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Contrasting the Roles of World-Transforming Business Enterprises in the Novels of Hazlitt, Heinlein, and Istvan – Article by G. Stolyarov II

Contrasting the Roles of World-Transforming Business Enterprises in the Novels of Hazlitt, Heinlein, and Istvan – Article by G. Stolyarov II

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The New Renaissance Hat
G. Stolyarov II
December 17, 2014
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Henry Hazlitt’s Time Will Run Back, Robert Heinlein’s Methuselah’s Children, and Zoltan Istvan’s The Transhumanist Wager each portray a different path by which business enterprises can dramatically improve the human condition, catalyzing paradigm shifts in the societies around them. (Follow the hyperlinks above to read my detailed analyses of each novel.) Far from being concerned solely with immediate profits or meeting quarterly earnings goals, the entrepreneurs depicted in these novels endeavor to thrive despite political persecution and manage to escape and overcome outright dystopias.

Among these three novels, Methuselah’s Children shows the tamest business-based route to reform. For centuries the Howard Foundation aims not to transform the broader society, but rather to protect its own beneficiaries and encourage incrementally greater longevity with each subsequent selectively bred generation. The Howard Families adapt to existing legal and cultural climates and prefer keeping a low profile to instigating a revolution. But even their mild outreach to the general public – motivated by the hope for acceptance and the desire to share their knowledge with the world – brings upon them the full force of the supposedly enlightened and rights-respecting society of The Covenant. Rather than fight, the Howard Families choose to escape and pursue their vision of the good life apart from the rest of humanity. Yet the very existence of this remarkable group and its members’ extraordinary lifespans fuels major changes for humanity during the 75 years of the Howard Families’ voyage. By remaining steadfast to its purpose of protecting its members, the Howard Foundation shows humankind that radical life extension is possible, and Ira Howard’s goal is attained for the remainder of humanity, whose pursuit of extended longevity cannot be stopped once society is confronted with its reality.

The path of incremental and experimental – but principled – reform through the use of business is illustrated in Time Will Run Back. Even though Peter Uldanov does not intend to embark on a capitalist world revolution, he nonetheless achieves this outcome over the course of eight years due to his intellectual honesty, lack of indoctrination, and willingness to consistently follow valid insights to their logical conclusions. Peter discovers the universality of the human drive to start small and, later, large enterprises and produce goods and services that sustain and enhance human well-being. Once Peter begins to undo Wonworld’s climate of perpetual terror and micro-regimentation, his citizens use every iota of freedom to engage in mutually beneficial commerce that allows scarce resources to be devoted to their most highly valued uses. Peter, too, must escape political persecution at the hands of Bolshekov, but, unlike the Howard Families, he does not have the luxury of completely distancing himself from his nemesis. Instead, he must form a competing bulwark against Wonworld’s tyranny and, through the superiority in production that free enterprise makes possible, overthrow the socialist dystopia completely. Where Wonworld experienced a century of technological stagnation, Peter’s Freeworld is able to quickly regain lost ground and experience an acceleration of advancement similar to the one that occurred in the Post-World War II period during which Hazlitt wrote Time Will Run Back. Because human creativity and initiative were liberated through free-market reforms, the novel ends with a promise of open-ended progress and a future of ever-expanding human flourishing.

The most explicitly revolutionary use of business as a transformative tool is found in The Transhumanist Wager. Jethro Knights conceives Transhumania specifically as a haven for technological innovation that would lead to the attainment of indefinite lifespans and rapid, unprecedented progress in every field of science and technology. Transhumania is an incubator for Jethro’s vision of a united transhumanist Earth, ruled by a meritocratic elite and completely guided by the philosophy of Teleological Egocentric Functionalism. Like Lazarus Long and the Howard Families, Jethro finds it necessary to escape wider human society because of political persecution, and, like them, he plans an eventual return. He returns, however, without the intent to re-integrate into human society and pursue what Lazarus Long considers to be a universal human striving for ceaseless improvement. Rather, Jethro considers unaltered humanity to be essentially lost to the reactionary influences of Neo-Luddism, religious fundamentalism, and entrenched political and cronyist special interests. Jethro’s goal in returning to the broader world is a swift occupation and transformation of both the Earth and humankind in Jethro’s image.

Jethro’s path is, in many respects, the opposite of Peter Uldanov’s. Peter begins as an inadvertent world dictator and sequentially relinquishes political power in a well-intentioned, pragmatic desire to foster his subjects’ prosperity. Along the way, Peter discovers the moral principles of the free market and becomes a consistent, rights-respecting minarchist libertarian – a transformation that impels him to relinquish absolute power and seek validation through a free and fair election. Jethro, on the other hand, begins as a private citizen and brilliant entrepreneurial businessman who deliberately implements many free-market incentives but, all along, strives to become the omnipotender – and ends up in the role of world dictator where Peter began. The two men are at polar opposites when it comes to militancy. Peter hesitates even to wage defensive war against Bolshekov and questions the propriety of bringing about the deaths of even those who carry out repeated, failed assassination attempts against him and Adams. Jethro does not hesitate to sweep aside his opposition using massive force – as he does when he obliterates the world’s religious and political monuments in an effort to erase the lingering influence of traditional mindsets and compel all humankind to enter the transhumanist age. Jethro’s war against the world is intended to “shock and awe” governments and populations into unconditional and largely bloodless surrender – but this approach cannot avoid some innocent casualties. Jethro will probably not create Wonworld, because he still understands the role of economic incentives and individual initiative in enabling radical technological progress to come about. However, the benefits of the progress Jethro seeks to cultivate will still be disseminated in a controlled fashion – only to those whom Jethro considers useful to his overall goal of becoming as powerful and advanced as possible. Therefore, Jethro’s global Transhumania will not be Freeworld, either.

All three novels raise important questions for us, as human society in the early 21st century stands on the cusp of major advances in biotechnology, nanotechnology, robotics, artificial intelligence, space travel, and hopefully radical life extension. However, reactionary political and cultural forces continue to inflict massive suffering worldwide through brutal warfare, sweeping surveillance and humiliation of innocent people, policies that instill terror in the name of fighting terror, and labyrinthine obstacles to progress established by protectionist lobbying on behalf of politically connected special interests. Indeed, our status quo resembles the long, tense stagnation against which Jethro revolts to a greater extent than either the largely rights-respecting society of The Covenant or the totalitarian regimentation of Wonworld. But can the way toward a brighter future – paved by the next generation of life-improving technologies – be devised through an approach that does not exhibit Jethro’s militancy or precipitate massive conflict? Time will tell whether humankind will successfully pursue such a peaceful, principled path of radical but universally benevolent advancement. But whatever this path might entail, it is doubtless that the trailblazers on it will be the innovative businessmen and entrepreneurs of the future, without whom the development, preservation, and dissemination of new technologies would not be possible.

References

Hazlitt, Henry. [1966.] 2007. Time Will Run Back. New York: Arlington House. Ludwig von Mises Institute. Available at http://library.freecapitalists.org/books/Henry%20Hazlitt/Time%20Will%20Run%20Back.pdf. Accessed December 13, 2014.

Heinlein, Robert A. [1958] 2005. Revolt in 2100 & Methuselah’s Children. New York: Baen.

Istvan, Zoltan. 2013. The Transhumanist Wager. San Bernardino: Futurity Imagine Media LLC.

