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The Image of Humans

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Book cover Business Ethics - A Philosophical and Behavioral Approach

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Abstract

The following chapter analyzes human behavior in the economy. What motivates people, what goals do they pursue and what makes them happy? We need the insights gained to explain unethical behavior and to move people to ethical behavior.

There are many people who selflessly do good deeds and feel better for doing so, not worse. This gives us a selfless motivation that contradicts the theory of utility maximization, or the concept of homo economicus. The fact that selfless, or even self-sacrificing, acts exists shows that such an ethic is not unrealistic. Volunteer work and individuals like Mother Theresa are clear examples. This behavior can be explained by a more general theory of maximizing happiness, which is behind theories like the Happiness Theory from Bentham and Mill. Many people are generally good, which is to say they have an ethical disposition.

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Notes

  1. 1.

    Weber explains the reduction to rational goal-oriented action as simplified behavioral assumptions by giving examples of exceptions to rational behavior, such as stock market panic. See Weber, Max (1922), p. 16.

  2. 2.

    “It is concerned with him solely as a being who desires to possess wealth, and who is capable of judging of the comparative efficacy of means for obtaining that end. It predicts only such of the phenomena of the social state as take place in consequence of the pursuit of wealth. It makes entire abstraction of every other human passion or motive;” Mill, John Stuart (1844), See p. 38.

  3. 3.

    See Hayek, F. A. (1971), p. 77.

  4. 4.

    See Franz, Stephan (2004) and Göbel, Elisabeth (2010), p. 52.

  5. 5.

    See Erlei, Mathias/Leschke, Martin/Sauerland, Dirk (1999), pp. 2. Current economic thinking handles market failure as a human failure only marginally, if it means rejecting the Rationality Theory of homo-oeconomicus. But even then human behavior is deterministic based on the assumptions of how they behave irrationally.

  6. 6.

    See Milgrom, Roberts (1992).

  7. 7.

    “The deeply rooted conception which every individual even now has of himself as a social being, tends to make him feel it one of his natural wants that there should be harmony between his feelings and aims and those of his fellow creatures. If differences of opinion and of mental culture make it impossible for him to share many of their actual feelings- perhaps make him denounce and defy those feelings- he still needs to be conscious that his real aim and theirs do not conflict; that he is not opposing himself to what they really wish for, namely their own good, but is, on the contrary, promoting it. This feeling in most individuals is much inferior in strength to their selfish feelings, and is often wanting altogether. But to those who have it, it possesses all the characters of a natural feeling.” Mill, John Stuart (1863), pp. 267.

  8. 8.

    See Föhr, Silvia/Lenz, Hansrudi (1992), p. 153.

  9. 9.

    See Hausmann, Daniel M./McPherson, Michael (2006), pp. 79.

  10. 10.

    See http://www.authorama.com/grimms-fairy-tales-2.html

  11. 11.

    “Nature has placed mankind under the governance of two sovereign masters, pain and pleasure. It is for them alone to point out what we ought to do, as well as to determine what we shall do. On the one hand the standard of right and wrong, on the other the chain of causes and effects, are fastened to their throne. They govern us in all we do, in all we say, in all we think: every effort we can make to throw off our subjection, will serve but to demonstrate and confirm it. In words a man may pretend to abjure their empire: but in reality he will remain subject to it all the while. The principle of utility recognizes this subjection, and assumes it for the foundation of that system, the object of which is to rear the fabric of felicity by the hands of reason and of law.” Bentham, Jeremy (1789), first chapter.

  12. 12.

    “… but its most appropriate appellation is a sense of dignity, which all human beings possess in one form or other, and in some, though by no means in exact, proportion to their higher faculties, and which is so essential a part of the happiness of those in whom it is strong…” Mill, John Stuart (1863), p. 10. See Mill, John Stuart (1992), pp. 86.

  13. 13.

    See Mill, John Stuart (1992), pp. 86 and 90.

