Business Bluffing
Given what we’ve said about truth-telling this may seem like a strange question to ask. But, the issue does arise in business in many ways from one’s first entry into the work world right through to the end of a career. What constitutes ethical practice when it comes to writing a resume or disclosing information in a job interview? What about negotiating business deals? It seems unlikely that anyone writing about business ethics would encourage “bluffing” in such situations. After all, that would be tantamount to encouraging them to lie! But, in 1968 that is exactly what Albert Carr seemed to do in his article by asking the question: Is Business Bluffing Ethical? Let’s examine his argument and then some criticisms offered by Norman Gillespie in his article titled “The Business of Ethics.”
The basis of Carr’s argument seems to be that there is a difference between what he calls “private morality” and the moral context of the business world. The analogy he uses is the game of poker. Many of you perhaps are familiar with poker and perhaps have even played in some of the online sites or with friends. Of course, there are rules to the game and certain things constitute cheating. However, there is also an understanding in poker that “bluffing” is acceptable and within the bounds of the rules. If I am holding a pair of threes and you have a full house it is perfectly acceptable for me to bluff you out of your better hand and take the winnings. Similarly, there are cases, according to Carr, where bluffing is acceptable in the business world. His argument for this seems to rest on the presumption that the business world is, in some sense, fundamentally different than the world of private morality. We’ll examine this presumption when we address the Gillespie article. For now, let’s look at what Carr has to say.
The argument Carr makes seems to rest on two points. First, there is a strong pressure to deceive in business. Consider the example he cites about an applicant filling out a psychological profile. Sure, this is a small example but it does illustrate that the pressure to deceive enters the business world from the very start. If one wishes to be successful in the world of business, or inthisinin this in this case even enter enter enter enters the business world, one has little choice but to deceive. Or as Carr more politely puts it, bluff.
A second point is that business in general only has the obligation must follow the law. There is no good reason for any business to go beyond the law or to consider what might be ethical if it demands doing more than the law requires. So, in a sense, he is equating, for the business world, law, and ethics.
The two points seem to go hand in hand. Given the competitive nature of business (like the competitive nature of poker), there is a strong pressure to only follow the law. After all, you can be sure that your competition will do this and nothing more so if you decide to run your business by extra-legal moral principles you will suffer as a result. Not only is this the case, but also everyone expects that you will only follow the law. As an extreme case in point remember remembers the Italian Tax case. There, it was expected that everyone would bluff on their taxes. Look at all the trouble that was caused when someone actuallytoldactually told the truth!
But then what explains all the talk about ethics in business? According to Carr,t his is partly good PR and prudent. After all, no one wants to deal with a business that talks about bluffing. But also, talk talking about business ethics and codes of ethics might just protect a business from government regulators. If you talk a good game of ethics today you might save yourself from more intrusive laws and regulations tomorrow. Sounds sort of Machiavellian doesn’t it?
You might think that business people would have loved Carr. After all, he seems to be giving them a license to behave just as they please. But businesspeople were among the first to protest Carr’s argument. Perhaps you can guess why. Here he is giving away their cover! But the strategy of bluffing is less effective the more it becomes known that you are bluffing or intending to do so. Also, once you equate ethical behavior with following the law you send a signal that if businesses need ethical improvement that means there needs to be more law and regulation of business. But, that is the exact opposite of what businesses want. So, Carr’s effort to be honest about bluffing won few friends in the business. Well, perhaps they agreed with him but wished he hadn’t said anything.
The central point of criticism which Norman Gillespie raises in his article is that the business world is not, as Carr seems to think, fundamentally different from the rest of our lives. So, the claim that business ethics must be different to accommodate this is unjustified. Gillespie’s main points are that
a) business is not a game,
b) the exceptional cases that occur in business are already handled by ethical theory and do not warrant a separate “business ethic,” and
c) if there is pressure to violate ethical principles in the business world then this indicates that “something is wrong with business.”
The simple truth of the matter is that business is not a game. To call it a game is to trivialize what amounts to the method people use to make a living. In other words, the analogy Albert Carr makes between business and poker is weak. One of the central weaknesses is that the poker analogy “while informative of the way things are, seems to have no bearing at all on the way they ought to be.” Another way of putting this is that Carr’s argument violates the is-ought problem in ethics. You cannot say that because bluffing occurs in the business world it should occur.
