How Not to Jump to Conclusions When Judging Business People and Situations

Over the years, I have written a few posts discussing the issue of judging other people (1, 2, 3).

Applying ethical principles to make moral judgments in business is particularly challenging, requiring much research and sorting before making a decision. Taking time to process the acquired data is necessary to avoid making unsound decisions.

There are three overlapping steps in the process: gathering all relevant facts before making a judgment, identifying and separating moral values from optional ones, and, most difficult, identifying and sorting out the role and influence of government in our modern mixed (or worse) economies.

Let us take these overlapping steps one at a time.

Facts. As I would always tell my students, “Dig, dig, dig for the facts. Do you have all of them?” One new fact can overturn a previous conclusion. Calling a person inconsiderate when cutting in line, for example, should change when you realize the cut was inadvertent.

Options. In one of my previous posts, I encouraged readers “to get beneath surface appearances and not be swayed by looks, words, or demeanor.” In other words, style. I emphasized the abstractness and universality of moral values and virtues, cautioning readers not to elevate concretes and optional tastes to the status of moral judgment, such as eating red meat or drinking water out of plastic bottles.

And the use of hyperbole and BS usually does not make another person immoral. Learning the other person’s psychology is prerequisite to making moral judgments. The hyperbole and BS may be the result of years of entrenched defensive habits, often learned from parents. (It’s also called “sellers’ puff” in the law and is ineffective as a marketing technique.)

Competence in business is an expression of the moral value of productive work, but level of competence usually does not entail anything immoral, though it may mean management should work harder to find the appropriate slot for someone who is less competent in the current job.

Personality is our distinctive way of thinking and acting and does include character, but most interaction with other people involves sharing and working with their concrete values and morally optionally tastes and preferences. So-called personality conflicts usually have nothing to do with ethics and everything to do with options—looks, words, demeanor, style.

The importance of getting to know partners was impressed upon me in my six-plus years working for the same company in New York City. The company was founded by two men ten years before I arrived. While there, I did notice that the partners’ offices were at opposite ends of the building, but did not think anything of it at the time. Friction between the owners was mentioned by some co-workers and once I did see what must have been a serious or unpleasant disagreement between them, but in the entire time I worked at the company I never observed a dishonesty (and I don’t think there ever was any). About ten years later, after I had left the company to attend graduate school, I read that the company had closed and the two men were suing each other.*

Moral of the story? Business partnerships (and I include mergers, joint ventures, and acquisitions) are marriages with over half ending either in divorce or with the stronger partner taking over the business.

Taking time to get to know a future partner, including the partner’s judgment of others, is crucial. There does not have to be immoral behavior to cause a breakup in the relationship; most values that we hold are concrete and optional and accepting and enjoying many of the same ones are required for cooperative success.

Government. Identifying and sorting the components of a more general situation in business, such as opinions, personality, and, especially, government intervention are required before judging. This last is not always easy to find, since most today do not think about how government can affect a moral evaluation, nor does the press report such interventions. More digging in search engines to read several articles presenting alternative viewpoints is required.

A 2002 academic paper of mine demonstrates the sorting I am talking about. It untangles many issues surrounding bribery, including its common law definition and the frequent conflating of it with several other terms—perk, grease payment, extortion, broker’s fee, and even candy or money offered to a child to clean his or her room. (Yes, it’s called bribing the child! Should mom be put in the slammer?? No, it’s metaphor, not ethics or law.)

Regulatory agencies, to elaborate further, are major initiators of physical force against businesses, through their nonobjective law, arbitrary rule-making, and catering to favored lobbyists at the expense of those who do not lobby or cannot afford to lobby. Violations of regulatory rules by the people or companies being regulated should not be taken as immoral action. The agencies themselves, not necessarily the regulators (bureaucrats) running them, are the ones that are immoral and unconstitutional, as they combine the legislative, judicial, and executive into one bureau (1, 2).

What I have concluded about judging others is that it takes time getting to know them personally before declaring, for example, a dishonesty. The adage “haste makes waste,” though trite, is relevant here. It should mean: don’t hop into bed after one or two dates or sign a business partnership after one meeting. Personalities and business situations are complex.

The most complex and challenging moral issue in business ethics is what I have called marketing to morally questionable countries. The problem is, what exactly is a morally questionable country—can there be one or are we talking about particular people, such as the leaders of the country who are morally questionable? And which moral values and principles are relevant to be applied?

Full, airtight dictatorship, especially of the giant post-office type of Lenin’s socialism where private enterprise did not exist, is often cited as an immoral country that one should not have traded with. The government owned and controlled everything, including you, so the system was totalitarian. The fascist Nazi Germany, although it had nominally private businesses, was also totalitarian; it controlled everything and everyone. In an airtight dictatorship, everyone is prisoner and slave and all external trade must be conducted with the party bureaucrats, the slave masters.**

In today’s world, countries without private-sector workforces are rare. China may have over 70% of its employment in private enterprises and even Cuba may now have over 20% of its workers in the private sector.

