Myths About the World of Commerce

I’m just back from St. John’s, Newfoundland, where I attended the Annual Meeting of the Canadian Bioethics Society. (Good conference, great party.)

I gave a presentation with the cranky title, “What Bioethics Gets Wrong About the World of Commerce.” In fairness to my bioethics pals, I did clarify that I thought the myths I discussed are pretty common far beyond the world of academic Bioethics. But misunderstandings regarding the world of commerce are particularly worrisome in Bioethics, given the huge role that commercial entities play in health care and health research (even in countries like Canada with robust publicly-funded healthcare systems). And constructive criticism and advice are impossible without understanding.

So, briefly, here are the 4 myths I tried to bust during my presentation, along with an abbreviated version of my comments on them.

    Myth #1. “Profit is the sole driver of corporate behaviour.” Corporate motivations are of course much more varied and complex than this. Even short-term motives (such as diversifying, or expanding market share, or improving community relations) that are linked to building long-term shareholder value are different in important ways from straightforward profit-seeking. And don’t forget that what drove key decision-makers at Enron (and the companies at the heart of so many other scandals) was not pursuit of corporate profits, but pursuit of personal gain.
    Myth #2. “For business, ethics is always just window-dressing.” Clearly not all companies that claim to care about ethics care very deeply. But as a generalization, the claim that corporate ethics is always window-dressing is an unsubstantiated empirical hypothesis, one at odds both with informed opinion and common sense. There are companies that care deeply about ethics, roughly because there are people who care deeply about ethics. And it’s worth adding that even companies whose commitment to ethics is instrumental (i.e., they pay attention to ethics because they think it’s good for the bottom line) can still manifest a deep instrumental commitment to ethics, one woven into the organization’s policies and procedures.
    Myth #3. “The profit motive is antithetical to the public good.” The pursuit of profit, properly constrained, is of course typically generally conducive to the public good. Or perhaps more precisely, a system where the provision of goods & services is motivated by the pursuit of profit is conducive to the public good: profit is a useful lure, attracting talent and investment toward useful projects. Those who believe that the profit motive is “the problem” have yet to offer a plausible alternative.
    Myth #4. “Corporations are unitary decision-makers.” If corporations were unitary decision-makers — thinking with one mind, speaking with one voice — they’d be both easier to steer and easier to criticize. But they’re not. Corporations are complex & difficult to manage. They have many internal stakeholders, many interests, many values. They famously are subject to a whole host of “agency problems.” Can shareholders effectively control the Board? Can the Board effectively control Management? Can Management effectively control employees? Although corporations are, from a legal point of view, individual “persons,” it’s crucial to remember that that convenient legal fiction also masks a very complicated social reality.

Of course, it’s quite likely that not very many people really believe all (or maybe even any) of those myths. But popular films like The Corporation have done their best to propagate them, so it’s worth pausing once in a while to consider just how silly they really are.

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