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BusinessPundit on business ethics

The BusinessPundit has an interesting post on business ethics:

If the only way you can stay in business is by lying, cheating, and manipulating your books, then you are a lousy capitalist and you will eventually get what is coming to you. Business schools need to step up and teach students more business philosophy. They need to know that they should play fair even when government regulators aren't looking, because otherwise earnings, stock price increases, or contract wins are meaningless. How can anyone be proud of their business accomplishments if they cheated?

Its not clear to me that ethics education at the post-graduate level can help all that much. Values and ethics education needs to start a lot earlier than that to take, I suspect: "Raise up a child in the way he should go. And when he is old he will not depart from it." On the other hand, it can't hurt.

One virtue of values and ethics education is suggested by the distinction between virtue and principle ethics. Principle ethics are most attractive to those who are tempted to propose a rule as a solution to a problem. In a principle-dominated ethical system, the moral life consists mainly of complying with society’s mandated code of conduct. In contrast, virtue ethics reject codes of conduct in favor of context-based judgment. In a virtues-based ethical system, the moral life consists mainly of the habitual private exercise of truthfulness, courage, justice, mercy, and the other virtues. Ideally, values-based education becomes one of those intermediating institutions that build what George Weigel calls “a citizenry regulating itself from within according to a shared public ‘language of good and evil.’”

In the wake of the Enron scandal, Congress and the SEC opted for a principle ethics-based approach. They mandated a host of new legal ethics rules. I supported these rules, but for reasons I’ve outlined in two recent law review articles (here and here) I doubt whether they’ll work in the absence of the sort of business and legal professionals who are capable of regulating themselves because they have internalized norms of honesty and justice.