Why be moral in business a rawlsian approach

WHY BE MORAL IN BUSINESS?A RAWLSIAN APPROACH TO MORAL MOTIVATION

Richard H. Toenjes

Abstract: This article puts forth the thesis that the contractualist ac-count of moral justification affords a powerful reply in businesscontexts to the question why a business person should put ethicsabove immediate business interests. A brief survey of traditionaltheories of business ethics and their approaches to moral motivationis presented. These approaches are criticized. A contractualist con-ception of ethics in the business world is developed, based on thework of John Rawls and Thomas Scanlon. The desire to justify ourchoices in terms that others can be reasonably expected to accept,or at least in terms that others cannot reasonably reject, is identifiedand differentiated from other accounts of motivation. It is this desirethat constitutes the core motive to be moral in business on thecontractualist conception. Implications of this contractualist concep-tion for the theory and practice of business ethics are then discussed.

/. Introduction

T he issue of moral motivation—Why be moral in business?—spans both theempirical and the philosophical work in business ethics. This overlap might

not appear obvious, for it is commonly assumed that matters of the require-ments of morality fall in the area of normative philosophy, while questions ofthe motivation to do what is moral are addressed by empirical science.' Thisdichotomy does exist when the philosophical conception of morality in busi-ness follows the paradigms of stakeholder theory, or virtue theory, or thetraditional paradigm of applying moral principles (utility, rights, justice) in busi-ness settings. The argument in this paper is that in a contractualist paradigm ofbusiness ethics, philosophic issues and motivational issues coalesce into onefocal concern. This is the concern to justify actions to others in terms that allcan accept. As we shall see, the desire to justify involves more than the psycho-logical question of whether individuals who tend to think in terms of agreementsand contracts will be less likely to act unethically (Dunfee 1995). The link be-tween the contractualist conception of ethics and the motivational desire to justifyis essential, not merely contingent. To situate the issue of motivation, 1 will beginwith a brief survey of the variety of philosophic approaches to business ethics.

© 2002. Business Ethics Quarterly. Volume 12, Issue 1. ISSN 1052-150X. pp. 57-72

58 BUSINESS ETHICS QUARTERLY

We can distinguish two fundamentally different philosophic approaches inbusiness ethics. The more traditional one involves the application of principles,rules, and maxims to cases. These principles might be utilitarian in nature, orthey might be deontic principles of rights and justice. Commonly all three prin-ciples are used as standards applicable to cases for the sake of directing orcriticizing conduct. Manuel Velasquez's Business Ethics: Concepts and Casesis an excellent example.

The other approach seeks to demonstrate that the goals of business includeor somehow coincide with the goals of ethics. There are several varieties of thisapproach. One (call it the Hobbesian variant) demonstrates the mutual advan-tages gained in cooperation defined by ethical principles. David Gauthier'sMorals by Agreement works out the details of this Hobbesian variant. Anotherapproach is formulated by LaRue Hosmer in terms of the trust, commitment,and effort companies need for long-term success (Hosmer 1994). Another varietyexamines the nature of community and the human good achieved as members ofthe community. This communitarian variant demonstrates how ethical businessis good business when seen from the perspective of the whole, virtuous personand the whole community. Robert Solomon's Ethics and Excellence and TheNew World of Business and Edwin Hartman's Organizational Ethics and theGood Life illustrate this variant.

There are obvious problems with either approach.^ The problem central tothe concern of this paper is the question of motivation. Why should a personmoved by business interests be moved also by considerations of utility, rights,or justice? Alternatively, on the mutual advantage or the communitarian mod-els, why should decision makers take the perspective of long-term mutualadvantage or the perspective of the whole good of persons as members of acommunity when immediate interests so apparently lie in a different direction? Ibelieve the truly hard cases in business ethics are dilemmas of this kind, ones inwhich business interests and ethical interests do not coincide. In this paper I willargue that contemporary versions of social contract theory shed new light on theancient question: Why be moral when one's interests appear to lie elsewhere?

This ancient problem is presented in Plato's fable of Gyges Ring. Gygesfinds a magic ring that allows him to become invisible and thus avoid sufferingthe legal or social consequences of his actions. Of course, as we know, Platoshows how Gyges would not in fact achieve happiness in this way, thus demon-strating that morally correct and virtuous action is after all in Gyges' best interests.Accordingly, Plato is advocating a version of the communitarian approach to eth-ics mentioned above. The contemporary social contract theories developed byJohn Rawls and Thomas Scanlon take a radically different approach to the moti-vational question. An examination of this contractualist alternative will shednew light on this ancient motivational question, one that still grips businesspersons and ethicists today.