Justice is the relevant principle in judging the morality of international trade. As Ayn Rand stated, “the principle of justice…is the principle of trade,” and includes not treating other people as “masters or slaves, but as independent equals.” The prisoners of airtight dictatorships were slaves and the bureaucrats were their masters, but private enterprisers in many countries today enjoy a modicum of freedom and independence.

Doing business in China can illustrate the complexity of ethics in the international arena.

Ethnic Chinese in particular are known to be entrepreneurial and hard-working, whether at home on the mainland or as a minority in other Asian countries. On the mainland their economy has shown the fruits of their efforts. (Less than 7% of the Chinese population are members of the Communist Party, leaving a large number of people to trade with.)


Economic reform in China under Deng Xiaoping (1978-89) was indeed impressive: de-collectivization of farms, acceptance of foreign investment, allowing citizens to own businesses, privatization of state-owned businesses, and the elimination of price controls and other regulations. Unfortunately, subsequent leaders have sought to limit this reform, though the economy still thrives in all areas of the country.

Also, recent accusations of Chinese genocide should be made more precise. There is no evidence of mass extermination, the correct definition of genocide, according to the Oxford English Dictionary. There is forced labor and forced sterilization, actions the United States was guilty of in the twentieth century with the military draft and the progressives’ eugenic goal of keeping the “feeble minded” from procreating.

But mixing forced labor and forced sterilization with execution to call China’s actions genocide is tantamount to calling the slums of Harlem and Watts ghettos; slums are not ethnic prisons. The definition of genocide being used today comes from the United Nations, which is more broad, going beyond killing, allowing lesser crimes into the definition. The UN itself, incidentally, is a massive governmental organization (hostile to the US) and not exactly an expert on concept formation and definition.

Attempted destruction of an ethnic minority’s culture? This is an accurate description of the actions of a large number of Chinese leaders and bureaucrats, but there is a difference between physical destruction of a group—think Jews, Armenians, Cambodians, and Tutsis—and forcing that group to integrate culturally into the majority. Still horrible, but not genocide.

Free trade is said to be the primary foreign policy of free societies; therefore, trade with private parties, not bureaucrats, should be the corollary. And the line attributed to Frederic Bastiat—“if goods don’t cross borders, armies will”—is also relevant here, but that would take us into economics and away from ethics.

Doing business in authoritarian countries poses additional questions and challenges. Are you really dealing with, and selling your products to, private citizens or with the jailers and killers? How do you know whether your products are made by (semi-) free citizens or by forced labor? Analogous questions can be asked about doing business in (semi-) free countries, such as the United States: how do you know your products are not being bought by criminals and the Mafia?

Facts do matter—a lot of them—especially when trying to decide whether doing business in certain countries is moral.

And judging other people is not an easy task, as the above examples indicate. Digging for facts is the first and persistently enduring action throughout the process required before making moral judgments in business. Time is your friend. Don’t jump to immediate conclusions.


* In contrast, I observed two brothers who owned their company; their desks were up against each other’s in an open office. They seemed to get along well.

** “Airtight” was the working title of Ayn Rand’s first novel We the Living. The background of the novel is life in the early years of the Soviet Union. Rand’s heroine shouts at her communist antagonist (p. 385): “You've driven us all into an iron cellar and you've closed all doors, and you've locked us airtight, airtight till the blood vessels of our spirits burst!” I’ve written before about our recent covid totalitarianism as a taste of airtightness.

But, again, it is necessary to understand the complexity of judging: there are bureaucrats who have their critics cancelled, jailed, or shot and others who may even help some of the slaves to escape. Bureaucracy is a huge continuum from evil to decent. (And yours truly was a “super bureaucrat” for thirty years in two government-run universities; he thinks he was on the decent end of the continuum!)

Standing Down from External Control

In economics the principle of unilateral free trade (1, 2, 3) holds that everyone benefits when one country by itself, ignoring what others may do, eliminates all tariff and non-tariff barriers to trade. Cheap imports increase the standard of living both at home and in the exporting country. The historical experiment and demonstration of this principle was the repeal of England's Corn Laws in 1846. Other countries followed England's lead and for a brief time peace, the natural consequence of free trade, was achieved.*

In human relationships psychiatrist William Glasser, whose choice theory I discussed in a previous post, offers a similar principle: in spite of what others may do (assuming the absence of physical abuse or attack), eliminate all habits of external control psychology from one's own behavior. The result will be less stress—from trying and failing to control the other person's behavior—and may even bring about a sense of calm. And the other person, says Glasser, may notice your change leading to a discussion of internal control psychology and new ways of relating to one another. Peace within the relationship may be achieved.

This strategy of unilateral refusal to use external control tactics is especially effective with teenagers, but works well in all relationships. Teenagers are not yet fully mature and can therefore afford guidance from parents, but they also want to be independent of their parents and resist attempts at control. Parents in the meantime instinctively practice all of Glasser's deadly habits—criticizing, blaming, complaining, nagging, threatening, punishing, and bribing, plus many other variations—and protest that if none of these are used the child will not learn or mature or become responsible, etc. But parents in Glasser's practice who have stood down from using the external control habits have found their teenagers coming back to them, opening up, and even asking for advice. "When you stop controlling," as Glasser says (chapter 1), "you gain control." The strength of the relationship is what gives the parent influence. The deadly habits erode and destroy both.

