Ethics – The Basics

Ethics is the study of right and wrong.

Business Ethics is the study of right and wrong human conduct in business.

Ethics and Morality will be used to mean the same thing in this class.

Standards are the measure of what a person or group finds acceptable.

Moral Standards

• Concern behavior that is of serious consequence to human welfare.
• Take priority over other standards, including self-interest.
• Depend for their validity on the reasons that are used to justify them.

Etiquette consists of the rules or standards for socially acceptable behavior.

• These are rules such as not speaking with your mouth full of food, or saying please and thank you, or not using curse words in certain company.
• They are not the same as moral standards, as they are unlikely to be of serious consequence to human welfare.

Laws are rules or standards established by a community for acceptable behavior. The community (city, county, state, country) has the power to enforce those rules.

• Laws are not the same as morality. It can be immoral to do something, yet not against the law. Lying or being unfaithful to one’s partner can be immoral but there may be no law against it.
• Laws are also not the same as morality because following the law does not make something moral. For example, slavery, or beating one’s wife and children were once legal, but were still immoral.

Professional Codes of Ethics are the rules that govern the conduct of members of a given profession.

• Doctors, lawyers, engineers, architects, scientists, barbers, and beauticians, etc. have certain rules they must follow when engaged in their professions.
• Failure to follow these rules can result in losing their ability to practice their profession, through the loss of a license or professional certification.
• Professional codes of ethics can be different from personal morality. For example, doctors and lawyers have obligations of confidentiality that may differ from what they might consider ethical in their personal lives.

Sources of Moral Standards

• Society – Ethical Relativism is the idea that morality means following the rules of your community. But,
  • The rules can only change when individuals or groups of individuals persuade others. Otherwise, morality cannot evolve. Someone had to argue that slavery was wrong, women should be able to vote, etc. or nothing would have changed.
  • This leaves no room for outsiders to criticize a community’s rules. Many nations do not allow women the freedom to make their own decisions. Our country believes this is wrong. The U.S. has not banned capital punishment, but most of Europe has done so. They believe we are wrong.
  • One’s culture is sometimes hard to identify in the modern world. Do you live in a neighborhood where everyone around you looks like you, speaks the same language you do, etc.? Is my culture my ethnicity, or my place of birth, or where I live now, or some combination of these things?
• Religion
  • Religion is often cited as the source of a person’s values.
  • But some people are not religious. This does not make them immoral.
  • There are nearly infinite sets of religious beliefs. If you and I are members of different religions, how can we agree on morality?
  • Nearly all religions have some form of “The Golden Rule” among their religious teachings. There are many non-religious belief systems that include the same idea. Therefore, it would seem that the reasonableness of the notion that we should not treat other people in such a way that we would not want to be treated might be a universal value.

Business Ethics

• Imagine you play for a soccer team that is in the league finals. If your team wins the final game, you will be champions. The game is tied 0-0, with only a few seconds left. Suddenly, your team scores a goal, time runs out, and you are the winners! However, you noticed that your team had an extra person on the field. This violates the rules, and the goal should not count. What would happen if you tried to call this to the attention of the officials?  First, your teammates would not be happy with you, but more importantly, it would not matter, because if the referees did not see the violation, it is as if it never happened. So. nothing would change and you would still be the winners.
• Now, after the game your team goes to a nearby pizza restaurant to celebrate. You sit at a table with 4 others, and you each put in a twenty-dollar bill to buy pizza and beverages. You take the money to the counter and put in your table’s order. The total comes to $90. You hand the five twenties to the cashier and receive your change. On your way back to the table, you realize that instead of getting a ten-dollar bill as change, the cashier accidentally gave you a hundred-dollar bill. You can either go back and correct the mistake or pocket the hundred-dollar bill.
• In the first case, you do not need to try to tell the officials about the rule violation, because that is the way the game is played. If the officials do not catch it, you get away with it. But in the second case, morality requires you to give back the extra money. Why? Because the loss of the money will be of serious consequence to human welfare. The cashier might get fired, or the loss might be subtracted from the cashier’s paycheck, and even if the owner forgives the cashier and just admonishes him or her to be more careful in the future, the restaurant owner has lost $90.00
• The main objective of this class is to persuade you that the world of business is more like the pizza party example than the soccer game example. In other words, business should be conducted with the idea that business decisions have serious consequences to others. Those conducting business should not have the attitude that “anything goes” as long as you do not get caught.

