The Altruistic Fallacy

I recently gave a talk at Brooklyn College's Faculty Day, a delightful annual event at Brooklyn College where about 100 of the faculty come together to share ideas. I put together a symposium entitled "Why Business Schools Can't Teach Ethics" and my paper was entitled "Ethics and the Enlightenment in Business Education."  The other participants were two philosophers, Professors Michael Menser and Christine Vitrano, and my business department colleague Professor Carol M. Connell.  I thought all of the presentations were very good, but a breach between the business faculty and our philosophical colleagues was evident.  The philosophers tended to view ethics in terms of altruism, while I do not.  Professor Connell focused on pedagogical issues.   I do believe that business schools can't teach business ethics; I coined the symposium's title.  But I came away thinking that philosophy departments cannot do so either.

In particular, the interpretation of  ethics as altruism is misguided. Aristotle gave the first rigorous alternative to Plato's confusion between collectivism and morality--he suggested that human happiness is the best moral ground.  It is true that Aristotle did not like retail trade or commercialism as we know it today, but he did not at all object to affluence, which he saw as necessary to the best life, that of philosophical contemplation. His belief in affluence as a necessary condition to the contemplative life is consistent with a belief in profit-making as we know it.  Aristotle did believe in the morality of household management, oiconomos,   from which the word economics is derived.  However, to make the distinction between retail trade and household management intelligible in today's mindset it needs to be reversed.

Aristotle's objection to retail trade rested on the absence of a mean with respect to profit.  More profit is always better, hence there is no way that a retailer can strike an intermediate between profit making and alternative aims.  This is analogous to today's discussion about corporate social responsibility.  However, he did see the aristocratic life of the Athenian landowner and slave master as capable of a mean.  The closest analogy in our experience is the life of the Southern slave owner, who did not need to maximize profit because he was assured of a graceful life so long as he managed his plantation well.  Someone like Thomas Jefferson, who engaged in philosophical contemplation as well as political activity while benefiting from his slaves' labor may be closest to the Aristotelian ideal. But as we now know, and as Jefferson himself thought, Jefferson's life depended on the profound immorality of slavery.

It is evident that in today's world, household management is less moral than retail trade, for we know that Aristotle's support for slavery was wrong. (In fact, some Sophists had argued against the institution of slavery, and Aristotle rejected their arguments.) Moreover, it is possible today to balance an affluent life with philosophical contemplation because of the separation of ownership and control, that is, because of modern capitalism.  In a purely socialist or altruistic society such balance would not be possible.

Grounding morality in a belief in the worth of every individual, and rejection of Aristotle's belief that it is in the character of slaves to be slaves, we can update Aristotle and so recognize the value of his ethics.  Without doing so we must reject all of Aristotle; his work is only intelligible if we replace his rejection of retail trade with a recognition that achievement is possible in the economic context.  For it is only through profit-making that balance is possible. This recognition is inconsistent with the claim that altruism is moral.

Aristotle could not have conceived of instruments like stocks, bonds and pension funds that permit income without one-sided fixation, and, better than an Athenian oikos, permit philosophical contemplation. Aristotle could not have visualized the enormous effect of economic and technological advance on human welfare that has only existed under profit-seeking capitalism. The pursuit of profit has tripled life expectancy, reduced hunger for billions and made widespread education possible. In a socialist state like India infant mortality remains much higher than in capitalist countries. In the former Soviet Union male life expectancy is still in the 50s.

Aristotle could only visualize retail trade as it was limited to the ancient context.  Even then, as Rostovtzeff describes in his Social and Economic History of the Roman Empire, the Hellenistic world had made tremendous advances with respect to agriculture and manufacturing that Aristotle may not have recognized because of his aristocratic orientation and his contempt for craft and technology.

In other words, human fulfillment and morality are synonymous with profit. A rigid equation of altruism to ethics ignores Henry Sidgwick's observation that we know ourselves better than others and so are better equipped to maximize our own happiness than that of others.  A system that strains the possibilities of human rationality, i.e., a system based on altruism, is bound to lead to profound immorality.  Altruism's responsibility  for the most egregious immorality in history evidences my claim.  Adolf Hitler did not pursue profit. He pursued socialist ideals as he conceived them.  The altruism of Marxism is responsible for 100 million murders, the bloodiest, most immoral outcome in human history. Altruism has been responsible for uglier immorality and depredation than any outcome of capitalism. In contrast, capitalism has improved the quality of life beyond recognition to the residents of the pre-capitalist or socialist world.
 
