Ethical Issues in the Real Business World
In economics, some ethical problems arise due
to adverse selection and moral hazard. Adverse selection is related to
dishonesty under information asymmetry whereas moral hazard is related to
self-indulgence or a lavish life style. The 2008-2009 financial crisis was
caused not only by the housing market bubble but also more importantly by
people’s moral hazard problems and/or business people’s unethical ways of life.
Commercial banks and other financial institutions invested their customers’
money on very risky housing market-related securities – MBS (mortgage-backed
security), CDOs (collateralized debt obligations), CMOs (collateralized
mortgage obligations), etc. When the housing market was booming, they could
earn a lot of profits/dividends. They enjoyed profits in the form of bonuses
and stock options among themselves with other people’s money. When the housing
market began to go down in 2017 and collapsed in 2018, some went bankrupt and
some others were in danger of bankrupt. The government provided them relief
fund to activate the economy by letting them lend more money to corporations
and people. However, instead of lending money to the needed corporations and
investors, they enjoyed bonuses and pay raise among themselves with the money
that was provided by the government – tax payers’ money. This was a typical
example of a moral hazard problem or a problem of economic or business ethics.
Characteristics of Christian Economic Ethics
If you misunderstand the Bible, especially
Jesus and Paul, you may think that you are free from all the restrictions as
you are saved by faith in Jesus Christ through the grace of God. Some people
think they may be okay even though their life is unethical as they were already
saved. However, Christian freedom is different from self-indulgence.
What are ethical behaviors
and unethical behaviors in terms of economic or business ethics? Poverty or
wealth itself does not tell whether the person is ethical or unethical. Some
people work hard, honestly and diligently but are still poor whereas some other
people do not work hard yet are rich by exploiting their employees or cheating
other people. There are some poor people as they are lazy whereas some other
people are wealthy as they work diligently. O. C. Ferrell, J. Fraedrich, and L.
Ferrell list integrity, honesty, and fairness as the foundational values for
identifying ethical issues.[1]
What are Christian values or standards for economic or business ethics that you
can find in the Bible?
1.
Honesty
Believers should be honest or just in their
business, not deceiving their clients. God in Leviticus 19:36 tells the
Israelites: “Use honest scales and honest weights, an honest
ephah and an honest (= just, RSV) hin. I am the Lord your God, who
brought you out of Egypt” (NIV). Moses (or God through Moses) in Deuteronomy
25:13-16 also emphasizes honesty: “You shall not have in your bag two kinds of
weights, a large and a small. 14You shall not have in your house two
kinds of measures, a large and a small. 15A full and just weight you
shall have, a full and just measure you shall have; that your days may be
prolonged in the land which the Lord your God gives you. 16For all
who do such things, all who act dishonestly, are an abomination to the Lord
your God.” Proverbs 13:11 states:
“Dishonest money dwindles away, but whoever gathers money little by little
makes it grow” (NIV). The old saying or Benjamin Franklin states, “Honesty is the
best policy.” When your clients recognize that you are an honest business
person, they will refer you to their family members, relatives, and friends.
2.
Integrity
Economic ethics also asks for integrity not
crookedness. Proverbs 11:3 states: “The integrity of the upright (or honesty,
NLT) guides them, but the crookedness of the treacherous (or dishonesty, NLT) destroys
them.” And Proverbs 19:1 states: “Better is a poor man who walks in his
integrity (or blameless, NIV) than a man who is perverse in speech and is a
fool.” Integrity is directly related with honesty whereas crookedness with
dishonesty.
3.
Fairness or Impartiality
Fairness or impartiality may go along with
honesty, which is also a very much important characteristic of God. Deuteronomy
10:17 states: “For the Lord your God is God of gods and Lord of lords, the
great, the mighty, and the terrible God, who is not partial and takes no bribe.”
When you are fair or impartial as a business person, you do not take any bribe
and do not show any favoritism. Paul in
Romans 2:11 acknowledges God’s fairness: “For God shows no partiality.” As God
shows impartiality or fairness, we, the people of God, show also show fairness
or impartiality in our life.
4. Humility
A humble heart not arrogance is required for
good business or economic ethics. As a business owner or entrepreneur, you must
be humble not arrogant when you deal with your employees. They will respect you
and work hard. James in James 4:10 advises us: “Humble yourselves before the
Lord and he will exalt you.” Peter in 1 Peter 5:5 says: “Likewise you that are
younger be subject to the elders. Clothe yourselves, all of you, with humility
toward one another, for ‘God opposes the proud, but gives grace to the humble.’”
Jesus in Luke 14:11 states: “For everyone who exalts himself will be humbled,
and he who humbles himself will be exalted.” Jesus shows an example of
self-humility when he came down to earth with human flesh and lived a life on
the earth. Paul in Philippians 2:5-11 describes Jesus’ humble life, total
obedience to God the Father unto death on cross. Then, God exalted him to the
highest place.
5.
Modesty
Economic ethics asks for a modest life not an extravagant or lavish life.
