David Dick

Abstract: "The Hobbesian Approach to Business Ethics"

When moral theory is applied to business cases it is often ill fitting. Most approaches require commitment to values (such as maximal utility or the good will) that are both foreign to business practitioners and that can require unprofitable actions. This leaves much of business ethics struggling to reply to a particular kind of skeptic who wonders why she should adopt a set of values so foreign and potentially contrary to her values as a business person. This kind of skepticism is even stronger for corporate entities that may be incapable or legally prohibited from advancing values other than shareholder return.

Here, I argue that this kind of skepticism can be answered by adopting an approach to business ethics inspired by the moral and political philosophy of Thomas Hobbes. Following interpreters like Gregory Kavka and Edwin Curley, the Hobbesian approach is a rule-egoist one that grounds reasons to behave well in one’s long term self-interest. The strength of this approach is that it can give reasons for the skeptic to behave well without forcing the adoption of a new set of values. Because it builds on the values business has already adopted, it can apply to both the skeptical business person and the abstract corporation.

Taking Hobbes’s texts as inspiration instead of gospel, the approach need not adopt each of Hobbes’s claims, but a surprising number of Hobbesian doctrines can be adapted seamlessly to the business environment.

The Hobbesian approach will not recommend a single, sovereign regulator to be obeyed absolutely, but instead finds each business person or firm in an iterated prisoner’s dilemma where the gains of short term defection are massively outweighed by their consequences for long term flourishing. Here, it is one’s reputation (rather than one’s sovereign) that gives reason to behave well. Too much defection and damage to one’s reputation and one might lose any willing cooperators in commerce, being left to a “financial state of nature” where a firm’s life will be “solitary, poor, nasty, brutish, and short.”

The Hobbesian approach to business ethics just is the “business case” for ethics made at the level of moral theory. As such, it is potentially subject to the same sort of objections that it is empirically naïve and mercenary when being good is contingently not profitable. Once again, the Hobbesian approach provides resources to answer these charges. Beyond the empirical work done to substantiate the way that doing good can offer both reputational advantage and protection, Hobbes’s own “reply to the Fool” can be adapted to claim that the promised gains from potential misdeeds can never be both so great and so certain to rationally outweigh the damage to reputation they risk. Furthermore, Hobbes’s political arguments to show the self-interested benefits to be derived from a peaceful and stable polity are easily applied to the marketplace, suggesting the proper role for government regulation.

In short, I here argue that the Hobbesian approach is the best and most promising for business ethics.