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Dialogue on Locke’s Business Ethics DAVID C. JACOBS Morgan State University Edwin Locke’s essay, “Business Ethics: A Way Out of the Morass” is a brief for a business ethics founded on objectivism and formulated for management education. While Locke’s argument is provocative and impressive in scope, he misconceives and caricatures the arguments of leading philosophers in order to elevate the work of Ayn Rand. His approach disserves both management education and practice.

........................................................................................................................................................................ I read the September 2006 AMLE with interest. Edwin Locke’s essay, “Business Ethics: A Way Out of the Morass” (Locke, 2006), is a provocative review of business ethics texts and brief for an objectivist alternative. However, it is deficient in its characterization of pragmatism, Kantian ethics, and utilitarianism, among other philosophies. Locke’s errors in interpretation stem from the objectivist lens through which he views the history of ideas.

[S]tudents and practitioners benefit when they understand the social and historic context of ideas, whether ideas in theory or ideas for practice. Of course, one should not adopt uncritically the theories of McGregor, the social criticism of Thomas Paine, the ethics of Aristotle, or any other historic perspective. Rather, I believe that a “decent respect for the opinions of mankind,” construed across the ages as well as across the globe, widens the span of experience under consideration and inspires a helpful humility. Similarly, an appreciation of context for contemporary thinkers and practitioners helps us better assess their work. I must admit that my embrace of a history of ideas framework has a basis in philosophical pragmatism. The pragmatists’ rejection of absolute truth leads to enhanced respect for provisional truths—whether historic or contemporary. However, this insight does not make William James or John Dewey an indispensable thinker. They were not alone in their contextual understanding of truth. Martin Heidegger and Dewey are sometimes compared with regard to their rejection of the notion of fixed foundations for knowledge (Abrams, 2002). Similar ideas emerge within different traditions and arguments, as the concept of “equifinality” would suggest. (See Katz & Kahn, 1978: 30, for their discussion of equifinality.) John Rawls proposed a respectful contextual review of historical works. He argued that philosophers’ arguments should be construed in the most favorable light and understood in the context of their times:

HISTORY OF IDEAS My AMLE essay on “Critical Biography and Management Education” (Jacobs, 2007) introduces a “history of ideas-based” approach to management education. By this I mean a framework that situates both theory and practice in social and historical context. I believe that students and practitioners benefit when they understand the social and historic context of ideas, whether ideas in theory or ideas for practice. While contemporary debates about theory and practice are obviously worthy of students’ attention, even classic arguments are instructive once we take context into account. The management theories of Frederick Taylor and Douglas McGregor, for example, should be understood as interventions in the contested workplaces of their respective eras. Despite vast differences in technology, language, and culture, there are enduring issues of social relations: the relations of subordinate and superior, men and women, young and old, rich and poor, human and animal, and the like, that are reflected in classic scholarship.

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When lecturing, say, on Locke, Rousseau, Kant, or J. S. Mill, I always tried to do two things especially. One was to pose their problems as they themselves saw them, given what their understanding of these problems was in their own time. . . . The second thing I tried to do was to present each writer’s thoughts in what I took to be its strongest form (Rawls, 2000: xvi). This does not mean, of course, that Rawls was necessarily right in his interpretations, as will be evident below. Despite his errors, he embraced an honest and transparent approach to the classics. He clearly admitted his role as interpreter. While it is difficult, the best stance for the contemporary thinker is to seek to find value in historic works, to treat them with respect, to excavate useful insights, and to adopt some ideas while rejecting others, rather than to simplify or distort works as a means to an end. Perhaps this is a Kantian lens for scholarship: treating thinkers as ends in themselves, not exclusively as means for one’s own arguments. Unfortunately, in his 2006 AMLE business ethics essay, Locke is cavalier with the history of ideas and invokes caricatures of Kant, Dewey, and James Mill based on the analysis of hostile interlocutors. He fails to engage directly with these philosophers. Rather, he cites Leonard Peikoff’s and Onkar Ghate’s summaries and interpretations. While Peikoff is recognized as a leading objectivist, he is not an authority on Kant or James Mill. The result of this indirect assessment of classic works is an account that treats centuries of argument as merely a prelude to the arrival of Ayn Rand. In fact, Locke insists that there were only three major systems of philosophy before Rand’s arrival, those provided by Plato, Aristotle, and Kant.

