We all need ethics, a set of moral principles, to guide our choices and actions. Since we have no automatic knowledge of the right goals and the means to them, it’s easy to make mistakes that prevent us from achieving values. To survive and thrive, we require values such as interesting work that gives us purpose and pays for food, shelter and clothing, health care, vacations, art, entertainment, and other material values.
We also require fulfilling social relationships to achieve the ultimate goal, a happy life. Without proper ethics, we are prone to make mistakes in this area as well. Choosing and dealing with business partners and colleagues, employees, customers and investors, and selecting friends and a romantic partner for a happy life is difficult without clear moral principles. Think of Travis Kalanick’s recent troubles at Uber, or the breakdown of friendships and families and unfulfilling or disappointing relationships many people experience.
But not all ethics guide us to achieve happy, fulfilling lives. In fact, the most widely taught ethics is called altruism. It is a moral code that guides us, not to pursue our own values and happiness—but to give them up for the sake of fulfilling others’ needs. Most of us have been taught altruism as the only correct moral code. From that we know that pursuing self-interest—the job we want or a promotion, or the material values that improve our lives—is immoral while sacrificing our interests for the sake of others’ needs is moral.
Ethicists present altruism, the moral code of self-sacrifice, as the ideal. Yet, altruism is destructive. Not only does it prevent the sacrificers from achieving their values; it stops the production of values altogether, until there is nothing more to give, and everyone will die. That is what consistently following altruism means. Any moral code not followed consistently is useless: how does one know when to follow its guidance and when not? Making choices becomes a matter of whim, with no clear path to values.
Instead of altruism, we need a rational (reason- and fact-based) ethics that recognizes what human survival and flourishing requires and guides us in living a happy life. This means not sacrificing for other people or sacrificing them to ourselves, but living in harmony with them, voluntary trading both material and spiritual values for win-win outcomes.
Such ethics—rational egoism—was developed by Ayn Rand on the foundation laid by Aristotle. Unfortunately, rational egoism is not widely taught. In fact, altruism is so prevalent among ethicists that many of them consider rational egoism—the code for pursuing self-interest without sacrificing others—as immoral.
All students should get exposed to rational egoism as an alternative to altruism, so that they can choose for themselves. Rational egoism would appeal to anyone who uses reason and wants to live a happy life.
It is particularly important that business students learn about rational egoism. As business professor who has taught rational egoism in contrast to altruism for over 20 years, I see clearly the consequences of presenting altruism as the moral code in business schools.
Many students who don’t know rational egoism feel unearned guilt. They come to the business school because they want to find interesting work or start a business and make money, to live a good life. But that is a selfish motive students are taught to hold in check. They are told to atone for it by “giving back” (without articulating what they have supposedly taken in the first place) to those less fortunate. Students are also taught that a business that ‘merely’ produces and trades material values for profit is not ethical but most atone for such selfish pursuit by being “socially responsible” and give up profits for various social causes.
If business students—the future business leaders, professionals, and entrepreneurs who will play a major role in the production and trade of the material values that our survival and flourishing depend on—learn that that business and the pursuit of profit is immoral, they would be reluctant to engage in it fully, thus diminishing all of our well-being. (Alternatively, they reject the morality of self-sacrifice as impractical, and embrace its false alternative: sacrificing others to oneself).
Therefore, it is crucial that business students learn about rational egoism that teaches them that the pursuit of rational self-interest is moral. When they do, they sit a little straighter in their seats and feel proud about their career choice, being committed to business as a moral endeavor.
For more about rational egoism applied to business, read my short ebook Ethics for business: Making profits with virtues, or How to be profitable and moral: A rational egoist approach to business.