reconciling traditional morality and the morality of competition

Reconciling TraditionalMorality and the Morality

of Competition

ADAM D. BAILEY

ABSTRACT

It is commonly believed that the moral norms of “every-day” or “traditional” morality apply uniformly in all busi-ness contexts. However, Joseph Heath has recentlyargued that this is not the case. According to Heath, thenorms of everyday morality apply with respect to “admin-istered” transactions but not “market” transactions.Market transactions are, he argues, governed by a dis-tinct, “adversarial” morality. In this article, I argue thatHeath’s attempt to show that competitive contexts aregoverned by a distinct, adversarial morality does notsucceed. I then undertake the task of showing that, con-trary to what is commonly thought, competitive actionscan be reconciled with the norms of traditional morality.

INTRODUCTION

It is commonly believed that the moral norms of “everyday”(or “traditional”) morality—treat others as you would wantto be treated, attend to the interests of others rather than

merely to your own interests, treat others as ends in themselves,

Adam D. Bailey is an Assistant Professor, School of Business, Black Hills State University,Spearfish, SD. E-mail: [email protected].

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Business and Society Review 119:2 207–219

© 2014 Center for Business Ethics at Bentley University. Published by Wiley Periodicals, Inc.,350 Main Street, Malden, MA 02148, USA, and 9600 Garsington Road, Oxford OX4 2DQ, UK.

and so forth—apply uniformly in all business contexts. However,Joseph Heath (Heath 2007) has recently argued that this is notthe case. According to Heath, the norms of everyday moralityapply with respect to “administered” transactions (transactionsthat take place within the firm, such as transactions betweenmanagers and employees), but the moral norms that govern“market” transactions (transactions that take place in the mar-ketplace, such as transactions between manufactures and theircustomers) are not the norms of everyday morality. Such trans-actions are, he argues, governed by a distinct, “adversarial”morality. Heath thus challenges the long-standing assumptionthat a correct account of morality in the business sphere isunitary, arguing instead that it is pluralist.

Heath’s argument has a number of significant implications.Most important of these is that, in competitive contexts (such asobtain with respect to typical market transactions), it is not thecase that one’s actions must necessarily be in accord with thenorms of everyday morality. In this article I critically examineHeath’s argument. I argue that his attempt to show that competi-tive contexts are governed by a distinct, adversarial morality doesnot succeed. I also argue that he does not provide sufficientreason to discard the long-standing assumption that a correctaccount of morality in the business sphere is a unitary account,or to accept that the norms of everyday morality are not bindingin competitive contexts. After completing this negative argument,I then turn to the task of developing a positive argument aimed atshowing that competitive actions can plausibly be held to bereconcilable with the norms of everyday morality.

HEATH’S ARGUMENT

At the core of Heath’s argument is the idea of a “collective actionproblem.” Collective action problems are, according to Heath(2007, p. 360), “interactions in which, despite acting in a self-interested fashion, each individual winds up with an outcome thatis much worse than some other feasible outcome, which mighthave been achieved had they all chosen to act differently.” Forinstance, suppose that Laura spends the morning reading a news-paper in the park and that when she’s finished, she leaves the

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newspaper on the grass. It would seem that by littering, she isbetter off. After all, she saves time and effort by not wanderingaround the park looking for a recycle bin. While it is true thatLaura is worse off in a sense because now the park is not aspristine as she would prefer, the park is really large, and so thisis only a slight cost, a cost that is insufficient, in itself, tooutweigh the benefits of littering (let us assume). However, if mosteveryone that frequents the park pursues their own interests inthis manner, Laura will be worse off than were it the case thateveryone (including herself) would just take a moment anddispose of their newspapers (and lunch sacks, and so forth)properly.1

Preventing such collectively self-defeating outcomes is, accord-ing to Heath (2007, p. 360), “[o]ne of the primary functions ofmorality.” For instance, a moral norm prohibiting littering, ifgenerally complied with, would serve to prevent such self-defeating outcomes and thereby serve everyone’s interests. Hence,by cooperating and complying with such norms, it is possible forthe outcome to be a “win–win” outcome (Heath 2007, p. 361). InHeath’s (2007, p. 361) view, acting so as to generate such win–winoutcomes is “the hallmark of moral action.” In contrast, thehallmark of immoral action is acting in a way that “tends togenerate win-lose outcomes (and when everyone does it, lose-loseoutcomes)” (Heath 2007, p. 361).