Carr seems to take as his starting point a catch 22. That is, if everyone in the business world is bluffing then the only rational strategy for me is to bluff. But, Gillespie makes the point that this doesn’t mean business represents a different set of moral principles. In fact, “our ordinary moral reasoning does, indeed, make allowance for just such cases.” As Gillespie puts it, we have moral rules for determining what one’s duty is when one should do one’s duty, and, contrary to Carr’s claim, when it is justifiable not to do one’s duty. Gillespie specifically outlines three of these cases.
First, if “the moral cost of obeying a standard moral rule is too great” we are justified in not obeying the moral rule. The examples here are pretty standard such as lying to save someone’s life. The cost of telling the truth, in this case, is too high so we are not obliged to tell the truth. Of course, we do need to address what counts as too high of a cost but this is an issue that has been addressed in standard ethical theory. One good example is W.D. Ross's book The Right and The Good.
Secondly, “when the cost to the individual of fulfilling that duty is too high” we are justified in not obeying the moral rule. This may sound identical to the first case but the difference is that in the first case the cost involved is to a moral principle (such as the principle of truth-telling) and in this case, the cost is to the individual. The example Gillespie gives is instructive.
Thirdly, if “the morally desirable state of affairs can be produced only by everyone, or virtually everyone, doing his part” and if they’re not doing their part, then you are not obliged to do what your duty dictates. After all, it would be ineffective. Ideally, your duty is not dictated by what others are doing but the simple fact is that if doing your duty puts you in danger and would be wholly ineffective there is a good case to be made on practical grounds for you not being bound by your duty.
This seems to be the point most directed towards Carr’s argument since Carr maintains that the business world is precisely such a case at all times. However, Gillespie’s point is that the fact that the business world might fit this condition doesn’t mean it is operating on fundamentally different moral principles than our ordinary conception of ethics. Instead, he argues that the principles governing our ordinary life also govern the business world.
And if they don’t then this indicates that something is wrong with the world of business. This raises an important point regarding business ethics in general. So much of the discussion of issues in the business world relates to how things are. Gillespie’s point is simply that we should be addressing ourselves to what ought to be the case. Yes, people lie, cheat, and steal. Sometimes. The question is whether this is justified. Should they lie, cheat, and steal? What makes business ethics so difficult for many people is to recognize that what we are trying to do here is get some clarity about how the business world ought to function. Some things might be fine as they are. Others need to be changed because changing them would make things better for everyone involved. And, what is not a trivial reason, because changing them is the right thing to do from an ethical standpoint.
The basis of Carr’s argument seems to be that there is a difference between what he calls “private morality” and the moral context of the business world. The analogy he uses is the game of poker. Many of you perhaps are familiar with poker and perhaps have even played in some of the online sites or with friends. Of course, there are rules to the game and certain things constitute cheating. However, there is also an understanding in poker that “bluffing” is acceptable and within the bounds of the rules. If I am holding a pair of threes and you have a full house it is perfectly acceptable for me to bluff you out of your better hand and take the winnings. Similarly, there are cases, according to Carr, where bluffing is acceptable in the business world. His argument for this seems to rest on the presumption that the business world is, in some sense, fundamentally different than the world of private morality. We’ll examine this presumption when we address the Gillespie article. For now, let’s look at what Carr has to say.
The argument Carr makes seems to rest on two points. First, there is a strong pressure to deceive in business. Consider the example he cites about an applicant filling out a psychological profile. Sure, this is a small example but it does illustrate that the pressure to deceive enters the business world from the very start. If one wishes to be successful in the world of business, or inthisinin this in this case even enter enter enter enters the business world, one has little choice but to deceive. Or as Carr more politely puts it, bluff.
A second point is that business in general only has the obligation must follow the law. There is no good reason for any business to go beyond the law or to consider what might be ethical if it demands doing more than the law requires. So, in a sense, he is equating, for the business world, law, and ethics.
The two points seem to go hand in hand. Given the competitive nature of business (like the competitive nature of poker), there is a strong pressure to only follow the law. After all, you can be sure that your competition will do this and nothing more so if you decide to run your business by extra-legal moral principles you will suffer as a result. Not only is this the case, but also everyone expects that you will only follow the law. As an extreme case in point remember remembers the Italian Tax case. There, it was expected that everyone would bluff on their taxes. Look at all the trouble that was caused when someone actuallytoldactually told the truth!
