against  stealing  because  it’s  intrinsically  wrong,  as  duty  theorists  may  propose.  The  rule  utilitarian  is  only  against  stealing  if  it  makes  the  world  less  happy.  If  tomorrow  it  turns  out  that  mass  stealing  serves  the  general  good,  then  theft  becomes  the  ethically  right  thing  to  do.  The  sticky  point  for  rule  utilitarians  involves  special  cases.  If  we  make  the  rule  that  theft  is  wrong,  consider  what  happens  in  the  case  from  the  chapter’s  beginning:  You  forgot  your  pencil  on  SAT  test  day,  and  you  spot  one  lying  on  an  abandoned  desk.  If  you  don’t  take  it,  no  one’s  going  to  be  any  happier,  but  you’ll  be  a  lot  sadder.  So  it  seems  like  rule  utilitarianism  verges  on  defeating  its  own  purpose,  which  is  maximizing  happiness  no  matter  what.  On  the  other  hand,  there  are  also  sticky  points  for  act  utilitarians.  For  example,  if  I  go  to  Walmart  tonight  and  steal  a  six-­‐pack  of  beer,  I’ll  be  pretty  happy.  And  assuming  I  don’t  get  caught,  no  one  will  be  any  sadder.  The  loss  to  the  company—a  few  dollars—will  disappear  in  a  balance  sheet  so  huge  that  it’s  hard  to  count  the  zeros.  Of  course  if  everyone  starts  stealing  beers,  that  will  cause  a  problem,  but  in  practical  terms,  if  one  person  does  it  once  and  gets  away  with  it,  it  seems  like  an  act  utilitarian  would  have  to  approve.  The  world  would  be  a  happier  place.  Advantages  and  Disadvantages  of  Utilitarian  Ethics  in  Business  Basic  utilitarianism  is  the  soft,  act  version.  These  are  the  theory’s  central  advantages:  • Clarity  and  simplicity.  In  general  terms,  it’s  easy  to  understand  the  idea  that  we  should  all  act  to  increase  the  general  welfare.  • Acceptability.  The  idea  of  bringing  the  greatest  good  to  the  greatest  number  coheres  with  common  and  popular  ideas  about  what  ethical  guidance  is  supposed  to  provide.  • Flexibility.  The  weighing  of  individual  actions  in  terms  of  their  consequences  allows  for  meaningful  and  firm  ethical  rules  without  requiring  that  everyone  be  treated  identically  no  matter  how  different  the  particular  situation.  So  the  students  whose  scores  were  suspended  by  the  College  Board  could  see  them  reinstated,  but  that  doesn’t  mean  the  College  Board  will  take  the  same  action  in  the  future  (if,  say,  large  numbers  of  people  start  stealing  test  booklets).  • Breadth.  The  focus  on  outcomes  as  registered  by  society  overall  makes  the  theory  attractive  for  those  interested  in  public  policy.  Utilitarianism  provides  a  foundation  and  guidance  for  business  regulation  by  government.  LDRS  320    Theories  of  Duties  and  Rights  Page  12  of  26  The  central  difficulties  and  disadvantages  of  utilitarianism  include  the  following:  • Subjectivity.  It  can  be  hard  to  make  the  theory  work  because  it’s  difficult  to  know  what  makes  happiness  and  unhappiness  for  specific  individuals.  When  the  College  Board  demanded  that  KDCP  give  free  classes  to  underprivileged  high  schoolers,  some  paying  students  were  probably  happy  to  hear  the  news,  but  others  probably  fretted  about  paying  for  what  others  received  free.  And  among  those  who  received  the  classes,  probably  the  amount  of  resulting  happiness  varied  between  them.  • Quantification.  Happiness  can’t  be  measured  with  a  ruler  or  weighed  on  a  scale;  it’s  hard  to  know  exactly  how  much  happiness  and  unhappiness  any  particular  act  produces.  This  translates  into  confusion  at  decision  time.  (Monetized  utilitarianism,  like  that  exhibited  in  the  case  of  the  Ford  Pinto,  responds  to  this  confusion.)  • Apparent  injustices.  Utilitarian  principles  can  produce  specific  decisions  that  seem  wrong.  A  quick  example  is  the  dying  grandmother  who  informs  her  son  that  she’s  got  $200,000  stuffed  into  her  mattress.  She  asks  the  son  to  divide  the  money  with  his  brother.  This  brother,  however,  is  a  gambling  alcoholic  who’ll  quickly  fritter  away  his  share.  In  that  case,  the  utilitarian  would  recommend  that  the  other  brother—the  responsible  one  with  children  to  put  through  college—just  keep  all  the  money.  That  would  produce  the  most  happiness,  but  do  we  really  want  to  deny  grandma  her  last  wish?  • The  utilitarian  monster  is  a  hypothetical  individual  who  really  knows  how  to  feel  good.  Imagine  that  someone  or  a  certain  group  of  people  were  found  to  have  a  much  greater  capacity  to  experience  happiness  than  others.  In  that  case,  the  strict  utilitarian  would  have  no  choice  but  to  put  everyone  else  to  work  producing  luxuries  and  other  pleasures  for  these  select  individuals.  In  this  hypothetical  situation,  there  could  even  be  an  argument  for  forced  labor  as  long  as  it  could  be  shown  that  the  servants’  suffering  was  minor  compared  to  the  great  joy  celebrated  by  those  few  who  were  served.  Shifting  this  into  economic  and  business  terms,  there’s  a  potential  utilitarian  argument  here  for  vast  wage  disparities  in  the  workplace.  • The  utilitarian  sacrifice  is  the  selection  of  one  person  to  suffer  terribly  so  that  others  may  be  pleasured.  Think  of  gladiatorial  games  in  which  a  few  contestants  suffer  miserably,  but  a  tremendous  number  of  spectators  enjoy  the  thrill  of  the  contest.  Moving  the  same  point  from  entertainment  into  the  business  of  medical  research,  there’s  a  utilitarian  argument  here  for  drafting  individuals—even  against  their  will—to  endure  horrifying  medical  experiments  if  it  could  be  shown  that  the  experiments  would,  say,  cure  cancer,  and  so  create  tremendous  happiness  in  the  future.  Key  Takeaways  • Utilitarianism  judges  specific  decisions  by  examining  the  decision’s  consequences.  • Utilitarianism  defines  right  and  wrong  in  terms  of  the  happiness  of  a  society’s  members.  • Utilitarian  ethics  defines  an  act  as  good  when  its  consequences  bring  the  greatest  good  or  happiness  to  the  greatest  number  of  people.  • There  are  a  variety  of  specific  forms  of  utilitarianism.  • Theoretically,  utilitarianism  is  straightforward,  but  in  practical  terms  it  can  be  difficult  to  measure  the  happiness  of  individuals.  