  14. 14.

    See Jonas K./Stroebe, W./Hewstone M. (2007), pp. 374; Fehr, Ernst/Fischbacher, Urs (2003), p. 786 and Fehr, Ernst/Gächter, Simon/Fischbacher, Urs (2001); Frank, Robert H. (2004); Frank, Robert H. (1988) and Gürerk, Özgür/Irlenbusch, Bernd/Rockenbach, Bettina (2006).

  15. 15.

    See Conrad, Christian A. (2005), pp. 391.

  16. 16.

    See Jonas K./Stroebe, W./Hewstone M. (2007), pp. 374; Fehr, Ernst/Fischbacher, Urs (2003), p. 786 and Fehr, Ernst/Gächter, Simon/Fischbacher, Urs (2001); Frank, Robert H. (2004); Frank, Robert H. (1988) and Gürerk, Özgür/Irlenbusch, Bernd/Rockenbach, Bettina (2006).

  17. 17.

    “Not that any political economist was ever so absurd as to suppose that mankind are really thus constituted, but because this is the mode in which science must necessarily proceed.” Mill, John Stuart (1844), V 38.

  18. 18.

    An interesting neurological experiment was conducted in 2003 that showed homo-economicus to be a fiction, and the press gave its conclusions much attention. The ultimatum game was conducted in the laboratory of Princeton University by Alan Sanfeys. See Sanfey, Alan et al. (2002) and Handelsblatt vom 03/23/06, p. 11.

  19. 19.

    See Starbatty, Joachim (1999), pp. 17.

  20. 20.

    Smith, Adam (1776), Paragraph I, p. 82. The idea of an invisible hand can be traced back to Mandevilles bee fable. “The worst of all the Multitude Did something for the Common Good.” Mandeville, Bernard de (1732) p. 9. Mandeville had already seen the danger than self-interest can pose to society: “So vice is beneficial found, when it’s by justice lopt, and bound; Nay the people would be great; as necessary to the state; As hunger is to make them eat; Bare virtue can’t make nations live; In Splendor; they, that would revive A Golden Age must be as free For Acorns, as for Honesty.” Mandeville, Bernard de (1732) p. 24

  21. 21.

    Smith, Adam (1776), Book IV, Chapter II, p. 489.

  22. 22.

    Smith Adam (1759), Part I, Chapter I.

  23. 23.

    “We are certain, that sympathy is a very powerful principal in human nature.” Hume, David (1739), p. 667. See Schopenhauer, Arthur (1840), § 15–18.

  24. 24.

    See Nass, Elmar (2003), p. 47.

  25. 25.

    See Smith, Adam (1776), chapter III, first paragraph.

  26. 26.

    See Rapoport, Anatol /Chammah, Albert M. (1970); Axelrod, Robert (1987) and Schwaninger, Markus (2008).

  27. 27.

    See Holzmann, Robert (2015), p. 131.

  28. 28.

    See Fehr, Ernst/Fischbacher, Urs (2003), p. 786.

  29. 29.

    See Fehr, Ernst/Fischbacher, Urs (2003), p. 786 and Fehr, Ernst/Gächter, Simon/Fischbacher, Urs (2001).

  30. 30.

    “Strong reciprocators bear the cost of rewarding or punishing even if they gain no individual economic benefit whatsoever from their acts.” Fehr, Ernst/Fischbacher, Urs (2003), p. 785. See Gürerk, Özgür/Irlenbusch, Bernd/Rockenbach, Bettina (2006).

  31. 31.

    See Föhr, Silvia/Lenz, Hansrudi (1992), pp. 153 and Frank, Robert H. (1988) and Frank, Robert H. (2004).

  32. 32.

    See Fehr, Ernst/Fischbacher, Urs (2003).

  33. 33.

    See Fehr, Ernst/Fischbacher, Urs (2003).

  34. 34.

