I have been reading articles about business ethics lately, and to my dismay discovered a common feature: a lack of understanding of self-interest. This is not surprising, given that altruism, the moral code advocating self-sacrifice, dominates the culture. Still, I was hoping that at least some intellectuals writing today would acknowledge alternatives to altruism, such as the common sense view of ethics accepted by most people (those not writing articles about ethics …).

The common sense view is that we should live by pursuing our own interests, without hurting others, by physical force or fraud. Most people recognize that if we don’t pursue our values—such as food, shelter, health, work, recreation—we cannot survive and be happy. The authors of the several articles I read ignored this. Instead, upholding altruism as the moral ideal, they set up self-interest as a straw man. In their view, self-interest means exploiting others, based on the assumption that people’s interests automatically conflict. For example, a CEO’s interest to maximize his compensation, the employees’ interest to maximize theirs, and the shareholders’ interest to maximize the return on their investment allegedly conflict. Because of this perceived conflict, achieving one’s self-interest supposedly requires exploiting others, such as the CEO deceiving the shareholders, or the employees shirking their responsibilities, or the shareholders manipulating the CEO.

If people’s interests unavoidably conflict, then pursuing self-interest automatically harms others. The authors of one article went as far as arguing that self-interest that is harmonious with the interests of others is logically impossible. By their logic, giving a raise to an employee is not in the self-interest of a manager (presumably because that will mean less money available to compensate himself). By the same logic, the manager getting a bonus conflicts with the interests of his employees.

Not only do intellectuals embrace the straw man view of self-interest; they also evade the true nature of altruism. Instead of recognizing it for what it is (as intended by that code’s developers such as August Comte): self-sacrifice for the sake of others as a principle, they promote putting others’ interests ahead of our own as noble. Never do these intellectuals tell us why it is moral to help others to achieve their values but immoral to pursue our own.

Why are the intellectuals’ views wrong? The idea that people’s interests automatically conflict and that pursuing self-interest means exploiting others is truly a straw man. It completely misses what self-interest actually means: pursuing one’s values—values that meet the requirements of human survival and flourishing. Pursuing self-interest is absolutely necessary if we want to survive and flourish, and most people know that simply from observation.

Exploiting others through force or fraud is not in our self-interest. Such action would invite others to do the same or get justice through the legal system, thus jeopardizing our values. Even if we derived some temporary gain, say, from deceiving others, such a gain would not be sustainable, as any pyramid investment schemer or other fraudsters eventually learn. As shown by Ayn Rand, people’s rational interests do no not conflict. Giving a raise to a productive employee does not conflict with the interests of the manager or the shareholders. Quite the contrary, it benefits them if the raise keeps the employee motivated and deters him from joining a competitor. As a consequence, the company will create more value, making possible a bonus to the manager and dividends to the shareholders. A bonus to a deserving manager would similarly promote the interests of the other parties.

Also, only by evading the self-sacrificial nature of altruism can anyone embrace it as the moral ideal. It is altruism not egoism that is destructive. By advocating putting others’ interests always first, it prevents us from achieving our self-interest: well-being and happiness. Despite the common sense view of ethics, many people do not question what the intellectuals, including religious leaders, teach and end up feeling guilty because they are not able to put others ahead of themselves on principle. Nobody can live by the opposite principles of the common-sense morality and of altruism.

Ironically, it is not altruism but the morality of self-interest that makes genuine benevolence and kindness possible. Only when people are free and their rights are protected against exploiters, can they seek their own interests and flourish and thus be able to help those deserving help when the need sometimes arises.

If we want to survive and flourish, we must reject altruism and study, understand, and adopt self-interest instead.