LDRS  320    Theories  of  Duties  and  Rights  Page  13  of  26  Review  Questions  1. What  is  a  utilitarian  argument  in  favor  of  a  college  education?  How  does  it  differ  from  other  reasons  you  might  want  to  go  to  college  or  graduate  school?  2. How  could  a  utilitarian  justify  cheating  on  an  exam?  3. What  is  a  “global  ethics”?  4. What  practical  problem  with  utilitarianism  is  (to  some  degree)  resolved  by  monetized  utilitarianism?  5. What  are  two  advantages  of  a  utilitarian  ethics  when  compared  with  an  ethics  of  duties?  6. What  are  two  disadvantages  of  a  utilitarian  ethics  when  compared  with  an  ethics  of  duties?  7. What’s  an  example  from  today’s  world  of  a  utilitarian  monster?  8. What’s  an  example  from  today’s  world  of  a  utilitarian  sacrifice?   [1]  “CB-­‐Karen  Dillard  Case  Settled-­‐No  Cancelled  Scores,”  College  Confidential,  accessed  May  15,  2011,­‐forum/501843-­‐cb-­‐karen-­‐dillard-­‐case-­‐settled-­‐no-­‐cancelled-­‐scores.html.    [2]  Paulina  Mis,  “College  Board  Sues  Test-­‐Prep  Company,  Countersuit  Filed,”,  February  26,  2008,  accessed  May  15,  2011,­‐school/college-­‐board-­‐sues-­‐test-­‐prep-­‐company-­‐countersuit-­‐filed/161.    [3]  Staci  Hupp,  “SAT  Scores  for  Students  Who  Used  Test  Prep  Firm  May  Be  Thrown  Out,”  Denton  Record  Chronicle,  February  22,  2008,  accessed  May  15,  2011,    [4]  “AETR  Report  Card,”  Americans  for  Educational  Testing  Reform,  accessed  May  15,  2011,­‐board.php.    [5]  Case  facts  taken  from  Manuel  Velasquez,  Business  Ethics,  Concepts  and  Cases,  6th  ed.  (Upper  Saddle  River,  NJ:  Pearson  Prentice  Hall,  2006),  60 61.    3.3  Altruism:  Everyone  Else  Learning  Objectives  1. Define  altruistic  ethics.  2. Show  how  altruism  works  in  and  with  business.  3. Consider  advantages  and  drawbacks  of  altruism.  TOMS  Shoes  There  is  no  Tom  at  TOMS  Shoes.  The  company’s  name  actually  came  from  the  title  for  its  social  cause:  Shoes  for  Tomorrow.  Tomorrow  shoes—TOMS  Shoes.  The  shoes  are  given  away  to  needy  children  in  Argentina  at  a  one-­‐to-­‐one  rate:  for  every  pair  bought  in  the  United  States,  TOMS  delivers  a  pair  down  there.  They’re  needed  in  Argentina’s  poverty-­‐stricken  regions  to  prevent  the  spread  of  an  infectious  disease,  one  that  flourishes  in  the  local  soil  and  rises  up  through  the  feet.  A  pair  of  shoes  is  all  that’s  needed  to  block  the  problem.  LDRS  320    Theories  of  Duties  and  Rights  Page  14  of  26  The  project  started  when  young  Texan  entrepreneur  Blake  Mycoskie  vacationed  in  Argentina.  Not  the  type  to  luxuriate  in  the  hotel  pool,  he  got  out  and  learned  about  the  country,  good  and  bad,  the  food,  the  sweeping  geography,  the  poverty  and  diseases.  The  foot  infection,  he  discovered,  was  so  devastating  yet  so  easy  to  block  that,  according  to  his  company’s  website,  he  decided  he  had  to  do  something  about  it.  [1]  Initially,  he  contemplated  a  charitable  fund  to  buy  shoes  for  the  needy  children,  but  that  left  his  project  subject  to  the  ebb  and  flow  of  others’  generosity.  It’d  be  better  and  more  reliable,  he  determined,  to  link  the  community-­‐service  project  with  private  enterprise  and  use  revenues  from  a  company  to  fund  the  charity.  Quickly,  Mycoskie  determined  that  he  could  make  the  whole  machine  work  most  efficiently  by  starting  a  shoe  company.  Simultaneously,  he  could  produce  shoes  for  donation  and  shoes  for  sale  to  finance  the  effort.  So  we  have  TOMS  Shoes.  Next,  a  kind  of  shoe  to  produce  and  sell  was  required.  Mycoskie  found  inspiration  in  Argentina’s  traditional  alpargata.  This  is  a  cheap,  workingman’s  shoe,  a  slip-­‐on  made  from  canvas  with  rope  soles.  [2]  For  the  American  adaptation,  Mycoskie  strengthened  the  sole,  styled  and  colored  the  canvas,  and  added  a  brand  label.  The  price  also  got  jacked  up.  The  originals  cost  a  few  dollars  in  Argentina;  the  adaptations  cost  about  forty  dollars  here.  They’re  a  splashy  hit.  You  find  TOMS  Shoes  at  trendy  footwear  shops,  at  Whole  Foods  grocery  stores,  and  all  over  the  Internet.  At  last  check,  about  half  a  million  pairs  have  been  sold  and  an  equal  number  donated.  Total  sales  in  seven  figures  isn’t  far  off,  and  the  company  was  recently  featured  on  a  CNBC  segment  as  an  American  business  success  story.  Notably,  TOMS  achieved  recognition  on  national  TV  sooner  after  its  inception  than  almost  any  other  enterprise  in  the  program’s  history.  It  all  happened  in  fewer  than  four  years.  Question:  how  did  it  get  so  big  so  fast?  How  did  some  guy  transform  from  a  wandering  tourist  to  a  captain  of  the  shoe  industry  in  less  time  than  it  takes  to  get  a  college  degree?  Answer:  celebrities.  Blake  Mycoskie’s  got  a  warm,  round  face  and  a  perfect  smile.  He’s  got  money  from  his  preshoe  projects  and  he’s  smart  too.  He’s  also  got  that  contemporary  bohemian  look  down  with  his  bead  necklace  and  wavy,  shoulder-­‐length  hair.  There’s  no  letdown  beneath  the  chin  line  either;  he’s  fit  (he  was  a  tennis  pro  until  nineteen).  You  get  the  idea.  He  commands  attention  from  even  Hollywood  women,  and  he  ended  up  coupled  with  the  midrange  star  Maggie  Grace.  He  introduced  her  to  his  TOMS  Shoes  concept,  gave  her  a  few  pairs  to  wear  around  and  show  friends,  and  the  ball  started  rolling.  [3]  A  few  parties  later,  Scarlett  Johansson,  Jessica  Biel,  Benicio  Del  Toro,  Tobey  Maguire,  Sienna  Miller,  and  Karl  Lagerfeld  were  parading  around  in  TOMS  Shoes.  There  was  no  stopping  it.  [4]  Today,  when  Blake  Mycoskie  introduces  himself,  it’s  not  as  the  CEO  of  his  company;  he  says  he’s  the  Chief  Shoe  Giver  at  TOMS  Shoes,  reflecting  the  idea  that  charity  drives  the  thriving  business,  not  the  other  way  around.    LDRS  320    Theories  of  Duties  and  Rights  Page  15  of  26  Is  TOMS  Shoes  Altruistic?  An  action  is  morally  right  according  to  the  altruist,  and  to  the  ethical  theory  of  altruism,  if  the  action’s  consequences  are  more  beneficial  than  unfavorable  for  everyone  except  the  person  who  acts.  That  means  the  actor’s  interests  aren’t  considered:  the  altruist  does  whatever  can  be  done  so  that  others  will  be  happier.  It’s  common  to  imagine  the  altruist  as  poverty  stricken  and  self-­‐sacrificing.  