WHY BE MORAL IN BUSINESS? 59

//. The Problem of Moral Motivation

It will help fix ideas if we survey the accounts of moral motivation assumedin the traditional approaches in business ethics. The communitarian and themutual advantage varieties see the goals of business as included in or somehowcoinciding with the goals of ethics. Thus the answer to the question, why bemoral in business, is essentially a demonstration that successful business is ethicalbusiness. Ethics in business is seen as a "win-win" proposition.

A major weakness of this approach is that it begs the motivational questionin just those circumstances where it is in most need of an answer. These aresituations in which it appears that business interests and ethical interests con-flict. Ford Motor's decisions regarding the Pinto's fuel tank or Nestle's marketingof infant formula in the third world are situations in which business interestsobviously appeared to conflict with ethical interests. Insisting to Ford or Nestlethat their long-term advantage or their flourishing as members of the commu-nity require putting ethics ahead of immediate profit is to assume that Ford orNestle are ready to evaluate matters from the perspective of long-term advan-tage or the total community good. Furthermore, it is to assume that Ford orNestle were simply mistaken in their calculation of their own interests or goals.̂And it assigns to empirical psychology the task of motivating people to con-sider the full range of the consequences of their actions.

The question of moral motivation is more complex if we approach businessethics as the application of principles to cases. Utilitarian concerns are differentfrom deontic concerns with rights or justice, and their accounts of moral moti-vation are also different. Utilitarianism identifies individual human well-beingas the fundamental moral fact. In this way it shares a root assumption of thecommunitarian and mutual-advantage models, which also take human well-beingas the fundamental moral fact. Utilitarianism can use the normal human senti-ments of sympathetic identification with the good of others to explain whyindividuals are motivated by a concern for the good of other persons. But what-ever psychological account of motivation it uses, utilitarianism as a moralprinciple aims at the total good, and hence there would have to be a motivationto favor increases in aggregate well-being, regardless of how well-being is dis-tributed. This is a highly abstract and impartial empathetic identification, andvery different from the normal sentiments of sympathy or empathy we feel to-ward others. In relying on an altruistic or impartial empathy with the well-beingof all, utilitarianism begs the question of why be moral in business. This kind ofimpartial empathy is already a moral concern, and one that does not address thequestion of why be moral when business interests lie elsewhere. And as is thecase with any consequentialist approach, it assigns to empirical psychology thetask of instilling the empathy or sympathy required to motivate ethical behavior.

Deontic concerns with rights or justice, when these do not reduce to the utili-tarian concern with the good of all, see moral motivation differently. Deonticconcerns see motivation as some kind of special intuition or perception. John


Locke is a good example. In explaining basic natural rights he states that reasonitself "teaches all mankind, who will but consult it, that being all equal andindependent, no one ought to harm another in his life, health, liberty, or posses-sions."* Kant's notion of duty or obligation might also be seen as appealing to akind of special intuition or apprehension of moral oughtness. This intuition isunderstood as containing an intrinsic or self-evident significance that consti-tutes its motivational force.^ The weakness with any such approach in businessethics is again tbat of begging the question. Why should a person moved bybusiness interests also be moved by such deontic concerns?

A different and in some ways a better answer to the question, why be moral,can be found in the contract theories developed by Rawls and Scanlon. Here wecan isolate another kind of human interest, one different from the core utilitar-ian desire for human well-being, and one different from the desire to flourish asa member of a community or to pursue rational self-interest in mutual coopera-tion. It is a desire that does not presuppose the deontic concern with rights orjustice. The contractualist desire is a desire to cooperate with other personsaccording to principles that all can accept. It is a desire to be able to justify ourconduct and the principles governing our conduct. Further, it is a desire to jus-tify conduct to others in terms that we can reasonably expect them to accept, orat least in terms that they cannot reasonably reject. The desire to justify is notdefined in terms of human well-being at all; it derives from another aspect ofmoral personality.^ Accordingly, the contractualist approach to moral motiva-tion is essentially different from the approaches just surveyed.

///. The Desire to Justify

A. Initial Characterization

The desire to justify is quite common and familiar. It is involved in attemptsto make excuses ("Don't blame me, I was just...") and attempts to get others tocooperate ("Let's work together so we can...").^ In business the desire to justifyappears in such expressions as "The market demands it," or "It's the way thingsare in the business world, the competition is doing it," or "It's legal and withinour rights," and so on. Classically the desire to justify business conduct andinstitutions was seen in "What's good for General Motors is good for America,"or "The social responsibility of business is to make a profit," or "In seeking hisown gain, each is led as if by an invisible hand to enhance the good of all." The"trickle-down effect" is an attempt to justify disparities of income and wealth.The desire to justify is seen in the lengths to which people will go to avoidadmitting the unjustifiability of their actions and institutions, including attemptsto discredit or even dehumanize those who might reasonably reject the justifica-tion offered, as is often done in war, colonializing, and slavery. The function ofexclusive clubs is not limited to "networking" with the influential, but includesthe desire to justify our conduct, at least to some who we expect will agree.