The Businessman as Radical Revolutionary in Zoltan Istvan’s “The Transhumanist Wager” – Article by G. Stolyarov II

The Businessman as Radical Revolutionary in Zoltan Istvan’s “The Transhumanist Wager” – Article by G. Stolyarov II

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The New Renaissance Hat
G. Stolyarov II
December 15, 2014
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Zoltan Istvan’s 2013 science-fiction novel The Transhumanist Wager portrays how a combination of business enterprises, united to achieve a philosophical goal, can transform the world. The novel’s protagonist, Jethro Knights, develops a wide-ranging business enterprise that simultaneously operates as its own country – Transhumania – and withstands a military offensive from the combined navies of the world powers. Transhumania then serves as the platform from which Jethro’s vision of transhumanism – the transcendence of age-old human limitations through science and technology – can spread throughout the world and become universally adopted.

The Transhumanist Wager takes place in a near-future world where economic malaise, resurgent Luddite sentiments, and labyrinthine political barriers to technological innovation have resulted in a climate of stagnation. Jethro Knights endeavors to change all this, knowing that the status quo will eventually result in his own death. He takes a highly principled, completely uncompromising, and often militant approach toward achieving his goal: indefinite life extension through science and technology. Jethro endeavors to avoid death through any rational means possible, while simultaneously striving to become the “omnipotender” – “an unyielding individual whose central aim is to contend for as much power and advancement as he could achieve, and whose immediate goal is to transcend his human biological limitations in order to reach a permanent sentience” (Istvan 2013, 33). As a college student, Jethro formulates his philosophical system of Teleological Egocentric Functionalism (TEF), which he later explains to an audience of fellow transhumanists:

Teleological—because it is every advanced individual’s inherent design and desired destiny to evolve. Egocentric—because it is based on each of our selfish individual desires, which are of the foremost importance. Functional—because it will only be rational and consequential. And not fair, nor humanitarian, nor altruistic, nor muddled with unreachable mammalian niceties. The philosophy is essential because it doesn’t allow for passive failure. It doesn’t allow transhumanists to live in delusion while our precious years of existence pass. (Istvan 2013, 84)

Jethro circumnavigates the world on his sailboat and works as a journalist in conflict-ridden areas, with the aim of learning as much as possible about the world. Upon returning to the United States, Jethro founds the activist organization Transhuman Citizen, which aims to promote emerging technologies – particularly biotechnological research into indefinite life extension. He must also to foil the increasingly violent and destructive attacks against cutting-edge scientists and research centers by Christian fundamentalist terrorists spearheaded by the Neo-Luddite Reverend Belinas. The Redeem Church, headed by Belinas, has no qualms about hiring thugs to brutally murder transhumanist scientists. At the same time, Belinas maintains a façade of public respectability and functions as a high-profile “moral leader.” He influences public opinion and prominent politicians – including Jethro’s former college classmate Senator Gregory Michaelson – to despise radical technological progress and crack down on transhumanist research through prohibitions and force. After Jethro’s wife and unborn child are murdered by Belinas’s henchmen and Transhuman Citizen rapidly loses support due to Belinas’s political and public-relations war, Jethro’s dream seems to be on the verge of total collapse. Jethro’s only opportunity for a turnaround arrives in the form of the Russian oil tycoon Frederich Vilimich.

Vilimich is not the ideal rights-respecting free-market capitalist; his rise to power during the chaotic post-Soviet era is marred by the suspicious death of a general with whom he illegally seized a large number of bankrupt oil companies. Vilimich has high business acumen and recognizes the benefits of using the best technology available: “Against the opinion of many people—including the general—Vilimich used every ruble of the company’s booming earnings to acquire the most technologically advanced oil extraction equipment available. Within a few years, the company quadrupled its oil output and became a dominant player in the worldwide energy field” (Istvan 2013, 174). Vilimich can be capricious and tyrannical but understands economic incentives and is ruthless about harnessing them to fulfill his objectives:

He was loathed by his own people for never giving one ruble to charity. He treated his workers poorly compared with other large oil companies, but paid them better. Governments feared him for his habit of impetuously shutting down his oil pipeline for days at a time, thus creating worldwide spikes in energy prices. Some said he did it just to amuse himself; others insisted he just wanted higher oil prices; still others grumbled that he just wanted to remind people who was in control. (Istvan 2013, 175).

Vilimich is a tragic figure; all joy had left his life when his wife and son were murdered by terrorists two decades earlier. Vilimich dedicates his time and his vast oil fortune to repeated, unsuccessful attempts to bring them back from the dead. Vilimich’s redeeming quality is his understanding and embrace of the necessity of radical technological progress: “Vilimich was a believer in change via technology. It had always been a natural instinct for him” (Istvan 2013, 176). Upon learning of the concerted worldwide crackdown against Transhuman Citizen, Vilimich’s reaction is to sympathize with Jethro: “The world was afraid of evolution, Vilimich told himself, shaking his head in frustration. His grueling but successful battle against colon cancer reminded him that life was not open-ended” (Istvan 2013, 175). Vilimich realizes that some of his previous, mystical attempts to revive his family could not possibly have worked; “however, advanced scientific technology, hard work, and wits most certainly could. They were the exact same things he had used to create his sprawling oil empire.” (Istvan 2013, 176).

Vilimich initially approaches Jethro with the aim to redirect Jethro’s quest for biological immortality toward bringing back the dead instead. He tells Jethro, “I can give you billions of dollars for exactly that mission. We can build a nation of scientists to accomplish it. It may not follow the pure transhuman and immortality quests you wanted, but it’s close enough” (Istvan 2013, 179). Not even Vilimich’s billions, however, can redirect Jethro from his overarching plan for transforming the world in the pursuit of indefinite life extension, as outlined in his TEF Manifesto. Jethro points out that biological life extension for the living is a far more realistic and proximately achievable goal than reviving the dead. He replies to Vilimich, “What you want is just not even on the transhuman timeline right now. And it would be irresponsible to dedicate more than only a fraction of transhuman resources to it at a moment when the real goals of the movement are, literally, on the verge of collapse; when the longevity of our own lifespans are so immediately threatened” (Istvan 2013, 180). A clash of personalities ensues. Jethro attempts to reason with Vilimich: “But your money could be used for more practical and possible goals, for near-term successes like your own immediate health and longevity. Then, at some later point, you could consider tackling the monumental task of bringing back the dead. What you want is not even reasonable just yet” (Istvan 2013, 180). To this Vilimich responds, “I didn’t get to be so successful because I was always reasonable” (Istvan 2013, 180). Both Vilimich and Jethro have lost their families to violence. However, unlike Jethro, who seeks to base his decisions on an overarching “machine-like” rationality, Vilimich is driven by his passionate obsession with bringing back his loved ones above all. Both men are stubborn and unyielding, and their initial meeting ends in an impasse.

However, four days later, Vilimich becomes swayed to give Jethro 10 billion dollars – half of Vilimich’s stake in Calico Oil – unconditionally. Vilimich sees much of himself in Jethro’s intransigence and single-mindedness, and his reversal makes all the difference for Jethro. Immediately, Jethro undertakes an elaborate scheme to conceal the money from the world’s governments, which would have expropriated it:

The next morning, in a rented private jet, Jethro flew around the world to Vanuatu, Singapore, Lebanon, Panama, Maldives, Djibouti, and Switzerland. He spent two weeks establishing bank accounts for various pop-up companies and corporations in out-of-the-way places, acting as the sole manager. He made up odd business names like Antidy Enterprises, Amerigon LLC, and Dumcros Inc. The money was wired in small, varying portions to all his hidden accounts belonging to the companies so it could never be frozen, tracked, or calculated by the NFSA [National Future Security Agency – a US federal agency established to crack down on transhumanist research] or anyone else on the planet. Even the Phoenix Bank president wasn’t aware of the account names or numbers, as third-party escrow accounts were used to hide and deflect all traceable sources. Jethro sent secondary codes and addresses to Mr. Vilimich, as the only other person capable of locating the money. But even he wasn’t allowed to know everything or control anything. On every account, there was a different company, a different address, a different identification number, a different mission statement. The ten billion dollars was split in a hundred different ways, all with digital tentacles that led only to Jethro Knights.

