What a Nobel Laureate Taught Me about Business Ethics

Given that I was assembling my own syllabus for such a course, I was also interested in the answer, so I audited Fogel’s spring offering. The class he taught for nearly a quarter century is very different from the one I currently offer at Booth. Whereas his approach relied more on a study of the intersection between business and public policy, mine examines the moral and cultural consequences of capitalism. However, one observation he made at the very first class meeting has always shaped my own approach to business ethics.

While describing what would be covered in the class, Fogel warned us that we would not be discussing questions such as whether you should ever steal from your company or commit fraud. These were not hard questions, he said. On the contrary, they were quite easy: the answer is “No.”

I say much the same thing in my first class, adding that, if students are unsure of the answers to such questions, there is probably little that I am going to be able to do for them in 10 weeks. And yet, I say, the point of a business-ethics class is not merely to raise questions that don’t admit of easy answers—Where should I rank professional advancement among my life’s priorities? Do I raise my voice if I think a customer is being treated unfairly? What are the obligations of a company to the local community?—but to give students the resources, the wherewithal, and ultimately the courage to answer them in a way that is consistent with their own sense of moral integrity.

This too I learned from Fogel. Business ethics was an elective for his students at Booth, but it would also be an elective for them in their professional lives. Beyond those bright-line questions that admitted of hard legal answers, his students simply did not have to take business ethics seriously.

By framing his class in this way for his students, Fogel was stressing an attention to sensibility over science. Rather than anticipating a series of models that might solve the problems of business ethics with algorithmic reliability, they needed to prepare themselves for a study that took uncertainty for granted.

For most students, this is a high hurdle. Few of them expect that a course in business ethics will resolve all of their career quandaries, but the idea that, by its very nature, the study does not offer fixed solutions can be frustrating to those whose work takes for granted right and wrong answers (as with engineers or “quants”) and a little alarming to others who gravitate to the class hoping to remedy, once and for all, some problem that has given them no small amount of professional distress.

Beyond a candid appraisal of the study before them, I think there are three reasons Fogel framed “business ethics” in this way, lessons that I have taken to heart as an educator and as a student of ethics.

First, Fogel hoped to make clear to his students that keeping your head down, while sound advice for professional advancement, does not necessarily lend itself to an abiding sense of moral integrity. It is no doubt true that most problems that confront you at work can be avoided, if not necessarily resolved, by closing the door to your office. And yet, being a strong moral actor requires that you pay attention to the whispers you hear in the chapel of conscience whenever something seems awry. To make the affirmative choice to listen closely, to decide for yourself what constitutes “the right thing to do,” and most importantly to be willing to act on that determination are all practices that must be cultivated in the daily habits that are the keystone and castle of moral integrity.

Second, by emphasizing sensibility over science in how he approached business ethics, Fogel was indicating the necessity of empathy. If you understand that your vision of “the right thing to do” will not be universally shared, not only do you need to understand the views of others, you have to appreciate how reasonable individuals might have arrived at them. No less than any other group of people, companies are negotiated communities in which, by trial and error, people have to find ways to get along. Understanding where people stand on contentious affairs helps you to make your case, but it can also persuade you that, when a matter qualifies as a “close call,” there is no shame, or guilt, in standing down.

The final lesson Fogel was trying to teach us not only flows from the other two but is a prerequisite for their wisdom: patience. The human world can be awfully frustrating. People either fail to see things the way you do, or they simply fail outright. At the same time, no matter how capable, competent, or intelligent you happen to be, you too will stumble. In either instance, sighing, snarling, or even lashing out are all natural reactions, but they tend to create the kind of environment that breeds bad behavior and discourages one from risking anything in favor of doing what’s right.

Such knee-jerk reactions also stifle individual growth. Fogel had a special appreciation of this, for patience, and the generosity of time it entails, is the greatest gift a teacher can offer his students. No matter how busy he was—and you can imagine that, as a Nobel Prize winner, he was always in high demand—Fogel made time for his students, inviting them to visit his home (as I did) when his health precluded a meeting at Booth, and even Skyping into his classes, toward the very end of his life, to fulfill the responsibilities of the full teaching load he cherished.

Like any category of moral reasoning, business ethics is not a science, but an art that succeeds by example. For those of us who have had the privilege of studying under a master—and to my mind, there is no better way of describing Robert W. Fogel—its success is no less obvious than the numbers on a balance sheet and no less inspiring than even the most elegant theory.

This essay was presented as an address at Chicago Booth’s 2015 Autumn Quarter graduate dinner.