The widespread appeal of "The Golden Rule" can be seen as an expressionof the desire to justify our actions to others in terms they could not reasonablyreject.̂ We often criticize someone's treatment of ourselves or others with thecomplaint "But put yourself in my or their position." The suggestion is that it isnot reasonable to expect me or them to go along, and that you would readily seethe unreasonableness if you took another perspective. The rebuttal "If you lookat it from my perspective" is suggesting it is not reasonable to reject my action.Simply put, the desire to justify is the desire to look others straight in the eyesand say, "It is reasonable for you to accept what I'm doing (or the scheme thatjustifies it), or at least it is not reasonable for you to reject it."

Of course, it is also common to consider consequences for human well-beingwhen putting ourselves in the places of others, or when otherwise justifying ouractions. We might even suppose that there could be nothing other than the goodfor persons that could serve as the basis of justification. The unique character ofthe contractualist desire is that it does not reduce to rational concerns with well-being, but instead intends the reasonableness or fairness of an action orarrangement.

B. Analysis of the Desire—The Reasonable and The Rational

1. The desire to justify can be phrased as the desire to give reasons that allcan reasonably be expected to accept, or as the more limited desire to give rea-sons that none can reasonably reject. The two formulas are not identical. In agroup that includes some altruistic persons motivated by concerns of the com-mon good, we might expect all to accept an arrangement that disadvantagessome (the altruists) for the sake of the greater good of all. But in that situation,it might still not be unreasonable for the disadvantaged to reject the arrange-ment (Scanlon, 1982, pp. 111-112). This difference need not detain us herebecause it will not substantially alter most conclusions we reach in applicationsto business ethics.

2. The desire to justify, to give reasons that all can reasonably be expected toaccept, is further specified by the character of those reasons and the criteria oftheir acceptability (or their non-rejectability). The desire to justify one's actionsis not a desire to manipulate others or to gain their acquiescence through anymeans whatsoever, or with any kind of reason whatsoever. Threats and promisesmight produce acceptance in the sense of acquiescence; but unless these appealto persons as free, equal, rational, and reasonable, the acquiescence is not rea-sonable agreement. And not everything one might offer or take as a reason (e.g.,one's self-interest or private religious beliefs, even false beliefs and illogicalinferences) constitutes a reason that all can reasonably be expected to accept.When attempting to justify our actions in terms we can reasonably expect othersto accept, we make appeal to impartial considerations, to factual and objectivematters, and to a whole range of publicly accepted agreements about what con-stitutes justification, and what distinguishes justification from manipulation.


coercion, or uninformed and irrational thinking. In a word, we assume and in-voke the whole network of ideas and values operating in social arrangementswhere free persons reciprocally interact in ways they accept as rational, reason-able, and equal agents. Here is not the place to discuss fully the criteria ofreasonable acceptability (or non-rejectability) of attempts to justify. We can anddo, with some degree of clarity and confidence, make the distinction betweenreasonably acceptable justifications and other forms of gaining acquiescence.The basis of the distinction and the moral force of contractualist conception ofmotivation being developed here derives from the core idea of contractualism,the notion of reciprocal cooperation among persons who seek to treat one an-other as free, equal, reasonable, and rational.^

3. In seeking to justify an action I say to others "It is not reasonable for youto reject it." This is not to say that others have no reason to reject it. Any interestto the contrary of what I propose is a reason to reject my action. Environmental-ists have a reason to reject policies that allow harvesting timber. The timberindustry has a reason to reject restrictive laws. The latest casualties of a corpo-rate "down-sizing" have a reason to reject that plan. And the corporation has areason to reject claims of wrongful dismissal, or claims that an alternative butperhaps less profitable plan should be implemented. In seeking to justify, weare not assuming there are no reasons on the contrary. But we are saying it isreasonable to accept, or not reasonable to reject, the action (policy, institution)in question. In other words, in seeking to justify we are not saying that thoseopposed are irrational. We are saying they are unreasonable if they reject thejustification. (Of course, those opposed may be reasonable themselves, holdingjustifications for other decisions, or other justifications. There can be situationswhere more than one course of action is reasonable.) The distinction betweenreasonableness and rationality will be taken up below (III-7). But here it will behelpful to illustrate how the contractualist conception and the desire for reason-able justifications can motivate and direct business behavior.