When  you  live  for  everyone  else  as  the  altruist  does,  it’s  no  surprise  that  you  can  end  up  in  pretty  bad  shape.  You  might  get  lucky  and  run  into  another  altruist  like  yourself,  but  if  you  don’t,  there’s  not  going  to  be  anyone  particularly  dedicated  to  your  well-­‐being.  On  the  positive  side  there’s  nobility  to  the  idea  of  dedicating  everything  to  everyone  else,  but  the  plain  truth  is  not  many  of  us  would  choose  to  live  like  Gandhi  or  Mother  Teresa.  It  doesn’t  have  to  be  that  way,  though.  A  suffering  life  may  be  an  effect  of  altruism,  but  it’s  not  a  requirement.  Living  for  others  doesn’t  mean  you  live  poorly,  only  that  there’s  no  guarantee  you’ll  live  well.  You  might,  however,  live  well.  Blake  Mycoskie  demonstrates  this  critical  element  at  the  heart  of  altruism:  it’s  not  about  suffering  or  sacrificing;  it’s  about  making  clear-­‐eyed  decisions  about  the  best  way  to  make  as  many  others  as  happy  as  possible.  If  you  happen  to  live  the  good  life  along  the  way—partying  with  Maggie  Grace,  Sienna  Miller,  and  friends  because  that’s  the  fastest  route  to  publicize  the  TOMS  Shoes  enterprise—that  doesn’t  count  against  the  project.  It  doesn’t  count  in  favor  either.  All  that  matters,  all  that  gets  tallied  up  when  the  question  gets  asked  about  whether  the  altruist  did  good,  is  how  things  ended  up  for  everyone  else.  In  the  case  of  TOMS  Shoes,  the  tallying  is  easy.  The  relatively  wealthy  shoe  buyers  in  the  United  States  come  off  well;  they  get  cool,  politically  correct  footwear  to  show  friends  along  with  a  psychological  lift  from  knowing  they’re  helping  the  less  fortunate.  On  the  other  side,  the  rural  Argentines  obviously  benefit  also.  Some  Rules  of  Altruism  Altruism  is  a  consequentialist  ethics.  Like  utilitarianism,  no  specific  acts  are  prohibited  or  required;  only  outcomes  matter.  That  explains  why  there  aren’t  lifestyle  requirements  for  the  altruist.  Some  live  stoically  like  Gandhi  while  others  like  Mycoskie  get  the  high  life,  but  they’re  both  altruists  as  long  as  the  goal  of  their  lives  and  the  reason  for  their  actions  is  bringing  happiness  to  others.  Similarly,  the  altruist  might  be  a  criminal  (Robin  Hood)  or  a  liar  (see  Socrates’s  noble  lie).  Like  the  utilitarian,  most  of  the  hard  questions  altruists  face  concern  happiness.  They  include:  • The  happiness  definition.  Exactly  what  counts  as  happiness?  In  the  case  of  TOMS  donating  shoes  to  rural  Argentines,  the  critical  benefit  is  alleviation  of  disease  and  the  suffering  coming  with  it.  Happiness,  in  other  words,  is  defined  here  as  a  release  from  real,  physical  pain.  On  the  other  hand,  with  respect  to  the  shoes  sold  in  the  States,  the  happiness  is  completely  different;  it’s  a  vague,  good  feeling  that  LDRS  320    Theories  of  Duties  and  Rights  Page  16  of  26  purchasers  receive  knowing  their  shopping  is  serving  a  social  cause.  How  do  we  define  happiness  in  a  way  that  ropes  in  both  these  distinct  experiences?  • Once  happiness  has  been  at  least  loosely  defined,  another  question  altruists  face  is  the  happiness  measure:  how  do  we  know  which  is  worth  more,  the  alleviation  of  suffering  from  a  disease  or  the  warm  happiness  of  serving  a  good  cause?  And  even  if  the  answer  to  that  question  is  clear,  how  great  is  the  difference,  how  can  it  be  measured?  • Another  altruism  difficulty  is  happiness  foresight.  Even  if  donating  shoes  helps  in  the  short  term,  are  the  recipients’  lives  really  going  to  be  happier  overall?  Conditions  are  hard  in  the  abandoned  regions  of  the  third  world,  and  alleviation  of  one  problem  may  just  clear  the  way  for  another.  So  TOMS  Shoes  saves  poverty-­‐stricken  Argentines  from  suffering  a  debilitating  foot  disease,  but  how  much  good  are  you  really  doing  if  you  save  people  only  so  that  they’re  free  to  suffer  aching  hunger,  miserable  sickness  in  places  lacking  antibiotics,  and  hard  manual  labor  because  there’s  no  other  work?  Altruism  is  a  variety  of  selflessness,  but  it’s  not  the  same  thing;  people  may  deny  themselves  or  they  may  sacrifice  themselves  for  all  kinds  of  other  reasons.  For  example,  a  soldier  may  die  in  combat,  but  that’s  not  altruism;  that’s  loyalty:  it’s  not  sacrificing  for  everyone  else  but  for  a  particular  nation.  The  same  may  go  for  the  political  protestor  who  ends  up  jailed  and  forgotten  forever.  That’s  self-­‐sacrifice,  but  she  did  it  for  the  cause  and  not  for  all  the  others.  The  fireman  may  lose  his  life  rescuing  a  victim,  but  this  is  because  he’s  doing  his  job,  not  because  he’s  decided  to  live  for  the  sake  of  others.  All  altruists,  finally,  are  selfless,  but  not  all  those  who  sacrifice  themselves  are  altruists.  Personal  versus  impersonal  altruism  distinguishes  two  kinds  of  altruists:  those  who  practice  altruism  on  their  own  and  leave  everyone  else  alone,  and  those  who  believe  that  everyone  should  act  only  to  benefit  others  and  without  regard  to  their  own  well-­‐being.  The  Altruist  in  Business  and  the  Business  That  Is  Altruistic  TOMS  Shoes  shows  that  a  business  can  be  mounted  to  serve  the  welfare  of  others.  A  company  aiming  to  serve  an  altruistic  purpose  doesn’t  have  to  be  organized  altruistically,  however.  An  individual  truly  dedicated  to  everyone  else  could  start  a  more  traditional  company  (a  real  estate  firm,  for  example),  work  like  a  dog,  turn  massive  profits,  and  in  the  end,  donate  everything  to  charity.  It  may  even  be  that  during  the  profit-­‐making  phase  the  altruist  CEO  is  ruthless,  exploiting  workers  and  consumers  to  the  maximum.  All  that’s  fine  as  long  as  the  general  welfare  is  served  in  the  end  when  all  the  suffering  is  toted  up  on  one  side  and  the  happiness  on  the  other.  A  business  operation  that  isn’t  at  all  altruistic,  in  other  words,  can  be  bent  in  that  direction  by  an  altruistic  owner.  Going  the  other  way,  the  business  operation  itself  may  be  altruistic.  