When the money was safe, he emailed Vilimich:

Dear Mr. Vilimich,

Thank you. The money is safe and being put to good use for the right reasons. I’ll be in touch as the transhuman mission progresses. Furthermore, you have my pledge that I will not forget that picture in your pocket.

Jethro Knights (Istvan 2013, 184)

What Jethro does with Vilimich’s money is nothing short of revolutionary. He endeavors to construct an independent community of cutting-edge scientists – Transhumania – on a floating platform – a seastead – in international waters, away from any country’s jurisdiction. Jethro fabricates the appearance of Transhuman Citizen’s continued decline, so as to trick the anti-transhumanist politicians and religious leaders into thinking that their victory against Jethro is imminent. In secret, Jethro reaches out to architect Rachel Burton, who pioneered many concepts for futuristic structures but is frustrated at the lack of interest in ambitious architectural projects due to the ongoing economic and technological stagnation in mainstream societies. Although the acerbic Burton is initially wary of Jethro, she becomes elated when he explains his vision to her:

“A floating city should shield transhumanists and the people I need away from those forces, giving me certain worldwide legal protections. The city will have to be built to house approximately 10,000 scientists and their immediate families. You’ll have to build up, because I want most of the city open for creating green spaces, jungles, and parks—so people like living there. Actually, so they love living there. These will be very picky people, some of the smartest in the world. They’ll want the best of everything, and they deserve it. I want them to be enthralled with every bit of their new home. I want the city big enough to have an airport for passenger jets, but small enough to comfortably ride a bike around in twenty minutes. I want to build the most modern metropolis on the planet, a utopia for transhumanists and their research.” (Istvan 2013, 192)

Unlike Vilimich, who pays his workers well but treats them poorly, Jethro is more focused on the quality of his employees’ lives. He understands the importance of employee motivation and creating a rewarding work environment and the opportunity for fulfilling personal lives outside of the workplace. Because Jethro must attract the best and brightest in order to have a hope of realizing his goal of living indefinitely, he needs to give these creative minds the best possible quality of life in order to entice them to come to Transhumania.

The platform and infrastructure for Transhumania – dominated by three towering skyscrapers – are assembled in Liberia at Burton’s recommendation. She outlines the geopolitical and economic considerations behind this choice: “West Africa is far off the radar screen for the rest of the world, so hopefully, there won’t be any troublesome interruptions by the media or the NFSA. Besides, Liberia has cheap labor, good weather, and lots of beach space to launch this puppy. It’s going to be at least ten soccer fields long, you know. We’re going to need lots and lots of space.” (Istvan 2013, 193) The construction effort is a massive project – requiring an “army of 15,000 workers” to labor for five months (Istvan 2013, 193). Jethro is a hands-on project manager who spends much time at the construction site and gets involved in the details of the plan for the seastead, as well as the means by which it is assembled. Jethro hires an international team of workers and, with the help of a multilingual foreman, sets up a work rotation to facilitate uninterrupted construction: “The work was endless: Twenty-four hours a day, there was a symphony of hammering, drilling, welding, grinding, and shouting. There was no break from the movement; sprawling bodies and their machines zipped tirelessly around the platform. The sheer creation process was a marvel to behold” (Istvan 2013, 195).

As Transhumania nears completion, Jethro travels throughout the world to clandestinely invite leading scientists to live there. Jethro becomes an expert presenter:

Jethro mastered his task of pitching the spectacular possibilities of the transhuman nation to his chosen candidates. His invitation to share in the rebirth of the transhuman mission and its life extension goals was compelling, exciting, and novel. Part of his presentation was done in 3D modeling on a holographic screen that shot out of his laptop computer. The state-of-the-art technology Burton’s company provided was impressively futuristic. (Istvan 2013, 196).

Jethro promises the candidate scientists that they will live in “The most modern buildings in the world. Every luxury and convenience you can imagine: spas, five-star restaurants, botanical gardens, farmers’ markets, an entertainment plaza, a world-class performing arts center. Then over there would be your offices and laboratories. No expense spared on your research equipment. The most sophisticated on the planet—I guarantee it.” (Istvan 2013, 196-197). Furthermore, Jethro emphasizes the tremendous freedom that scientists would have to pursue their research in the absence of political restraints: “Once scientists arrived there, he promised hassle-free lives from bossy governments and others that disapprove of transhumanist ways. The United Nations decreed three decades ago that rules and ownership 200 miles away from any land masses on the planet do not exist” (Istvan 2013, 197). Jethro grasps the essential harmony of interests between a well-run business and its employees, and therefore does not forget about providing generous pay and benefits, as well as creating a family-friendly living environment on Transhumania:

Additionally, he promised the scientists amazing salaries, stellar healthcare, and citizenship to Transhumania if people desired. For their children, there would be competitive schools, sports groups, piano tutors, French classes, tennis lessons, and swim teams. Dozens of varied restaurants and cafes would serve organic, sustainable, and cruelty-free foods. Coffee shops, juice bars, and drinking pubs would be ubiquitous. Movie theaters, art galleries, fitness centers, libraries, science and technology museums, and shopping centers would dot the city. Innovative designers would set up furniture and clothing outlets, including those that created products and garments with the latest intelligent materials capable of bio-monitoring the body. Whatever you wanted or needed, no matter how far-fetched; it would all be there. Jethro laid out the promise of an ideal, advanced society, the chance to belong to a country with everything going for it. (Istvan 2013, 197).

Jethro’s hiring policy is enlightened and meritocratic with regard to avoiding any prejudice based on attributes irrelevant to a person’s ability to get the job done. However, Jethro is also unforgiving of sub-optimal performance and ruthless about preventing or suppressing any possible behavior or institution that would get in the way of the fulfillment of his overarching vision for Transhumania. Moreover, Jethro – unlike a principled libertarian – does not brook significant ideological dissent in his country:

His hiring policy was simple. He didn’t give a damn where you came from, or what color you were, or with whom you had sex, or what gender you were, or if you had disabilities, or whether you were a criminal or not. But if you were hired for a position, and you failed to meet the goals assigned to you, or if you hindered other hires from meeting the goals assigned to them, then you would be fired and forced off Transhumania at once. There were no labor unions allowed. No workers’ compensation. No welfare. No freebies. In short, there was no pity, or even pretense at pity. There was just usefulness—or not. And if you didn’t like it, or didn’t agree with it, then you didn’t belong on Transhumania. Every contract of every scientist who wanted to join bore this severe language, as well as their consensual agreement to uphold the [tenets] of the TEF Manifesto and the core mission of transhumanism. (Istvan 2013, 197)

Because Jethro acts not only as the head of a vast business but also as the leader of a de facto independent city-state, it is not clear whether his behavior is consistent with respect for individual rights. On the one hand, every arrangement into which Transhumania’s residents enter is a freely chosen contract. On the other hand, they lose every association with Transhumania if they fail to adhere to Jethro’s demanding terms. They not merely lose their jobs, but they may no longer live or own property on Transhumania. Ultimately, Jethro facilitates comfortable lifestyles and offers abundant economic incentives not out of a devotion to individual freedom per se, but out of a recognition that a considerable allowance for economic liberty (though constrained by Jethro’s overarching purpose) would be the most conducive to rapid technological innovation and the eventual discovery of a means to reverse biological senescence and live indefinitely.