The value of eliminating external control tactics with students, a relationship that is not unlike that of parents to teenagers, has been demonstrated abundantly by Glasser in numerous books (1, 2, for example). Other factors may complicate matters in couples and work relationships. A mature adult can choose to walk away from either or both. And a spouse or boss may not be willing to try to make the relationship work. Nevertheless, one-sided abandonment of external control, notably the "CBC's" (criticizing, blaming, and complaining), can work wonders in improving a relationship. Criticizing, says Glasser, is the most corrosive habit one can use in any relationship, but it is particularly harmful in marriages. Caring, trusting, listening, supporting, negotiating, befriending, and encouraging—Glasser's connecting habits—bring people closer together (1, 2).

Work relationships sometimes pose a challenge if the employee feels stuck and cannot move to a new job. The boss should be practicing what Glasser calls lead management, the application of choice theory to managing employees, but what if the boss is external control to the point of being almost drill-sergeant harsh? What can the employee do? Abandoning external control and practicing the connecting habits are a must, but offering an occasional compliment might melt some of the insecurities that seem to motivate such a boss. And reminding yourself constantly that you are choosing to remain in that position, choosing to stay for the benefits, for example, or to stay until economic conditions improve, can help. Internal control means choosing one's own behavior. Knowing that builds confidence and contentment.

The connection between internal control psychology and free trade is simple. The former is a theory of human relationships, of how people get along with one another on a personal basis, whereas the latter is a theory of human relationships occurring within the social institutions of business and society. The latter is the implementation of the former and there is no place for external control in either relationships or trade.** This is why advocates of capitalism argue that the monolithic and historical practitioner of external control, the government, should be prevented permanently from intruding into all aspects of our personal and business lives.


* "If goods don't cross borders, armies will" is a phrase attributed to French economist Frederic Bastiat. It emphasizes the connection between free trade and peace.
** Indeed, Ayn Rand calls the trader principle the foundation of all rational human relationships, because it is the principle of justice.

Why Does Capitalism Need To Be Defended?

I admit that I have not heard this question in precisely that form. After the hardcover edition of my book In Defense of Advertising: Arguments from Reason, Ethical Egoism, and Laissez-Faire Capitalism was published, I did hear the question this way: Why does advertising need to be defended? As advertising is the point man and product of capitalism, the two questions are intimately related.

The question about advertising initially surprised me. When the look on my face expressed a “Did you read the book?” reply, my questioners promptly continued, “Advertising in the U.S. is a $270 billion a year business. It doesn’t need to be defended!” Somehow, apparently, the amount of money spent by the industry was supposed to be its own justification. Similarly, I could imagine someone thinking or saying, “The United States is a $12 trillion a year economy. Capitalism doesn’t need to be defended!”

I soon came to realize where my advertising questioners were coming from: their question is motivated by the premises of what I call the critics’ world view. As I argue in my book, the social and economic criticisms of advertising—namely that advertising is coercive, offensive, and monopolistic—are based on false philosophic and economic ideas that at root are authoritarian.

The discussion with my questioners usually runs as follows. The questioners comment that advertising is a “big bucks” industry and, like any other big business, assume it eventually becomes immune to competition—and to criticism. “It’s just words,” they say, “like water falling off a duck’s back. The criticisms have no effect on advertisers who, after all, are so big and powerful that they can easily ignore the complaints. Therefore, advertising does not need to be defended.” QED. Subsequent discussion then brings out the premise that a little (or a lot) of legislation is needed to help cut these guys down to size. Why? Because advertising is so . . . well, coercive, offensive, and monopolistic. At that point, we are off to the litany of criticisms that ranges from alleged sexual orgies subliminally embedded in a Howard Johnson’s restaurant menu to the four-firm concentration ratio.

No doubt, anyone who has engaged the critics of capitalism has observed a similar pattern. It involves a move from surface appearances—advertising doesn’t need to be defended—to underlying causal principles that initially seem unconnected to the appearances—these big advertisers need to be brought down a few notches. It is a move from what is seen, to use Bastiat’s phrase, to what is not seen. Bastiat explained the seen and unseen in terms of economic events, but the more fundamental psychological issue here is that conscious perceptions (the seen) are shaped by the contents of one’s subconscious (the unseen). Defenders of advertising and capitalism must probe to those deeper levels and make the critics aware of, and answer, all of the buried fallacies that motivate their surface comments.

Contrary to what the critics of advertising—or capitalism—may think, their criticisms do have an effect. When left unanswered, the criticisms reinforce ignorance and misunderstandings about the nature of advertising and, by implication, capitalism. They reinforce and encourage hostility toward both. And they implicitly and explicitly provide a call for legislation to restrain what are perceived by the critics to be “abuses” of advertising and big business.