For  example,  this  comes  from  the  College  Board’s  website,  the  About  Us  page:  The  College  Board  is  a  not-­‐for-­‐profit  membership  association  whose  mission  is  to  connect  students  to  college  success  and  opportunity.  [5]  That  sounds  like  a  good  cause.  The  company  doesn’t  exist  to  make  money  but  to  implement  testing  that  matches  students  with  their  best-­‐fit  colleges.  It  is,  in  other  words,  an  altruistic  enterprise,  and  the  world,  the  argument  could  be  made,  is  a  better  place  because  the  College  LDRS  320    Theories  of  Duties  and  Rights  Page  17  of  26  Board  exists.  But—and  this  is  the  important  distinction—that  doesn’t  mean  everyone  who  works  at  the  College  Board  is  selfless.  Far  from  it,  the  CEO  takes  home  $830,000  a  year.  That  money  would  buy  a  lot  of  shoes  for  the  poverty-­‐stricken  in  Argentina.  So,  there  can  be  altruistic  business  organizations  driven  by  workers  who  aren’t  altruists.  A  church  is  also  a  business  organization  with  cash  flows,  budgets,  and  red  and  black  ink.  The  same  goes  for  Goodwill.  Here’s  their  mission  statement:  “Goodwill  Industries  International  enhances  the  dignity  and  quality  of  life  of  individuals,  families  and  communities  by  eliminating  barriers  to  opportunity  and  helping  people  in  need  reach  their  fullest  potential  through  the  power  of  work.”  [6]  So,  the  Salvation  Army  fits  into  the  group  of  altruistic  enterprises,  of  organizations  that  exist,  like  the  College  Board,  to  do  public  good.  It’s  distinct  from  the  College  Board,  however,  in  that  a  very  healthy  percentage  of  those  working  inside  the  organization  are  themselves  altruists—they’re  working  for  the  cause,  not  their  own  welfare.  Think  of  the  Salvation  Army  red  kettle  bell  ringers  around  Christmas  time.  Conclusion.  Altruism  connects  with  business  in  three  basic  ways.  There  are  altruists  who  use  normal,  profit-­‐driven  business  operations  to  do  good.  There  are  altruistic  companies  that  do  good  by  employing  nonaltruistic  workers.  And  there  are  altruistic  organizations  composed  of  altruistic  individuals.  Advocating  and  Challenging  Ethical  Altruism  The  arguments  for  and  against  an  altruistic  ethics  overlap  to  a  considerable  extent  with  those  listed  under  utilitarianism.  The  advantages  include:  • Clarity  and  simplicity.  People  may  disagree  about  exactly  how  much  good  a  company  like  TOMS  Shoes  is  really  doing,  but  the  overall  idea  that  the  founder  is  working  so  that  others  can  be  happier  is  easy  to  grasp.  • Acceptability.  The  idea  of  working  for  others  grants  an  ethical  sheen.  No  matter  what  you  might  think  of  someone  as  a  person,  it’s  very  difficult  to  criticize  them  in  ethical  terms  if  they  really  are  dedicating  themselves  to  the  well-­‐being  of  everyone  else.  • Flexibility.  Altruists  have  many  ways  of  executing  their  beliefs.  The  disadvantages  of  altruism  include:  • Uncertainty  about  the  happiness  of  others.  Even  if  individuals  decide  to  sacrifice  their  own  welfare  for  the  good  of  others,  how  do  they  know  for  sure  what  makes  others  happy?  • Shortchanging  yourself.  Even  though  altruism  doesn’t  require  that  the  altruist  live  a  miserable  life,  there  doesn’t  seem  to  be  any  clear  reason  why  the  altruist  shouldn’t  get  an  at  least  equal  claim  to  happiness  as  everyone  else  (as  in  a  utilitarian  approach).  Also,  some  critics  suspect  that  altruism  can  be  a  way  of  escaping  your  own  life:  if  you  spend  all  your  time  volunteering,  could  it  be  that  deep  down  you’re  not  a  good  soul  so  much  as  just  afraid  of  going  out  into  the  competitive  world  and  trying  to  win  a  good  place  for  yourself?   LDRS  320    Theories  of  Duties  and  Rights  Page  18  of  26  Key  Takeaways  • Altruism  defines  ethically  good  as  any  act  that  ends  up  increasing  net  happiness  (or  decreasing  net  unhappiness)  when  everything  is  taken  into  account  except  the  actor’s  increased  or  diminished  happiness.  • Altruism  doesn’t  require  living  a  miserable  life.  • Altruism  intersects  with  the  business  world  in  various  ways.  Review  Questions  1. Theoretically,  could  the  most  devoted  altruist  in  a  society  also  be  its  richest  and  happiest  member?  How?  2. Does  Blake  Mycoskie  have  to  be  an  altruist  for  TOMS  Shoes  to  be  considered  an  altruistic  enterprise?  3. Does  TOMS  Shoes  have  to  be  an  altruistic  enterprise  for  Mycoskie  to  be  considered  an  altruist?  4. What  are  some  other  motives  that  may  lead  someone  to  live  the  life  of  an  altruist?   [1]  TOMS  Shoes,  “One  for  One  Movement,”  accessed  May  15,  2011,­‐movement.    [2]  TOMS  Shoes,  accessed  May  15,  2011,­‐oct-­‐vogue.jpg.    [3]  sharon_b,  December  14,  2008  (5:24  p.m.),  “Blake  Mycoskie—he’s  handsome,  rich  and  helps  children  in  the  Third  World,”  Gossip  Rocks,  accessed  May  15,  2011,­‐blake-­‐mycoskie-­‐hes-­‐handsome-­‐rich-­‐helps-­‐children-­‐third-­‐world.html.    [4]  Lesley  M.  M.  Blume,  “You  Are  What  You  Wear,”  Huffington  Post,  July  30,  2008,  accessed  May  15,  2011,­‐m-­‐m-­‐blume/you-­‐are-­‐what-­‐you-­‐wear_b_65967.html.    [5]  “About  Us,”  College  Board,  accessed  May  15,  2011,    [6]  “Our  Mission,”  Goodwill  Industries  International,  Inc.,  accessed  May  15,  2011,­‐us/our-­‐mission.    3.4  Egoism:  Just  Me  Learning  Objectives  1. Define  ethical  egoism.  2. Show  how  egoism  works  in  and  with  business.  3. Consider  advantages  and  drawbacks  of  egoism.  Ethical  Egoism  Ethical  egoism:  whatever  action  serves  my  self-­‐interest  is  also  the  morally  right  action.  What’s  good  for  me  in  the  sense  that  it  gives  me  pleasure  and  happiness  is  also  good  in  the  sense  that  it’s  the  morally  right  thing  to  do.  Ethical  egoism  mirrors  altruism:  If  I’m  an  altruist,  I  believe  that  actions  ought  to  heighten  the  happiness  of  others  in  the  world,  and  what  happens  to  me  is  irrelevant.  If  I’m  an  egoist,  I  LDRS  320    Theories  of  Duties  and  Rights  Page  19  of  26  believe  that  actions  ought  to  heighten  my  happiness,  and  what  happens  to  others  is  irrelevant.  Could  someone  like  Blake  Mycoskie—someone  widely  recognized  as  an  altruistic,  social-­‐cause  hero—actually  be  an  egoist?  Yes.  Consider  things  this  way.  Here’s  a  young  guy  and  he’s  out  looking  for  money,  celebrity,  good  parties,  and  a  jaw-­‐dropping  girlfriend.  