Charles W. Colson - Doing the Right Thing Participants Guide: Making Moral Choices in a World Full of Options

The United States is facing a serious crisis of ethics.

Perhaps the most obvious example of this is the recent financial crisis, where ethical lapses very nearly brought down the global financial system. Yet it is all too easy to blame the crisis on corporate greed and wrongdoing on Wall Street. Looking more closely at the situation, we find ethical problems on all levels, including on the part of the government and even individuals who took out mortgages they could not hope to repay, along with the banks and financial firms.

But what exactly is ethics? And how have our ethical standards so deteriorated that we dont even seem to know right from wrong? What are the consequences of these failures?

Maybe the simplest operating definition is that ethics are standards of behavior, presumably derived from some objective source or transcendent authority, whether it is natural law or God. These standards regulate the conduct of our behavior and our relationships with one another. When sound standards are in place, transparency and honesty generally operate in financial and commercial markets. Obviously there are exceptions, but these become the norm for behavior.

Yet many in our society today reject the very notion of ethics as something that is either objective or universal. Instead, many have embraced the idea of moral and ethical relativism. This view holds that ethics are not based on transcendent truths, but are instead dependent on the situation and the people involved. Since there is no objective standard of right and wrong, all cultures are equal, all individual values are valid, and we cannot judge the choices that other people make. Even government cannot get involved in these questions because there is no such thing as objective moral truth.

Relativism is a common view of ethics in many influential circles today, including business schools and academia in general, medical research labs, law schools, and halls of government. In our pluralistic world, it seems to many to be the only option.

The problem is, it doesnt work.

First, it is obvious that ethical failures occur. The outrage against executives at the financial ser vices firms is ample evidence that we recognize wrongdoing. Yet if there is no objective ethical standard by which we can measure peoples behavior, how can we even talk about unethical actions? There is no basis for judging anyones actions as wrong or inappropriate. At best we can say they are illegal.

This leads directly to the second problem. In a world that believes in relativism, when obvious ethical lapses occur the only recourse is laws and government regulation. Yet regulations have loopholes and boundaries, whether by accident or design. No matter how carefully crafted regulations are, unethical people will find a way around the letter of the law and thus will not be restrained by them. Furthermore, increasing laws and regulations inevitably leads to an erosion of our freedoms.

So determining what ought to be and building a consensus around setting some ethical standards becomes essential for the survival of a free society. And developing this consensus and teaching it is critical for preventing the kinds of disastrous ethical failures that have caused so much havoc not only in the U.S., but internationally as well.

I. Ethical failures and the economic collapse

[Your Notes]

II. The dictatorship of relativism

A. Business schools

[Your Notes]

B. Creating a culture without ethics

[Your Notes]

III. Criminality

[Your Notes]

IV. Borrowed capital and ethical erosion

[Your Notes]

V. Resolving ethical disputes

[Your Notes]

S ELLING S HORT is a way of making money when a stock declines in value. The short seller borrows a certain amount of stock from a broker and sells it; if the stock declines in value, the short seller buys it at the lower value, returns it to the broker, and keeps the difference in price less the borrowing fees. For example, the short seller could borrow 100 shares of a stock valued at $10 per share and sell them for $1,000; if the stock then drops to $8 per share, he could buy another 100 shares for $800, return them to the broker, and keep the $200 difference between the price he received for selling the shares and the price he paid to buy their replacements. If the stock goes up, the short seller will lose money. This is generally considered an ethical form of trade, though in the examples discussed here, the financial firms knew the assets were bad, sold them deceptively to companies that thought they were buying legitimate assets, and then shorted them to make a profit when they inevitably dropped in value. That action was clearly unethical on several levels.