Any number of widely publicized cases illustrate the force of the contractualistconception of reasonableness and its suitability as an approach to the why bemoral question. Nestle's practices of marketing infant formula in third-worldcountries have changed significantly in light of criticisms of the unreasonable-ness of their practices. Obviously it would not be reasonable to expect vulnerablemothers and their infants to agree with marketing practices that endangered theirhealth for the sake of Nestle's profit. Under pressures from an internationalboycott of its products and from agencies such as the World Health Organiza-tion, Nestle has changed its practices to include information on the safe use offormula, the advantages of breast feeding over formula, maternal nutrition andpreparation for safe breast feeding, and many others. Nestle set up an auditcommission to monitor its own conduct. And while normal business practice isto increase marketing in growth markets such as the third world. Nestle is de-creasing its efforts to sell formula in those markets.'o To be sure, there are manyreasons and motives operational in Nestle's behavior. No doubt arguments about


rights and justice, about long term profitability, public relations, etc. all weremade. My claim is that the sheer unjustifiability of their practices offers a coher-ent account of Nestle's change. Those earlier practices fail the test of justifiabilityin terms that all can reasonably be expected to accept, or that none can reason-ably reject. Persons on all sides easily understand how reasonable persons canreject Nestle's practices and its earlier attempts to defend them. In makingchanges, presumably Nestle itself came to see the unjustifiability of its earlierways. Whatever might be said about public relations, long term profitability,etc.. Nestle now behaves in a more reasonable way; it either is or can coherentlybe understood as being moved by the contractualist desire to justify its actionsin reasonable terms.

Another example is the recent changes in Nike's use of cheap Asian laborand child labor in sweatshop conditions to produce its footwear. As in the caseof Nestle, after public pressures brought in the press, including ridicule in thecomic strip Doonesbury, Nike has had a change of heart. It now requires that itsoverseas producers meet U.S. health and safety standards, and it has agreed toprovide outside inspectors access to its Asian factories, things it had previouslyresisted.'̂ The decision reflects the need for public acceptance. And the accep-tance involves more than public relations and image management. It involvesthe acceptability involved in the contractualist conception of business ethicsbeing developed here. Prior to its change of heart, Nike quite apparently failedthe basic test of the contract view; it was not reasonable to expect others toaccept its practices and its rationalizations. When such unreasonable practicescome to the light, public acceptance and even sales volume can decrease. Thecontractualist approach articulates and explains the dynamics of scenarios suchas the Nike and the Nestle cases.

4. The desire to justify does not reduce to the basic utilitarian concern forhuman well-being. In seeking to give a reason I believe all can reasonably acceptI am not essentially concerning myself with the well-being of others. This canbe seen in Scanlon's example of a wealthy person who is moved by the horriblesuffering of children in some impoverished third-world country (1982, p. 116).Concern with their suffering is, of course, concern with their well-being. Butthere is an additional fact. The wealthy person is also moved by the thought thatthe children could be helped at very little cost to the wealthy (assuming, obvi-ously, that this might be true). This additional motive, "I could help at so littlecost to me," is not aimed at the welfare of the children nor the aggregate well-being of all. This additional motive is more clearly evident in examples thatinclude deontic considerations. For example, it is nearly impossible to see howany degree of economic advancement for an underdeveloped country could jus-tify the imposition of "sweat shop" working conditions on children that damagetheir health and leave them as bad off as they were under less prosperous condi-tions. The sentiment that "there is no excuse, no justification" in these examplesrefers to the comparative inequalities of the situation and is not explainable onexclusively utilitarian grounds, on the balancing of outcomes or comparison of


alternative aggregate goods. The source of this additional motive is the desire tojustify my actions to them. (We might suppose the desire is actually aimed atavoiding potential criticism of our insensitivity or selfishness. While that mightbe the immediate occasion of the desire, its object like the grounds of the poten-tial criticism itself is the comparative inequalities of the situation.)

5. The desire to justify is not limited to cases where the appeal is to mutualadvantage (to "win-win" situations). This is seen in the fact that the desire doesnot cease when some have no bargaining advantage, as in the case of the suffer-ing children just mentioned. It is also seen, for example, in the desire to justifya corporate down-sizing to persons being laid off who, by definition, have noth-ing more to offer the firm. We might suspect in such a case there remains amutual advantage in concluding the matter amicably and without embarrassingscenes. This would be a mistake. For those being terminated might be docileand unassertive persons who will leave quietly and without resentment uponsimply being told without explanation to do so. The manager might expect suchpersons to accept the termination decision without explanation. But we cannotsay that those being laid off cannot reasonably reject the absence of a justifica-tion. And if it were possible to give a justification at very little cost, thiscomparative fact would ordinarily strengthen the motivation to do so. The de-sire involved in this additional motivation is not aimed at the well-being of othersand not limited to their bargaining advantage. It is a different desire.

