The first part of this post’s title is a quotation from a student in my business ethics class. She had said that to her teenagers after learning about rational self-interest, or egoism, in the course and reading How to Be Profitable and Moral. More exactly, she had told the kids that there would be no altruism in their household any more. Everybody would be pursuing their rational self-interest instead, trading value for value, and respecting the others’ right to do the same. There would be no sacrifice, of others to oneself (no coercion or fraud), or oneself to others (the deadly moral code of altruism).

What a bold move by a mother—and a rare one. Rejecting altruism is bold and rare, because the ethics of self-sacrifice dominates today’s culture, as it has throughout history. Altruism dominates, not as a moral practice, but as a moral ideal.

We are told, since the early childhood, that we should think about others first and of ourselves last. Parents tell their children to share their toys with others at the sandbox who happen to want them. Parents encourage older children to forgo birthday or Christmas presents in lieu of donations to charity. Governments require and schools give credit for mandatory “volunteerism.” Business school students are taught that contributing to charity is laudable and necessary to atone for  selfish profit making. When they enter the world of business, they have concluded that profit-making in itself is immoral and must be balanced with environmental and social goals, the Triple Bottom Line.

Given all this indoctrination, why is it that altruism does not dominate as a moral practice that people would systematically apply in their personal and business lives?

Altruism is not adopted as a systematic practice, because it is an impossible moral code. To apply it systematically would mean abandoning the pursuit of values that allow us to survive and flourish. Altruism requires that we base our decisions and action on the needs of others. Every value we set out to pursue—food, shelter, clothing, jobs, medicine, labor-saving products, vacations, and so on—are more urgently needed by others. Therefore, we must forgo the values for the sake of others.

Giving up every value leads to our death and eventually, to the destruction of the others who have been counting on our sacrifices. This is also true in business that would go bankrupt if operated on the basis of prioritizing others’ needs over those of the shareholders. A company that hires employees and contracts suppliers based on their need versus their competence, and gives their products away on the basis of customers’ need for them versus their ability to pay, cannot survive.

If you tell a CEO that they cannot prioritize profit maximization—creating wealth for the shareholders—but must balance it with pursuing a pristine environment and with a myriad of social goals, the CEO will not know what to do. Competing goals cannot be achieved. There must be a clear hierarchy for them, with the most fundamental goal at the top that makes the other goals possible. Only by holding profit maximization as the top goal, can a company acquire technologies to control pollution, say, and create products that meet the needs of their costumers and employ workers.

As my student had concluded, the only life-enhancing alternative to altruism is rational egoism, not the immoral exploitation of others. In a home context, rational egoism and its trader principle do not mean, of course, that school-aged children are required to pay rent and give money for food, or for their parents’ guidance. Parents choose to have children—a tremendous value—and are therefore responsible for them. Raising children is not self-sacrifice but a voluntary responsibility that parents pursue out of love. (It does require a rational approach: raising independent, responsible human beings who learn to interact properly with others).

Rational egoism, the moral code developed by Ayn Rand, is the only life-enhancing alternative also in business, as the majority of the students in my recent class concluded. But rational egoism is not well known among business people. Most students in the class had significant business experience, but had never heard of this moral code. It is not widely taught in business schools, where the business ethics curriculum is dominated by varieties of altruism that also many professors of other subjects espouse.

Sadly, as a consequence, many businesspeople carry unearned guilt that hampers profit making, and prosperity of everybody. How can we change that? By sharing knowledge about rational egoism.

 

Photo credit: Max Pixel

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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.

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