Synopses & Reviews
This 8th edition of Business Ethics and Society is designed to introduce students to controversies in business ethics. The readings, which represent the arguments of leading philosophers and business commentators, reflect a variety of viewpoints and are presented as "pro" and "con" arguments. This title is also supported by the student Web site, Dushkin online at http://www.dushkin.com/online.
Synopsis
People often feel surrounded by debates that could significantly affect their lives, yet are frustrated when they can't find the time to truly understand the issues involved. Titles in McGraw-Hill/Dushkin's Taking Sides series feature clear, readable selections from leading periodicals and journals, each choosing an opposing side in the debate. Postscripts written by series editors review both arguments, and suggest additional resources for deeper understanding.
Table of Contents
PART 1. Capitalism and the Corporation
ISSUE 1. The Classic Dialogue: Is Capitalism the Best Route to Human Happiness?
YES: Adam Smith, from An Inquiry Into the Nature and Causes of the Wealth of Nations, vols. 1 and 2 (1869)
NO: Karl Marx and Friedrich Engels, from The Communist Manifesto (1848)
Free-market economist Adam Smith (1723–1790) states that if self-interested people are left alone to seek their own economic advantage, the result, unintended by any one of them, will be greater advantage for all. He maintains that government interference is not necessary to protect the general welfare. German philosopher Karl Marx (1818–1883) and German sociologist Friedrich Engels (1820–1895) argue that if people are left to their own self-interested devices, those who own the means of production will rapidly reduce everyone else to virtual slaves. Although the few may be fabulously happy, all others would live in misery.
ISSUE 2. Can Individual Virtue Survive Corporate Pressure?
YES: Robert C. Solomon, from “Victims of Circumstances? A Defense of Virtue Ethics in Business,” Business Ethics Quarterly (January 2003)
NO: Gilbert Harman, from “No Character or Personality,” Business Ethics Quarterly (January 2003)
Joining the long-standing debate on the possibility of free choice and moral agency in the business world, Quincy Lee Centennial Professor of Business and Philosophy at the University of Texas in Austin Robert C. Solomon argues that whatever the structures, the individual’s choice is free, and therefore his character or virtue is of the utmost importance in creating a good moral tone in the life of a business. Stuart Professor of Philosophy at Princeton University Gilbert Harman employs determinist arguments to conclude that no individual can of his own free choice make a difference in a group enterprise.
ISSUE 3. Can Restructuring a Corporation’s Rules Make a Moral Difference?
YES: Josef Wieland, from “The Ethics of Governance,” Business Ethics Quarterly (January 2001)
NO: Ian Maitland, from “Distributive Justice in Firms: Do the Rules of Corporate Governance Matter?” Business Ethics Quarterly (January 2001)
Josef Wieland, director of the German Business Ethics Network’s Centre for Business Ethics, argues that moral issues can be attributed toorganizations (as well as to individual persons). After developing a concept of governance ethics for corporations, he asserts that the incorporationof moral conditions and requirements in the structures of the firm is the precondition for lasting beneficial effects of the virtues of theindividuals within it. Wieland concludes that one can only be a moral person at work when the workplace, too, is moral. Ian Maitland, professor of business, government, and society at the University of Minnesota’s Carlson School of Management, counters thatchanging the rules will only succeed in impairing the corporation’s efficiency.
ISSUE 4. Should Corporations Adopt Policies of Corporate Social Responsibility?
YES: Robert D. Hay and Edmund R. Gray, from “Introduction to Social Responsibility,” in David Keller, man. ed., Ethics and Values: Basic Readings in Theory and Practice (Pearson Custom Publishing, 2002)
NO: Milton Friedman, from “The Social Responsibility of Business Is to Increase Its Profits,” in Thomas Donaldson and Patricia H. Werhane, eds., Ethical Issues in Business: A Philosophical Approach, 4th ed. (Prentice Hall, 1993)
Robert D. Hay, professor of management at the University of Arkansas, and Edmund R. Gray, professor and chair of the Department of Management at Loyola Marymount University, argue that in the long run, businesses will only be successful if they are directed to the needs of the society. If they choose to ignore that advice, government regulation is likely to fill the gap between business operations and the welfare of the people the government is sworn to protect. In this classic defense of laissez-faire, Paul Snowden Russell Distinguished Service Professor Emeritus of Economics at the University of Chicago Milton Friedman states that businesses have neither the right, in law or morals, nor the ability to meddle with "social responsibility." Customers, employees, and the general public, he concludes, are best served when the company simply does its job with maximum efficiency.