In spite of the severity of some of Jethro’s terms, the scientists who come to work on Transhumania know what they are getting into. Many come willingly after being inspired by a speech filled with Jethro’s characteristic militant, uncompromising rhetoric:

After so many years of being professionally stifled, intellectually muted, and socially ostracized, many transhuman entrepreneurs and scientists of the world cheered. While the speech was worded stronger than they themselves would have delivered, they respected Jethro Knights’ unwillingness to compromise the transhuman mission. They valued his promotion of the determined and accomplished individual. They applauded his hero’s journey to reverse the falling fortunes of the immortality quest. They especially appreciated the face-slapping of religion, human mediocrity, and overbearing government. Modern society was at a tipping point of such cowardly self-delusion and democratic self-sacrifice that someone needed to stand up and fight for what everyone wanted and admitted secretly to themselves: I want to reach a place of true power and security that can’t be snatched from me at the world’s whim. (Istvan 2013, 203)

Vilimich is pleased with his investment and sends Jethro a one-line note, “Thanks for punching the world for me” – to which Jethro replies, “Thanks for giving me muscles to do so” (Istvan 2013, 203). Through this exchange, Istvan illustrates the indispensability of these two visionary, intransigent men’s business partnership to making Transhumania possible.

Jethro raises the incentives for coming to Transhumania by offering each researcher “a tax-free million dollar signing bonus. It was more money than many had accumulated in decades of work. If they brought approved colleagues from their fields with them, an additional hundred thousand dollars was given. The main obligations of those who joined the transhuman nation included staying their full five-year term and reaching reasonable performance goals in their work” (Istvan 2013, 203). Jethro also creates the possibility of owning real estate: “One-, two-, three-, and four-bedroom residences were sold at enticing prices. Jethro made it cheaper to own than to rent, and most people opted to buy upon arriving. It replenished the cash Transhumania needed for actual research and city operations” (Istvan 2013, 204). Jethro understands that ownership of private property (limited though it may be by the requirement to adhere to the TEF Manifesto) gives the owner a powerful incentive to strive for the economic progress of the community where the property is located. By turning his employees into stakeholders of Transhumania, he not only enhances Transhumania’s revenue stream but also turns his scientists into more motivated, dedicated producers and innovators. Essentially, Jethro utilizes the principles of running a successful start-up technology firm and applies them to an entire small country: “Jethro ran the entire nation as if it were an aggressive, expanding technology company racing to bring an incredible invention to market. Every scientist had stock in its success, in the urgency of its mission. The result was a hiring domino effect. Soon, hundreds of scientists were showing up weekly to make tours of Transhumania and to sign contracts” (Istvan 2013, 204).

Jethro succeeds in cultivating a motivated, even inspired, workforce, with a prevailing “can-do” ethos:

Problems occurred, but they were quickly worked out for the most part. These were not people who complained about a broken hot shower or a bad Internet connection. These were professionals of the highest order, and they were all building the nation together. They fixed things themselves, went out of their way to improve operations, and helped one another when they could. These citizens were people of action, of doing—and doing it right. (Istvan 2013, 205).

Jethro is also able to vastly improve his scientists’ quality of life by restoring their sense that an amazing future can be created through their own work:

Many scientists commented they felt like graduate students again—when the world was something miraculous to believe in, when anything was still possible, when the next great discovery or the next great technological leap was perhaps just months away. […]At night, many of them looked at the stars from the windows of their skyscrapers and felt as if they had arrived on a remarkable new planet. They were never happier or more productive, or bound with a greater sense of drive. (Istvan 2013, 205).

In his discussion of the incentives and outcomes found in Transhumania, Istvan illustrates that the best-run businesses will not only generate economic value but will also inspire employees with the prospect of improving the human condition and creating a better world. Even though Jethro’s methods of sweeping aside all opposition are questionable, his goals of overcoming disease, lengthening lifespans without limit, and producing life-improving technological advances on all fronts are clearly some of the most admirable aims for any enterprise.

Five years after Transhumania’s founding, a major breakthrough enables the goal of indefinite lifespans to approach fruition. Jethro’s colleague, the scientist Preston Langmore announces that “The new cell-like substance that we’ve developed has so many applications. The manipulation of its DNA, controlled by our nanobots, will bring unprecedented changes to human life in the next decade, perhaps even in the next few years. We will begin our ascent to a truly immortal life form, full of all the benefits of what it means to be a transhuman being” (Istvan 2013, 222).

But the obstacles to the realization of Jethro’s dream do not cease once Transhumania becomes economically and scientifically successful. Jethro recognizes that anti-transhumanist organizations and governments will not simply allow Transhumanian research to continue in peace. Therefore, he devotes a third of Transhumania’s budget to defense. Transhumania’s vast revenues enable the construction of a missile shield, four megasonic airplanes, and ten combat robots, as well as the world’s most advanced cyber-warfare infrastructure. Shortly after Transhumania’s defensive capabilities are deployed, Belinas orchestrates Jethro’s kidnapping and torture. However, Jethro’s colleagues manage to locate the compound where he is held hostage, and one of the Transhumanian combat robots destroys Belinas’s thugs and kills Belinas himself. Jethro is freed, and Belinas’s crimes are broadly publicized, to the shame of the world’s governments. However, too many politicians and military leaders have become personally vested in attempting to seize Transhumania’s scientific and economic production for themselves, and it is too late to stop them from mobilizing their combined navies in an assault on Transhumania. Jethro’s hackers manage to cripple most of the invaders’ missile-guidance systems, causing the nations’ fleets to destroy one another. Only some extremely obsolete Russian missiles, whose use Jethro did not anticipate, manage to inflict moderate damage. Within twenty-four hours, the ingenuity of Transhumania’s scientists enables them to anticipate these missiles and effectively defend against them as well. By establishing the framework for the world’s freest and most innovative economy, Jethro enables the emergence of the ample resources needed to resist those who would stand in the way of his ambition.

Having defeated the combined might of the world’s navies, Jethro considers it impossible for Transhumania to peacefully coexist with the political status quo. Now that he possesses the technological means to easily outmaneuver and foil any nation’s military, Jethro is able to occupy much of the world after destroying all of the major religious and political monuments of traditional human societies. This is where Jethro crosses the line from justifiable self-defense of his society and into aggression against the rest of humanity – becoming an authoritarian world dictator in his quest to be the omnipotender. What distinguishes Jethro’s rule from historical totalitarianism is his instrumental use of free-market policies and incentives to facilitate technological and economic growth – but, again, only insofar as this serves his overarching goal of transforming the human condition along the path outlined in the TEF Manifesto. Jethro’s approach to the population of Earth is more utilitarian than based on any absolute, inviolate concept of individual rights; Jethro will recognize a semblance of personal freedom, but only for those who are useful to his broad ambition of turning humanity into a rapidly advancing, transhuman species. Those who cast their lot with Jethro during the early days of Transhumania are, on the other hand, rewarded with unprecedented power. Jethro urges his Transhumanian colleagues to renew their contracts and oversee vast swaths of the transhumanist-dominated Earth:

“You will have a choice, of course, to do as you desire and go where you like, and take the wealth you’ve earned. Nevertheless, in the best interest of the transhuman mission, I feel it expedient to appoint you as interim leaders of your birth nations and its major cities. Many of you will also oversee massive new science projects that only the resources of individual continents can foster. Others of you will be asked to found and build new universities and educational institutes, some of which will become the largest, most populated learning centers in the world.