The claim that there is an inconsistency between morality and profit fails to consider the distinction between profit and theft.  As Benjamin Franklin claimed in the eighteenth century and as Stanley and Danko empirically confirm in their Millionaire Next Door, written in the 1990s and very much in line with Franklin's claims, the wealthy tend to be more moral than others. They tend to defer gratification, save, and productively invest. They tend to care for their families and donate to charity when they die (not before). The deferment of gratification is very much in line not only with Franklin's but with Aristotle's vision of human happiness and morality.

Business students ought not be taught that altruism is preferable to profit seeking. Rather, they ought to be taught that profit seeking needs to be rational and balanced with other goods--that it ought not to contradict the moral foundations of a free society.  To claim that the quest for economic achievement is immoral is to sink backward into the immorality of Medieval tribalism and socialism.

America Is No Longer A Moral Nation

Americans remember that their nation was "conceived in liberty" but tend to forget that liberty was based on morality. Morality is not the same thing as charity. A thief can donate his booty to charity, but he is not moral. Aristotle argued that there are moral as well as intellectual virtues. The moral virtues in Aristotle's view were justice, temperance, prudence and courage. Morality, then, depends on justice. Justice means that each producer receives a fair return, and that no producer receives an unearned return.

The Founding Fathers' morality was linked to the Aristotelian philosophy. Liberty in the sense that it once existed in America depended on justice. This was the underlying assumption of John Locke's Second Treatise on Government on which the Declaration of Independence and the Constitution were based. Governments are formed for the just reason of protecting life, liberty and property from violence.

The morality of justice is in turn dependent upon truth. For without a willingness to examine the truth justice is not possible. One cannot receive a fair reward if one is not willing to truthfully examine the contribution one has made.

Ever since the beginning of the Republic a sizable contingent of Americans fought the idea of justice. These Americans wanted the public to subsidize them. The way that they were to be subsidized was through the power to create paper money.

Because of the inherent morality of the 19th century American public, the public rejected this attack on moral values. In 1836 President Andrew Jackson abolished the Second Bank of the United States, the precursor of today's Federal Reserve Bank. The American people of 1836 were too moral to tolerate the fraud associated with the central bank.

In the 1930s John Maynard Keynes proposed an economic system whose foundation is the commission of fraud. Employees would be fooled into accepting lower wages through inflation. The nation's universities would be called into service to perpetuate the fraud by claiming non-existent economic expertise that justified the fraud. The media, already controlled by banking and Wall Street interests, were also called into service of the fraud.

The American people could no longer call themselves moral. For the people did not oppose the fraudulent issuance of bank notes. They did not oppose the transfer of wealth from productive labor to speculator and banker because they were afraid. They were afraid of deprivation because the mass media told them to be afraid. They feared for their security. They trusted experts whose motives were corrupt and whose ideas were merely warmed over and elaborated versions of the same claims that banks had made previously.

America stopped being a moral nation. It could no longer claim justice as the foundation of its ideology. And where justice dies, freedom is sure to follow.

A little dishonesty and a small decline in morality are likely to be followed by ever greater lapses. A little cheating is observed, and then someone does a little more. America has become a nation governed by immoral people. Its economy no longer encourages productivity. Its ethical base has deteriorated. Instead of justice, its ideology is theft. Wal-Mart is excoriated for reducing costs. Goldman Sachs is subsidized for stealing and reducing Americans' standards of living.

A nation that has rejected morality and has rejected justice is sure to deteriorate into the kind of nation that favors charity and stealing. Such a society existed in Europe in the Middle Ages. The socialist economy will see decline to the primitive backwardness of the Soviet Union and pre-Tudor England.

Progressivism, Morality and Power

What is called "liberalism" in American popular parlance is better termed "social democracy", although even that term fails to fairly characterize it. I nevertheless use the term "liberalism". Liberalism is in part a moral system. Liberals believe that state action can improve moral outcomes. For example, liberals believe that it is more moral to have less income inequality than more, and therefore that it is moral for the state to force wealthier people to give their wealth to less wealthy people.

There are a number of interesting corollaries to liberal morality. For example, there is a shamanistic belief in the power of the state to bestow morality. If an individual with less wealth were to simply take the wealthier person's assets, then that would be termed theft. But the liberal believes that morality is conferred upon the theft if the state takes it.

Part of the liberal's claim is that democracy bestows morality. A group of people decides that a given income distribution is fair, and then morality is bestowed on the theft by the fact that the group made the decision. Hence, liberalism is a system of fetishization of some construct, be it the state, democracy or power itself, by which the liberal believes that morality or right is conferred.