Given this conception of moral and immoral action, how cancompetitive actions, and competition itself, be morally permis-sible? After all, it seems that “[w]hile cooperation is designed todeliver win-win outcomes, competitions are specifically designedto produce win-lose ones. Furthermore, the structure of compe-tition is designed to induce all of the competitors to defect ratherthan to cooperate” (Heath 2007, p. 361).2 To illustrate the diffi-culty in justifying competitive actions and competition as beingmorally permissible, consider an example developed by Heath:

Take the example of an athletic competition, such as long-distance running. If you took a randomly selected group ofpeople and told them to run a race, promising to give a prizeto the fastest, then generally speaking the prize would go tothe person with the most natural ability (the right sort offrame and musculature, the best cardiovascular system,etc.). On the other hand, if you announce the contest well in

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advance, it is possible for those with less natural ability toimprove their chances of winning by training for the race(thereby improving their musculature, cardiovascular system,etc.). Yet when the less talented begin to train, this just forcesthose with more natural ability to train as well, so that theycan retain position. At the end of the day, when everyonetrains equally, the person with the most natural ability stillwins. Yet, everyone involved in the competition now is expend-ing much greater time and effort to achieve this result, andthus the outcome is suboptimal from the standpoint of thecompetitors. In other words, training for an athletic competi-tion is a form of defection (equivalent to littering . . .). (Heath2007, p. 361)

How then can defection (pursuing one’s self-interest in a way thatharms others rather than cooperating) and competition itself(given that its very purpose is to “encourage . . . this sort of‘one-upmanship’” (Heath 2007, p. 362) be morally permissible?

The answer, according to Heath (2007, p. 362), is that “desir-able competitions also generate positive externalities—benefits topeople other than those directly involved.” His position, followingArthur Applbaum’s (1999) analysis of the ethics of adversarialrelations, is as follows:

Thus, Applbaum argues that, in the majority of cases,adversarial institutions generate behavior that is morallywrong pro tanto, but perhaps permissible all things consid-ered, i.e., when the systemic consequences of that behaviorwithin that institution are brought into the picture. In thecase of competitive behavior, this means that the conse-quences of defecting from the cooperative arrangement consti-tutes a genuine harm for the other competitors, but that thewrongness of this harm is outweighed by the positive exter-nalities generated by the competition as a whole . . . and thusthe action in its context is morally permissible. This is, ofcourse, still a somewhat tricky position to defend, since itinvolves a certain instrumentalization of the other competi-tors. The general point, however, is sound. Adversarial institu-tions do not provide individuals with a moral “get out of jailfree” card, such that categories of moral evaluation no longerapply to their conduct (leaving them free to pursue whatevercourse of antisocial behavior happens to suit their fancy). Inother words, these institutions do not dissolve morality. What


they provide is, at best, a set of highly specific exemptionsfrom particular moral obligations. (Heath 2007, pp. 365–366)

This analysis sets the stage for Heath’s solution to a dilemmaconfronted by scholars in attempting to set forth a unifiedaccount of morality in the business sphere. The dilemma is this:

In order to set a uniform standard “high enough” to governcooperative relations within the firm (and thus to handleissues like employee health and safety, personnel manage-ment, and so on), it must be set so high that it essentiallyprecludes adversarial behavior. . . . Yet if one turns aroundand lowers the standard, in order to permit adversarialbehavior toward competitors, the moral code winds uplicensing all sorts of [unethical] practices within the firm.(Heath 2007, p. 360)

Heath’s solution is to take into account the distinction betweentransactions that take place within the firm (“administered” trans-actions) and transactions that take place in the marketplace(“market” transactions) and hold that traditional, everyday “coop-erative” moral norms govern administered transactions, but adifferent set of moral norms (“competitive” norms) govern markettransactions. Contrary then to what is widely assumed by busi-ness ethicists, morality in the business sphere is not unified butrather differs depending on whether one is engaged in adminis-tered or market transactions. Heath’s position then is that whilenorms of everyday morality are fully in effect with respect toadministered transactions, some exceptions from the norms ofeveryday morality obtain with respect to market transactions, andthus, a correct account of morality in the business sphere ispluralist rather than unitary.3

CRITIQUE

It is plausible to believe that by defecting rather than cooperat-ing with a moral norm that prohibits, say, littering, one wrong-fully harms others (Heath 2007, p. 361). By parallel of reasoning,4

Heath believes that competitive actions, such as training for afootrace or underpricing one’s competitor, wrongfully harm com-petitors (Heath 2007, pp. 362, 365–366). However, Heath accepts

211ADAM D. BAILEY

an important disanalogy: Contrary to actions such as littering,competitive actions can be morally permissible, all things consid-ered, if they give rise to positive externalities sufficient to outweighthe harm inflicted on competitors (Heath 2007, pp. 362, 365–366).

