Romanticism of the 1600's
ETHICS IS MORE THAN LEGALITY
In the early 2000s, the U.S. public was shocked to learn that Enron, the giant energy trading company, had created off-the-books partnerships to unlawfully hide its debts and losses. The Enron disgrace soon was followed by more scandals at major companies like WorldCom, Tyco International, ImClone, HealthSouth, and Boeing. (See the Legal Briefcase box for a brief summary of a few of these cases.) In recent years, greedy borrowers and lenders alike were among those who brought the real estate, mortgage, and banking industries to the edge of a financial crisis that threatened the entire U.S. and world economies.1
Given the ethical lapses prevalent today, how can we restore trust in the free-market system and in leaders in general? First, those who have broken the law should be punished accordingly. New laws making accounting records more transparent (easy to read and understand) and businesspeople and others more accountable for their actions may also help.2 But laws alone don't make people honest, reliable, or truthful. If they did, crime would disappear.
One danger in writing new laws to correct behavior is that people may begin to think that any behavior that is within the law is also acceptable. The measure of behavior then becomes “Is it legal?” A society gets into trouble when people consider only what is illegal and not also what is unethical. Ethics and legality are two very different things. Although following the law is an important first step, behaving ethically requires more than that. Ethics reflects people's proper relationships with one another: How should we treat others? What responsibility should we feel for others? Legality is narrower. It refers to laws we have written to protect ourselves from fraud, theft, and violence. Many immoral and unethical acts fall well within our laws.
ETHICAL STANDARDS ARE FUNDAMENTAL
We define ethics as society's accepted standards of moral behavior, that is, behaviors accepted by
In the early 2000s, the U.S. public was shocked to learn that Enron, the giant energy trading company, had created off-the-books partnerships to unlawfully hide its debts and losses. The Enron disgrace soon was followed by more scandals at major companies like WorldCom, Tyco International, ImClone, HealthSouth, and Boeing. (See the Legal Briefcase box for a brief summary of a few of these cases.) In recent years, greedy borrowers and lenders alike were among those who brought the real estate, mortgage, and banking industries to the edge of a financial crisis that threatened the entire U.S. and world economies.1
Given the ethical lapses prevalent today, how can we restore trust in the free-market system and in leaders in general? First, those who have broken the law should be punished accordingly. New laws making accounting records more transparent (easy to read and understand) and businesspeople and others more accountable for their actions may also help.2 But laws alone don't make people honest, reliable, or truthful. If they did, crime would disappear.
One danger in writing new laws to correct behavior is that people may begin to think that any behavior that is within the law is also acceptable. The measure of behavior then becomes “Is it legal?” A society gets into trouble when people consider only what is illegal and not also what is unethical. Ethics and legality are two very different things. Although following the law is an important first step, behaving ethically requires more than that. Ethics reflects people's proper relationships with one another: How should we treat others? What responsibility should we feel for others? Legality is narrower. It refers to laws we have written to protect ourselves from fraud, theft, and violence. Many immoral and unethical acts fall well within our laws.
ETHICAL STANDARDS ARE FUNDAMENTAL
We define ethics as society's accepted standards of moral behavior, that is, behaviors accepted by