Freeman

ARTICLE

The Businessman's Morals

JUNE 01, 1963 by FRED DEARMOND

Mr. DeArmond, salesman, writer, and busi­ness consultant on personnel training, is a contributor to numerous periodicals and the author of books such as The Executive at Work and How To Sell and Unsell Ideas.

Business and industry constitute the one area in which our country has led the world for the past half century. Visitors to our shores would naturally expect business­men to be in high repute here. In­stead, they read and hear a con­stant barrage of criticism directed at men of business — more vocal than in any other nation of the free world. Truly, the prophet is without honor in the country he has made great.

Underlying most strictures on the morals of business are two basic assumptions. First, that men of business devote their lives to the pursuit of money, while pro­fessional people are dedicated to the ideal of service, with money­making not the major considera­tion. Second, that capitalism, un­der which we operate, is an eco­nomic system run by and for cap­italists.

These assumptions are deeply grounded in our literature. Novel­ists such as Charles Dickens, who drew his most villainous charac­ters from the business vocation, have had innumerable imitators in the United States. Think of all the cloistered readers who obtained lasting impressions of the busi­nessman from the flinty-hearted Mr. Murdstone in David Copper-field or from Sinclair Lewis’s flab­by "Babbitt" caricature.

The most articulate and influen­tial of the assaults on the ethics of businessmen have come from these three sources:

1. The academic fraternity

2. The clergy

3. The left-wing politicians. Let’s attempt to analyze the ar­ticles of indictment from these sources.

1. The Professors vs. Business

It appears that a majority of college professors are innately hostile to the business community. Most critical are the economists and sociologists. But a great many history majors hold to the Marx­ian concept of industry as a goli­ath wringing its unearned incre­ment from the bodies of workers. They seem quite unable to per­ceive why a mere crude business­man, perhaps without an academic degree to his name, should make more money than they do. This is a standard "liberal" view among the college faculties, and any marked dissent from it within the cap-and-gown circle labels the holder as a rebel.

One economics professor charges businessmen with "pursuing their naked self-interest." Again he be­rates "the tendency of many busi­nessmen to cling to an outmoded system of ethics based on a per­verted version of the philosophy of individualism." On the con­trary, the philosophy of individ­ualism represents an advance from the philosophy of absolutism. Just now we are witnessing a backwash in the evolution of civilization when a highly vocal group seeks to convince us that more authori­tarianism, less individual liberty, spells Progress.

After having compared the tech­niques of selling to the arts prac­ticed by a prostitute, Professor Max Radin asks, "Will it be pos­sible to make habitual the sup­pression of greed, that is to say, the tendency to aggrandize oneself by accumulating more property than other persons have? It is clear that society does not begin at all until some of the grosser forms of such lust for property are in fact suppressed."

This self-aggrandizement, this "lust for property" that Professor Radin excoriates, is an expression of the natural urge toward inequal­ity with its accompanying demand for rewards in proportion to tal­ents and individual contribution to general well-being.

College youth, especially from middle-class business familiee, generally resist this form of in­doctrination by their teachers. But it is here that a great many derive a pronounced prejudice against business.

2. The Clergy vs. Business

Particularly among the Protes­tant ministry, but abetted by some Catholic authorities, there is a marked tendency in our time to regard Christianity and the gospel of Jesus Christ as a program of social betterment and leveling re­form, rather than a hope for in­dividual salvation. This doctrine reached its climax in the so-called Social Gospel. One of its militant spokesmen is the Rev. E. Stanley Jones, prolific author and lecturer.

Jones holds that competition among business enterprises and individuals is an odious, outmoded system that is out of step with the modern world. He endorses the Marxian creed, "To each accord­ing to his needs, from each ac­cording to his ability," and adds, "I am persuaded that the Russian experiment is going to help — and I was about to say force — Chris­tianity to rediscover the meaning of the Kingdom of God upon earth." He believes the Christian should work with anyone who is trying to bring about the new and higher order, "under whatever name he may work."

