EH.net is owned and operated by the Economic History Association
with the support of other sponsoring organizations.

The Moral Background: An Inquiry into the History of Business Ethics

Author(s):Abend, Gabriel
Reviewer(s):Frey, Donald

Published by EH.Net (August 2014)

Gabriel Abend, The Moral Background: An Inquiry into the History of Business Ethics. Princeton: Princeton University Press, 2014. ix + 399 pp. $39.50 (cloth), ISBN: 978-0-691-15944-7.

Reviewed for EH.Net by Donald Frey, Department of Economics, Wake Forest University.

Gabriel Abend argues that a range of cultural beliefs and thought patterns provide an influential “moral background” as context for the more obvious everyday morality. Most of his book looks at business ethics during the period from the 1850s through the 1930s through the lens of the moral background concept.

Chapter 1 delineates the nature of a moral background: for instance, it defines what is properly considered a moral issue and what is not; what kinds of moral arguments are persuasive; and who are moral actors. A moral background may be shared by a whole culture, or specific sub-cultures. However, if “a common core of cultural accounts” (p. 36) is important for a moral background to exist, this would seem to require ideas common to enough people to define a true culture.  Applications to business ethics come in later chapters.

Abend’s second chapter is a preliminary look at ethics promoted by the business community itself — that is, business associations, captains of business, business schools, etc., in the 1850s-1930s era. It was a heavily utilitarian morality claiming: first, ethical business practices have a payoff; and second, business therefore should be conducted ethically. Abend carries out a careful and highly critical examination of varying versions of this logic. However, the biggest service he provides, in my opinion, is to reveal how depressingly pervasive this simplistic theme was among business moralists. Although Abend notes antecedents to this line, such as Benjamin Franklin’s advice to tradesmen, his major discussion of the moral background is held until Chapter 6.

An alternative Christian business ethic appears in Chapter 3. Protestant clergy of the era were highly critical of the ethics-pays approach, primarily because it involves impure motives. The Jewish-Christian scriptures endlessly affirm that God cares about motives of the heart. Acting ethically only in hopes of a reward is not a moral motive (even if the reward is cloaked in religiosity, such as a reward in an afterlife). Rather, a righteous heart responds to divine commands simply because they are from God. (Abend briefly notes less legalistic Christian motivations, such as love of God and neighbor, or walking in Christ’s ways.) In this chapter the “moral background” is clear because it was the high-profile Protestant morality of that period.

Chapters 4 and 5 deal further with the ethics of the business community itself — “Standards of Practice” ethics, in Abend’s nomenclature. Chapter 4 examines the early years of the Chamber of Commerce, when it used business ethics to deflect government regulation. Abend fills out the analysis with inferences about the Chamber’s implicit philosophical outlook. For example, its publications assigned Business (as distinct from lower-case businesses) an ontological status of its own; what this added to the analysis was unclear to me.

Chapter 5 addresses the emergence of graduate schools of business at major universities. The chapter ignores the substance of business ethics to discuss its rhetorical role in gaining faculty support for graduate programs of business.

Finally in chapters 6 and 7, Abend turns to his full-fledged analysis of the moral background of the two schools of business ethics — which he names Standards of Practice (the ethic of those closest to business itself) and Christian Merchant (the ethic of American Protestantism). His comparison of the two is summarized in a table. Although the table shows some overlap between the two ethical schools, I will emphasize the difference here. The fundamental question is: why be moral? Standards answers with the ethics-pays argument and the Christian Merchant answers with “because it is right,” (or for love of God and neighbor). The table notes that these answers mean Standards morality is “consequentialist,” and Merchant’s is mostly “deontological.” Further, says the table, the Standards school emphasizes doing, the Merchant school, being. The Standards school appeals to science (or claims to); the Merchant school appeals to Biblical and metaphysical arguments. Given this, the table concludes the Merchant school sees morality in absolute terms, while the Standards school tends to relativism, with exceptions. Surprisingly, despite such big differences, the work-a-day precepts of both schools (what is in the foreground, not the background) turn out to be very similar: service to clients, practicing the Golden Rule, and following professional norms (Standards school).

In this chapter, Abend asks, “where are the Standards of Practice and Christian Merchant types to be found? What are their social and organizational locations or roots…?” (p. 263). He easily locates the background of the Christian Merchant ethic, as previously noted. However, in my opinion, he does not convincingly locate the roots of the Standards school. Abend portrays the Standards morality as rooted in the views of the founders of the Standards school. But that is not a very deep background — it lacks clear links between the founders’ assertions and a more deeply rooted moral background common to a large part of society. For example, founders of the then-new business ethics assert emphatically that business and its ethics are science-based. But merely asserting this is far from demonstrating it to be so. Assertions do not demonstrate 1) the existence of a large enough science-oriented sub-culture in America at the time to serve as a moral-background that would resonate with many people; nor 2) how this scientific culture was meaningfully linked to business ethics, which would normally have affinities with the humanities.

Some founders of the Standards school also advocated moral relativism, but the chapter does not really demonstrate that moral relativism was widely prevalent in the culture of the time, and not even among scientists. Scientists may view some things in relative terms, but make universal claims about other things. Further, some influential social thinkers who claimed to find moral values in “science,” such as the Social Darwinists, were nothing if not absolutist in their views (consider William Graham Sumner). Abend seems to see these weaknesses for he ratchets down his goal for this chapter: his “aims are essentially typological” (pp. 263-64).

Despite this weak chapter, this book presents a thesis that I find credible and potentially enriching of the subject of business ethics. The author has superior familiarity with philosophy and the business ethics of the period he studies. His discussion of the Christian Merchant ethic shows a real understanding of a long history of Christian thought and practice, and its American variations (something not many social scientists seem to possess). Further, I don’t believe Chapter 6 needed to be weak. In my own work on economic moralists, something like a “moral background” appeared to be enlightening. My thesis was that economic moralities (yes, two competing moralities, just as Abend deals with two competing business ethics) drew support from alternative economic theories (again differing economic theories, just as Abend has different moral backgrounds). Perhaps economic theory is a much narrower kind of “moral background” than Abend envisions, but it is a reasonable proxy for a moral background. It is a distinct body of thought, often familiar — in one form or another — to much of the population. And economic theory can indeed support or undermine some kinds of moralities (for example, if economic outcomes are viewed as the efficient work of impersonal markets, moral concerns for equity are put on the defensive).  I think Abend might have described a convincing moral foundation in Chapter 6, perhaps by linking the Standards school to antecedents such as Benjamin Franklin (briefly noted in Chapter 2), and to ideas that were abroad in economics. Abend, I think, has a good concept, and is at least partially successful.

Donald E. Frey is author of America’s Economic Moralists: A History of Rival Ethics and Economics (SUNY Press, 2009)

Copyright (c) 2014 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator (administrator@eh.net). Published by EH.Net (August 2014). All EH.Net reviews are archived at http://www.eh.net/BookReview

Subject(s):Business History
History of Economic Thought; Methodology
Social and Cultural History, including Race, Ethnicity and Gender
Geographic Area(s):North America
Time Period(s):19th Century
20th Century: Pre WWII