 

Two Ethical Theories

Imagine you are a child on a playground. There is a piece of play equipment that can be dangerous if used improperly. For example, you might be told by your parent or other guardian that you should not play on the swings without holding on, or you shouldn’t climb up the slide in case someone else slides down and runs into you. You see one of your friends doing the thing you have been forbidden to do. If you say, “Don’t do that!” your friend will ask why. How will you reply?  If you say something like, “because my mom says so!” your friend could argue that he is not obligated to listen to your mother’s rules. But if you say, “because you could get hurt if you fall off” or “because someone might run into you coming down”, you will have offered a reasonable response. Your friend may or may not listen, but your answer would apply to anyone who was in that position.

In the same way, people often tell others what to do based on religion. “God says you can’t do that”, or “my religion’s sacred writings say that is wrong.”  In a world where some are believers in God and some are not, and among those who are there are a variety of different sacred writings, and among those who follow the same sacred writings there are vast differences in the way those writings are interpreted, justifying your words or actions based on religion is often a matter of appealing to an authority that someone else does not recognize. Note that there is a difference between following your own religious precepts and trying to impose them on others.

Similarly, people will try to justify their words or actions by saying that they are dictated by their culture or society. Certainly, difference styles of dress, ways of eating, and similar differences are not moral differences. People’s cultural differences should be respected. But what about moral differences?  If your society tells you that some human beings have fewer rights than others based on appearance or gender, that is just wrong, and no one can justify it based on culture.

What then, if not religion or culture, can we use to make moral arguments?  In the last reading, I mentioned “The Golden Rule”. Click here for many versions of this rule from different religions and ethical perspectives. (Links to an external site.)  It is an argument from analogy. In other words, if two things are alike in some relevant way, they can be assumed to be alike in some other way. For example, dogs give birth to live offspring and do not lay eggs. This makes them mammals. Cats also give birth to live offspring and do not lay eggs. Therefore, they are mammals as well. “The Golden Rule” states that we should treat other people the way we would want to be treated. The analogy is, “I am a human being and I don’t want to be injured or stolen from or lied to or enslaved. That person is also a human being, so he or she does not want to be injured or stolen from or lied to or enslaved.”

Still, we often have difficulty figuring out the right thing to do. A number of philosophers have come up with theories about how to determine right from wrong. We will examine a few of them here.

Utilitarianism

This theory, most famously associated with British philosophers Jeremy Bentham (1748-1832) and John Stuart Mill (1806-1873) and more recently by Australian philosopher Peter Singer (1946- ), states that what matters in determining right actions from wrong ones are the results or consequences of an action for anyone who might be affected by it.

The Principle of Utility is described by Bentham as “that principle which approves or disapproves of every action whatsoever. according to the tendency it appears to have to augment or diminish the happiness of the party whose interest is in question: or, what is the same thing in other words to promote or to oppose that happiness.”[i] Mill holds “that actions are right in proportion as they tend to promote happiness, wrong as they tend to produce the reverse of happiness. By happiness is intended pleasure, and the absence of pain; by unhappiness, pain, and the privation of pleasure. “[ii]

Put in plainer language, the right thing to do, according to Utilitarianism, is that action which will result in the greatest balance of happiness over unhappiness, for everyone involved, than any other action that might be taken. The point is not to obtain the greatest happiness for yourself alone, or for someone else alone. It is to create the greatest overall happiness. Certainly, we would want our elected leaders or business leaders to take more into account than just their own happiness or the happiness of their constituents or shareholders.

Deontology

German philosopher Immanuel Kant (1724-1804) opposed utilitarianism on the basis that it lacks a firm foundation upon which to ground morality. A particular action might be right in one case depending on the balance of happiness over happiness, but wrong in another case. For example, under utilitarianism, a circumstance might arise in which telling a lie would lead to benefitting the liar a little but harming the person lied to a great deal. Lying in that case would be wrong. But in another scenario, lying might benefit both the liar and the person lied to, in which case lying would then be right. Kant felt that human beings can easily deceive themselves as to the amount of happiness and unhappiness involved, and thus would be more likely to lie any time it benefits themselves.

