What is Ethics?
Ethics is conventionally defined as a system of moral principles governing the appropriate conduct for a person or group. But this definition is kind of vague as it doesn’t really address application in real life. How does one arrive at personal governing principals, and why? That is the question of ethics in a nutshell.
Realize ethics operates in context. In any given situation, even if you are living in a cave by yourself, you will have interactions with your environment. What do you eat? What resources do you use and how do you manage them? What do you do with your waste? Add another person to the mix and you have to worry about their rights, feelings and the social context as well. Make one or more wrong decisions and you will find yourself freezing, alone, in the dark, up to your eyes in your own excrement with nothing to eat.
What Ethics is not. What Ethics Is.
Ethics cannot be equated with feelings, laws, religion or even societal norms; it is easy to find cases where ethical conduct is not necessarily equated these things. Consider that a person enjoys driving a car very fast; if this driver decides to race through a neighborhood it may feel good, but it makes this unethical driver very dangerous to all those around him or her. As for following the law, slavery was a part of US law, but clearly slavery deviates from ethical norms as well. If ethics were a matter of religion, then only religious people could be ethical, but ethics must apply to all people of all faiths and to people who are not religious at all. Finally if society itself drove ethics then we would merely have to poll the entire society to find out what was right, and then do that, but entire societies can be corrupt as in the case of Hitler’s Third Reich; blindly following the pack does not make for ethical decisions either.
Since we can’t rely on the law, our feelings, religion or society to tell us what ethics is we must find a well-reasoned basis for defining what is right and what is wrong. Right and wrong involves not only introspection, but also evaluating our relationship with our environment via perceived rights, obligations, benefits to society, fairness and other virtues. For example there are ethical standards not to rape, steal, murder, assault, slander and defraud. Ethical standards embrace certain virtues of honesty, compassion and loyalty. Furthermore ethical standards include standards relating to rights, such as the right to life, the right to freedom from injury and the right to privacy. Such standards are standards of ethics because they are supported by well-founded reasoning. Furthermore, we need to keep evaluating our positions with respect to right and wrong as we garner more information through our personal experiences.
Ethics is the cornerstone to making good decisions.
One cannot legislate morality or intelligence, but ethics attempts to address both of these things on a personal level. Ethics supports good decision making. When making a decision one should not only consider the consequences and utility of a decision, but also others’ rights, whether a decision is fair and just, and whether it serves the common good or not.
Ethics and decision making in the BP Disaster
Clearly BP considered the utility of their decision. They are a company who has an obligation to its shareholders to use their money wisely. Drilling where they did seems like it was a good idea; it appears there is a lot of oil there. They knew they were drilling in a dangerous place and they had been handed down rigorous standards to deal with the dangers of that situation. They knew the consequences would be dire if they failed. So why did they fail?
I confess I know nothing of about oil-well drilling in the deep ocean, and my opinion rests on the conclusions of experts describing what went wrong. If the conclusions of these witnesses and experts ultimately prove to be true, then, in my opinion, this disaster occurred because the people empowered to make decisions did not make ethical decisions. They were working in a dangerous place; they compounded the situation by being making stupid decisions to save a little bit of money. They apparently did not adequately incorporate all of the information at hand and ignored the very real consequences of a failure; they apparently did not consider the rights of those who would be injured by their decision. Had they made ethical decisions, this disaster might not have happened.
Decisions based on hubris, greed and the avoidance of unpleasant emotions are completely understandable human failings. That is why it is vital for the people at the top of the decision making trees, especially those who can impact the lives and livelihoods of so many others, to make ethical decisions.
Ethics, Taxes & the Individual Taxpayer & Small Business Owner
I am sure as you are reading this you are thinking,” I am not British Petroleum. If I decide to cut a corner or bend a tax law for financial reasons, I am not going to precipitate a national disaster; I am not hurting anyone one.” We disagree.
Every time an employer collects his employees’ payroll taxes and does not send them into the government, that employer is stealing from that employee-it’s was not the employer’s money to begin with. It’s not only unfair, it’s thievery. Furthermore this employer is stealing from every taxpayer who does follow the rules, because it falls on those who do pay into the system to cover the shortfall. A company that does not pay into the unemployment system is stealing from every employer who does pay as those paying into the system cover the short fall and pay higher taxes as a result. A tax payer who cheats on their taxes is stealing from every taxpayer who does pay what they owe.
A single drop of water raises the sea; a large enough number of individuals not paying their fair share do make a difference to the rest of us. It is neither fair nor just for a single taxpayer to expect everyone else to cover their obligations. Theft does not serve the greater good. Bilking the system is dishonest. Failure to deposit payroll taxes is a heartless act; the government may make an employee pay taxes they already paid once again.
Failure to pay taxes is also short-sighted. There are very real punishments associated with defrauding the government and failing to pay taxes: Penalties, interest, potential seizure of assets, garnishment of wages & bank accounts, and even jail time. From a risk-reward assessment, saving a few bucks here and there can cost big later on, not to mention the costs of hiring professionals to deal with the problem once the IRS catches on.
A business owner is a person in a position of leadership. How a business owner behaves does influence the behavior of their employees and vendors. If the business owner thinks it is okay not to pay taxes, then their employees may think stealing from the boss is okay too.
In conclusion, being a tax cheat does not even serve vested-self interest over the long haul.
Whereas we at Art & Business Consulting, LLC can help you get back every dime in taxes you are entitled to and can assist you in resolving your tax problems, we are kind of like an executive at the top of a decision making tree. We are obligated to serve not only our clients, but our society as a whole. We must make ethical decisions. As always Art and Business Consulting is here to help. If you find yourself in an ethical quandary, or need help with another small business and or tax issue, please give us a call.
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