It seems clear that we do have a desire to justify a decision to someone with"nothing to offer," with no bargaining advantage, not even a threat advantage ofmaking a scene or expressing resentment. In the example of employees beinglaid off, a common form of justification would be to invoke the doctrine of"employment at will." Just as employees can leave at will, so too employers canterminate at will. Such an attempt illustrates the desire to justify, of course. Butperhaps the desire is thought to come from some recognition of other's rights orempathy with other's feelings. No doubt often it does; but it need not. For we donot need to be concerned with others' rights or well-being when we are movedby the thought that a justification could be given (if it could) at very little cost tous. Or it might be supposed that the desire to justify comes from a recognitionthat even where there is no bargaining advantage in the particular scheme ofcooperation (e.g., a corporate downsizing), there remains a larger social schemein which bargaining advantages still exist. This would be a mistake. For theobjections being made within the confines of the schemes of mutual advantagejust considered can be raised at the level of those larger schemes as well.

6. The desire to justify does not reduce to the desire to live and flourish as amember of a community (unless the community is essentially defined in termsof principles that all can reasonably accept).'^ This is because the general basicdesire to belong is not limited to or necessarily governed by the idea that thecommunity form is one that all can reasonably accept, A communitarian schemerecognizes persons as rational, as having a good that they can see is achievedwithin the community. The community is defined by its ends, the flourishing of


the members, and of the association itself. Therefore, persons who reject thecommunity form or the duties and privilege associated with their roles within itare, on the communitarian view, irrational. I think we would all be uneasy withsuch a view. For it amounts to saying to any who reject a decision either "Youare irrational" or "You are not a member of the community at all." Consider, forexample, textile workers whose jobs are being eliminated or moved to a third-world country. Can we say with a straight face that they are irrational if theydisagree? That they somehow fail to understand their own good or the good ofthe global textile community? Alternatively, must we say that they are no longera member of the community? That their good is not bound up with the commu-nity to which the former employer still belongs? The desire to justify persistseven where the limits of communitarian thinking have been reached.

7. At the most general level of description, the desire to justify is not limitedto considerations of the rationality of the parties involved. The desire does notappeal to others as rationally self-interested individuals (the mutual advantagemodel). It does not appeal to others as seeking the good of community member-ship (the community model). Nor does the desire to justify appeal to the altruisticconcern with human well-being (the utilitarian model). Indeed the desire to jus-tify persists in circumstances where persons have reasons to reject an action, incircumstances where there are reasons to the contrary. In fact, it is exactly suchcircumstances that constitute the tough cases in business ethics. These are situ-ations where there are reasons on all sides of the issue.

We might think that there must be some basic flaw in the account of thedesire to justify being developed here. For we might think that somehow ratio-nality must be at the root of the desire. What else but human reason could possiblyaccount for attempts to justify our actions and our arrangements? The history ofethical theory just is, we might suppose, the history of attempts to derive prin-ciples to govern ourselves from the concept of reason itself. From Plato throughAristotelian eudaimonistic conceptions, to Hobbesian and game-theoretic accountsof mutual advantage, and to utilitarian accounts of human well-being, the prin-ciples that govern our actions are derived from some conception of the humangood known to reason. In all such theories the powers of rationality are associ-ated with individuals' conceptions of their good. Even deontic theories based ona special intuition of rights and justice can be seen as attempts to derive moral-ity from reason itself. The powers of rationality involve the ability to have agood, to know it, or to construct it. Rationality also involves the powers of judg-ment and deliberation in seeking one's own interests and ends. Rationality appliesto how these ends are given priority and to the choice of means toward those ends.

The Rawls-Scanlon account of the desire to justify being developed herestands in sharp opposition to such attempts. The contractualist notion guidingthe present account does not derive the reasonable from the rational. Reason-ableness is a different capacity. As reasonable, persons seek to cooperate withothers on terms that all can accept, or at least on terms that none can reasonably


reject. It is a desire to propose and to honor principles and standards specifyingterms of cooperation.'^

By way of contrast, irrational persons are ones who do not know their owngood or who somehow fail to have a coherent notion of the priorities of theirfinal ends. Or perhaps they are irrational in failing to pursue effective means totheir ends, or in choosing less probable means over more probable ones. Unrea-sonable persons, on the other hand, are ones who engage in (or find themselvesin) cooperative schemes but are unwilling to honor or even to propose standardsfor specifying terms of cooperation. While they may pretend to be reasonable,they stand ready to violate the terms of cooperation if circumstances permit (ascircumstances do permit in the case of Gyges). Unreasonable persons may in-deed be rational. Free-riders and hypocrites may indeed be rational in their pursuitof their interests and ends. Persons who lack any desire to justify their actionsto others may indeed be rational. Only if it is necessary to derive the reasonablefrom the rational must we conclude that all rejections or pretences of justifica-tion are necessarily irrational. But such rejections or pretences are necessarilyunreasonable.