“It is my hope that in your new appointments, you will seed and cultivate a surplus of amazing new transhuman projects to fruition for us all. As incentive to accept these new duties asked of you, your compensation packages will be staggering. I aim to make each and every one of you—as well as all other citizens on Transhumania—some of the richest and most powerful people in the world.” (Istvan 2013, 231)

In effect, Jethro takes the meritocracy he established in Transhumania and transposes it onto the wider world, turning the best and brightest into world leaders and fulfilling the age-old dream of some thinkers to put enlightened “philosopher-kings” in charge of human society. Jethro explicitly announces that the entire world will become Transhumania writ large:

“Earth, and human habitation of it, will be redesigned. It will no longer be many different countries with different cultures on different continents, but one committed transhuman alliance. It will be transformed into one global civilization bound to advancing science—one great transhuman planet. There will be no more sovereign nations, only Transhumania. Our transhuman goals will be the same as before; there will just be a lot more people working towards them, and a lot more resources to help us achieve success.” (Istvan 2013, 231)

With all of the Earth’s resources at his disposal, Jethro continues his quest to overcome disease and death, and by the novel’s end it appears that he is successful. Jethro is even able to be cryonically frozen and subsequently revived. He begins to venture into the possibility raised by Vilimich of eventually recovering deceased loved ones – but this quest remains unconcluded, and Istvan leaves the question of its feasibility as open-ended.

The Transhumanist Wager is a story about the clever use of a vast business structure and carefully crafted economic incentives to achieve the most revolutionary transformation of humankind conceivable: a revolution against contemporary societies and in favor of a global culture committed to rapid technological progress and the defeat of death above all. Jethro Knights is more of a utilitarian than a libertarian, and his choice of means eventually departs starkly from principled libertarianism, since a consistent respect for the individual rights of all people, including those whom one considers deeply hostile to one’s vision of progress, must ultimately clash with the desire to become an “omnipotender” and achieve as much power as possible. However, during the stage in which Jethro uses free-market policies and innovative business management as instruments toward the attainment of his vision, he is able to create an admirable and inspiring model for human progress.

Reference

Istvan, Zoltan. 2013. The Transhumanist Wager. San Bernardino: Futurity Imagine Media LLC.

Creation of an Ethical Business: The Implementation of Virtuous Behavior and Shared Values and Goals – Article by Jessica L. Kuryn

Creation of an Ethical Business: The Implementation of Virtuous Behavior and Shared Values and Goals – Article by Jessica L. Kuryn

Comments 2 comments
The New Renaissance Hat
Jessica L. Kuryn
May 10, 2012
******************************

IN TODAY’S COMPETITIVE BUSINESS ENVIRONMENT, a growing number of firms will do almost anything to gain sales and customers, as well as to increase profits.  For some of these firms, playing by the rules doesn’t achieve the results they are after.  Firms have the choice to act ethically or unethically.  While misguided managers think that unethical behavior can lead the firm, and ultimately themselves, to greater profits over the long term, it is only for the short term.  It will eventually lead to their downfall in that unethical behavior spirals out of control and can be very difficult to maintain.  Once this occurs, a firm’s reputation becomes tarnished and the company fades into non-existence.  On the contrary, “firms that pursue ethically driven strategies realize a greater profit potential than those firms who currently use profit-driven strategies” (Arjoon 159).

The point is that a firm’s leaders do have a choice in how they conduct business.  Creating an ethical business does not happen overnight.  It takes extensive collaboration and several implementation and evaluation processes, as well as continual reinforcement of and changes to established practices and values.  Perhaps one of the most important aspects to creating an ethical business is that it requires cooperation on multiple organizational levels and the implementation of virtuous behavior and values.

Maintaining ethical practices, once implemented, is an ongoing process.  There are many factors that can affect ethical behavior, such as competition for customers and market share, the need for increased profits, and management incentives.  Some firms, such as BB&T have been able to implement an ethical environment that has led to firm success, while others such as Enron, have succumbed to greed and wrongdoing, and no longer are in existence.  BB&T’s story of success will be discussed later in this paper.

CREATING AN ETHICALLY DRIVEN BUSINESS

Business ethics can be defined as “the applied ethics discipline that addresses the moral features of commercial activity” (Marcoux).  The question we have to ask concerning business ethics is how they can be applied to a business.  One of the most important aspects in creating an ethical business entails the need for new and refined organizationalvalues.  A value, as defined by Ayn Rand in Younkins’s article, is “that which one acts to gain and/or keep” (Younkins 9). Antonio Argandoña suggests a business must first identify its currently existing values and from that develop what values are needed (Argandoña 22).  In identifying these needed values, it is crucial that businesses select values that pertain to both the business’s goals, as well as the employees’ goals.  Congruence between the goals of the business and its employees increase the chances that the valueswill be received well and adhered to.

Once the desired values and goals have been determined, it falls in the hands of management to implement and communicate them.  “At the top level of an organization, it takes effective communicators who are clear about what they champion and who establish the company on virtuous behavior” (Younkins 21).Virtues, which are also defined by Ayn Rand in Younkin’s article, are “the act[s] by which one gains and/or keeps an objective value” (Younkins 11).  It is crucial for each employee and manager to establish virtues within themselves in order to pursue individual and organizational values, as well as keep them once they have been successfully implemented.It is the responsibility of management to ensure that these values are clearly communicated and followed, while established virtuous behavior becomes the mean by which these values flourish and exist.“A culture (or climate) of virtue in a business begins with executives who exhibit virtuous leadership through their personal actions and interpersonal relationships” (Younkins 21).

In displaying virtuous behavior throughout an organization, managers are setting an example for employees.   “Employees are influenced by observing visible and legitimate role models who themselves act as virtuous agents.  Not only should leaders openly discuss virtues and values, they should also live the virtues and values that they advocate” (Younkins 21).  I believe that this is one of the most important aspects in creating and sustaining an ethical business environment.  As explained by Kouzes and Posner in Minkes, Small, and Chatterjee’s article, “…leaders who could not personally adhere to a firm set of values, could not convince others of the worthiness of those values” (Minkes, Small, and Chatterjee 330).  People learn through example.  Therefore, managers should be mindful of this and back up their words with consistent virtuous behaviors that champion the organization’s values.

Once organizational values have been implemented, only half of the work has been done.  The remaining half is a continual and never ending process within the business.  In maintaining an ethical business, ongoing promotion and reinforcement is necessary.  Management must continue to display ethical behavior, while continuing to communicate values to employees.  This also includes communicating what actions are and are not acceptable.  Employee evaluations should also frequently be performed, in which employees are evaluated on values implemented by the organization’s managers.  In addition, management also needs to develop systems that reward value-oriented behaviors and reprimand value-destructive behaviors.

In regards to a reward system, “employees should be objectively appraised and compensated based on their contribution toward achieving a firm’s mission, values, and goals” (Younkins 19).  Employees may receive monetary or recognition awards for their display of virtuous and ethical behavior.  In establishing such incentives, there is an encouragement that exists among employees to accept and display the organization’s values and goals.  In addition, such incentives create a pathway in which individuals can fulfill their own self-interests and goals simultaneously.  “The good manager tries to shape employees’ ideas about self-interest by instituting incentives rewarding cooperation and reinforcing the pleasure people take in collaborating with each other” (Koehn 498). When employees act ethically, the business is also handsomely rewarded in that it gains a good reputation as being an ethically driven business.  This can lead to higher profits in that consumers will be more likely to choose that particular business over competitors because of its reputation.  “Many companies are now realizing that ethically driven strategies are resulting in a sustainable competitive advantage” (Arjoon 168).  In addition, “companies that have seriously adopted ethically driven or people-centered strategies have seen clear gains in productivity, sales and profits, customer service, retention rates, reduction in absenteeism, positive impact on employee morale, [and] increased and timely launching of products” (Arjoon 169).

Adversely, a disciplinary system is also necessary in order to maintain organization values and ethically driven behavior that have already been established.  Employees should be aware of the possible repercussions of their actions in advance, and management needs to ensure disciplinary actions are followed through with when dealing with value-destructive behaviors.  This sends a message to employees that unethical behavior will not be tolerated and it should be avoided at all costs.

The acts of Enron and WorldCom have increased consumer demands for ethically driven organizations.  Therefore, the businesses that make ethics a priority will likely obtain a sustainable competitive advantage because more consumers will choose to do business with them.  In today’s economy and business world, businesses must place a large focus on ethics in order to be successful.