How innocent of the practical affairs of business many of our religious leaders are is illustrated in a passage from Christopher Hollis, a well-known Catholic writ­er, as quoted in America. An ad­vertiser’s activity is legitimate, Hollis says, only to the extent that he "is concerned merely to inform the public what goods are available and informs it in a rea­sonably attractive manner." He would thus condemn as outside the pale the variety of appeals to feel­ing in advertising. If the same rule were applied to religion, how far would the churches get in hold­ing or adding to their following? If all preaching and ritual were confined to rational and essential appeals to reason, how many of our fine church "plants" would have to suspend activities? In fact, the churches are doing a large volume of advertising of their own, and they do inject high­ly emotional sales talk into their copy.

Referring to the scriptural ad­jurations to charity and benevo­lence, Heard and Opitz wrote in The Kingdom Without God: "There is nothing in any of these admoni­tions which can possibly be con­strued as sanctioning the use of political coercion to deprive some men of what is rightfully theirs for the dubious benefit of someone else."

On this score of the Christian ethics as a yardstick, at least one economics professor comes to the defense of business. Dr. Thomas L. Petit, Director of the Breech School of Business Administration at Drury College, Springfield, Mis­souri, said in a public address:

"First, it is true that business­men do not live up to the ideal of Christian ethics, but this is not because they are businessmen; it is because they are men…. Where is such a standard attained in American life?

"Secondly, important as Chris­tianity is, it is not the only source of ethics in America. Therefore, to say that businessmen do not live up to Christian ethics is not the same thing as saying the business­men do not live up to American ethical standards.

"Thirdly, many actions which seem incompatible with Christian ethics may not really be so if their significance in the situation in which they occur is truly under­stood."

The Christian world has come of age to the point where certain biblical injunctions are being in­terpreted more realistically, in­cluding the one about the individ­ual undertaking to be his brother’s keeper. More practical, and hence a better guide to everyday living, is the famous and oft-disputed passage in Adam Smith’s Wealth of Nations: "By pursuing his own interest he (the individual) fre­quently promotes that of society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good."

3. The Politicians vs. Business

It is a peculiar paradox that so­cialistic politicos, who are forever declaiming about "vested interest" have the strongest vested interest in arousing popular prejudice against business of any of the three critical groups that we are here discussing. "Why do you rob banks?" the bandit Sutton was asked at his New York trial. "Be­cause that’s where the money is," was his quite logical answer. And so we may say that in skinning Big Business before economically illiterate audiences is where the votes are to be had.

It should be made clear at this point that I am not labeling all pol­iticians as demagogues. I know plenty who are both honest and in­telligent. In fact, politicians as a class may well be as moral as law­yers, or teachers, or realtors, or farmers — and they unquestion­ably would assay better than labor leaders.

It is the reform politician whom business has to fear. There is gold for him in applying the method described by William Graham Sumner — how A and B put their heads together and decide what C shall do for D. The businessman is in the position of the unfortunate C. He is plagued by a plethora of planners who want to bring about the millennium with him picking up the check.

H. L. Mencken wrote a sentence that vigorously characterized the source of most of the political yammer about business. "Nine-tenths of the burbling against cap­italism which now goes on in the United States," said the Baltimore satirist, "is done by mountebanks who dream of getting on top by changing the rules."

The Double Standard of Ethics

The critics of business seem to set a higher code of ethical be­havior for businessmen than is ex­pected of other mortals. The man of commerce is penalized by a double standard.

I have quoted Dr. Petit in de­fense of business against the eccle­siastical stricture that business­men fall short by the measure of Christian ethics, when in fact no other group in American life lives up to that ideal. However, in the same speech Dr. Petit failed to follow his own guideline when he said: "Businessmen, unrestrained by government, may be free, but it does not follow that they want this freedom because of concern for the welfare of anybody but themselves."