The fact is that we cannot expect that conscientious and rational persons willultimately agree on the same conclusion. And the desire to justify does not de-pend on such an idealistic assumption. The real world of business is not thatneatly rational, but it does contain within it the desire to justify. It is unrealisticto suppose that all of our differences are rooted in ignorance and perversity, orelse in unrestrained rivalries for power, status, and economic gain.'' 'And such asupposition is not necessary, if the present account of the desire to justify iscorrect. Furthermore, the assumption that our differences are rooted in igno-rance and perversity is a main source of the mutual suspicion and hostility wesometimes see in ethical disagreements in business. In the truly tough cases, itis unreasonable to expect all rational persons to agree, and to dismiss disagree-ment as irrationality.'^ It is quite common to confront a situation where we knowthe parties will never agree, where sincere and rational persons will disagree. Insuch situations, however, the desire to justify persists. It is the desire to seek asolution that none can reasonably reject, even if as sincere rational agents theirunderstanding of their own good (mutual advantage), the community good, thegood of all (utilitarianism), or their deontic intuition does not result in a single

IV. Implications and Applications

I argued in section III that the desire to justify exists and that it is distinctfrom the basic motivational desire envisioned by utilitarian, communitarian, andmutual advantage models of ethics as applied to business. Here I turn to thequestion of what difference the desire makes, how the contractualist view ap-plies to business ethic, and what advantages it offers.


1. Contractualism is more realistic. The hard cases in business ethics aredilemmas in which business interests are in tension with ethical interests. Agood business decision is not necessarily good for all, not necessarily "win-win" all the way around. Utilitarian, mutual advantage, and communitarianconceptions of ethics deny that such hard cases actually exist, explaining themas failures of reason, relegating them to matters of ignorance or insincerity. Thecontractualist conception, on the contrary, is compatible with the existence ofsuch hard cases. It allows business interests (and all other individual and com-munal goods) to function in decision-making along with the interest to justifydecisions to others. On the contractualist conception, the desire to justify per-sists even when sincere rational persons disagree about what is good forthemselves or their associations.

2. Because it does not presuppose that sincere and rational agents must agree,the contractualist conception does not automatically lead to distrust and suspi-cion in cases of disagreement. The contractualist conception separates thereasonable from the rational. It allows rational agents to disagree, while empha-sizing a separate capacity, reasonableness. The goal of agreement is linked notto the rational good but to the reasonableness of decisions. In seeking such agree-ment we are not automatically forced to view others (or ourselves) as ignorantor insincere when we disagree. We can view them instead as persons who in fullrationality have a good that is not entirely consistent with our own or otherrational conceptions of the good.

3. The contractualist conception specifies and de-mystifies the common expe-rience of the tension between business interests and ethical interests. This tensionis experienced when decision makers arrive at what they feel is the correct busi-ness decision, and still wonder "But is it the right thing?" The idea of "the rightchoice" has a place in business decisions, and its meaning is distinct from andcan be opposed to the idea of "the correct business decision." This tension, whichwe often experience and express in language, remains unspecified and some-what mysterious. For some it refers to their nonbusiness commitments to religiousor other moral codes. For others it refers to an inner voice of conscience orcertain personal sensibilities. Or the notion of "the right thing to do," whileoperative in business discussion, remains unspecified as to its reference or mean-ing. The contractualist conception specifies that the notion of the right thing isconnected with the desire to justify decisions in terms that all can accept, or atleast in terms that none can reasonably reject. As a separate desire it naturallyoperates distinct from business interests and can easily run opposed to thoseinterests. But as a desire that business persons have, it operates within the busi-ness world, not from some personal source outside the business context.'̂

4. The contractualist desire to justify explains another ordinary feature ofethical reasoning. It is commonly assumed that in evaluating a decision we mustpay particular attention to those who will be losers in the transaction (those putout of work, for example). A decision that appears justifiable only to those who


come out ahead (appealing to their interests or rational good) will ordinarily bemet with suspicion and distrust. And we will not consider such responses unrea-sonable, especially when it comes from those who lose. Up to this point I havenot stated specific criteria of an acceptable justification, beyond the generalconstraints imposed by the contractualist conception itself. But one criterioncertainly is that the justification must not automatically exclude any who lose inthe decision being justified. The contractualist conception captures this com-mon element of fairness, that justifications must include the less advantagedand probably in a special way. This is because it is they who can be expected toreasonably reject the decision, if anyone can.