FACTORS THAT AFFECT ETHICAL BEHAVIOR

Implementing a form of virtue ethics and values throughout a business can be very challenging, but maintaining it can be just as difficult.  There are many factors that can affect ethical behavior and lead a manager or employee to act unethically.  Competition for customers and increased market share, as well as the need for more profit are common issues that can lead to unethical behavior.  In addition, management incentives, such as bonuses, pay increases, promotions, and stock options can open the gateway for unethical behavior.

With a specific focus on profit, businesses that have an urgency to increase profits are likely to engage in false reporting.  Reporting false financial information makes a business’s financial statements look more appealing to investors and gives a false pretense that the business is in better financial health than it really is.  In addition, management may inflate earnings if they receive bonuses, pay increases, or promotions for increasing profits.  These monetary compensations can prove beneficial for businesses in that management will be more driven to make sales and increase wealth in the business.  Adversely, these monetary compensations can be dangerous if a manager works in his or her own interest and does not act ethically.  It could put the business in a financial position that is difficult to correct.

Stock options are another form of management compensation.  “Stock options allow employees to purchase a particular number of common shares of company stock at a specified price over a specified time period” (Brooks and Dunn 172).  Stock options can be beneficial in that they serve as a motivational devise.  When managers have an interest in the company they work for, they are more willing to strive towards an increase in stock prices.  Shareholders, as well as the managers, enjoy higher returns when stock prices increase.  In addition, stock options enable management to adopt the investor’s perspective in that theyenable both the interests of investors and management to be aligned.

One of the biggest problems with this is that unethical managers can work out of their own self-interest to falsely raise stock prices in order to earn more money.  With the incentive to earn more money comes the high possibility for unethical behavior and false reporting.  Managers that get used to these increasing stock prices are also the ones who will likely forego ethical standards and correct reporting procedures.  The concept of stock options can be extremely dangerous to a firm, especially when stock prices are truly in decline and these types of managers are present.  Reporting false income to increase these prices will eventually catch up to the firm and will result in the company’s non-existence.  Another problem with stock options is that management has the option to exercise their stock options and then sell them immediately.  This does not align with investor interests in that managers are only maintaining a short term perspective.  Making decisions based on the short term only hurts the long term investors.

BB&T – A TRUE ETHICALLY DRIVEN BUSINESS

BB&T is a fine example of a business that has been led to success through the values-driven approach adopted by one its leaders.  John Allison, former CEO of BB&T, now serves as the chairman of the board of directors.  During Allison’s time as CEO, the company has grown from approximately $5 billion in assets to $165 billion in assets.  This substantial growth has placed the company as the eighth largest financial institute in the United States.  Just a few of the issues BB&T has made a bold stand on are a municipality’s right to seize property by eminent domain for the purpose of economic development, and negative amortization loans.  Allison received national attention is his decision to “not provide loans for any economic development projects in which the land for the project had been taken in this manner” (Parnell and Dent 587).  This decision was not initially favored by many mortgage producers.

“When we made the decision not to do these loans, we got beat up in the market.  We also lost a number of mortgage producers who could make more money working for Countrywide – of course a number of these producers would now like to come back to BB&T.  We believe that doing our best to help our clients make the right financial decisions is good for BB&T.  I believe that while there may be short-term trade-offs by sticking to your values, you are never making a sacrifice in the long run, if your values are rational” (Parnell and Dent 589).

“Allison is known for, and attributes BB&T’s success to, operating by a set of principles that are embodied in BB&T’s Values Statement.  These ten values – Reality (Fact-Based), Reason (Objectivity), Independent Thinking, Productivity, Honesty, Integrity, Justice (Fairness), Pride, Self-Esteem (Self-Motivation), and Teamwork/Mutual (Supportiveness) – are not simply platitudes at BB&T but drive the decision-making process of the bank” (Parnell and Dent 588).  These values serve as the foundation that BB&T was built on.  As part of the evaluation process, employees are evaluated on their performance in accordance with the 10 values.  Those employees that perform in accordance with the values are rewarded.

Allison attributes Rand’s philosophy of Objectivism as the framework for these 10 values.  The main aspect of Objectivism is that it relies on truth and blocks out all emotions in the decision making process.  “The purpose of the process is to help you think rationally.  It is about not letting your emotions make decisions that are bad for you.  It is the ability to make logical decisions based on the facts and to pursue our purposes that makes us happy” (Parnell and Dent 591).

In addition, BB&T has also been viewed as being socially responsible.  Milton Friedman, who is referenced to in Parnell and Dent’s article, argues that there are two reasons as to why a firm should act socially responsible.  “First, not doing so can increase the likelihood of more costly government regulation.  A number of regulations over business operations were enacted because some firms refused to be socially responsible” (Parnell and Dent 593).  The second reason as to why a firm should act socially responsible is that “stakeholders affected by a firm’s social responsibility stance – most notably customers – are also those who must choose whether to transact business with the firm” (Parnell and Dent 593).  The point here is that if consumers do not think a firm is socially responsible, they have the option to do business with another company, and they will more than likely do so.  As discussed in Parnell and Dent’s article, studies have shown that consumers will be willing to pay more for products and services that are responsibly produced.  Simply, consumers favor ethically driven and responsible businesses, and will purchase products and services from them considering this factor.  This is why it is crucial for businesses in today’s economy and environment to be ethically driven and socially responsible.  With the events as seen in Enron and WorldCom, it has made consumers extra sensitive to firms and what approach they take in formulating profit.  Consumers want to be valued for their choice to do business with a particular firm, and they take enjoyment in purchasing products from these firms when they display ethically driven strategies.

From a market and environmental perspective, we could argue that BB&T is doing exceptionally well.  “From a market perspective, BB&T has delivered strong growth and financial performance since Allison’s appointment as CEO in 1989.  From a broad environmental perspective, BB&T’s business decisions defending eminent domain rights and eschewing negative amortization loans reflect support for a sustained society that respects personal property rights and responsible mortgage loan practices” (Parnell and Dent 594).  In respect to this, BB&T speaks on behalf of individuals and what they want.  While BB&T suffered somewhat in the short term, they were able to come out on top in the long run.  In my personal opinion, I have much more respect for companies like BB&T because they are willing to forgo potential profits and take a stand, even when it is not the popular decision.  Companies, like BB&T, will be around for years longer than the companies that jump on the popularity bandwagon.  They will also see considerably larger profits because they stand out among their competitors – just as BB&T has come to do

CONCLUSION

In conclusion, it is easy to see how BB&T has come to be a top competitor in the financial institution sector of business.  BB&T is a classic example of an ethically driven firm that has realized greater profits than the firms that have adopted a profit-driven strategy.  The implementation of ethics throughout an organization is a very difficult thing to do.  It requires substantial acceptance from employees and managers alike to be successful.  Most importantly, managers are the driving forces in implementing such a strategy throughout an organization.  They must be effective in communicating the values of an organization to employees, as well as lead by example.  Management cannot expect to preach values that they do not live by themselves.  After all, people learn through example.  A leader that lives by the values it communicates to employees has the best shot at having an ethically driven business.

In addition to the communication process, managers must provide incentives for desirable behavior.  A rewards system based on monetary or recognition awards are great ways to encourage cooperation and motivate employees.  This also encourages the creation of a pathway in which individuals can fulfill their self-interests.  These same values must also be a part of the evaluation process.  Just as there are rewards systems, management must also design a disciplinary system.  It is important that employees are aware in advance what they could encounter by not behaving in accordance with a firm’s values and policies.  Managers must also follow through with any disciplinary action to reinforce their importance on having a values-based business.