Heath’s analysis is grounded on the assumption that, from theperspective of everyday morality, when faced with a collectiveaction problem, one ought to cooperate, generating a win–winoutcome, and one ought not to defect, generating a win–lose orlose–lose outcome (Heath 2007, p. 361). To see that Heath iscommitted to this assumption, consider the following example andHeath’s analysis of it.

The Academy Award-winning film Chariots of Fire portraysBritish collegiate track-and-field competitors who have devel-oped an implicit norm that limits their training and practicetime. Their apparent understanding is that since the mosttalented runner will win whether all train arduously or nonedoes, the sensible thing is for no one to train very hard. Thisarrangement is challenged by an outsider with a rigoroustraining regimen. In response the incumbents bring consider-able social pressure to bear upon the maverick. In the face ofsuch pressure, most normal challengers might have suc-cumbed. But this particular runner is tough, and he goes onto win in the end. (Heath 2007, p. 362, citing Frank and Cook1995, p. 142)

Heath’s Analysis:

Of course, when it comes to competitions our sympathies liewith those who “break ranks” and adopt the non-cooperativestrategy of training. Indeed, the point of a competition is toencourage precisely this sort of “one-upmanship.” Yet, whywould society want to inflict this peculiar sort of collectiveaction problem upon people? The answer is that desirablecompetitions also generate positive externalities—benefits topeople other than those directly involved. The competition isprecisely how society induces those involved to produce thesebenefits, despite the personal inconvenience that it entails.(Heath 2007, p. 362)

Heath’s commitment to the assumption that the actions of defec-tors, as competitive actions, wrongfully harm competitors iscentral to his argument.5 To see this, note that if competitive


actions do not wrongfully harm competitors, then there is no needfor a distinct morality for competitive contexts, a morality inwhich such wrongful harms may be permitted. If there is no needfor a distinct morality for competitive contexts, then Heath’s claimthat, contrary to what is widely supposed, morality in the busi-ness sphere is not unified but rather that there are two distinct(but related) business moralities (one for administered transac-tions, another for market transactions) is insufficiently motivated.

However, the assumption that the actions of defectors, as com-petitive actions, wrongfully harm competitors is problematic forthe reason that an act being harmful does not entail that it iswrongful. For instance, suppose that Laura is walking across thestreet, newspaper in hand, in search of a recycle bin. Seeing thatin her carelessness Laura is about to be hit by a bus, Seth quicklyrushes forward and gives her a mighty push, sending her sprawl-ing across the pavement. As a result, Laura’s elbow is bruised andher face is badly cut. Here it seems clear that Seth harmed Laura,but it is not at all clear that he wronged her. In fact, most wouldagree that Laura greatly benefited from Seth’s act, given that itprevented her untimely (and unsightly) death. Further, supposethe case were different. Suppose that all that Seth had to do tosave Laura’s life was to shout “Hey, look out!” It is plausible tohold that if he had realized this to be the case but he neverthelesssimply did nothing, he would have wronged Laura, although it isnot clear that he would have harmed her.6 Therefore, the idea thatthere is a relationship of entailment between harmful and wrong-ful is not plausible.

There is also a pragmatic difficulty with holding that harmfulentails wrongful. This difficulty arises because almost any act cangive rise to both good (i.e., beneficial) and bad (i.e., harmful)effects. Heath’s analysis fails to adequately take this into accountbecause he focuses on the harms that a competitive act visitsupon competitors and the benefits, in the form of externalities,produced by the act. Focusing on only one harm—harm tocompetitors—produces a misleading picture that merely by coop-erating, harm can be avoided. However, this need not be so. Forinstance, suppose that A and B are competitors, and they bothproduce X. I can grant, for the moment, that if A cooperates withB, A will not harm B, but if A instead undertakes competitive actssuch as innovating or reducing prices, A will harm B. However,

213ADAM D. BAILEY

this analysis is incomplete because not all harm is accounted for.If A cooperates with B, then C, the customer, is harmed (because,say, the features of X do not meet C’s needs as well as theyotherwise would, or the price of X is higher than otherwise wouldbe the case). Once this other harm is accounted for, it is no longerplausible to hold that harm can be avoided merely by cooperating.

