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Monday, June 25, 2012

Ethics from the Squishy Middle

No good can come from unethical business
From time to time, I stumble on articles which I think should be shared with the general public.  This one from Salon is a dozy.  In it, they talk about efforts for the University of Chicago Business School to teach both free market principles and ethics to its students.  If you follow the article you will notice that the instructors are deeply conflicted by the behavior of their students to rig the biding systems for classroom assignments.

There are many different schools of thought about business and ethics from free-for-all enterprise champions who say that everything and anything should be for sale to the moralistic ideas of Utilitarian thinkers who feel that commerce should be part of a calculus of pleasure.  I happen to reside in the squishy middle.  I feel that both the letter of the law and the spirit of it should be obeyed which would make me the wrong kind of person to work at an insurance company or financial firm.  These types of organizations make their living with fine print and written expectations.  It is not a world for me.

I crave structure so that business can be conducted in an atmosphere of trust and respect.  Thus, when someone doesn't pay me I reserve the right to deny them service.  Likewise, if I don't meet their expectations then I have to perform some kind of appeasement to satisfy the customer.  It is a world of give and take.  This is why I think that America has a pretty good business environment.  Property rights are respected and enforced by courts.  I have a military and police to protect my business.  Finally, the rules and regulations are easy to follow and establishing a business is easy. 

I suspect this is why people still come to this nation.  We have the freedom to succeed or fail on our own terms.  We also have the security from criminal behavior and unscrupulous business people to conduct business in an atmosphere of trust.  It is by no means perfect but it is better than what the rest of the world can muster right now. 

So what do I do about students who arbitrage points for classes.  Nothing, but I do point out to the first year students that the people involved in arbitrage are not doing trustworthy business and that the cost is not going to be worth the benefit.  The invisible hand of the market not only works on logic but on perception and shaming a poor business practice seems better than regulating against it.  It sound na├»ve but peer pressure is a wonderful tool for good behavior. 

Until next time.