Business is One Thing, Ethics is Another: Revisiting Bernard Mandeville's Fable of the Bees

Abstract

Recent corporate scandals raise an old question anew: is capitalism fundamentally infected by immorality? A now almost forgotten answer to this question was advanced at the dawn of capitalism, an answer that students of business ethics would find profit in considering. In the early 18th century, Bernard Mandeville authored The Fable of the Bees, which became notorious in its day for arguing that capitalism created wealth while necessarily relying on vicious impulses. The fundamental dilemma is that morality requires self-denial while capitalism runs on self-interest. As such, Mandeville claims that business and ethics are essentially separate.

While this would appear to align him with skeptics of business ethics, Mandeville does suggest a role for moral theorists in dealing with the challenges of commercial societies. The Mandevillean business ethicist proceeds by separating the public and private spheres. In the former, where government policy towards business is at issue, the Mandevillean ethicist applies a market-friendly utilitarianism. In the latter, where individual conduct is at issue, the Mandevillean gently articulates a market critical ethic predicated on self-restraint.

Keywords: Business ethics, Mandeville, morality

JEL Classification: A13, B1, B3, B11, B31, I31, N01, P1