Thomas talks about business ethics in the course of a discussion of fraud. Thomas is in the course of discussing the various virtues of the good man, and the vices opposed to them and so his remarks on business practice are incidental. His approach, as usual, is twofold.
Is it morally permissible to sell a thing for more than it is worth? Key principles cited by AquinasIs it allowed in business to sell something for more than it was bought?Can one separate natural exchange and wealth getting?
The first word on this question comes from Scripture: Do unto others as you would have them do unto you (Matt 4, 12). No one wishes to pay more for a thing than it is worth, so they should also not sell a thing for more than it is worth. Thomas then cites Cicero, from his book De Officiis, which means On Duties. In this book, Cicero discusses many of the ethical aspects of public life, the ethics of holding office and doing business.
We must, therefore, take away all lying from business dealings; the seller will not engage a bogus bidder to run prices up, nor will the seller engage some other person to bid against himself to keep them down. (Cicero, De Officiis, book III, c 15)
Cicero continues, that buyer and seller should state their price out front when they meet. It is not wrong to pursue riches, but it is wrong to pursue riches merely for their own sake. Cicero writes:
For we do not aim to be rich merely for our own sakes, but for the sake of our children, our neighbours, friends and most of all, for our community. For the private fortunes of individuals are the wealth of the state.
Here Cicero strikes a fine balance. On the one hand, the man who seeks riches for their own sake is morally corrupt, but there is such a thing as a rich man who is primarily seeking the good of his community. The industry of the businessman is a virtue, the fact that he is resourceful and works hard, and his industry (or industriousness) provides benefits to others.
There are four:
1. His most important point. There are two different kinds of exchange, two different ways of exchanging goods or doing business. Here Thomas cites Aristotle’s book The Politics in which Aristotle also distinguishes two types of exchange:
2. Something that has been brought in for the benefit of all should not be more expensive for one than for another, or a greater burden or inconvenience to some than to others. The same thing should be available equally to all, and for this purpose money serves as a common measure, and one thing will have a set price on the market. Aquinas seeks ‘equality of justice’ which can be illustrated as follows:
Let us suppose that if we were bartering, then one pair of shoes would be a fair trade for twenty loaves of bread. In that case, the price in money for a pair of shoes and the price for twenty loaves of bread should be the same, and otherwise one of the parties is charging too much and we have an instance of injustice.
3. To sell the same thing at a higher price to one buyer than to another is unjust and illicit. He gives an example:
Suppose a merchant has an article, and someone enters the store and for personal reasons is very attracted to this article. This article would bring the customer more delight than it would to others, or perhaps he has some very special need for the thing. The merchant would suffer no great loss in the sale, whereas the customer (at least in his own mind) would greatly gain. Can the seller charge a higher price, since at least to the customer the article is very valuable? Aquinas says no. The special value of the article to the buyer does not come from the seller, but from the condition of the buyer. No one should sell to another what is not his own. Thomas adds that the buyer who desires it so greatly may of his own free will offer something extra to the buyer.
4. It is immoral to sell anything for more than it is worth. The first index of what a thing is worth is basic human needs. If the thing meets no human need, it is not worth anything. For example, there should not be a special high price of water for thirsty people. The law tolerates instances where the price differs moderately from the value, but only if this is not excessive. Aquinas here would allow the state to intervene in the economy and we can imagine that he had in mind situations of monopoly and price-fixing.
It is very difficult to distinguish the two ways of doing business, and it is almost impossible to pass laws against predatory profiteering. Perhaps the best test would be an honest question. Suppose we were to ask a man in the shoe business what his purpose was. He could answer in two ways:
The man who is primarily seeking profit also supplies shoes, and the man who is primarily seeking to provide a service makes a profit, but the goals are different. And it is entirely possible that we may distinguish which man is seeking which goal when we are more closely acquainted with the smaller details of their business practice.
In this article Geoffrey Klempner argues for an ob...
Disclaimer. Inducit Learning Ltd. is not responsible for any content outside of the pushmepress.com domain. If you are a rights holder and you think we have breached your copright, please email the editor and we will remove it.