If harming were necessarily wrongful, then, in such cases, onewould do wrong regardless of what one did. (Even if one chose todo nothing, one would act wrongfully because doing nothingwould give rise to harm to some stakeholders, such as sharehold-ers and employees.) While it is plausible to hold that suchsituations—moral dilemmas in the Greek tragedy sense—are pos-sible, it is not plausible to hold that they obtain with respect tomost everything we do, as would be the case if harmful entailedwrongful. (In dealing with this difficulty, many philosophersinvoke a distinction between intended and merely foreseeableharms, allowing that it can be morally permissible, in some con-texts, to act in a way that foreseeably will give rise to harm.)However, if this is the case, then Heath’s argument does notsucceed, given that it depends on the assumption that becausecompetitive actions harm (and therefore wrong) competitors (andassuming that competitive actions can be morally permissible), adistinct morality, one that permits some such harming (and hencewronging), must necessarily apply with respect to competitivecontexts. However, if it is admitted that harmful does not entailwrongful and that everyday morality does not necessarily forbidharming, then there is no reason to suppose that some other,harm-permitting morality is needed for competitive contexts.7

RECONCILING COMPETITIVE ACTION WITHEVERYDAY MORALITY

Even if there is no reason available, as of yet, sufficient to warrantthe conclusion that a distinct (less rigorous) morality is needed forcompetitive contexts, it still may seem difficult to understand whythe norms of everyday morality—treat others as ends in them-selves, treat others as you would want to be treated, attend to theinterests of others rather than merely to your own interests, and soforth—are always relevant to moral evaluation but that, in competi-


tive contexts, it is nevertheless morally permissible to do thatwhich is harmful to others—puts them out of business, undercutthem in terms of price, innovate so as to make their products orservices comparatively services less attractive, and so forth. Thus itmay be wondered: Can competitive actions wherein the point, itseems, is to one-up or beat others be reconciled with the norms ofeveryday morality (norms such as treat others as you would wantto be treated)?

Like Heath, I believe that certain ways of competing are morallyimpermissible—taking steroids, hiring someone to “kneecap” youropponent, and so forth (Heath 2007, p. 362). However, given theargument of the previous section, I am not willing to discard theassumption that morality is unitary, and hence, I am resistant tothe idea that actions in market contexts ought to be judged bydifferent moral norms than actions in administrative contexts.Accordingly, unlike Heath, I have the burden of showing how, forinstance, treating others as one would want to be treated can bereconciled with trying to one-up or outdo one’s competitors.

My strategy for meeting this burden centers on distinguishingtwo different kinds of competitive action: principled action andmerely self-interested action. I shall not attempt to justify merelyself-interested action and will simply admit that the bad reputa-tion that competitive action has incurred is warranted withrespect to merely self-interested action. However, I shall attemptto show that while from an outsider’s perspective principledaction may appear to be merely self-interested action, it need notbe. Further, I aim to show that it is plausible to hold thatprincipled action is in accord with everyday morality.

To begin, a new case may be helpful, Chariots of Fire II. Much isthe same here as in the original Chariots of Fire scenario addressedbriefly above (p. 212). The primary difference is that this secondversion is about academic performance rather than athletic perfor-mance. For instance, in this second version, the norm among thestudents is not to study much at all (rather than not to train muchat all). Suppose that this norm has been followed for many years atthe university. The students all get along pretty well (i.e., they havea lot of fun but still successfully complete their degrees) becausethe professors have grown accustomed to their minimal efforts, andfor the sake of keeping their wealthy parents (the university’sbenefactors) happy, they play along, requiring some (but not much)

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effort. Suppose a new student comes along and defects; he studiesdiligently. Assume that he does so for a number of reasons, includ-ing he loves learning, and he is grateful for an opportunity to attendthe university (no one in his family has ever stepped foot on auniversity campus, and he has seen his parents sacrifice greatlyover the years to provide him with a good education).

Must it be the case that the new student’s engaging in competi-tive actions that harm others (requires them to put forth muchmore effort to maintain their position, undermines cooperation,upsets the status quo, introduces a win–lose situation, and soforth) necessarily fails to accord with the norms of everyday moral-ity? While, from an outsider’s point of view, the new student canaptly be described as breaking rank, defecting, and underminingcooperation, this description is not the only available, apt descrip-tion. He can also be described as engaging in principled action: Heis appropriately responsive to the value of knowledge, fulfilling aduty (to himself) to develop his talents and abilities, taking seri-ously the needs of others, working to develop solutions to pressingsocial problems, appropriately expressing gratitude for the sacri-fices of his parents, and so forth. Therefore, while he can bedescribed as engaging in merely self-interested action, he can alsoaptly be described as simply doing the right thing.

