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Overview of Business Ethics

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Business Ethics from Antiquity to the 19th Century

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Abstract

What is meant by business, trade, and commerce? The key facet is an exchange of property rights to goods and services. The basic voluntary exchange of goods or services is a mutually beneficial, positive-sum situation. People’s choices can create benefits and impose costs; economics can help identify costs and benefits. What is ethical in business depends, in part, upon who wins and who loses. During the twentieth century, business ethicists developed the stakeholder theory; although the new concept gained acceptance, it also met with resistance.

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Notes

  1. 1.

    Economist Kenneth Arrow made a similar point: “much of the economic backwardness in the world can be explained by a lack of mutual confidence” (Arrow 1972, 357).

  2. 2.

    Game theory suggests that if there is a known and definite end to a game or relationship, the losses from acting opportunistically fall.

  3. 3.

    Economist Deirdre McCloskey challenged economists’ hesitance to acknowledge the role of virtue (McCloskey 2006, 4).

  4. 4.

    Sub-Saharan Africa provided examples of what happens when nations lacked the requisite “moral infrastructure.” Equatorial Africa and Botswana present stark contrasts. A dictator in the former country destroyed the economy, while the latter country enjoyed prosperity (Friedman and McNeill 2013, 51).

  5. 5.

    One can read about the “Stanford Prison Experiment” at www.prisonexp.org.

  6. 6.

    Psychologist Lawrence Kohlberg also described moral development within an individual (Kohlberg 1976, 32–36).

  7. 7.

    Loyal Rue’s conundrum was similar to George Carlin’s Catholic Junior High School boys’ question of the priest: “If God is all powerful, can he make a rock that he can’t lift?”

  8. 8.

    George Akerlof made similar point (Akerlof 1983, 56–57).

  9. 9.

    See also Starr, March 26, 1984, A18. A variation on the New York diamond trade occurred across the world in Vietnam (McMillan 2002, 58).

  10. 10.

    See also 1334–1335 for Cuban exiles in the early 1906s.

  11. 11.

    Winners of lotteries quickly discover many relatives demand a share, in a perverted form of family and group solidarity.

  12. 12.

    Edward Banfield studied the lack of trust among Italian villagers (Banfield 1958, 10, 18).

  13. 13.

    JCPenney Blog, n.d., no page numbers; Washington Examiner, February 1, 2012, no page numbers. For Lincoln Electric Company and Worthington Industries (Singer 1988, no page numbers; Funding Universe n.d., no page numbers; Worthington Industries n.d., no page numbers.

  14. 14.

    See also Oliver Williamson and R. Edward Freeman and William Evan for nuances in the stakeholder theory (Williamson 1985, 304; Freeman and Evan 1990, 346–349).

  15. 15.

    Donald Frey disputed the Friedmanian emphasis upon profit maximizing and efficiency (Frey 2009, 155–156).

  16. 16.

    In comparison with previous societies, economic freedom would seem to have served the poor better than most other social organizations).

  17. 17.

    N. Scott Arnold summarizes the argument by characterizing the successful entrepreneur as “someone who exploits social ignorance about the malallocation of resources” (Arnold 1987, 389).

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  1. Department of Economics, University of Northern Iowa, Cedar Falls, IA, USA

    David George Surdam

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Surdam, D.G. (2020). Overview of Business Ethics. In: Business Ethics from Antiquity to the 19th Century. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-37165-4_2

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  • DOI: https://doi.org/10.1007/978-3-030-37165-4_2

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