    See Falk, Armin (2003), p. 147 and Fehr, Ernst/Gächter, Simon/Fischbacher, Urs (2001).

  35. 35.

    See Lück, Helmut E./Manz, Wolfgang (1973).

  36. 36.

    See Hornstein, Harvey A./Fisch, Elisha/Holmes, Michael (1968).

  37. 37.

    See Gneezy, Uri (2005), pp. 387.

  38. 38.

    See Hausmann, Daniel M./McPherson, Michael (2006), p. 86.

  39. 39.

    It was interesting to see that in the ultimatum games students who had the course microeconomic before and therefore knew the experiment for showing not rational behavior gave only one of the ten chewing gums to the second person. Their argument was that they wanted to behave rational and the other person should be grateful to receive anything.

  40. 40.

    The ultimatum game was adapted and executed under competitive conditions with a proposer and several responders. Only the first responder to accept the proposer’s offer received a payout. The responders accepted even very low offers in this situation. See Holzmann, Robert (2015), p. 130 and Roth, A. E./Prasnikar, V./Okuno-Fujiwara, M./Zamir, p. (1991). Such a something or nothing situation is not comparable to the competition based on performance as per the do-ut-des principle of the markets.

  41. 41.

    See Sanfey, Alan et al. (2002). The ultimatum game has existed since the 1980s. See Güth, W./Schmittberger R./Schwarze, B. (1982).

  42. 42.

    See Aristoteles (1944), 1253a.

  43. 43.

    See Conrad, Christian A. (2010), pp. 125 and Fehr, Ernst/Fischbacher, Urs (2003), pp. 785.

  44. 44.

    See Holzmann, Robert (2015), p. 129.

  45. 45.

    See Brosnan, Sarah F./de Waal, Frans B. M. (2003); Perry, Susan (2003) and Brosnan, Sarah F./de Waal, Frans B. M. (2014).

  46. 46.

    See Höffe, Otfried (1992), pp. 91.

  47. 47.

    See http://wirtschaftneudenken.blogspot.de/2010/09/abschied-vom-iq.html

  48. 48.

    People need to select maxims to guide their actions, which can simultaneously function as general laws.

  49. 49.

    See Gardner, Howard (1983); Gardner, Howard/Kornhaber, Mindy L. (1996); Gardner, Howard (1999) and Schlesinger, Christian (2007).

  50. 50.

    See Holzmann, Robert (2015), p. 117.

  51. 51.

    See Greene, Joshua D./Nystrom, Leigh E./Engell, Andrew D./Darley, John M. (2004).

  52. 52.

    See Haidt, J./Koller, S./Dias, M. (1993).

  53. 53.

    See Eshghi, Parto/Arofzad, Shahram /Hosaini, Taghi Agha (2013). Zur Diskussion See Gardner, Howard /Moran, Seana (2006).

  54. 54.

    One study was conducted in Germany with craftsmen and one in the USA with students (lecture “business ethics”). See Steinmann, H./Löhr, A. (1994), pp. 174, 190 and Noll, Bernd (2002), p. 144.

  55. 55.

    See Wiswede, Günther (1985), p. 195.

  56. 56.

    See Wiswede, Günther (1985), p. 195, Hayek, Friedrich August von (1976), p. 39, 40 und 59; Hayek, Friedrich August von (1979), pp. 154 and 167 and Noll, Bernd (2002), p. 29.

  57. 57.

    See Maslow, A. H. (1943).

  58. 58.

    See Luhmann, Niklas (2000).

  59. 59.

    See Conrad, Christian A. (2015).

  60. 60.

    See Bennis, Warren G./O’Toole, James (2005), p. 95.

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    Christian A. Conrad

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Conrad, C.A. (2018). The Image of Humans. In: Business Ethics - A Philosophical and Behavioral Approach. Springer, Cham. https://doi.org/10.1007/978-3-319-91575-3_3

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