SHARE
Previous article“You are not that good”—why business leaders need pride, not humility
Next article“But I don’t want to be moral!”
Jaana Woiceshyn teaches business ethics and competitive strategy at the Haskayne School of Business, University of Calgary, Canada.She has lectured and conducted seminars on business ethics to undergraduate, MBA and Executive MBA students, and to various corporate audiences for over 20 years both in Canada and abroad.Before earning her Ph.D. from the Wharton School of Business, University of Pennsylvania, she helped turn around a small business in Finland and worked for a consulting firm in Canada.Jaana’s research on technological change and innovation, value creation by business, executive decision-making, and business ethics has been published in various academic and professional journals and books. “How to Be Profitable and Moral” is her first solo-authored book.

5 COMMENTS

  1. “Exploiting others through force or fraud is not in our self-interest. Such action would invite others to do the same or get justice through the legal system, thus jeopardizing our values. Even if we derived some temporary gain, say, from deceiving others, such a gain would not be sustainable, as any pyramid investment schemer or other fraudsters eventually learn.”

    Just because we see all the pyramid investment schemers who fail (and are then plastered all over the newspaper) doesn’t mean there aren’t plenty who succeed.

    Are you saying the only reason to not exploit others is because you might be punished later by the victim or the State?

    Say the man had no family and you knew a crooked judge. It’s okay then? Seems dubious to me…

    • Thank you for your comment, Zach—it raises an important point that I want to address. The argument is not: “We should not exploit others because we might get caught and penalized.” That is not the argument from self-interest but from pragmatism, which advocates doing whatever you can get away with. According to pragmatist ethics, one might as well choose to become a bank robber if one calculates the chance of getting caught and penalized being low.

      In contrast to the pragmatist view, the principle of self-interest is an integration. Instead of counseling a short-term cost-benefit calculation, it guides a long-term, integrated perspective. When contemplating a choice of action, pursuing self-interest entails asking: Will I be able survive and flourish in the long term if I choose to act this way? Is my action consistent with the requirements of man’s life (both physical survival and flourishing)?

      Answering these questions will make it clear that exploiting others is destructive, not only to the others but to yourself. For example, a businessman who chooses to exploit his shareholders, customers, and employees, will run out of victims and lose his business eventually. By destroying others’ ability to survive and flourish, he is also destroying his own. We do not survive by destroying and looting values but by creating (and trading) them.

      And even if the exploiter manages to make a quick killing through a fraud and disappear, say, to some tropical paradise, his deception is destructive not just to his victims but also to himself. Assuming that the tropical paradise will provide opportunities to spend his loot for things he wants, his original deception will jeopardize his most important asset and tool of self-interest: his mind’s ability to deal with reality. In order to enjoy his loot undisturbed, the fraudster will have to create a new identity for himself and a convincing story how he got his money. And since this will all be fiction, it is difficult to remain consistent in his story with all those he will interact (such as potential new business partners, “friends,” and romantic partners). His mind’s focus will necessarily be distracted from dealing with reality to a focus on maintaining a network of lies, which is an impossible task–everything in reality is interconnected, and he will eventually slip and risk losing all. This is hardly in his self-interest.

  2. Articles tend to be written by activists, most of whom have accepted anti-human conclusions. Key to their approach to your example of who gets raises in their pay is fixed-pie economics and drive-to-the-bottom ethics, which deny human creativity and deny that honest dealings are life-sustaining (as you point out in your replay to Zach). Thus they are blind to the increase from co-operative dealings, and assume exploitation is the motivation of all parties and that it will be successful. The root of their anti-human beliefs is denial of the mind.

    You’ve given an excellent response to the person you refer to as Zach (his photo/symbol is unreadable), the effect on oneself of cheating. One’s thinking methods are skewed by faking reality, which impairs one’s ability to deal with reality, which is necessary to prosper in the long term.

  3. You also pointed to the response of others – people he wants to deal with will avoid him. They may be customers, suppliers, or financers. (Renowned Seattle WA area venture capitalist Tom Cable’s #2 priority in considering an investment in a business is “Can we trust these people?” (#1 was whether or not the venture was something they wanted to look into – they were only investing in certain fields. #3 was “Can these people follow though?” – can they do the job, startup and run the business well.))

    I point Zach to the justice system, inadequately funded though it is. With good access you can sue the crooks.

Leave a Reply