Kant’s ethical theory is known as Deontology – the ethics of duty. For Kant, the following is true:

Morality is duty-based. Duty is something you are required to do whether you want to or not. Duties are obligations that must be fulfilled no matter the consequences.

Our will is our capacity to make decisions and act on them. A good will acts out of duty and is the only thing about a person that is absolutely good. All other things we think of as good – talents, dispositions, etc. can be used for good or bad purposes. For instance, being clever with words can be used to explain or to mislead. Being good with numbers can be used to make money legitimately or to cheat.

To act out of duty for Kant is to follow what he calls the Categorical Imperative. Categorical means without exception. Imperative means command. So, the Categorical Imperative is a command or rule that has no exceptions. In his writings he mentions several different descriptions, or formulations, of what he means by Categorical Imperative. Here are two:

• First Formulation– Act only according to that maxim (rule) by which you can at the same time will that it should become a universal law.

Ask yourself what general rule would describe what you are thinking about doing. If you cannot want it should be acceptable for everyone to do it under any circumstances, then you cannot make an exception for yourself or for any other reason. For example, say you are just about to take an important test and you did not have time to eat breakfast. You know you will do better on the test if you eat something first, but as you walk by the convenience store on the way to class, you realize you don’t have any money with you. You consider entering the store and pocketing an energy bar while the clerk is distracted. To apply the first formulation of the categorical imperative you would have to ask yourself whether you could want it to be universally accepted that it is right to steal from stores. Logically, you really could not, because if so, there would most likely be no stores, since the store owner would assume that everyone would steal. So, you cannot at the same time want it to be right to steal from stores and want there to be stores. Stealing is wrong without exception.

• Second Formulation– Act so that you treat humanity, whether in your own person or in that of another, always as an end and never as a means only.

To use something (or someone) as a means to an end it to use it as a tool to get what you want. I am using my laptop as a means to an end when I use it to type this information for you to read on Canvas. I used my car earlier as a means to an end when I drove it to the grocery store. My laptop would have no value to me if I had nothing I wanted to do with it. My car would have no value to me if I had nowhere to go.

Kant is telling us that people have value just because they are people. We should not exploit or manipulate them to get what we want. We should respect human beings because they can think for themselves and have an independent will. Remember that argument from analogy we call the Golden Rule. We would not want to be exploited or manipulated, so we should not exploit or manipulate others. For example, we should not give consumers false information about a product to get them to purchase it. We should not make a promise to someone in order to get them to do something for us when we have no intention of keeping the promise.

Criticisms of Each Theory

For many, including Kant, utilitarianism is not a good way to do ethics because it is too flexible. Any action might be acceptable if it fulfills the Principle of Utility. But what if violating the rights of a few people will result overall in more happiness than not violating their rights?  Does that make it right to violate them? Here is a thought experiment to illustrate this problem.

A hospital has a walk-in clinic for minor illness and injuries. Anyone can come in and see a doctor without an appointment. All the doctors who work at that hospital take turns seeing these patients. One day, a young man comes in with an injured big toe. The doctor who sees him happens to be transplant surgeon. She asks what happened to the toe, and the young man explains that he is on a mission to walk across the United States. He is a few months into his journey and his boots are getting thin. He kicked a rock, and split open his toe, which is red and throbbing. The doctor asks him why he is doing this, and he says it is just an adventure. His parents are deceased and he has no other family, so no one will need him while he is away. The doctor orders a blood test to confirm that the toe is infected and tells the young man he will need an injection of an antibiotic. The blood test reveals something amazing to the doctor!  The young man is the perfect donor candidate for 4 of her patients who need transplants. His corneas, lungs, liver, and kidneys would be a perfect match. (Yes, I know this is medically implausible but just play along). The doctor gives the young man an injection that causes his heart to stop. To others, it appears to be a heart attack. She then operates to remove his useful organs for transplant to her patients. She reasons that no one will miss the young man by his own admission, while four people plus their families and friends will be overjoyed by the patients getting their transplants. From a utilitarian perspective, it seems like her calculation is correct, but our instincts tell us this is very wrong.

