McCloskey and Rand:


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Well, that was way too much topic. This is only an eight-page paper for a 200-level class. It took me 17 pages to deal with half of it.

Below are six paragraphs. The paper has all the footnotes, citations, facts, and figures required. Below is the text only.

Morality in Business: The Objectivist Ethics

Enron, Martha Stewart, the savings and loan scandal, junk bond raiders, … Over the last 20 years, moral failures in capitalism have paralleled the increasing profits to both the corporations the their chief executive officers. The gap between rich and poor widens. For most people, from 1980 to 2008, wages have risen about two or three times (unadjusted for inflation), while executive compensation has increased 600% over the same period. Since 1980 corporate profits increased over 500%, while taxes on them only tripled. Inequalities in income and wealth represent a grave structural problem in our society for which mere structural solutions may be insufficient. Or so it is claimed.

Ed Snider is the Chairman of Comcast-Spectacor, the holding company of the Philadelphia Flyers, the Philadelphia 76ers and the AHL Philadelphia Phantoms. His company also owns the Wachovia Center and the Wachovia Spectrum stadium, the regional sports network Comcast SportsNet and an international facilities management company, Global Spectrum. As he tells the story, he was a meeting of the National Hockey League board, seated next to Peter O’Malley, owner of the NHL Washington Capitols. Incredulous at the proposal on the table, and especially at its positive reception, Snider turned to O’Malley and asked why these men would vote for something so obviously against their self-interest.” O’Malley wrote Atlas Shrugged on a piece of paper and passed it to him, saying “Read this and you’ll understand.”

Following long enough – and sometimes not very long at all – ultimately, the discussion ends on the Law of Identity.

So it was when the Academy of Management Review published “Integrity in Organizations: Beyond Honesty and Conscientiousness” by Thomas E. Becker of the University of Delaware. Becker’s thesis is that integrity is more than a loose synonym for other virtues. Honesty is a necessary but not sufficient condition for integrity. Conscientiousness is highly regarded in business – and some businesses administer tests to measure it – but it may not correlate to integrity.

Becker offers this definition: Integrity is commitment in action to a morally justifiable set of principles and values, where the criterion for moral justification is reality-not merely the acceptance of the values by an individual, group, or society. Because survival and happiness are the ultimate standards of morality, life – not subjective opinion – is the foundation of integrity.

Given those precepts, what of Martha Stewart, Michael Milken, Kenneth Lay and Jeffrey Skilling? According to Objectivist ethics, Stewart and Milken were blameless while Lay and Skilling were crooks. However, all of them were fallen by a lack of integrity. In the case of the Enron executives, that failure was endemic and systematic. Stewart and Milken betrayed themselves by sacrificing their integrity for a temporary moral compromise with their enemies. The criminals at Enron got what they deserved. Stewart and Milken were placed in the same predicament as a million young African-Americans: they were picked up on a pretext and offered a plea which they took as being preferable to a trial they could not afford.

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  • 2 weeks later...

So what is the issue? Is it whether or not integrally is a normal aspect of human interaction?

I would argue yes! But I would caution that the interaction must be between full functioning human-beings. I would also caution that that interaction cannot be conditioned by any kind governmental interference what so ever.

It's impossible to judge a persons integrity when he is being forced to act in certain ways the consequence of which has no correlation with what he is or where he is living.

Capitalism cannot fail. This is because capitalism is not a something which does (or can do) something resulting in a consequence which can be judged against a known or knowable standard. Capitalism is merely the resultant of an observation involving more than one properly-functioning human-being.

Capitalism resulted from observing how properly functioning human-beings act when they are engaged with other properly functioning human-beings. Capitalism is the recognition that to be considered a properly functioning human-being; in a social setting, one must have agreed to be in that social setting and one must have agreed the others also have a right to be there. When properly functioning human-beings agree to socialize (for whatever purpose) the benefit to each participant is greater than if they acted alone. The additional benefit is called profit.

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So what is the issue?

At issue were the roles of integrity and conscientiousness in business. Thomas Becker asserted that integrity is more than just doing what you say you will do -- though that is important. He derived integrity specifically from Objectivist morality and showed that integrity is the adherence to a rational, pro-life ethic. The replies from others asserted more conventional, academic claims, for instance, that by communicating we share perspectives that become "hypernorms" which are superior to localized ethics. You can find more on this under the toplevel Objectivism heading about the "Becker Debate."

My original intention had been to show the links between Rand's Objectivism and McCloskey's Bourgeois Virtues, but that was too ambitious for a limited assignment. It would have been a separate book on Objectivist ethics with the catalog of bourgeois virtues for a table of contents. My original goal was only two write about both at the same time. As it was, I focussed only on Objectivist Ethics by reviewing four academic papers on morality in business.

Capitalism cannot fail. ... Capitalism is merely the resultant of an observation ...

I agree, but I was using the common claim as a strawman anyway. It is not too hard to find such phrases in college textbooks these days.

Capitalism resulted from observing ...

Actually, that's an ideal statement, but not one rooted in history. Just by analogy, when writing about totalitarianism, Arnendt and Popper looked the writings of Giovanni Gentile (1875-1944), Mussolini's ghostwriter. For them, totalitarianism was a 20th century phenomenon. However, it is also true that ancient Sparta was a totalitarian state. So, too, with capitalism. As Rand noted, there were hints of it all through history. Professional traders probably go back 8.000 years. But capitalism as we know it, is a modern system tied to indiivdual rights, etc., etc. That capitalism had its origin in the Protestant Reformation.

Capitalism was the result of a strict code of hard work, deferred enjoyment, and worldy engagement, all lived continuously, without surcease: no holidays, no days off, just hard work all day long. Take care of your business and it will take care of you. A couple of hundred years later, Franklin's "Way to Wealth" 1738 was the secular expression of Calvinist capitalism.

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