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Amidst the ongoing recriminations concerning responsibility for the 2008 financial crisis, business leaders continue to be listed among the guilty. Of course, any objective analysis of the financial crisis soon indicates that politicians and central bankers were just as, if not more responsible for facilitating the financial perfect storm.

Still, the financial crisis has raised questions about the prevailing moral culture within the business community and the ethical formation they are receiving. As Professor Michael Jacobs astutely observed in the Wall Street Journal: “As we try to understand why our economy is so troubled, fingers are increasingly being pointed at the academic institutions that educated those who got us into this mess. What have business schools failed to teach our business leaders and policy makers?  ... Would Bernie Madoff have acted differently if he had aced his ethics final?”

For several decades, there has been no shortage of ethics courses for aspiring business leaders at innumerable business schools. Naturally, as long as people have free will, no formation can guarantee that business executives won’t sometimes make imprudent or simply wrong decisions. But the sheer number of bad decisions – and, in some instances, morally evil actions – by some business leaders before and during the financial crisis must surely cause us to reassess the content of business ethics classes.

A brief perusal of any number of business schools’ curricula soon indicates that some are doing excellent work in this area. Generally, however, the picture is discouraging. Business schools have not proved immune from the tide of ethical relativism, and the political correctness that often substitutes for serious moral reflection, that has swept the West since the 1960s.

Far too many business schools consequently refuse to seriously engage questions of right and wrong, virtue and vice. Ethics is either reduced to “corporate social responsibility,” which invariably translates into promoting politically correct agendas (and an often-implicitly negative view of business), or the attitude of “if it’s not illegal, it’s permissible.” 

Neither of these stances is adequate if private enterprise is to be allowed to assume its characteristics as a genuine vocation. They also encourage the development of technocratic mindsets within business schools. This leads to business students being turned into people who, theoretically, can be charged with managing any form of business.

Business, however, is about more than management. It also involves stewardship (inasmuch as managers have moral and fiduciary responsibilities to their clients and investors) and entrepreneurship – the actual creation of wealth. Many business leaders would be shocked to discover that studying entrepreneurship remains optional in many business schools today.

This underlines another problem for some business schools. It’s not clear that all business professors are convinced of the morality of economies based on free enterprise, limited government, and rule of law. This ambivalence cannot help but be communicated to their students, which they take with them into the marketplace. It is very difficult for business schools to teach the moral habits associated with successful business when many business professors regard private enterprise and markets as, at best, useful but morally-insignificant phenomena.

Unexpectedly weighing into this discussion recently was Pope Benedict XVI. Affirming in his encyclical Caritas in Veritate that business executives’ responsibilities go beyond – though always include (CV 21, 37, 38) – profit-making, the pope notes the contemporary plethora of courses, seminars, and research into business ethics. He remarks, however, that “the adjective ‘ethical’ can be abused”when “the word is used generically,” and can “lend itself to any number of interpretations,” many of which actually undermine human flourishing (CV 45).

Hence, though Pope Benedict speaks approvingly of the rise in ethics-consciousness in the worlds of finance and business, he cautions that simply attaching the label “ethical” to a given enterprise tells us nothing about the actual morality of its practices. What ultimately matters, the pope affirms, is the precise vision of morality – and therefore the understanding of the human person– informing not simply a particular business, but the entire economy (CV 45).

Obviously business schools that simply outline different “visions” of ethics and then leave the rest to chance in the name of tolerating all views (however incoherent) have little to offer here. By failing to engage morality in terms of determining the truth of the good or evil of particular business choices on the basis of right reason (and hence open to believer and non-believer alike), they merely lead their students into the intellectual and moral dead-end of “my opinion, your opinion, and everyone else’s opinion.”

Part of the genius of successful business is constant and prudent innovation and adaption to new circumstances. When it comes to reforming business ethics instruction, those institutions that educate so many business executives should be capable of no less.

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Dr. Samuel Gregg is research director at the Acton Institute. He has written and spoken extensively on questions of political economy, economic history, ethics in finance, and natural law theory. He has an MA from the University of Melbourne, and a Doctor of Philosophy degree in moral philosophy and political economy from the University of Oxford.

Gregg oversees Acton’s research program and team of scholars and is responsible for oversight of research international programing, including budgeting, management, personnel, publishing, and program development and