Economic rationality and ethical behavior

Marc Le Menestrel ()

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

Abstract: This paper argues that economic rationality and ethical behavior cannot be reduced one to the other, casting doubts on the validity of formulas like 'profit is ethical' or 'ethics pays'. In order to express ethical dilemmas as opposing economic interest with ethical concerns, we propose a model of rational behavior that combines these two irreducible dimensions in an open but not arbitrary manner. Behaviors that are neither ethical nor profitable are considered irrational (non-arbitrariness). However, behaviors that are profitable but unethical, and behaviors that are ethical but not profitable, are all treated as rational (openness). Combining ethical concerns with economic interest, ethical business is in turn an optimal form of rationality between venality and sacrifice. Because every one prefers to communicate that he acts ethically, ethical business remains ambiguous until some economic interest is actually sacrificed. We argue however that ethical business has an interest in demonstrating its consistency between communication and behavior by a transparent attitude. On the other hand, venal behaviors must remain confidential to hide the corresponding lack of consistency. This discursive approach based on transparency and confidentiality helps to further distinguish between ethical and unethical business behaviors.

Keywords: Rationality; business ethics; economic rationality; transparency; confidentiality (search for similar items in EconPapers)
JEL-codes: A13 M14 (search for similar items in EconPapers)
Date: 2001-11
New Economics Papers: this item is included in nep-cwa, nep-evo, nep-hpe and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:upf:upfgen:584

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