PART 2. Current Issues in Business
ISSUE 5. Are Pharmaceutical Firms Obliged to Cut Their Prices for Poor AIDS Victims?
YES: Debra Watson, from “U.S. Pharmaceutical Companies Reap Huge Profits From AIDS Drugs,” World Socialist Web Site, (June 5, 1999)
NO: Robert Goldberg, from “Wrong Prescription: Don’t Rush to Embrace the Bush AIDS Plan,” National Review Online, (February 7, 2003)
Writer Debra Watson argues that the greed of AIDS profiteers is killing impoverished people with AIDS all over the world-including in the United States. She concludes that only drastic price reductions will make necessary drugs available to the victims. Senior fellow at the Manhattan Institute Robert Goldberg doubts that reducing pharmaceutical prices will make much of a difference to AIDS sufferers, since the education and health infrastructures remain inadequate to reach and teach the victims.
ISSUE 6. Should Casino Gambling Be Prohibited?
YES: William A. Galston and David Wasserman, from “Gambling Away Our Moral Capital,” The Public Interest (Spring 1996)
NO: William R. Eadington, from “The Proliferation of Commercial Gaming in America,” The Sovereign Citizen (Fall 1994)
Political theorist William A. Galston and research scholar David Wasserman argue that there are significant moral objections to widespreadcasino gambling: gambling is deleterious to family and social life, and gambling losses fall on the most vulnerable members of society. Worse,legalizing gambling masks the need for adequate taxing to meet social responsibilities. Professor of economics William R. Eadington counters that gambling is a normal extension of commercial activity and it can safely promotethe welfare of the host areas. He is less concerned about the reported downside of the gaming enterprise.
ISSUE 7. Should Prudent Managers Avoid Purchasing Derivative Instruments?
YES: Frank Partnoy, from F.I.A.S.C.O.: The Inside Story of a Wall Street Trader (Penguin Books, 1999)
NO: Merton H. Miller, from Merton H. Miller on Derivatives (John Wiley & Sons, 1997)
Frank Partnoy, former trader and salesman at Morgan Stanley, makes a case that the financial instruments known as “derivatives” arewildly risky and generally good only for making large commissions for the salesmen who push them on unwary insurance companies and pensionfunds. Merton H. Miller, a Nobel Prize–winning economist, contends that derivatives allow financial players to hedge their bets moreefficiently, and in doing so they make the world a safer place.
ISSUE 8. Does the Enron Collapse Show That We Need More Regulation of the Energy Industry?
YES: Richard Rosen, from “Regulating Power: An Idea Whose Time Is Back,” The American Prospect (March 25, 2002)
NO: Christopher L. Culp and Steve H. Hanke, from “Empire of the Sun: An Economic Interpretation of Enron’s Energy Business,” Policy Analysis (February 20, 2003)
Writer Richard Rosen contends that the disastrous collapse of the Enron energy company-accompanied by soaring prices in California, disruptions of the market in the United States and abroad, and accusations of fraud all around-means that America needs more government oversight. Christopher L. Culp, adjunct professor of finance at the Graduate School of Business at the University of Chicago, and Steve H. Hanke, professor of applied economics at the Johns Hopkins University, maintain that it was unwise regulation that caused the Enron problem in the first place. They conclude that only deregulation will let the market clear up the problems with the industry.
PART 3. Human Resources: The Corporation and the Employee
ISSUE 9. Does Blowing the Whistle Violate Company Loyalty?
YES: Sissela Bok, from “Whistleblowing and Professional Responsibility,” New York University Education Quarterly (Summer 1980)
NO: Robert A. Larmer, from “Whistleblowing and Employee Loyalty,” Journal of Business Ethics (vol. 11, 1992)
Philosopher Sissela Bok asserts that although blowing the whistle is often justified, it does involve dissent, accusation, and a breach ofloyalty to the employer. Robert A. Larmer, an associate professor of philosophy, argues that attempting to stop illegal or unethical company activities may be thehighest type of company loyalty an employee can display.