Two criticisms of utilitarianism are

• It is too flexible
• It doesn’t take individual rights into account.

———

Kant tells his own story that his critics use against deontology. The first formulation of the categorical imperative makes it clear that lying is always wrong. There are no exceptions. One of Kant’s contemporaries countered that Kant could not possibly mean this, so Kant wrote an essay titled “On a Supposed Right to Lie from Altruistic Motives” to reaffirm that he was serious about there being no exceptions. He wrote,

the definition of a lie as merely an intentional untruthful declaration to another person does not require the additional condition that it must harm another, as jurists think proper in their definition …. For a lie always harms another; if not some other particular man, still it harms mankind generally, for it vitiates the source of law itself. ….. For instance, if by telling a lie you have prevented murder, you have made yourself legally responsible for all the consequences; but if you have held rigorously to the truth, public justice can lay no hand on you, whatever the unforeseen consequences may be. After you have honestly answered the murderer’s question as to whether this intended victim is at home, it may be that he has slipped out so that he does not come in the way of the murderer, and thus that the murder may not be committed. But if you had lied and said he was not at home when he had really gone out without your knowing it, and if the murderer had then met him as he went away and murdered him, you might justly be accused as the cause of his death. For if you had told the truth as far as you knew it, perhaps the murderer might have been apprehended by the neighbors while he searched the house and thus the deed might have been prevented. Therefore, whoever tells a lie, however well-intentioned he might be, must answer for the consequences, however unforeseeable they were, and pay the penalty for them even in a civil tribunal. This is because truthfulness is a duty which must be regarded as the ground of all duties based on contract, and the laws of these duties would be rendered uncertain and useless if even the least exception to them were admitted.[iii]

 So, the criticism against deontology is that it is too rigid and does not take into account our ability to determine relevant differences between situations.

———-

These are just two of many ethical theories, but the conflict between these two has been prominently featured in Western philosophical debate over the last 3 centuries. It is important to point out that in most cases, these quite different theories will result in the same answers. Punching your neighbor in the nose, cheating your customers, plagiarizing your academic work, etc. will be wrong using either the Principle of Utility or the Categorical Imperative, in all but a few extreme cases. And sometimes neither theory gives a completely satisfying result. In a short book called Utilitarianism – For and Against, co-author Bernard Williams gives the following example (which I paraphrase here to remove language acceptable to a white British philosopher 60 years ago, but much less so today):

 

Jim finds himself in the central square of a small village. Tied up against the wall are a row of twenty villagers, most terrified, a few defiant, in front of them several armed men in uniform. An armed man turns out to be the captain in charge. The captain questions Jim and establishes that he got there by accident while on a botanical expedition The captain then explains that the villagers are a random group of the inhabitants who, after recent acts of protest against the government, are just about the be killed to remind other possible protestors of the advantages of not protesting. However, since Jim is an honored visitor from another land, the captain is happy to offer him a guest’s privilege of killing one of the villagers himself. If Jim accepts, then as a special mark of the occasion, the other villagers will be let go. Of course, if Jim refuses, then there is no special occasion, and the captain will do what he was about to do when Jim arrived, and kill them all, after which he will conduct Jim to safety. Jim wonders whether, if he got hold of a gun, he could hold the captain and the rest of the soldiers at gunpoint to rescue the villagers, but it is quite clear from the set-up that this will not work: any attempt at that sort of thing will mean that all the villagers will be killed, and so will Jim. The men against the wall, and the other villagers, understand the situation, and are begging Jim to accept. What should Jim do?[iv]

Utilitarianism would direct Jim to shoot, therefore letting one man die instead of twenty. Deontology would direct Jim not to shoot, as murder is never acceptable under the categorical imperative. Williams calls this scenario “morally unthinkable”. There is no neat set of rules that gives us the answer to such an extreme scenario.