It  wouldn’t  be  the  first  time  there  was  a  guy  like  that.  Put  yourself  in  his  shoes  and  imagine  you’re  an  ethical  egoist:  whatever’s  good  for  you  is  good.  Your  situation  is  pretty  clear,  your  moral  responsibility  lists  what  you  should  be  trying  to  get,  and  the  only  question  is  how  can  I  get  it  all?  That’s  a  tall  order.  Becoming  a  rock  star  would  probably  work,  but  there  are  a  lot  of  people  already  out  there  going  for  it  that  way.  The  same  goes  for  becoming  a  famous  actor.  Sports  are  another  possibility;  Mycoskie,  in  fact,  made  a  run  at  pro  tennis  as  a  younger  man,  but  like  most  who  try,  he  couldn’t  break  into  the  upper  echelon.  So  there  are  paths  that  may  work,  but  they’re  hard  ones,  it’s  a  real  fight  for  every  step  forward.  If  you’re  smart—and  Mycoskie  obviously  is—then  you  might  look  for  a  way  to  get  what  you  want  that  doesn’t  force  you  to  compete  so  brutally  with  so  many  others.  Even  better,  maybe  you’ll  look  for  a  way  that  doesn’t  present  any  competition  at  all,  a  brand  new  path  to  the  wish  list.  The  idea  of  a  celebrity-­‐driven  shoe  company  that  makes  a  profit  but  that  also  makes  its  founder  a  star  in  the  eyes  of  the  Hollywood  stars  is  a  pretty  good  strategy.  Obviously,  no  one  can  look  deep  into  Mycoskie’s  mind  and  determine  exactly  what  drove  him  to  found  his  enterprise.  He  may  be  an  altruist  or  an  egoist  or  something  else,  but  what’s  important  is  to  outline  how  egoism  can  actually  work  in  the  world.  It  can  work—though  of  course  it  doesn’t  work  this  way  every  time—just  like  TOMS  Shoes.  Egoism  and  Selfishness  When  we  hear  the  word  egoist,  an  ugly  profile  typically  comes  to  mind:  self-­‐centered,  untrustworthy,  pitiless,  and  callous  with  respect  to  others.  Some  egoists  really  are  like  that,  but  they  don’t  have  to  be  that  way.  If  you’re  out  to  maximize  your  own  happiness  in  the  world,  you  might  find  that  helping  others  is  the  shortest  and  fastest  path  to  what  you  want.  This  is  a  very  important  point.  Egoists  aren’t  against  other  people,  they’re  for  themselves,  and  if  helping  others  works  for  them,  that’s  what  they’ll  do.  The  case  of  TOMS  Shoes  fits  right  here.  The  company  improves  the  lives  of  many;  it  raises  the  level  of  happiness  in  the  world.  And  because  it  does  that,  the  organization  has  had  tremendous  success,  and  because  of  that  success,  the  Blake  Mycoskie  we’re  imagining  as  an  egoist  is  getting  what  he  wants:  money,  great  parties,  and  everyone  loving  him.  In  short,  sometimes  the  best  way  to  one’s  own  happiness  is  by  helping  others  be  happier.  That’s  not  always  the  way  it  works.  Bernie  Madoff  destroyed  families,  stole  people’s  last  dimes,  and  lived  the  high  life  all  the  way  through.  For  an  ethical  egoist,  the  only  blemish  on  his  record  is  that  he  got  caught.  LDRS  320    Theories  of  Duties  and  Rights  Page  20  of  26  Madoff  did  get  caught,  though,  and  this  too  needs  to  be  factored  into  any  consideration  of  egoists  and  how  they  relate  to  others.  Just  as  egoists  may  help  others  because  that  serves  their  own  interests,  so  too  they  may  obey  social  customs  and  laws.  It’s  only  important  to  note  that  they  obey  not  out  of  deference  to  others  or  because  it’s  the  morally  right  thing  to  do;  they  play  by  the  rules  because  it’s  the  smart  thing  to  do.  They  don’t  want  to  end  up  rotting  in  jail.  A  useful  contrast  can  be  drawn  in  this  context  between  egoism  and  selfishness.  Where  egoism  means  putting  your  welfare  above  others’,  selfishness  is  the  refusal  to  see  beyond  yourself.  Selfishness  is  the  inability  (or  unwillingness)  to  recognize  that  there  are  others  sharing  the  world,  so  it’s  the  selfish  person,  finally,  who’s  callous  and  insensitive  to  the  wants  and  needs  of  others.  For  egoists,  on  the  other  hand,  because  working  with  others  cooperatively  can  be  an  excellent  way  to  satisfy  their  own  desires,  they  may  not  be  at  all  selfish;  they  may  be  just  the  opposite.  Enlightened  Egoism,  Cause  Egoism,  and  the  Invisible  Hand  Enlightened  egoism  is  the  conviction  that  benefitting  others—acting  to  increase  their  happiness—can  serve  the  egoist’s  self-­‐interest  just  as  much  as  the  egoist’s  acts  directly  in  favor  of  him  or  herself.  As  opposed  to  altruism,  which  claims  that  it’s  our  ethical  responsibility  to  serve  others,  the  enlightened  egoist’s  generosity  is  a  rational  strategy,  not  a  moral  imperative.  We  don’t  help  others  because  we  ought  to:  we  help  them  because  it  can  make  sense  when,  ultimately,  we  only  want  to  help  ourselves.  One  simple  and  generic  manifestation  of  enlightened  egoism  is  a  social  contract.  For  example,  I  agree  not  to  steal  from  you  as  long  as  you  agree  not  to  steal  from  me.  It’s  not  that  I  don’t  take  your  things  because  I  believe  stealing  is  morally  wrong;  I  leave  you  alone  because  it’s  a  good  way  to  get  you  to  leave  me  alone.  On  a  less  dramatic  level,  all  of  us  form  mini  social  contracts  all  the  time.  Just  think  of  leading  a  group  of  people  through  one  of  those  building  exits  that  makes  you  cross  two  distinct  banks  of  doors.  If  you’re  first  out,  you’ll  hold  the  door  for  those  coming  after,  but  then  expect  someone  to  hold  the  next  door  for  you.  Sure,  some  people  hold  the  door  because  it’s  good  manners  or  something  like  that,  but  for  most  of  us,  if  no  one  else  ever  held  a  door  open  for  us,  pretty  soon  we’d  stop  doing  them  the  favor.  It’s  a  trivial  thing,  of  course,  but  in  the  real  world  people  generally  hold  doors  open  for  others  because  they’ve  agreed  to  a  social  contract:  everyone  else  does  it  for  me;  I’ll  do  it  for  them.  That’s  enlightened  egoism,  and  it  frequently  works  pretty  well.  TOMS  Shoes  can  be  understood  as  a  more  sophisticated  version  of  the  same  mentality.  It’s  hard  to  discern  exactly  what  the  contract  would  look  like  if  someone  tried  to  write  it  down,  but  it’s  not  hard  to  see  the  larger  notion  of  enlightened  egoism.  