5. The contractualist conception expands the horizon of factors that can beused in justification. In mutual advantage, communitarian, and utilitarian con-ceptions the only kind of justification possible is in terms of what is good forpersons. But human nature is not so limited. Ideals such as fairness, reciprocity,honor, duty, and so on can enter our minds and move us to action. At the heart ofthe contractualist conception is a notion of reciprocal cooperation as free, rea-sonable, and rational persons. We are capable not only of having a rational good,but also of regulating and justifying our actions according to reasonable prin-ciples, ones that all can accept or at least not reasonably reject.

The desire to justify is largely, if not wholly, learned in a liberal democraticsociety. By way of contrast, the desire to pursue one's rational good in commu-nal or mutually advantageous settings may have both learned and naturalelements. The important thing is not the psychological etiology of the desire tojustify, but the fact that it is a desire that we have and that we cultivate. Further-more, it is a desire that is not limited by conceptions of the rational. Rather it iswhat Rawls terms an idea-based desire, one whose explanation must make use ofthe idea of reciprocal cooperation among reasonable persons (1993, pp. 81-86).This expansion of the horizon of factors we can use in justification of actions isperhaps the most attractive feature of the contractualist conception. It makessense of our widespread (liberal democratic) understanding of ourselves as freeand autonomous, rational and reasonable persons.

6. One effect of the contractualist conception is that it shows the limits ofjustifications ordinarily offered in defense of business decisions. Often we hearthat "the market" justifies a particular decision (and a suggestion that those whodisagree are ignorant or insincere). Behind the idea of the market may be autilitarian conception of efficiency such as that envisioned by Adam Smith. Or"the market" might be shorthand for the notion of rights to freedom and prop-erty as envisioned by Locke and other liberal theorists. The contractualistconception does not assign primacy to such appeals to the utilitarian good or tocertain rights confined within a particular conception of rationality. Instead, thecontractualist conception allows disagreement in conceptions of the rational goodwhile insisting that justification must still be formulated such that no one canreasonably disagree. It may or may not be irrational to reject market efficiencyor some particular decision made in its name or in the name of property rights.


But justification seeks a different kind of agreement, one that cannot be reason-ably rejected. For example, it might be both rational and reasonable to close aplant to cut costs in order to preserve the whole company. Presumably all canreasonably be expected to agree, when evidence supports the decision, and thevalue of preserving the company is accepted. It might be quite rational givensome conceptions of good business and given some conceptions of property, forthe GEO to close a plant to cut costs in order to redecorate the executive officeswith expensive imports. But it would not be unreasonable for displaced workersto reject the GEO's justification if it is based on nothing but property rights orthe CEO's particular conception of good business. Similarly, it might be reason-able to expect agreement with a decision to move a production facility off shore,for the sake of lower cost and hence more competitive products that can en-hance well-being on all sides, even in areas where labor is redistributed todifferent and perhaps better industries. But the same decision to move produc-tion off shore could meet reasonable rejection if the move is justified by loweredproduction costs achieved by environmentally destructive and unsafe manufac-turing methods. In other words, people offering "the market" as justificationwill recognize that in some circumstances it might reasonably be rejected. Thoseoffering "the market" as justification will have to look beyond their own par-ticular conceptions of property and efficiency for the common grounds ofcooperation, the terms of which none can reasonably reject the course of action.

7. The contractualist conception forces decision makers to seek commonground on which to provide justifications. At the same time it expands the scopeof that common ground, because it is not limited to utilitarian, communitarian,or mutually advantageous notions (as explained in no. 5 above). The contractualistconception directs our concern to persons understood not just as rational agentsseeking their good but also as reasonable persons capable of engaging in faircooperation as such, and capable of doing so on terms that others can reason-ably be expected to endorse. It directs our attention to the ways in which peopleactually do cooperate in the expectation that others will abide by the terms ofthe arrangements (not just cooperation designed to achieve some rational good).In contractualism we look at persons as members of numerous overlapping groups(including nations, business associations, and many other less formal arrange-ments within and across societies), and we look to the forms of justificationoperative within those groups. In contractualism, justification is not limited toindividual good, but also can include commitments honored in fair cooperation.

V̂ Conclusion

Beyond the implications just discussed, I cannot tell what differences recog-nizing the desire to justify will make in business practice. But the change inmind-set or business philosophy is definable nonetheless. Contractualism basedon the idea of fair cooperation suggests a business philosophy quite distinctfrom communitarian or competitive models, and distinct from utilitarian social


well-being models. The contractualism involved in this analysis characterizescontemporary liberal democratic societies. Therefore, the argument in this paperwould support a variety of policies advocated in the names of corporate democ-racy, employee rights and participation, and so forth. Neither the authority ofsuperiors nor the rights of subordinates would be absolute. All decisions mustbe reasonable, capable of being stated publicly so that all can see the decisionsare ones which all can accept, or at least that they are decisions which cannotreasonably be rejected.