Now, of course, the new student’s observable actions could beidentical, and it could nevertheless be correct to describe him asbeing engaged in merely self-interested action and deserving of allthe negative connotations that likely follow, were, say, he studyingdiligently merely so as to embarrass his classmates or prove thatpeople of his ethnicity are superior. I will make no attempt todefend this sort of competitive action. However, I do want to showthat once a distinction is drawn between two types of competitiveaction—principled and merely self-interested—it can then beplausible to hold that competitive action in and of itself can be inaccord with everyday morality. After all, in order to defend theclaim that competitive action can be held to be in accord witheveryday morality, it is not necessary to defend every sort ofcompetitive action. Rather, all that is necessary is to show that atleast one kind of competitive action—in this case, principledaction—is in accord with everyday morality.

Let us then return to competition in the business sphere. Whilethe development of new innovations (making it possible to provide


better value to customers than is provided by one’s competitors)or the reduction of inefficiencies (making it possible to sell at alower price than one’s competitors) can be undertaken so as todestroy the lives of competitors, such efforts can also simply be anoutcome of principled action—working hard to develop one’s owntalents (as well as those of one’s employees) and to better meet theneeds of others. Thus, because competitive actions in the busi-ness sphere can be either merely self-interested actions or prin-cipled actions and because it is plausible to hold that principledactions are in accord with everyday morality, it is not the casethat competitive actions (even those that harm competitors) arenecessarily at odds with everyday morality.

Principled action is, I believe, easily confounded with merelyself-interested action. The resulting “lump” is naturally refer-red to simply as competitive action. When this occurs, it isperhaps all too easy for the negative connotations that right-fully attach to merely self-interested action to attach to all com-petitive action. However, this is a mistake.8 To the question ofcan competitive actions be reconciled with norms of everydaymorality such as treat others as you would want to be treated,my answer is yes, once we distinguish two sorts of compet-itive actions: principled and merely self-interested competitiveactions.9

CONCLUSION

I have attempted to accomplish two things in this article. First, Ideveloped a negative argument with the intent of showing thatHeath does not provide a sufficient reason for believing that adistinct morality is needed for competitive contexts. Second, Ideveloped a positive argument intended to show that competitiveactions can plausibly be held to be reconcilable with the norms ofeveryday morality.

NOTES

1. Here, I follow Heath (2007, p. 361) in using littering to illustrate theidea of a collective action problem.

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2. Citations omitted.3. Heath is careful to make clear that his position is not that moral

norms do not apply with respect to market transactions, but rather thatthe moral norms applicable to market transactions differ from those ofeveryday morality.

4. An illustration of such parallel reasoning: “Training for an athleticcompetition is a form of defection (equivalent to littering . . .)” (Heath2007, p. 361).

5. Heath’s commitment to this position is most explicit when heconcurs with Applbaum’s position.

6. This “shouting” case is intended to parallel Singer’s (1972, p. 231)child-in-the-pool case.

7. However, suppose, for sake of argument, that harming is necessar-ily wrongful. I think Heath’s argument would still run into troublebecause many would regard the implicit utilitarian conception of harm(wherein merely having to exert more effort is itself deemed to be harmful)as being problematic. For instance, it would seem to imply that publicschool teachers that “break rank” and require their students to put forthmore effort than is typically required harm their students.

8. Principled action, like merely self-interested action, has a tendencyto “rock the boat,” upsetting those who have, over time, come to be wellplaced so as to benefit from the status quo. This is illustrated alltoo clearly in cases of political and religious martyrs. Such martyrscommonly suffer at the hand of long-standing groups of leaders whohave, through cooperation, benefited greatly and whose position is threat-ened by those who, on grounds of principle, either defect, refuse totake part in the reigning power scheme, or criticize those in positions ofpower.

9. However, it may be wondered: What about more directly competi-tive actions in which one’s actions directly take into account the “moves”of one’s competitors and attempt to defend against them or even thwartthem? In this article, I will not attempt to defend this sort of behavior.However, I do not believe that such behavior is necessarily morallyimpermissible. Competing is a key means for discovering one’s relativetalents so as to determine where one’s efforts are best placed and whereone’s contribution to the common good is best made. By facilitatingthis discovery process, competition produces great benefits. Further,studying competitors is important for preventing duplication of effortsand for discovering gaps in which the needs of customers are notbeing met.


REFERENCES

Applbaum, A. I. 1999. Ethics for Adversaries: The Morality of Roles inPublic and Professional Life. Princeton, N.J.: Princeton University Press.

Frank, R. H., and Cook, P. J. 1995. The Winner Take All Society. NewYork: Penguin.

Heath, J. 2007. “An adversarial ethic for business: Or when Sun-Tzu metthe stakeholder,” Journal of Business Ethics 72: 359–374.

Singer, P. 1972. “Famine, affluence, and morality,” Philosophy & PublicAffairs 1: 229–243.

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reconciling traditional morality and the morality of competition

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