The benefits of implementing an ethically driven business strategy can be great, but it can be a difficult thing to do.  Competition for customers and increased market share, as well as the need for more profit are common issues that can lead to unethical behavior.  In addition, management incentives, such as bonuses, pay increases, promotions, and stock options can open the gateway for unethical behavior. However, if a firm is able to successfully implement an ethics-driven approach, these issues can be minimized and the interests of the firm and employees will be satisfied and aligned.  When a firm is able to align individual self-interests with its own interests, happiness and flourishing are more likely to occur for both.

Jessica Kuryn is a student in Wheeling Jesuit University’s Master of Science in Accountancy (MSA) program.

SOURCES

Argandoña, Antonio. (2003).  Fostering values in organizations.  Journal of Business Ethics 45:

            15-28.

Arjoon, Surendra (2000).  Virtue theory as a dynamic theory of business.  Journal of Business

            Ethics, no. 28:159-78.

Brooks, L. J., and P. Dunn. Business & Professional Ethics for Directors, Executives &

Accountants. 5. South-Western Pub, 2011. 172.

Koehn, Daryl. (1998).  Virtue ethics, the firm, and moral psychology.  Business Ethics Quarterly

            8 (3): 497-513.

Marcoux, Alexei, “Business Ethics”, The Stanford Encyclopedia of Philosophy (Fall 2008

Edition), Edward N. Zalta (ed.), URL

<http://plato.stanford.edu/archives/fall2008/entries/ethics-business/>.

Minkes, A.L., M.W. Small, and S.R. Chatterjee. (1999).  Leadership and business ethics: Does it

            Matter? Implications for management.Journal of Business Ethics 20: 327-35.

Parnell, John A., and Eric B. Dent. (2009).  Philosophy, Ethics, and Capitalism: An Interview

            With BB&T Chairman John Allison.Academy of Management Learning & Education

            8 (4): 587-96.

Younkins, Edward W. “Morality, Success, and Individual Happiness in Business: The Virtuous

            Pursuit of Values and Goals,” Libertarian Papers 3, 26 (2011).

Objectivist Virtue Ethics in Business – Article by Edward W. Younkins

Objectivist Virtue Ethics in Business – Article by Edward W. Younkins

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The New Renaissance Hat
Edward W. Younkins
April 24, 2012
******************************

Virtuous actions can lead to the achievement of values. When one’s context is reduced to business, virtue theory contends that pursuing virtuous principles, strategies, and actions can result in firms realizing their values including their mission, purpose, profit potential, and other goals. Virtuous employees tend to carry out their roles in a competent manner that is congruent with the firm’s goals. Virtues are instrumental allowing a person to act to gain values. When business people conform to the Objectivist virtues, they increase the likelihood of achieving their values and goals. Virtue ethics stresses the importance of each individual employee being able to make contributions of value. Valid virtue concepts are required to describe what it means to be an excellent director, leader, manager, or employee. To be successful, a business needs to espouse a set of virtues that are reality-based, non-contradictory, integrated, and comprehensive.

Virtue theory holds that ethics is an inherent part of business and that it is necessary to integrate moral theory into management theory and practice. The role of the virtues in business is to direct and motivate behavior toward the success of the business. Strategic management and business ethics converge because each area has an explicit interest in the nature and goals of business. In business, the virtues facilitate successful management and cooperation and enable a company to attain its goals. The Randian virtues can provide a moral framework and integrating strategy to guide a business in achieving its goals.[1]

The virtues connect ethics to business positively and provide a sound logical foundation for business ethics. Given the laws of nature and of human nature, there exists a set of virtues that fit reality and that are most likely to lead to success and happiness in business. Ayn Rand’s Objectivist ethics specifically recognizes production as the central human value. In addition, the personal virtues that she advocated have a direct bearing on work: rationality, honesty, independence, justice, integrity, productiveness, and pride. These virtues can be used as guiding forces in a business career and in the management of a business. They define the excellent manager (or other employee) and provide the principles that a corporation should adopt with respect to investors, employees, customers, vendors, and others.

A case can be made that virtue ethics has priority over, and perhaps grounds, other competing ethical approaches to business. In most cases being virtuous will be sufficient for leading a morally decent life in the world of business. Virtue theory is more attractive, positive, unified, comprehensive, and practical than are traditional approaches to business ethics because it is concerned with the type of person that one should be rather than with rules that tell people how they ought to act. Virtue theory is concerned with the cultivation of character and provides a framework through which a person can lead a flourishing and happy life. Moral growth comes from choice rather than from conformity to rules or codes.

Traditional approaches to business ethics (i.e., deontology, consequentialism and codes of conduct) are viewed as formulaic, prescriptive, constraining forces that legislate the form of moral deliberation. Conventional approaches focus on a set of prohibitive principles or rules that tell people how they ought to act. Kantian and utilitarian act-oriented approaches concentrate only on the development of principles while neglecting the cultivation of an individual’s character. Neither deontic nor consequentialist judgments are apt to supply sufficient action guidance for resolving particular dilemmas. Virtue ethics should be viewed as a precondition of, and complement to, moral reasoning based on a deontological focus on one’s obligation to act and on a teleological focus on the consequences of an action. Virtue ethics is more fundamental, and in many cases, preempts the consideration and application of deontic and utilitarian rules. An emphasis on virtuous behavior is motivational because it depends upon a person’s ability to aspire to excellence through virtuous acts. Virtue ethics emphasizes the process of individual moral character development. Above all, virtue ethics is concerned with the flourishing and happiness of the human agent (Mintz 1996, 537-38; Arjoon 2000, 159-78; Whetstone 2001, 101-14).

Virtue theory provides a context in which strategies, plans, tactics, policies, and procedures can be developed to attain a business’s stated mission and other relevant values. Virtues can play a causal role in achieving economic success. Virtues-driven firms tend to maximize profits. However, acting virtuously does not always result in wealth creation because other factors can come into play. Despite such an occurrence, virtuous employees still can experience the internal rewards of pride, self-esteem, and the joy of knowing that they did their jobs well.

The achievement of a firm’s telos, mission, purpose, ultimate end, or ultimate value requires virtuous action on the part of the company’s employees. The ultimate value for a business is financial value. The purpose of a business is to maximize owner value over the long-term by selling goods and/or services. Most corporation mission statements explain this purpose explicitly, or at least implicitly. It is necessary to recognize a business’s distinctive purpose when organizing and integrating human effort into purposeful long-term activities. Purposeful behavior requires a single overarching valued objective function. In a corporation market price per share can be a surrogate for owner value. More specifically, the ultimate purpose of maximizing total long-term market value can provide a criterion for management decisions and choices among competing alternatives, Virtues are instrumental and support a firm’s overall telos.

To accomplish a corporation’s ultimate purpose requires the attainment of a number of goals within a business. It is possible look upon both a firm’s ultimate purpose and its goals as values that need to be achieved. Although technically a value is an object of goal-directed action, in general parlance, the terms, goals and values, are often used interchangeably. For our purposes, we can consider both the ultimate end of a corporation (i.e., the long-term maximization of firm value) and the goals that can lead to the ultimate end to be values.

Goals (sometimes referred to as objectives) are specific quantitative targets that a business needs to meet in a manner consistent with ethical principles in order to accomplish its purpose. Typical goal areas in a business include: profitability, sales, sales growth, return on investment (ROI), profit margin, cash flow, market share (or position), customer loyalty, productivity, efficiency, cost control, research and development, product leadership, employee development, employee attitudes, employee loyalty, expansion or contraction of product and service lines, reducing business risks, and so on. Each and every goal should be analyzed to determine the potential impact on firm value and whether or not they are contributing to the attainment of the firm’s target valuation. Goals whose achievement does not contribute to increasing shareholder value should be eliminated.