Shoes  are  donated  to  others  not  because  of  a  moral  obligation  but  because  serving  the  interests  of  others  helps  Blake  Mycoskie  serve  his  own.  As  long  as  shoe  buyers  keep  holding  up  their  end  of  the  bargain  by  buying  his  product,  Mycoskie  will  continue  to  help  them  be  generous  and  feel  good  about  themselves  by  donating  pairs  to  people  who  need  them.  Cause  egoism  is  similar  to,  but  also  distinct  from,  enlightened  egoism.  Enlightened  egoism  works  from  the  idea  that  helping  others  is  a  good  way  of  helping  myself.  Cause  egoism  LDRS  320    Theories  of  Duties  and  Rights  Page  21  of  26  works  from  the  idea  that  giving  the  appearance  of  helping  others  is  a  promising  way  to  advance  my  own  interests  in  business.  As  opposed  to  the  enlightened  egoist  who  will  admit  that  he  is  out  for  himself  but  happy  to  benefit  others  along  the  way,  the  cause  egoist  claims  to  be  mainly  or  only  interested  in  benefiting  others  and  then  leverages  that  good  publicity  to  help  himself.  Stated  slightly  differently,  enlightened  egoists  respect  others  while  pursuing  their  own  interests,  while  cause  egoists  just  fake  it.  Adam  Smith  (1723 90)  is  known  for  making  a  connected  point  on  the  level  of  broad  economic  trade  and  capitalism.  In  the  end,  it  usually  doesn’t  matter  whether  people  actually  care  about  the  well-­‐being  of  others,  Smith  maintains,  because  there  exists  an  invisible  hand  at  work  in  the  marketplace.  It  leads  individuals  who  are  trying  to  get  rich  to  enrich  their  society  as  well,  and  that  enrichment  happens  regardless  of  whether  serving  the  general  welfare  was  part  of  the  original  plan.  According  to  Smith,  the  person  in  business  generally  intends  only  his  own  gain,  but  is  led  by  an  invisible  hand  to  promote  an  end  which  was  no  part  of  the  original  intention.  By  pursuing  his  own  interest  he  frequently  promotes  that  of  the  society,  and  does  so  more  effectively  than  when  he  directly  intends  to  promote  it.  [1]  What’s  the  invisible  hand?  It’s  the  force  of  marketplace  competition,  which  encourages  or  even  requires  individuals  who  want  to  make  money  to  make  the  lives  of  others  better  in  the  process.  The  invisible  hand  is  a  central  point  defenders  of  egoism  in  business  often  make  when  talking  about  the  virtues  of  a  me-­‐first  ethics.  Egoism  is  good  for  me,  but  it  frequently  ends  up  being  good  for  everyone  else,  too.  If  that’s  right,  then  even  those  who  believe  the  utilitarian  ideal  of  the  general  welfare  should  guide  business  decisions  may  be  forced  to  concede  that  we  should  all  just  become  egoists.  Here’s  a  quick  example.  If  you  open  a  little  takeout  pizza  shack  near  campus  and  your  idea  is  to  clear  the  maximum  amount  of  money  possible  to  pay  your  tuition,  what  kind  of  business  are  you  going  to  run?  Does  it  make  sense  to  take  a  customer’s  twelve  dollars  and  then  hand  over  an  oily  pie  with  cheap  plastic  cheese  and  only  three  pepperonis?  No,  in  the  name  of  pursuing  your  own  happiness,  you’re  going  to  try  to  charge  a  bit  less  than  Domino’s  and  give  your  customers  something  slightly  better—maybe  you’ll  spread  richer  cheese,  or  toss  on  a  few  extra  pepperonis.  Regardless,  you’re  not  doing  this  for  the  reason  an  altruist  would;  you’re  not  doing  it  because  you  sense  an  ethical  obligation  to  make  others’  lives  better.  As  an  egoist,  you  don’t  care  whether  your  customers  are  happier  or  not.  But  if  you  want  your  business  to  grow,  you  better  care.  And  because  you’re  ethically  required  to  help  your  business  grow  in  order  to  make  tuition  money  and  so  make  yourself  happier,  you’re  going  to  end  up  improving  the  pizza-­‐eating  experience  at  your  school.  Better  food,  less  money.  Everyone  wins.  We’re  not  talking  Mother  Teresa  here,  but  if  ethical  goodness  is  defined  as  more  happiness  for  more  people,  then  the  pizza  place  is  ethically  good.  Further,  anybody  who  wants  to  start  up  a  successful  pizza  restaurant  is,  very  likely,  going  to  end  up  doing  good.  If  you  don’t,  if  you  can’t  offer  some  advantage,  then  no  one’s  going  to  buy  your  slices.  Going  beyond  the  quality-­‐of-­‐life  benefits  of  businesses  in  society,  Smith  leaned  toward  a  second  claim  that’s  far  more  controversial.  He  wrote  that  the  entrepreneur  trying  to  do  well  actually  promotes  society’s  well-­‐being  more  effectively  than  when  directly  intending  to  LDRS  320    Theories  of  Duties  and  Rights  Page  22  of  26  promote  it.  This  is  startling.  In  essence,  it’s  the  claim  that  for  the  most  dedicated  altruist  the  most  effective  strategy  for  life  in  business  is…to  act  like  an  egoist.  Within  the  economic  world  at  least,  the  best  way  for  someone  who  cares  only  about  the  well-­‐being  of  others  to  implement  that  conviction  is  to  go  out  and  run  a  successful  profit-­‐making  enterprise.  Clearly,  this  is  a  very  powerful  argument  for  defenders  of  ethical  egoism.  If  it’s  true  that  egoists  beat  altruists  at  their  own  game  (increasing  the  happiness  of  everyone  else),  then  egoism  wins  the  debate  by  default;  we  should  all  become  egoists.  Unfortunately,  it’s  impossible  to  prove  this  claim  one  way  or  the  other.  One  thing  is  clear,  however:  Smith’s  implicit  criticism  of  do-­‐gooders  can  be  illustrated.  Sometimes  individuals  who  decide  to  act  for  the  good  of  others  (instead  of  seeking  profit  for  themselves)  really  do  end  up  making  the  world  a  worse  place.  Dr.  Loretta  Napoleoni  has  shown  how  attempts  by  Bono  of  U2  to  help  the  destitute  in  Africa  have  actually  brought  them  more  misery.  [2]  Bono  threw  a  benefit  concert  and  dedicated  the  proceeds  to  Africa’s  most  needy.  The  intention  was  good,  but  the  plan  wasn’t  thought  all  the  way  through  and  the  money  ended  up  getting  diverted  to  warlords  who  used  it  to  buy  guns  and  bullets.  Still,  the  fact  that  some  altruistic  endeavors  actually  make  things  worse  doesn’t  mean  they’re  all  doomed.  Just  as  surely  as  some  fail,  others  succeed.  The  same  mixed  success  can  be  attributed  to  businesses  acting  only  for  their  own  welfare,  only  for  profit.  