ETHICS IN ECONOMICS: OR, MORE PRECISELY, THE LACK THEREOF
social responsibility other than to make as much money for their stockholders as possible”.2 The idea that businesses have a single, narrow financial goal is now repeated ad nauseam in the business and popular press, as well as forming the foundation for teaching in economics and management. The widening chasm between the compensation of Chief Executive Officers and ordinary workers in the United States was spurred by the economic theory that CEOs must be “incentivized” to act in the interest of shareholders. Yet the damage goes much further. Many critics of corporate abuses and rising inequality now also subscribe to the economistcreated dogma about the essence of business. Arguing the case for an ethics of justice and sustainability from a Buddhist point of view, for example, David Loy argues that “Corporations are legally charted so that their first responsibility is not to their employees or customers, nor to other members of the societies they are part of, nor to the ecosystems of the earth, but to those who own them, who with very few exceptions are concerned primarily about return on investment”.3 As a result, most aspirations for “alternative economies” tend to veer towards utopian or state-directed visions of communitarianism that are of limited practical value. The message seems to be, from both right and left, that business is -by its very nature-an ethics-free, and care-free, sphere. And this pernicious doctrine continues to spread, even beyond the business sphere. One recent article, for example, proclaimed “Whether we like it or not, colleges and universities are a business. They sell education to customers….While the typical for-profit firm tries to maximize its profit, non-profit universities generally try to maximize their endowments or operating revenue…”.4 Even thinking about nations has been contaminated: applying to nations the economists’ dictum that only actions that serve self-interest will be chosen, Posner and Weisbach argue that global climate “justice” 2. Friedman, Milton (1982). Capitalism and Freedom. Chicago, University of Chicago Press., p. 133 3. Loy, David R. (2015). A New Buddhist Path: Enlightenment, Evolution, and Ethics in the Modern World. Boston, Wisdom publications., p. 122 4. Brennan, Jason and Phillip Magness (2016). “Estimating the Cost of Justice for Adjuncts: A Case Study in University Business Ethics.” Journal of Business Ethics. 23