The result of this indirect assessment of classic works is an account that treats centuries of argument as merely a prelude to the arrival of Ayn Rand. On the other hand, Locke is right in his charge that ethics texts frequently present a truncated version of Kantian, utilitarian, and other ethical models. Textbook writers are perhaps more concerned with deriving heuristics from classic philosophical arguments than with constructing nuanced analyses. These heuristics emerge from a process of distillation and vast oversimplification to enhance the practicality and managerial orientation of the

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texts. For example, Hartman and Desjardins (2008: 67), like Locke and many others, explain utilitarianism in a way that blurs the distinct formulations offered by Jeremy Bentham and the Mills. (John Stuart Mill’s version stresses the quality, not just the quantity, of happiness, and introduces conceptions of social welfare. See Kurer, 1999.) The sheer volume of Kant’s and others’ works helps explain but does not excuse the omissions and possible distortions. The simplistic presentations of textbook authors surely are not undone by a hostile reading of the classics. Students and scholars alike benefit from honest engagement with the important philosophical debates. PRAGMATISM Locke begins with a striking misrepresentation of pragmatism. It is not a justification of “attaining any goal that you want . . . or makes [you] feel better” (Locke, 2006: 324). William James and John Dewey agreed that truth is provisional but differed in the interpretation of the decisive consequences. James stressed consequences for the individual in the quality of life led, not material gain or personal expediency. His classic The Will to Believe (James, 1899) explored the personal impact of religious faith. Dewey stressed social consequences. His Liberalism and Social Action (Dewey, 1935) was a powerful indictment of the coercive powers of the corporation in Depression Era America. Neither James nor Dewey had any interest in defending the self-dealing that has corrupted many historic and modern enterprises (Kuklick, 2001: 164, 196; Jacobs, 2004). Pragmatists do not deny the existence of facts, of empirical data. Rather, they argue that facts must be interpreted (and reinterpreted) in order to provide models of reality. The practice of peer review in academic journals has in common with pragmatism the assumption that knowledge is not inert personal property but emerges from a social process of argument and validation. KANT AND RAWLS Locke’s critique of Kant relies upon a mixture of Peikoff’s, Ghate’s, and Ayn Rand’s selective quotations and builds to an astonishing and misguided declaration: that there is no greater hatred of man in the entire history of philosophy (Locke, 2006: 325). Locke argues that ethics texts provide a sketchy summary of Kant, emphasizing the universality principle and asserting that Kant respects the individual and embraces reason. Locke denies that Kant values the individual or reason. In fact, he

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insists that Kant’s conception of duty negates any personal interests or desires. Certainly Kant’s formulation of duty places his philosophy at odds with self-interest and liberty as understood by Ayn Rand. However, it is quite a stretch to construe universalistic formulations of duty to others as a “hatred of humanity.” Those to whom duties are owed may find their lives enriched. Reciprocity of duty provides personal benefit even as it exacts a cost. In The Conflict of the Faculties (Kant, 1798/1992: 69 –70) Kant wrote: Now the critique of reason has appeared and determined the human being to a thoroughly active place in the world. The human being itself is the original creator of all its representations and concepts and ought to be the sole author of all its actions. Indeed, Kantian ethics bring human autonomy and reason to the fore. These elements cannot be easily squared with Locke’s interpretation. Although Kant’s claim to build the categorical imperative from pure synthetic a priori reason merits skepticism (I find Dewey more persuasive in his experience-derived ethics), and Kantian duty may appear to be a difficult standard, Kantian appeals to autonomy and reason cannot summarily be denied. In fact, Kantian duty is rigorous and not easily reconciled with modern capitalism. Bowie thinks he can do so, partly by positing service to stockholders as a duty, coexisting with obligations to employers and community (Bowie, 1999). Rawls quite decisively severs the categorical imperative from Kant’s a priori logic and ultimately substitutes his own “original position” argument (incorporating an empirical component) in order to rebuild a universalistic ethical model. Rawls writes: I conclude these remarks by saying that in presenting Kant’s moral philosophy, I have played down the role of the a priori and the formal. . . . These things I have done because I believe that the downplayed elements are not the heart of his doctrine. Emphasizing them easily leads to empty and arid formalities . . . (Rawls, 2000: 275; see also Budde, 2007). Although Rawls may go too far in this deemphasis of Kantian metaphysics, he is not wrong to seek to build on a portion and not the whole of the Kantian edifice.