If  it’s  true  that  the  pizza  sellers  help  improve  campus  life,  what  about  the  entrepreneurial  honor  student  who  volunteers  to  write  your  term  paper  for  a  price?  It’s  hard  to  see  how  a  pay-­‐for-­‐grades  scheme  benefits  students  in  general,  even  though  the  writer  may  make  a  tidy  profit,  and  that  one  student  who  paid  for  the  work  may  come  out  pretty  well.  The  invisible  hand  is  the  belief  that  businesses  out  in  the  world  trying  to  do  well  for  themselves  tend  to  do  good  for  others  too.  It  may  even  be  that  they  do  more  good  than  generous  altruists.  It’s  hard  to  know  for  sure,  but  it  can  be  concluded  that  there’s  a  distance  between  ethical  egoism  in  reality  and  the  image  of  the  egoist  as  a  ruthless  destroyer  of  broad  social  happiness.  Some  Rules  of  Egoism  Egoism,  like  altruism,  is  a  consequentialist  ethics:  the  ends  justify  the  means.  If  an  egoist  were  at  the  helm  of  TOMS  Shoes  and  he  cared  only  about  meeting  beautiful  people  and  making  huge  money,  he’d  have  no  scruples  about  lying  all  day  long.  There’d  be  no  problem  with  smiling  and  insisting  that  the  reason  TOMS  Shoes  exists  is  to  generate  charitable  shoe  donations  to  the  poor.  All  that  matters  for  the  egoist  is  that  the  lie  works,  that  it  serves  the  goal  of  making  TOMS  as  attractive  and  profitable  as  possible.  If  it  does,  then  deviating  from  the  truth  becomes  the  ethically  recommendable  route  to  follow.  Personal  egoism  versus  impersonal  egoism  distinguishes  these  two  views:  the  personal  egoist  in  the  business  world  does  whatever’s  necessary  to  maximize  his  or  her  own  happiness.  What  others  do,  however,  is  considered  their  business.  The  impersonal  egoist  believes  everyone  should  get  up  in  the  morning  and  do  what’s  best  for  themselves  and  without  concern  for  the  welfare  of  others.  LDRS  320    Theories  of  Duties  and  Rights  Page  23  of  26  An  impersonal  egoist  may  find  comfort  in  the  invisible  hand  argument  that  the  best  way  for  me  to  do  right  with  respect  to  society  in  general  is  to  get  rich.  Of  course  it’s  true  that  there’s  something  crude  in  shameless  moneygrubbing,  but  when  you  look  at  things  with  rational  eyes,  it  is  hard  to  avoid  noticing  that  the  kinds  of  advances  that  make  lives  better—cars  affordably  produced  on  assembly  lines;  drugs  from  Lipitor  to  ChapStick;  cell  phones;  spill-­‐proof  pens;  whatever—often  trace  back  to  someone  saying,  “I  want  to  make  some  money  for  myself.”  Rational  egoism  versus  psychological  egoism  distinguishes  two  reasons  for  being  an  ethical  egoist.  The  rational  version  stands  on  the  idea  that  egoism  makes  sense.  In  the  world  as  it  is,  and  given  a  choice  between  the  many  ethical  orientations  available,  egoism  is  the  most  reasonable.  The  psychological  egoist  believes  that,  for  each  of  us,  putting  our  own  interests  in  front  of  everyone  else  isn’t  a  choice;  it’s  a  reality.  We’re  made  that  way.  Maybe  it’s  something  written  into  our  genes  or  it’s  part  of  the  way  our  minds  are  wired,  but  regardless,  according  to  the  psychological  egoist,  we  all  care  about  ourselves  before  anyone  else  and  at  their  expense  if  necessary.  Why  would  I  rationally  choose  to  be  an  egoist?  Maybe  because  I  figure  that  if  I  don’t  look  out  for  myself,  no  one  will.  Or  maybe  I  think  almost  everyone  else  is  that  way,  too,  so  I  better  play  along  or  I’m  going  to  get  played.  (The  Mexicans  have  a  pithy  phrase  of  common  wisdom  for  this,  “O  te  chingas,  o  te  chingan,”  which  means  “either  you  screw  everyone  else,  or  they’ll  screw  you.”)  Maybe  I  believe  that  doing  well  for  myself  helps  me  do  good  for  others  too.  The  list  could  be  drawn  out,  but  the  point  is  that  there  are  numerous  reasons  why  an  intelligent  person  may  accept  ethical  egoism  as  the  way  to  go.  As  for  those  who  subscribe  to  the  theory  of  psychological  egoism,  obviously  there’s  no  end  of  examples  in  business  and  history  to  support  the  idea  that  no  matter  how  much  we  may  want  things  to  be  otherwise,  the  plain  truth  is  we’re  made  to  look  out  for  number  one.  On  the  other  hand,  one  problem  for  psychological  egoists  is  that  there  do  seem  to  be  examples  of  people  doing  things  that  are  irreconcilable  with  the  idea  that  we’re  all  only  trying  to  make  ourselves  happier:  • Parents  sacrificing  for  children.  Any  mom  or  dad  who  works  overtime  at  some  grinding  job  for  cash  to  pay  their  children’s  college  tuition  seems  to  be  breaking  the  me-­‐first  rule.  Here,  the  psychological  egoist  responds  that,  when  you  really  think  about  it,  there  may  be  something  there  for  the  parents  after  all:  it  could  be  the  pride  in  telling  friends  that  their  children  are  getting  their  degrees.  • Mother  Teresa  or  similar  religious-­‐based  advocates  for  the  needy.  Anyone  spending  their  time  and  energy  making  things  better  for  others,  while  living  painfully  modestly,  seems  like  a  good  candidate  to  break  the  rule  of  psychological  egoism.  Here,  the  psychological  egoist  responds  that  perhaps  they  see  a  different  reward  for  themselves  than  earthly  pleasures.  They  may  believe,  for  example,  that  their  suffering  on  this  earth  will  be  more  than  compensated  by  paradise  in  heaven.    LDRS  320    Theories  of  Duties  and  Rights  Page  24  of  26  The  Four  Relations  between  Egoism  and  Business  Structurally,  there  are  four  possible  relations  between  ethical  egoism  and  business  life:  1. You  can  have  egoists  in  egoist  organizations.  This  is  mercenary  capitalism.  Individuals  do  whatever  work  is  required  so  long  as  it  benefits  them  to  the  maximum.  Naturally,  this  kind  of  person  might  find  a  good  home  at  a  company  entirely  dedicated  to  maximizing  its  own  health  and  success,  which  can  mean  one  looking  to  maximize  profits  without  other  considerations.  A  good  example  is  executives  at  the  Countrywide  mortgage  firm.  They  OK’ed  thousands  of  mortgages  to  clients  who  had  no  way  to  repay  the  money.  Then  they  bundled  and  sold  these  mortgages  to  banks  and  other  financial  institutions,  making  a  quick  profit.  