To succeed a business must have a superior vision and purpose to work toward and the strategic focus and direction of effort to achieve them. The Objectivist virtues can enable people to direct their actions toward the attainment of a company’s goals and values including the maximization of owner value. Virtuous actions can lead to better customer service, gains in productivity and efficiency, higher employee retention rates, reduction in employee absenteeism, improvement in employee morale, better communications both internally and externally, honest and reliable internal and external financial reporting, the flexibility necessary to adapt to market conditions, increased innovation and the more frequent and more timely launching of new products and services, higher sales and profits, sustainable competitive advantages, greater flourishing and happiness of the firm’s employees, and so on.

Virtuous behavior is required at all levels of a company from employees who realize that business is a natural and moral means by which they can satisfy their needs and attain their actualization as individual human persons. Virtuous employees are energetic, productive workers who: (1) focus on reality; (2) think objectively, rationally, and logically in applying relevant knowledge; (3) ask clear, pertinent, insightful questions and listen carefully; (4) search for facts in their total context before judging and evaluating business situations; (5) use time efficiently and effectively; (6) organize their lives and work toward accomplishing worthwhile endeavors; and (7) set value-producing goals and strive to accomplish them.

A virtuous employee begins by understanding what the facts are and does not evade the distinction between the real and the unreal. Evasion detaches a person from reality. Virtue begins with the effort to confront reality as it is. Given that there is no standardized algorithm for making business decisions, an employee needs to use his reason to make rational, logical decisions based on the facts of reality. One needs to apply conscious, prudent, rational judgments and choices in various business contexts in order to identify, execute, and implement profitable and ethical internal and external exchange transactions.

Much of morality in business falls under the rubric of honesty. Honesty means being in accord with reality. Honesty is basic to the structure of human relationships in virtually all contexts. Dishonesty is self-defeating because it involves being in conflict with realty. Morality in business involves objectively recognizing and dealing with customers, employees, creditors, stockholders, and others as autonomous rational individuals with their particular goals and desires. The trader principle should govern the course of all human interactions because voluntary value-for-value relationships are consonant with human nature.

Honesty is closely related to the virtue of justice. Justice, a form of faithfulness to reality, is the virtue of granting to each man that which he objectively deserves. Justice is the expression of man’s rationality in his dealings with other men and involves seeking and granting the earned. A trader, a man of justice, earns what he gets and does not give or take the undeserved. For example, a virtuous manager must make sure that customers get what they pay for. In addition, he needs to identify employees for what they accomplish and treat them accordingly. Employees should be objectively appraised and compensated based on their contribution toward achieving a firm’s mission, values, and goals. A virtuous manager will discriminate among all those that he deals with (i.e., customers, suppliers, workers, etc.) based on relevant qualities and personal merits such as ability, competency, performance, and character. He will not improperly discriminate based on irrelevant characteristics such as sex, race, nationality, and so on.[2]

Although individuals can learn from each other, the fact remains that each of us thinks and acts alone and is responsible for his own actions. Independence requires the acceptance of one’s intellectual responsibility for his own existence, requires that a man form his own judgments, and that he support himself by the work of his own mind. It is not a corporation’s fault if someone does not attain his goals. Each employee is responsible for his favorable or unfavorable outcomes in a business setting where responsibilities are defined by, and arise out of, his particular role. Of course, a goal may not be completely under one’s control. It may require interdependence with or on other employees who co-contribute to whether or not someone attains a goal. Positive change and innovation in a company are based on the creativity of logical independent thinkers. It is through such employees that a firm discovers and invents ways to improve the fiscal bottom line thereby increasing the firm’s market value.

Integrity is the refusal to permit a breach between thought and action. It means acting consistently with rational principles that will lead to success and happiness. In business, an employee’s rationally-made plans are integrated with his actions in order to bring values into existence. From more of a macro viewpoint, we could say that the integrity of a business is maintained if the purpose for which it was created is followed (i.e., the maximization of owner value).[3]

Productiveness, the virtue of creating material values, is the act of translating one’s thoughts and goals into reality. Productiveness comprises an important existential component of virtuousness and is a responsibility of every moral person. It involves a commitment to creating value and to being self-responsible for bringing what one needs and wants into existence. Workers in a business are committed to producing wealth and bringing about well-being by taking the actions required to achieve the firm’s mission. Profits are an indicator of productive work on the part of people who want to achieve, produce, and improve well-being. Because people differ with respect to their intelligence, talents, and circumstances, the moral issue becomes how a particular employee addresses his work given his facticity, including his potentialities and concrete circumstances. In a business, the Randian virtues (including productiveness) offer a set of principles for getting the most value from one’s work. Rand’s Objectivist ethics recognizes that individuals search for meaning and purpose in the various components of one’s life (i.e., one’s work life, love life, home life, social life, and so on). Each of these is an end-in-itself and a means to the end of one’s life in total. One’s life in total is an end-in-itself and an ultimate value.

Pride, also called moral ambitiousness, is a man’s commitment to achieving the best in his life thereby effecting his moral perfection. Pride is the reward we earn by living by the other six Objectivist virtues. A businessman’s drive for success is a result of his taking pride in the business portion of his life. Each employee needs to work in a way as to be able to be rightfully proud of what he has done. Work is needed not only for sustenance, but also for one’s psychological well-being—it can be viewed as a means by which a man can maintain an active mind, attain purposes, and follow a goal-directed path throughout his lifetime. Through work a man can achieve his highest potentials. Doing work well in accordance with the goals of a firm (which are aligned with the personal goals of the worker) can cause an employee to positively enhance his self-esteem.

Dr. Edward W. Younkins is Professor of Accountancy at Wheeling Jesuit University. He is the author of Capitalism and Commerce: Conceptual Foundations of Free Enterprise [Lexington Books, 2002]. Many of Dr. Younkins’s essays can be found online at his web page at www.quebecoislibre.org. You can contact Dr. Younkins at younkins@wju.edu.

 

[1] Ayn Rand’s Objectivist ethics is specifically related to business and business ethics in Kirkpatrick 1992; Greiner and Kinni 2001; and Hicks 2003.

[2] See Locke and Woiceshyn 1995 for an argument for honesty in business from the perspective of rational egoism.

[3] Paine 1994 provides an interesting perspective on how to manage for organizational integrity.

References

Arjoon, Surendra. (2000). Virtue theory as a dynamic theory of business. Journal of Business Ethics, no. 28: 159-78.

Greiner, Donna and Theodore Kinni. (2001). Ayn Rand and Business. New York: Texere.

Hicks, Stephen R.C. (2003). Ayn Rand and contemporary business ethics. Journal of Accounting: Ethics and Public Policy 3 (1) (Winter): 1-26.

———. (2009). What business ethics can learn from Entrepreneurship. Journal of Private Enterprise 24 (2): 49-57.

Kirkpatrick, Jerry. (1992). Ayn Rand’s objectivist ethics as the foundation for business ethics. In Business Ethics and Common Sense. Edited by Robert W. McGee. Westport: CT: Quorum Books 67-88.

Locke, Edwin A. (2001). and J. Woiceshyn. (1995). Why businessmen should be honest: The argument from rational egoism. Journal of Organizational Behavior 16: 405-14.

Mintz, Stephen M. (1996). Aristotelian virtue and business ethics education. Journal of Business Ethics, no. 15: 827-38.

Paine, Lynn Sharp. (1994). Managing for organizational integrity. Harvard Business Review 72 (March-April): 106-17.

Rand, Ayn.  (1964). Objectivist ethics. In The Virtue of Selfishness. New York: New American Library.

Whetstone, J. Thomas. (2001). How virtue fits within business ethics. Journal of Business Ethics, no. 33: 101-14.