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A BOUNDED ALTRUISM Kant, Dewey, and many other philosophers have in common a commitment to the importance of altruism, and this is entirely inconsistent with objectivist thinking. Locke singles out Kant, Dewey, and Rawls because each makes reason and inquiry a social process. Note that, contrary to Locke’s assertion that altruism is necessarily equivalent to selfsacrifice and self-destruction, Kant specifically identifies limits to beneficence: I ought to sacrifice a part of my welfare to others without hope of return, because this is a duty, and it is impossible to assign determinate limits to the extent of this sacrifice. How far it should extend depends, in large part, on what each person’s true needs are in view of his sensibilities, and it must be left to each to decide this for himself (Kant, 1996: 393). Locke is not persuasive in his argument that altruism admits of no limits. Consider the famous saying of the Hebrew philosopher Hillel: “If I am not for myself, who will be? If I am only for myself, what am I? And if not now, when?” It would appear that a bounded self-interest and a bounded altruism need not be contradictory. A contradiction emerges only when altruism is defined so as to require surrender and self-destruction. An altruist who disregards self in service to others may not live to serve again. Altruism appears to be an enduring element in the life of families and communities (see Mauss, 2002). Locke specifically criticizes Rawls, this time citing neither an objectivist interpreter nor Rawls himself. He misconstrues the “difference principle,” which directs institutional design to the benefit of the least advantaged. Locke equates the difference principle to the punishment of the competent, because he rejects any form of altruism and questions the concept of disadvantage. Locke notes a false dichotomy in ethics texts but misses his own. He protests the false choices of the hedonistic, amoral business leader versus the selfless business leader as a steward of society’s resources. He is right to note the omission of rational self-interest from this framing, which is not attributed to any author in particular and represents his own distinctive reading of ethics texts. There is surely an important place for rational self-regard in business, but there is probably also a place for a balanced altruism. There is another false dichotomy, between the individual and social, which is fundamental to

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Locke’s thinking. Corporations are not the instruments of individuals; they are inherently social bodies. Conceptions of individual self-interest are not sufficient to explain the behavior of these complex social institutions. Management education benefits from attention to the ideas of great philosophers like Kant, James, and Dewey in part because they address enduring problems of social life and social justice. We owe them something more than idiosyncratic and inappropriate representations of their ideas, and we certainly owe them much more than the assignment of minor status in the story of objectivism.

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Kant, I. 1996. The doctrine of virtue. In M. Gregor, (Ed. and Trans.), The metaphysics of morals. New York: Cambridge University Press. (Original work published 1797) Katz, D., & Kahn, R. L. 1978. The social psychology of organizations. NY: Wiley. Kuklick, B. 2001. A history of philosophy in America, 1720 –2000. Oxford: Clarendon Press, 2001. Kurer, O. 1999. John Stuart Mill: Liberal or utilitarian? European Journal of the History of Economic Thought, 6: 200 –215. Locke, E. 2006. Business ethics: A way out of the morass. Academy of Management Learning & Education, 5: 324 –332. Mauss, M. 2002. The gift: The form and reason for exchange in archaic societies. New York: Routledge. Rawls. J. 2000. Lectures on the history of moral philosophy. Cambridge: Harvard University Press.

REFERENCES Abrams, J. 2002. Philosophy after the mirror of nature: Rorty, Dewey, and Peirce on pragmatism and metaphor. Metaphor and Symbol, 17: 227–242. Bowie, N. 1999. Business ethics: A Kantian perspective. Malden, MA, and Oxford, UK: Blackwell. Budde, K. 20007. Rawls on Kant: Is Rawls a Kantian or Kant a Rawlsian? European Journal of Political Theory, 6: 339 –358. Dewey, J. 1935. Liberalism and social action. New York: G. P. Putnam. Hartman, L., & Desjardins, J. 2008. Business ethics: Decisionmaking for personal integrity & social responsibility. New York: McGraw-Hill Irwin. Jacobs, D. 2004. A pragmatist approach to integrity in business ethics. Journal of Management Inquiry, 13: 215–223. Jacobs, D. 2007. Critical biography and management education. Academy of Management Learning & Education, 6: 104 –110. James, W. 1899. The will to believe and other essays in popular philosophy. New York: Longmans, Green, and Company. Kant, I. 1992. In M. Gregor, (Ed. and Trans.), The conflict of the faculties. Lincoln: University of Nebraska Press. (Original work published 1798)

David C. Jacobs (dc.david. [email protected]) is associate professor of labor, business, and society at the Earl Graves School of Business and Management at Morgan State University. Jacobs’ work focuses on the role of altruism and self-interest in decision making by business, labor, and other stakeholders. His most recent book, coauthored with Joel Yudken, The Internet, Organizational Change, and Labor, explores promise and peril in the effects of the Internet on organizations. Jacobs has also published books on social security and employee benefits, business lobbies, and bargaining as an instrument of social change. His articles appear in The Academy of Management Review, Journal of Management Inquiry, Negotiation Journal, Labor Studies Journal, Advances in Industrial and Labor Relations, Labor Law Journal, Academy of Management Learning & Education, Ephemera, etc. He has contributed chapters to research volumes on labor history and has edited symposia for Perpectives on Work.