Does Ethical Business Exist?

In the current society where all the consumers are very green in terms of values and very aware of the current state of the world. This emphasizes the importance of big corporations ans even smaller firms to be more transparent and responsible in their operations. Thus responsible business has become on of the most important things in doing business in these modern times and corporations just cannot pollute the whole Gulf of Mexico without some serious consequences am I right?

Many arguments are for and against responsible business. By being responsible, the corporations wouldn't run their operations in ways that would endanger the environment, for instance. Also by being green the corporations would also create competitiveness of the firms who are seen as less ethical by potential consumers.

On the other hand, doing business ethically and responsibly comes with a cost. Firms must pace resources to ethical and responsible business continuously and this can be against the basic idea of a firm; to create maximum amount of wealth for the shareholders. A new program or marketing designed to be environmentally friendly, can be shown as a reduction of dividends, for instance. This can create unsatisfied shareholders that would like to take their investments out of the firm.

In my personal opinion corporations should be ethical and show responsible behavior in their business. But the big question is that can they be and will it matter? Will it matter in our world filled with greed and capitalism? Can you be ethical when after all, your actions themselves still are unethical?

The market system is inherently unethical. The law of supply and demand is in the heart of economics. Still, it is based on the willingness of consumers to buy the product and the suppliers to supply the product in a given price. The price mechanism doesn't necessarily present the real value of the product. It is only based on the mechanism of creating the most welfare in the economy (and maximum profits for the firm). Demand and supply aren't ethically driven.

Business is based on self-interest. Exchange will happen with a motivation for a benefit. Business is based on creating profits or a win-loss situation of the maximum kind. In theory, other man's win is an other's loss. Making profits out of someone's losses, well, that sounds unethical.

A good example comes from my dear world of banking. Back in the ancient times, Aristotle argued that interest is unnatural, since money, as a sterile element, cannot naturally reproduce itself. That's why taking on the interest on the money that you loan to someone else is unethical. You are not going to loan the money on your good will: You are doing it to get a benefit in the form of interest. The whole business idea of banks and the financial sector bases highly on taking interest and commissions on loans and financial transactions. The stock-broker trades stocks that lead to profit for the broker. The investment advisers advice you to buy the products on which they get the most profit. The two latter of these have gotten us into much trouble before.

The unethical nature of the world economy is also one causation of the business cycle with its booms and recessions. When a mass of economic agents are buying or selling products purely for the sake of making profits without considering the current economic conditions will inevitably lead to inflation and bubble economies.

So where this has gotten us?

It is still important businesses to be ethical and responsible in their actions, but people aiming their accusations on these firms on obtaining profits should aim their focus on the whole society and human nature itself. Although the truth is that we are probably a bit crazy of creating ourselves this kind of an unethical system.

But that's the way the world works. I'll say we abandon our political argumentation and our accusations of big corporations if we don't focus more on the philosophy behind our system when taking stands for or against ethical business. No matter how ethical a business tries to be, inherently business of any kind is unethical.

Text: SW
Pictured don't belong to me