Why businessmen should be honest: The argument from rational egoism

Abstract You are a business owner who has just taken out a loan to manufacture a new high technology product, for which you have lucrative orders. Although you thought you could make the product to specifications, you have not been able to do so. You will not be able to meet the delivery deadline and cash is running short — so short that it is threatening the viability of the rest of your business. Things are in a critical state, but you desperately want the product to succeed. You have several options. You could tell the customers about your problems, ask for a postponement of the deadline, and hire an outside consultant to help with the product. But this will anger your customers, take time and not solve your cash flow problem. You could also get another bank loan by telling the bank's president that you need it to expand an old line of business. You know he will refuse more money for the new product, but he does not have to be told how you will actually use the money. The loan will take a while to process but you need money now. You can get it from your children's college savings accounts; it would upset your wife (who helped fund the accounts) and the kids, but you do not have to tell them and can repay later. You can also borrow money from the employee pension fund. The employees do not have to know. Finally, you can ship the products even though they do not meet specs, and hope that nobody finds out right away. You can use customers' payment to pay back the various loans and worry about fixing the product later. What should you do? Should you take the honest route or the dishonest route? Clearly, you have to make a moral choice, but you can only do so by reference to a moral code. In this essay we will address three questions: (1) What are the main moral codes that have been accepted throughout the centuries and what are their views on honesty? (2) Why are they inadequate and what would be a rational moral code and its argument for honesty? (3) How would one apply it to the issue of businessmen being honest?