But then what explains all the talk about ethics in business? According to Carr,t his is partly good PR and prudent. After all, no one wants to deal with a business that talks about bluffing. But also, talk talking about business ethics and codes of ethics might just protect a business from government regulators. If you talk a good game of ethics today you might save yourself from more intrusive laws and regulations tomorrow. Sounds sort of Machiavellian doesn’t it?
You might think that business people would have loved Carr. After all, he seems to be giving them a license to behave just as they please. But businesspeople were among the first to protest Carr’s argument. Perhaps you can guess why. Here he is giving away their cover! But the strategy of bluffing is less effective the more it becomes known that you are bluffing or intending to do so. Also, once you equate ethical behavior with following the law you send a signal that if businesses need ethical improvement that means there needs to be more law and regulation of business. But, that is the exact opposite of what businesses want. So, Carr’s effort to be honest about bluffing won few friends in the business. Well, perhaps they agreed with him but wished he hadn’t said anything.
The central point of criticism which Norman Gillespie raises in his article is that the business world is not, as Carr seems to think, fundamentally different from the rest of our lives. So, the claim that business ethics must be different to accommodate this is unjustified. Gillespie’s main points are that
a) business is not a game,
b) the exceptional cases that occur in business are already handled by ethical theory and do not warrant a separate “business ethic,” and
c) if there is pressure to violate ethical principles in the business world then this indicates that “something is wrong with business.”
The simple truth of the matter is that business is not a game. To call it a game is to trivialize what amounts to the method people use to make a living. In other words, the analogy Albert Carr makes between business and poker is weak. One of the central weaknesses is that the poker analogy “while informative of the way things are, seems to have no bearing at all on the way they ought to be.” Another way of putting this is that Carr’s argument violates the is-ought problem in ethics. You cannot say that because bluffing occurs in the business world it should occur.
Carr seems to take as his starting point a catch 22. That is, if everyone in the business world is bluffing then the only rational strategy for me is to bluff. But, Gillespie makes the point that this doesn’t mean business represents a different set of moral principles. In fact, “our ordinary moral reasoning does, indeed, make allowance for just such cases.” As Gillespie puts it, we have moral rules for determining what one’s duty is when one should do one’s duty, and, contrary to Carr’s claim, when it is justifiable not to do one’s duty. Gillespie specifically outlines three of these cases.
First, if “the moral cost of obeying a standard moral rule is too great” we are justified in not obeying the moral rule. The examples here are pretty standard such as lying to save someone’s life. The cost of telling the truth, in this case, is too high so we are not obliged to tell the truth. Of course, we do need to address what counts as too high of a cost but this is an issue that has been addressed in standard ethical theory. One good example is W.D. Ross's book The Right and The Good.
Secondly, “when the cost to the individual of fulfilling that duty is too high” we are justified in not obeying the moral rule. This may sound identical to the first case but the difference is that in the first case the cost involved is to a moral principle (such as the principle of truth-telling) and in this case, the cost is to the individual. The example Gillespie gives is instructive.
Thirdly, if “the morally desirable state of affairs can be produced only by everyone, or virtually everyone, doing his part” and if they’re not doing their part, then you are not obliged to do what your duty dictates. After all, it would be ineffective. Ideally, your duty is not dictated by what others are doing but the simple fact is that if doing your duty puts you in danger and would be wholly ineffective there is a good case to be made on practical grounds for you not being bound by your duty.
This seems to be the point most directed towards Carr’s argument since Carr maintains that the business world is precisely such a case at all times. However, Gillespie’s point is that the fact that the business world might fit this condition doesn’t mean it is operating on fundamentally different moral principles than our ordinary conception of ethics. Instead, he argues that the principles governing our ordinary life also govern the business world.
And if they don’t then this indicates that something is wrong with the world of business. This raises an important point regarding business ethics in general. So much of the discussion of issues in the business world relates to how things are. Gillespie’s point is simply that we should be addressing ourselves to what ought to be the case. Yes, people lie, cheat, and steal. Sometimes. The question is whether this is justified. Should they lie, cheat, and steal? What makes business ethics so difficult for many people is to recognize that what we are trying to do here is get some clarity about how the business world ought to function. Some things might be fine as they are. Others need to be changed because changing them would make things better for everyone involved. And, what is not a trivial reason, because changing them is the right thing to do from an ethical standpoint.