ISSUE 10. Is Controlling Drug Abuse More Important Than Protecting Privacy?
YES: Michael A. Verespej, from “Drug Users—Not Testing—Anger Workers,” Industry Week (February 17, 1992)
NO: Jennifer Moore, from “Drug Testing and Corporate Responsibility: The ‘Ought Implies Can’ Argument,” Journal of Business Ethics (vol. 8, 1989)
Michael A. Verespej, a writer for Industry Week, argues that workers are the hardest hit when their coworkers use drugs, and hesuggests that, for this reason, a majority of employees are tolerant of drug testing. Jennifer Moore, a researcher of business ethics and business law, asserts that a right is a right and that any utilitarian concerns thatemployers can cite to justify drug testing should not override the right of the employee to dignity and privacy on the job.
ISSUE 11. Is CEO Compensation Justified by Performance?
YES: Kevin J. Murphy, from “Top Executives Are Worth Every Nickel They Get,” Harvard Business Review (March/April 1986)
NO: Lisa H. Newton, from “The Care and Feeding of the Truly Greedy: CEO Salaries in World Perspective,” An Original Essay Written for This Volume (2000)
Professor of finance and business economics Kevin J. Murphy argues that chief executive officers (CEOs) are simply paid to do what theywere hired to do—bring up the price of the stock to increase shareholder wealth. He concludes that for large increases in shareholder wealth,CEOs deserve large compensation. Professor of philosophy Lisa H. Newton finds the ultimate effect of large compensation packages on U.S. business to be negative. Sheasserts that the disparity between CEOs’ wealth and the pay of their workers—let alone the poverty-stricken developing world—is unjustand a case of bad stewardship of resources.
PART 4. Consumer Issues
ISSUE 12. Are Marketing and Advertising Fundamentally Exploitive?
YES: John P. Foley, from “Ethics in Advertising: A Look at the Report by the Pontifical Council for Social Communications,” Journal of Public Policy & Marketing (Fall 1998)
NO: Gene R. Laczniak, from “Reflections on the 1997 Vatican Statements Regarding Ethics in Advertising,” Journal of Public Policy & Marketing (Fall 1998)
Archbishop John P. Foley summarizes and comments on the 1997 report of the Pontifical Council for Social Communications, which charges thatadvertising can be deceptive and improperly influential on media editorial policy and states that it often promotes a lifestyle based on unbridledconsumption. Professor of marketing Gene R. Laczniak contends that many of the Pontifical Council report’s conclusions are overstated, only partiallytrue, economically naive, and socially idealistic. While sympathetic to its aims, he argues that the Church’s contribution to the debate is vitiatedby such errors.
ISSUE 13. Was Ford to Blame in the Pinto Case?
YES: Mark Dowie, from “Pinto Madness,” Mother Jones (September/October 1977)
NO: Ford Motor Company, from “Closing Argument by Mr. James Neal,” Brief for the Defense, State of Indiana v. Ford Motor Company, U.S. District Court, South Bend, Indiana (January 15, 1980)
Award-winning investigative journalist Mark Dowie alleges that Ford Motor Company deliberately put an unsafe car—the Pinto—onthe road, causing hundreds of people to suffer burn deaths and horrible disfigurement. He contends that the related activities of Ford’s executives,both within the company and in dealing with the public and the government, were criminal. James Neal, chief attorney for Ford Motor Company during the Pinto litigation, argues to the jury that Ford cannot be held responsible fordeaths that were caused by others—such as the driver of the van that struck the victims—and that there is no proof of criminal intent ornegligence on the part of Ford.
ISSUE 14. Should We Require Labeling for Genetically Modified Food?
YES: Philip L. Bereano, from “The Right to Know What We Eat,” The Seattle Times (October 11, 1998)
NO: Joseph A. Levitt, from Statement Before the Health, Education, Labor, and Pensions Committee, United States Senate (September 26, 2000)
Professor of technical communication Philip L. Bereano contends that consumers have a real and important interest in knowing the processesby which their foods arrive on the table. He argues that the demand for a label for bioengineered foods is entirely legitimate. Joseph A. Levitt, director of the Center for Food Safety and Applied Nutrition, states that as far as the law is concerned, only thenutritional traits and characteristics of foods are subject to safety assessment. He notes that labeling has been required only where health risksexist or where there is danger that a product’s marketing claims may mislead the consumer as to the food’s characteristics.