Nevertheless, the insight from Utilitarianism that we should take into consideration the happiness of others, as well as the insight from Deontology that we should take into consideration the rights of others, are both useful guides to morality.

Distributive Justice

Distributive justice refers to the just or fair distribution of the world’s goods.  Some people have more money than others.  Some countries are poorer than others.  There are people with more power, or freedom, or opportunities than others.  The study of distributive justice looks at the ways these tangible and intangible goods are distributed among countries and among people, and whether the current methods should be changed.  We will look first at

• 3 definitions of justice
  • Justice may mean fairness. Are the world’s goods distributed fairly?
  • Justice may mean equality. Are the world’s good distributed equally?
  • Justice may mean desert. Does everyone get what they deserve?  Does everyone deserve what they get?
• 5 possible methods of distribution
  • Each person should get what is fair. But who decides?
  • Each person should get an equal share. But does everyone need or want the same amount?
  • Each person should get what he needs. But shouldn’t we have to work for what we get?
  • Each person should get what he earns. But what if some are more able because of their natural talents and abilities or childhood opportunities to earn?
  • Each person should get back in proportion to what they contribute to society. But again, who decides which contributions are worth more than others?
• 3 theories of justice
  • Utilitarianism: Utilitarians want an economic system that will bring more happiness to society than any other system.
  • Libertarianism: Libertarians value liberty, or personal freedom, above all. Everyone should be allowed to pursue their own happiness without interference from anyone else.
  • Egalitarianism: Egalitarians value a society based on equality of opportunity for all members.

Now we will look at the ideas of 3 philosophers – one for each of the 3 theories of justice.

Peter Singer – Utilitarian Philosopher

In his book, Practical Ethics[i], Singer tells the following story:

The path from the library at my university to the Humanities lecture theatre passes a shallow ornamental pond. Suppose that on my way to give a lecture I notice that a small child has fallen in and is in danger of drowning. Would anyone deny that I ought to wade in and pull the child out? This will mean getting my clothes muddy and either cancelling my lecture or delaying it until I can find something dry to change into; but compared with the avoidable death of a child this is insignificant.

A plausible principle that would support the judgment that I ought to pull the child out is this: if it is in our power to prevent something very bad happening, without thereby sacrificing anything of comparable moral significance, we ought to do it. This principle seems uncontroversial. It will obviously win the assent of consequentialists; but nonconsequentialists should accept it too, because the injunction to prevent what is bad applies only when nothing comparably significant is at stake. Thus the principle cannot lead to the kinds of actions of which non-consequentialists strongly disapprove—serious violations of individual rights, injustice, broken promises, and so on. If a nonconsequentialist regards any of these as comparable in moral significance to the bad thing that is to be prevented, he will automatically regard the principle as not applying in those cases in which the bad thing can only be prevented by violating rights, doing injustice, breaking promises, or whatever else is at stake. Most non-consequentialists hold that we ought to prevent what is bad and promote what is good. Their dispute with consequentialists lies in their insistence that this is not the sole ultimate ethical principle; that it is ethical principle is not denied by any plausible ethical theory.

Nevertheless, the uncontroversial appearance of the principle that we ought to prevent what is bad when we can do so without sacrificing anything of comparable moral significance is deceptive. If it were taken seriously and acted upon, our lives and our world would be fundamentally changed. For the principle applies, not just to rare situations in which one can save a child from a pond, but to the everyday situation in which we can assist those living in absolute poverty. In saying this I assume that absolute poverty, with its hunger and malnutrition, lack of shelter, illiteracy, disease, high infant mortality, and low life expectancy, is a bad thing. And I assume that it is within the power of the affluent to reduce absolute poverty, without sacrificing anything of comparable moral significance. If these two assumptions and the principle we have been discussing are correct, we have an obligation to help those in absolute poverty which is no less strong than our obligation to rescue a drowning child from a pond. Not to help would be wrong, whether or not it is intrinsically equivalent to killing. Helping is not, as conventionally thought, a charitable act which it is praiseworthy to do, but not wrong to omit; it is something that everyone ought to do.

This is the argument for an obligation to assist. Set out more formally, it would look like this.