Proverbs 15:16 states: “Better a little with the fear of the Lord than great treasure
(or wealth, NIV) and trouble with it.” Business or economic ethical issues
often occur when people want to live a luxurious life that they cannot afford
to maintain. They may owe money due to their lavish lifestyle and thus they
seek unlawful ways to make more money. Christians also live their life
according to the Spirit not according to their fleshly desires. Paul in
Galatians 5:16-17 advises us: “16But I say, walk by the Spirit, and
do not gratify the desires of the flesh. 17For the desires of the
flesh are against the Spirit, and the desires of the Spirit are against the
flesh; for these are opposed to each other, to prevent you from doing what you
would.” God’s people try to live a modest life not only materially but also
spiritually.
6.
Not Too Much Greed
Greed is a part of human nature. Greed to a
certain extent may make people work hard. However, too much greed makes people
become unethical. Proverbs 28:25 states: “A greedy man stirs up strife, but he
who trusts in the Lord will be enriched.” Ecclesiastes 5:10 states: “He who
loves money will not be satisfied with money; nor he who loves wealth, with
gain: this also is vanity.” A man’s greed can never be satisfied, and it makes
him away from God. He will be too busy in making money to seek God. Greedy mind
may accept bribes. Proverbs 15:27 states: “He who is greedy for unjust gain
makes trouble for his household, but he who hates bribes will live.” Jesus in
Luke 12:15 says: “Take heed and beware of all covetousness (or greed, NIV); for
a man’s life does not consist in the abundance of his possessions.”
7.
Diligence
Economic ethics asks you to be diligent not
lazy. Proverbs 12:24 states: “The hand of the diligent will rule, while the
slothful will be put to forced labor.” Proverbs 13:4 states: “The soul of the
sluggard craves, and gets nothing, while the soul of the diligent is richly
supplied.” Peter in 2 Peter 1:10 states: “Therefore, brethren, be the more
zealous (or diligent, ESV) to confirm your call and election, for if you do
this you will never fall.” As we previously discussed, poverty due to laziness
is not God’s blessing and cannot get God’s commend. In Jesus’ parable of
talents, the servant who was entrusted one talent was lazy in managing his
master’s money (although the master had an intention to give it along with
whatever profit he would make to him). The master rebuked him later as he was
economically unethical (Matthew 25:26-27).
8. Trustworthiness
or Faithfulness
Christian
economic ethics requires you to be trustworthy or faithful not unfaithful.
Jesus in Luke 16:10 states: “He who is faithful in a very little is faithful
also in much; and he who is dishonest in a very little is dishonest also in
much.” Paul in 1 Corinthians 4:2: “Moreover it is required of stewards that
they be found trustworthy (or faithful, NIV).” Each Christian who is entrusted
God’s property and talents should be trustworthy or faithful.
9.
Generosity
Generosity not reluctance is another good
characteristic to be economically ethical. When you are reluctant or forced to
do business, your business conduct may not be ethical. A generous mind will
make you a man of good conduct in your business. Paul in 2 Corinthians 9:6-7
states: “6The point is this: he who sows sparingly will also reap
sparingly, and he who sows bountifully will also reap bountifully
(or generously, NIV). 7Each one must do as he has made up his mind,
not reluctantly or under compulsion, for God loves a cheerful giver.”
Christian Freedom and Its Boundary
Jesus Christ, the Truth, set us free (John
8:3). So, believers are no more under the law but under the grace of God.
However, it does not mean that their Christian conduct is unbounded. Paul in
Romans 6:1-2 states: “1What shall we say, then? Are we to continue
in sin that grace may abound? 2By no means! How can we who died to
sin still live in it?”
Christian conduct has its
boundary – if our conduct is within its boundary, it is ethical; if it goes
beyond its boundary, it becomes unethical. Paul in 1 Corinthians 6:12 says: “‘All
things are lawful for me,’ but not all things are helpful. ‘All things are
lawful for me,’ but I will not be enslaved by anything.” Although someone may
say, ‘I have the right to do anything,’ his or her conduct should be such that
first, it should be beneficial to other people (or should not be harmful to
others), and second, it should not be controlled or mastered by anything (or it
should be constructive for others and community). Paul in 1 Corinthians 10:23
repeats what he says in 1 Corinthians 6:12: “‘All things are lawful,’ but not
all things are helpful. ‘All things are lawful,’ but not all things build up.”
Paul adds there in 1 Corinthians 10:24: “Let no one seek his own good, but the
good of his neighbor.” When we work for the good of others, our Christian
economic ethics can be completed. When I was a college student, I joined a
Christian club, JOY, which stands for Jesus, Others, and You – the priority should
be in this order in our life. Paul emphasizes the order of a Christian’s
conduct – Jesus, others, and you.
Paul in 1 Corinthians 8:9
states: “Only take care lest this liberty of yours somehow become a stumbling
block to the weak”; then in 1 Corinthians 8:13: “Therefore, if food is a cause
of my brother’s falling, I will never eat meat, lest I cause my brother to fall.”
Paul in Romans 14:13 states: “Then let us no more pass judgment on one another,
but rather decide never to put a stumbling block or hindrance in the way of a
brother.” Paul’s advice is about a Christian conduct in general, however, we
can apply this to Christian economic ethics as it is a way of our daily
decision making as a Christian.
[1] O. C. Ferrell, J. Fraedrich, L.
Ferrell, Business Ethics: Ethical
Decision Making and Cases (12th ed.), Cengage Learning, 2019,
58-60.
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