This seems to say that business­men advocate freedom of enter­prise for selfish reasons, and by implication, that other groups do not, at least in equal degree. Would that be true of labor leaders, of farmers, of teachers, to name but three examples? To answer that these vocations are more unselfish in their aims would be a dogma of very doubtful validity.

Another authority who supports the double standard is Louis Fink­elstein, Professor of Theology in the Jewish Theological Seminary of New York City. "Why do I single out the American business­man for indictment, when he is probably no more materialistic than any of the rest of us? I do so because of the responsibility he bears, because his role in Ameri­can society is so great."

Dr. Finkelstein frankly admits that he poses a double standard —one for businessmen and a lower one for everybody else — and he at­tempts to justify this position. A similar stand was taken by Adolf A. Berle, who said, "The corpora­tion, almost against its will, has been compelled to assume in ap­preciable part the role of con­science-carrier of twentieth cen­tury American society." Thus, on the one hand, business is loaded with opprobrium, and on the other hand, is told that "You are our model; you must be better than we."

Of course, this is an impossible role for any group to play. Busi­nessmen are a cross section of the whole society, neither more nor less moral than the whole. The function of business is to feed and clothe and house and serve the people. It could do a better job if it were freer to meet that respon­sibility, with less lecturing and back-seat driving by the innumer­able army of monitors of business. Let the whole people share in car­rying the conscience of society.

There is an inclination to be­lieve that when an action is con­templated, two alternatives will present themselves — one clearly labeled "Right," and the other "Wrong." Actually, there may be a choice of several courses of ac­tion, each of which has elements of moral sanction and other as­pects of doubtful propriety. In short, we do not have just black and white indicia to guide our moral instinct, but also a large area of varying shades of gray. It is in this setting that a business­man must decide. He is called up­on continually to exercise mana­gerial judgment, not only in the economic zone, but in the ethical as well.

An example will clarify the point. Kindrick owned a successful camera and photographic materi­als store, the only one in his town until Wornall set up a competing business. Wornall was a CPA and his photo shop was a sideline, run by a young hired manager. It never did much good. After about two years, Kindrick offered to buy out his competitor. "I’ll take over your inventory at cost or whole­sale market value, whichever islower, and give you $2,000 for any good will value there may be," he said.

"Oh, no, I couldn’t do that," was Wornall’s reply. "I’d rather go on with it, even if I only break even, than to take such a ridiculous fig­ure." A year later, Wornall died suddenly. His widow, knowing nothing about business, came to Kindrick and asked him to buy the store on the basis of the offer orig­inally made. Kindrick knew that the shop had run down somewhat since he tried to buy it. He knew, too, that Mrs. Wornall would have to sell it for whatever she could get, which would likely be the val­ue of the inventory alone, and per­haps with depreciation deducted. Nevertheless, he agreed to pur­chase the stock and pay her $1,000, which after making other inquir­ies, she accepted. Here was a case where a businessman refrained from driving a hard bargain, and paid a higher price than he would have had to do. I believe the ex­ample is not exceptional.

The Businessman’s Obligation to Himself

No one need apologize for an en­lightened selfishness. When Jesus admonished Christians to "love thy neighbor as thyself," he was far from forbidding them to pre­serve a healthy regard for their own interests. One should love himself, too. Or, as the good Polo­nius phrased it,

To thine own self be true,

And it must follow as the night the day,

Thou cans’t not then be false to any man.

A man of action, intent on per­formance which is both success­ful and ethical, must strive to see that his actions are consistent with the principles he professes. To fail in that respect is the worst form of inconstancy. It’s tough to part with one’s friends on a contro­versial issue, but truth is superior to friendship. "What is right?" is always a relevant question. "Who is right?" may lead us astray. Ab­raham Lincoln’s policy is a good guide: To go along with a man as long as he is right, and part from him when he is wrong.

ASSOCIATED ISSUE

June 1963

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