• First premise: If we can prevent something bad without sacrificing anything of comparable significance, we ought to do it.
• Second premise: Absolute poverty is bad.
• Third premise: There is some absolute poverty we can prevent without sacrificing anything of comparable moral significance.
• Conclusion: We ought to prevent some absolute poverty.

[omitted section]

Our affluence means that we have income we can dispose of without giving up the basic necessities of life, and we can use this income to reduce absolute poverty. Just how much we will think ourselves obliged to give up will depend on what we consider to be of comparable moral significance to the poverty we could prevent: color television, stylish clothes, expensive dinners, a sophisticated stereo system, overseas holidays, a (second?) car, a larger house, private schools for our children. … For a utilitarian, none of these is likely to be of comparable significance to the reduction of absolute poverty; and those who are not utilitarians surely must, if they subscribe to the principle of universalizability, accept that at least some of these things are of far less moral significance than the absolute poverty that could be prevented by the money they cost.

Singer says that contributing to charity is not just something nice for us to do.  Instead, he says we are morally obligated to give our excess wealth to those living in poverty, since the sacrifice we make may lead to some unhappiness, but that unhappiness will be far outweighed by the suffering we will relieve.

What do you think? Is Singer’s argument persuasive?

Robert Nozick – Libertarian Philosopher

In Nozick’s most influential book, Anarchy, State and Utopia[ii], he offers the following thought experiment:

Suppose that Wilt Chamberlain is greatly in demand by basketball teams, being a great gate attraction. He signs the following sort of contract with a team. In each home game, twenty-five cents from the price of each ticket goes to him. The season starts, and people cheerfully attend his team’s games; they buy their tickets, each time dropping a separate twenty-five cents into a special box with Wilt Chamberlain’s name on it. They are excited to see him play; it is worth the total admission price to them. Let us suppose that in one season one million persons attend his home games, and Wilt Chamberlain winds up with $250,000, a much larger sum than the average income and larger even than anyone else has. Is he entitled to this income?

 There is no question about whether each of the people was entitled to the control over the resources they held. Each of these persons chose to give twenty-five cents of their money to Wilt Chamberlain. They could have spent it on going to the movies, or on candy bars…. But they all, or at least one million of them, converged on giving it to Wilt Chamberlain in exchange for watching him play basketball.

 If the people were entitled to dispose of the resources to which they were entitled, didn’t this include their being entitled to give it to, or exchange it with, Wilt Chamberlain? Can anyone else complain on the grounds of justice?

 Nozick’s point is that when the government forces people to give up part of their income in the form of taxation so that the money can be used for the benefit of others, the government is interfering in the ability of people to live their lives as they wish.  He equates taxation to forced labor, in that when we earn $15.00 for an hour of labor but have to give $1.00 of that to the government, we have been cheated out of $1.00 worth of our labor.

What do you think?  Do you see any flaws in this argument?

 

John Rawls – Egalitarian Philosopher

 This story works better when we aren’t social distancing in the midst of a pandemic, but bear with me.

Tomorrow at 3pm, all students in my class should meet by the fountain on the Tower Lawn.  You will see that I have a spaceship parked there.  We will all get on the spaceship and go to a distant planet I have picked out.  We won’t be coming back (not enough fuel) and we won’t be able to communicate with Earth.  Once there, we will begin a new society.

 On the way to our new planet, we will have a meeting, during which we will choose the principles which will govern our new society.  We’ll get to start from scratch, no old rules will apply.

 As the meeting starts, I will push a button on the spaceship.  This will release a chemical into the atmosphere that will have the following effect:  We will all forget who we are, our gender, appearance, talents, abilities, weaknesses, disabilities, etc.  Don’t worry – the chemical is otherwise harmless and will wear off in a few hours.

While under the influence of this chemical, I predict that we will choose these two principles for our new society:

• Each person will have equal rights
• If there are social and economic inequalities, they must be to the greatest benefit of the least advantaged

 Why would we pick these principles?  It would not necessarily be because they sound nice or we are concerned about other people.  Instead, it would be because we don’t want to be disadvantaged.  If we don’t know our gender, would we pick a principle that says that women must be the servants of men?  If we don’t know our appearance, would we pick a principle that says people of color should have fewer opportunities for advancement than white people?  No, we’d pick principles that would give us the best chance for a life with the same rights as anyone else. 