When  the  loans  later  collapsed,  those  institutions  fell  into  bankruptcy.  The  Countrywide  executives  quickly  formed  a  new  company  to  buy  those  same  loans  back  at  pennies  on  the  dollar,  thus  once  again  turning  millions  in  profits.  [3]  2. You  can  have  egoists  in  nonegoist  organizations.  Possibly,  the  CEO  of  the  College  Board  fits  into  this  category.  His  salary  of  just  under  a  million  dollars  annually  sounds  pretty  good,  especially  when  you  consider  that  he  gets  it  working  for  a  nonprofit  company  that  exists  to  help  high  school  students  find  the  college  best  fitted  to  them.  It’s  also  possible  that  Blake  Mycoskie  of  TOMS  Shoes  fits  this  profile:  he  lives  an  extremely  enviable  life  in  the  middle  of  a  company  set  up  to  help  people  who  almost  no  one  envies.  3. You  can  have  nonegoists  in  egoist  organizations.  Somewhere  in  the  Countrywide  mortgage  company  we  could  surely  find  someone  who  purchased  shoes  from  TOMS  because  they  wanted  to  participate  in  the  project  of  helping  the  rural  poor  in  Argentina.  4. You  can  have  nonegoists  in  nonegoist  organizations.  Think  of  the  red  kettle  bell  ringers  popping  up  outside  malls  around  the  holiday  season.  Advocating  and  Challenging  Ethical  Egoism  The  arguments  for  an  egoistic  ethics  include  the  following:  • Clarity  and  simplicity.  Everybody  understands  what  it  means  to  look  out  for  themselves  first.  • Practicality.  Many  ethical  theories  claim  to  protect  our  individual  interests,  but  each  of  us  knows  ourselves  and  our  own  interests  best.  So  doesn’t  it  make  sense  that  we  as  individuals  take  the  lead?  Further,  with  respect  to  creating  happiness  for  ourselves,  there’s  no  one  closer  to  the  action  than  us.  So,  again,  doesn’t  it  make  sense  that  each  of  us  should  be  assigned  that  responsibility?  • Sincerity.  For  those  subscribing  to  psychological  egoism,  there’s  a  certain  amount  of  honesty  in  this  ethics  not  found  in  others.  If  our  real  motive  beneath  everything  else  is  to  provide  for  our  own  happiness  first,  then  shouldn’t  we  just  recognize  and  say  that?  It’s  better  to  be  sincere  and  admit  that  the  reason  we  don’t  steal  is  so  that  others  don’t  steal  from  us  instead  of  inventing  some  other  explanations  which  sound  nice  but  are  ultimately  bogus.  LDRS  320    Theories  of  Duties  and  Rights  Page  25  of  26  • Unintended  consequences.  In  the  business  world,  the  concept  of  the  invisible  hand  allows  egoists  to  claim  that  their  actions  end  up  actually  helping  others  and  may  help  them  more  than  direct  charity  or  similar  altruistic  actions.  • Finally,  there’s  a  broad  argument  in  favor  of  egoism  that  concerns  dignity.  If  you’re  out  in  the  world  being  altruistic,  it’s  natural  to  assume  that  those  benefiting  from  your  generosity  will  be  grateful.  Sometimes  they’re  not,  though.  Sometimes  the  people  we  try  to  help  repay  us  with  spite  and  resentment.  They  do  because  there’s  something  condescending  about  helping  others;  there’s  a  message  wrapped  up  in  the  aid  that  those  who  receive  it  are  incapable  of  taking  care  of  themselves  and  need  someone  superior  to  look  out  for  them.  This  is  especially  palpable  in  the  case  of  panhandlers.  If  you  drop  a  dollar  into  their  hat,  it’s  hard  to  not  also  send  along  the  accusation  that  their  existence  is  base  and  shameful  (you  refuse  to  look  them  in  the  eye;  you  drop  the  money  and  hurry  away).  To  the  extent  that’s  right,  an  egoism  that  expects  people  to  look  out  for  themselves  and  spurns  charity  may  actually  be  the  best  way  to  demonstrate  respect  for  others  and  to  acknowledge  their  dignity.  Arguments  against  ethical  egoism  include  the  following:  • Egoism  isn’t  ethics.  The  reason  we  have  ethics  is  because  there  are  so  many  people  in  the  world  and  in  business  who  care  only  about  themselves.  The  entire  idea  of  ethics,  the  reasoning  goes,  is  to  set  up  some  rules  for  acting  that  rescue  us  from  a  cruel  reality  where  everyone’s  just  looking  out  for  number  one.  • Egoism  ignores  blatant  wrongs.  Stealing  candy  from  a  baby—or  running  a  company  selling  crappy  baby  food—strikes  most  of  us  as  unacceptable,  but  the  rules  of  egoism  dictate  that  those  are  recommendable  actions  as  long  as  you  can  be  assured  that  they’ll  serve  your  interests.  • Psychological  egoism  is  not  true.  The  idea  that  we  have  no  choice  but  to  pursue  our  own  welfare  before  anything  else  is  demonstrated  to  be  false  millions  of  times  every  day;  it’s  wrong  every  time  someone  makes  an  anonymous  contribution  to  a  cause  or  goes  out  of  their  way  to  help  another  without  expecting  anything  in  return.  Key  Takeaways  • Egoism  defines  ethically  good  as  any  act  that  raises  the  actor’s  overall  happiness  (or  decreases  unhappiness)  without  counting  anyone  else’s  increased  or  diminished  happiness.  • Egoism  does  not  mean  ignoring  the  existence  and  welfare  of  others,  though  they  are  not  necessarily  advocated  either.  • Though  egoists  act  in  the  name  of  their  own  happiness,  others  may  benefit.  • Egoism  intersects  with  the  business  world  in  various  ways.  Review  Questions  1. What’s  the  difference  between  egoism  and  selfishness?  2. In  what  situation  would  an  egoist  decide  that  a  lie  is  morally  wrong?  3. In  the  real  world,  is  there  any  way  to  distinguish  an  enlightened  egoist  from  a  cause  egoist?  4. What  are  some  reasons  someone  may  become  a  rational  egoist?  5. What  is  the  invisible  hand?  LDRS  320    Theories  of  Duties  and  Rights  Page  26  of  26  6. If  you  were  starting  a  small  business,  would  you  prefer  that  your  partner  is  a  utilitarian,  an  altruist,  or  an  egoist?  Why?   [1]  Adam  Smith,  An  Inquiry  into  the  Nature  and  Causes  of  the  Wealth  of  Nations  (London:  Strahan  and  Cadell,  1776),  bk.  4,  chap.  2.    [2]  Can  Tran,  “Celebrities  Raising  Funds  for  Africa  End  Up  Making  Things  ‘Worse,’”  Ground  Report,  May  14,  2008,  accessed  May  15,  2011,­‐Raising-­‐Funds-­‐For-­‐Africa-­‐End-­‐Up-­‐Making/2861070.    [3]  Eric  Lipton,  “Ex-­‐Leaders  of  Countrywide  Profit  from  Bad  Loans,”  New  York  Times,  March  3,  2009,  accessed  May  15,  2011,