Notes

The author wishes to thank the anonymous referees of BEQ for their very helpful ideas andcomments,

•A double special issue of Business Ethics Quarterly 8, no, 3 (July 1998) is devoted totopics relating empirical work in psychology with theoretical work in normative philosophy,

^Indeterminacy is one problem. Exactly what decision is indicated by the particular prin-ciple or approach taken? Indeterminacy in business ethics is one reason philosophers havebegun to speculate that business ethics is a post-modern, non-foundational, and historicistenterprise. A recent special edition of Business Ethics Quarterly 3, no, 3 (July 1993) isdevoted to this theme,

'Johnson & Johnson's decision to take all Tylenol off the shelves to prevent risk of poi-soning from tainted product is often heralded as a paradigm case in which ethical interestsand business interests coincided. Perhaps so. But J & J's decision was motivated by concernwith safety, not ultimately the bottom line. At the time, no one could know the decision thatwould advance business interests the most,

^Locke, John, Two Treatises of Government, rev, ed,, Peter Laslett, ed (New York: Cam-bridge University Press, 1963), 309, 311, as quoted in Velasquez, 1982, 143,

'It can be argued that Kant does not hold such an intuitionist view. It can be argued thatKant grounds morality on a conception of rational human nature and membership in an intel-ligible order of existence. Viewed this way, Kant is close to the contractualist view beingdeveloped here. Indeed, Rawls argues that there is a Kantian interpretation of his theory ofjustice as fairness, where the root ideas of the Rawls-Scanlon contractualism are first articu-lated (Rawls, 1970, 251-257), This clarification was offered to me by the anonymous reviewersfor BEQ.

^The distinction between the interest in human well-being (the good) and the desire tojustify is rooted in Rawls' conception of moral personality. For Rawls, moral personality ischaracterized by two capacities: one for forming a conception of the good, the other thecapacity for a sense of justice. This point is developed more fully in section III, B, 7,

''The fact that these often reduce to self-interest and manipulation, especially in children,is not an objection. For justification cannot be reduced to manipulation in all cases, unlesswe simply assume there is no such thing as justification distinct from manipulation,

8The golden rule in some version appears in many religions and philosophies. It can beexplained on most moral theories, including those 1 am rejecting as inadequate to answer thewhy be moral question in business. But that doesn't mean it doesn't exhibit the desire tojustify. If I'm right, it means that the desire to justify is exhibited in those religions andphilosophies.


'The questions about the nature and adequacy of justification in morals, while basic, isnot the central concern of this paper. The present analysis of the desire to justify actions pre-sumes the general correctness or acceptability of the work of Rawls, Scanlon, and others. Onthe specific notion of public reason, see Rawls "The Idea of Public Reason" (1993, 212-254).

•"The treatment of the Nestle case comes from a case written by Eugene Buchholz, LoyolaUniversity of New Orleans, reprinted from Business Environnment and Public Policy, inBeauchamp and Bowie (1997, 606-607).

"The treatment of the Nike case comes from Shaw and Barry (2001, 228-231).'̂ If justifiability is the limiting concept and not the end of individual or community flour-

ishing, then what we have is not recognizably a community at all. It is not formed by acommon conception of the good known to reason. It is instead a society, as understood onthe contractualist notion guiding the view being developed here.

"The distinction between the reasonable and the rational is so basic and pervasive inRawls' thought, its roots are traceable to the conception of moral personality itself (what forRawls functions as a foundation in human nature). Moral persons are characterized by twomoral powers and two corresponding highest-order interests in realizing and exercising thesepowers. The first is the capacity for a sense of justice, the basis of the reasonable. The secondis the capacity for a conception of the good, the basis of the rational. This characterization ofmoral personality appears early in A Theory of Justice on p. 9. It is referred to periodicallythrough the years between 1971 and 1993 {Political Liberalism). See for example "KantianConstructivism in Moral Theory: Rational and Full Autonomy," The Journal of Philosophy11, no. 9 (September 1980), 515-535.

'"Rawls makes this point regarding philosophical and religious differences (1993, 58)."Ronald Duska (1993) takes this as a reason to deconstruct the idea of truth, in his

discussion of Aristotle as post-modern.•'I cannot take up the obviously crucial question of priority and weighting of business

and ethical interests. One thing is clear, however. Someone who says "The heck with justifi-cation, I'm going after the business" exhibits nothing of the desire to justify.

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Why be moral in business a rawlsian approach

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