In case you haven’t already guessed, I really don’t have a spaceship.  Political philosopher John Rawls, in his book A Theory of Justice, describes his conception of justice as follows:

Rawls’s Just Society[iii]

• The Original Position
  • Imagine that those who engage in social cooperation choose together, in one joint act, the principles which are to assign basic rights and duties and to determine the division of social benefits.
• The Veil of Ignorance
  • No one knows his place in society, his class position or social status, nor does anyone know his fortune in the distribution of natural assets and abilities, his intelligence, strength, and the like.
• Two Principles
  • Each person is to have an equal right to the most extensive total system of equal basic liberties compatible with a similar system of liberty for all.
  • Social and economic inequalities are to be arranged so that they are both:

(a) to the greatest benefit of the least advantaged, consistent with the just savings principle, and

(b) attached to offices and positions open to all under conditions of fair equality of opportunity.

 

Another way to look at it is this.  You and five friends have a cake to share.  You have the knife, so your job is to cut the cake into six slices.  The other five will take theirs, and then you will take the one remaining.  In that case, wouldn’t cutting the cake into equal slices result in a larger slice for you than if you sliced it unequally?

Rawls is not talking about equality in the sense that everyone has exactly the same amount of stuff.  Instead, he believes we should all have equality of opportunity.  No one should be barred from trying to obtain happiness (life, liberty, property) because of gender, ethnicity, place of origin, etc.  We don’t all want the same thing.  For example, I don’t want to be president, but I shouldn’t be barred from running for president because I am female.

Neither is Rawls saying that we should throw out all the rules and institutions of society and start over with new ones.  That would be impossible, and besides, we don’t really have that chemical which will impose the veil of ignorance on us when we are choosing.  Instead, Rawls believes we should examine our existing rules and institutions.  If we determine that people in the original position behind the veil of ignorance would not have chosen one of those existing rules, maybe that rule should be changed.

In a Facebook post last month, I quoted Joe Biden’s 4^th of July tweet.  He wrote,

Our nation was founded on a simple idea: We’re all created equal. We’ve never lived up to it — but we’ve never stopped trying. This Independence Day, let’s not just celebrate those words, let’s commit to finally fulfill them. Happy #FourthOfJuly!

Corporations

The most prevalent type of business organization in the U.S. is the corporation.  Businesses can also be sole proprietorships (one owner) or partnerships (a contract entered into among partners), but we will concentrate for now on corporations.

What is a corporation?

It is “a thing that can endure beyond the natural lives of its members and that has incorporators who may sue and be sued as a unit, and who are able to consign part of their property to the corporation for ventures of limited liability.”

Let’s take that apart.

A corporation can “endure beyond the natural lives of its members” because the original investors may sell or give away their shares in the corporation but the corporation remains.

“Incorporators …may sue and be sued as a unit” means that the business itself can sue or be sued, rather than the individual investors.

Because the incorporators “are able to consign part of their property to the corporation for ventures of limited liability”, they do not risk all of their money when the invest in the corporation, just the amount they choose to invest.

A corporation must be recognized as such by a government entity.  It is a great advantage to the investors to be able to limit their liability, therefore not risking their entire wealth on a potentially risky new business.

After the U.S. Civil War, the Congress passed the 14^th Amendment to the Constitution.  It states in section 1:

All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the state wherein they reside. No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any state deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.

The point of this was to protect the rights of persons who had been enslaved.  However, it soon occurred to attorneys to argue that the amendment also applies to corporations.  Why?  Because by giving them the legal ability to “endure beyond the natural lives of their members” and “sue and be sued as a unit”, it was argued that corporations are persons.  Certainly. they are not human beings, but they have been recognized as artificial persons.

The 1^st amendment to the U.S. Constitution guarantees the right of free speech.  In 1978, the Supreme Court agreed that this applies to corporations as well, in the Case of First National Bank of Boston v. Belotti.