PART 5. International Operations: Global Obligations
ISSUE 15. Are Multinational Corporations Free From Moral Obligation?
YES: Manuel Velasquez, from “International Business, Morality and the Common Good,” Business Ethics Quarterly (January 1992)
NO: John E. Fleming, from “Alternative Approaches and Assumptions: Comments on Manuel Velasquez,” Business Ethics Quarterly (January 1992)
Professor of business ethics Manuel Velasquez doubts that, in the absence of accepted enforcement agencies, any multinational corporationwill suffer for violating rules that restrict business for the sake of the common good. He argues that since any business that tried to conform tomoral rules in the absence of enforcement would cease to be competitive, moral strictures cannot be binding on such companies. Professor emeritus John E. Fleming asserts that multinational corporations tend to deal with long-term customers and suppliers in thegoldfish bowl of international media and must therefore adhere to moral standards or lose business.
ISSUE 16. Are Sweatshops Necessarily Evil?
YES: Susan S. Black, from “Ante Up,” Bobbin (September 19, 1996)
NO: Allen R. Myerson, from “In Principle, a Case for More ‘Sweatshops,’” The New York Times (June 22, 1997)
Susan S. Black, publisher of Bobbin, argues that customers will not tolerate goods made by slave labor, children, or women workingin inhumane conditions. She maintains that customers are willing to pay more to make sure that the goods they buy were not made insweatshops. Allen R. Myerson, a writer for the New York Times, looks at the economies of less developed countries and finds that allowing theircitizens to work in sweatshops may be the only option these nations have to accumulate capital.
ISSUE 17. Should Patenting Life Be Forbidden?
YES: Jeremy Rifkin, from “Should We Patent Life?” Business Ethics (March/April 1998)
NO: William Domnarski, from “Dire New World,” Intellectual Property Magazine (January 1999)
Jeremy Rifkin, president of the Foundation on Economic Trends, fears that genetic engineering extends human power over the rest of nature inways that are unprecedented and whose consequences cannot be known. He urges a halt to such research, especially research whose aim is profit for thecompany that “owns” the results. William Domnarski, an intellectual property lawyer, finds the patenting of genes or genetic discoveries no different than patenting anyother ideas. The purpose of patents is to reward and encourage useful invention, he argues, and there is no doubt that the modifications we introduceto the genetic material of plants and animals are useful to feed a starving world.
PART 6. Environmental Policy and Corporate Responsibility
ISSUE 18. Do Environmental Restrictions Violate Basic Economic Freedoms?
YES: John Shanahan, from “Environment,” in Stuart M. Butler and Kim R. Holmes, eds., Issues ’96: The Candidate’s Briefing Book (Heritage Foundation, 1996)
NO: Paul R. Ehrlich and Anne H. Ehrlich, from “Brownlash: The New Environmental Anti-Science,” The Humanist (November/December 1996)
John Shanahan, vice president of the Alexis de Tocqueville Institution in Arlington, Virginia, argues that many government environmentalpolicies are unreasonable and infringe on basic economic freedoms. He concedes that environmental problems exist but denies that there is anyenvironmental “crisis.” Environmental scientists Paul R. Ehrlich and Anne H. Ehrlich, whose 1974 book The End of Affluence first outlined the consequencesof environmental mismanagement, contend that many objections to environmental protections are self-serving and based on bad or misusedscience.
ISSUE 19. Can Rain Forest Products Save the Tropical Rain Forest?
YES: Thomas A. Carr, Heather L. Pedersen, and Sunder Ramaswamy, from “Rain Forest Entrepreneurs: Cashing in on Conservation,” Environment (September 1993)
NO: Jon Entine, from “Let Them Eat Brazil Nuts: The ‘Rainforest Harvest’ and Other Myths of Green Marketing,” Dollars and Sense (March/April 1996)
Economics professors Thomas A. Carr and Sunder Ramaswamy and mathematics teacher Heather L. Pedersen describe three projects to promotesustainable use of rain forest products, which they argue help to preserve the forest and support the local economy. Investigative reporter Jon Entine asserts that most green marketing programs do nothing to slow forest destruction and, moreover, frequentlyresult in the mistreatment of employees, vendors, and customers.