In the eighteenth century Hume showed that there is no intellectual basis for ethics, but rather right and wrong are emotions hence cannot be proven. However, the intellectual content of the emotion, right and wrong, can be conferred by a wide range of constructs. Aristotle believed that virtue derived from a socially inculcated set of habits and that a virtuous individual has integrated virtue into their decision making capacity, their right reason or ortho logos. Descartes, an Enlightment rationalist writing in the Christian tradition, believed that God verifies the authenticity of perception and that as a result logical (and moral) choice is possible. Locke argued that labor confers ownership and therefore it is morally right for a free individual to lay claim to property and estate. None of these beliefs suggests the need to curtail or control human nature. Control is not normally considered part of ethics.

In contrast, John Dewey, the proto-typical liberal, father of progressive education and arguably founder of modern liberalism says this in the introduction of his book "Human Nature and Conduct":

"Morality is largely concerned with controlling human nature. When we are attempting to control anything we are acutely aware of what resists us. So moralists were led, perhaps, to think of human nature as evil because of its reluctance to yield to control, its rebelliousness under the yoke."

It is true that the inculcation of habits involves a degree of control, but none of the great philosophers, particularly Aristotle, saw good habits as in themselves representative of morality. Rather, morality involves freedom and choice between good and evil.

Dewey, however, claims that the Sunday School teacher's mission represents all morality, that all morality involves control. More likely, Dewey fetishizes control and power, and therefore defines morality as control. How far Dewey would go with that definition was and is uncertain. In the real world, Dewey never did protest Stalin's crimes.

Thus, Dewey defines morality as control. This is characteristic of liberalism, which idealizes control or power used in conjunction with democratic processes or for social democratic ends. Is liberalism's goal democracy, equality or power for the liberal? In fact, the liberal regime has yielded less equality and less democracy than existed in the nineteenth century. What has changed is the allocation of power.

Liberalism and Moral Relativism

The impulse underlying Progressive-liberalism was the late nineteenth century's moral angst at the expanded power of big business, its lack of moral foundation and the disorder and uncertainty that the railroads, the expanding market and the increased homogeneity of the American market had caused. Americans of that time were mostly religious Protestants. Their reaction to the increased power of business and the railroads was in part informed by their religious values. The economy had been a source of moral training and discipline when producers were small and life was local, what Robert H. Wiebe calls "island America" in his book The Search for Order. The late nineteenth century response to expanding markets included Populism, trade unionism, and Mugwumpery. The Progressives arose from the introduction of the ideas of the German historical school to this mix. It held that the state ought to be strengethened in order to manage big business. The underlying impulse was the moral one of correcting the moral abuses of big business and the new mass production.

The moral impulse behind Progressivism carries through to liberalism and its more extreme variants. Progressive-liberalism claims to rectify moral abuses through government or the marshalling of public opinion. Thus, Wal-Mart is evil because its prices are too low; oil companies are evil because their prices are too high; banks are evil because they demand that borrowers repay; and fast food restaurants are evil because they serve too much food. Liberalism is thus a moral movement that derives from late nineteenth angst about business. Liberals believe that the business system requires their moral guidance.

But liberalism pretends to derive from science, not religion. In part because of its scientism liberalism adopts Enlightenment skepticism about morality. But it applies its skepticism only to others', not to its own moral claims. Liberalism holds that the school system ought not to advocate religion. It insists that American values are not superior to those of other cultures. In its more extreme variants it holds that 9/11 victims are "little Eichmanns". It assumes that public morality is a convention and that rules about public morality amount to infringement on freedom of speech. It argues that morals are locally derived, have no logical foundation, and that their chief purpose is to justify power. Philosophy and literature have been written by dead white males; and natural rights have no meaning because morals have no logical meaning.

Given Progressive-liberals' skepticism with respect to American values, natural rights and morals, the liberal position faces an irreconciliable dilemma. No argument about morality is possible if there is no such thing as morality. If there is such a thing as morality, then liberalism has to explain why it is to be preferred over nationalism, religion or other locally derived moral systems.

Progressive-liberals wish to have it both ways. They offer one emotionally charged moral argument after the next: Global warming is wrong; Wal-Mart is evil; America is the Great Satan. But at the same time, liberals deny that there is such a thing as morality.

From whence do liberals' derive their moral sense? If morals have meaning, liberals must be able to show that their causes are morally superior to those whom they attack. If natural rights have meaning, then liberal causes are generally immoral, for liberalism depends on redistribution of property by violence. If economic inequality is wrong, why is it worse than stealing? By what moral system does liberalism justify forcing me to pay taxes? What makes liberal causes more moral than natural rights?

Liberalism has not attempted to answer such questions. It is an ideology, not a philosophical system. It is an ideology whose aim is to justify the assumption of power by educated elites.