Peter Singer proposes a formula for living an ethical life. We should use our time, money, skills, and other resources to do the most good we can. And thanks to the effective altruism movement he has inspired, individuals are in a better position than ever to choose the careers and charities that allow them to do the most good. The effective altruism movement promises great impact on the decisions of individuals in affluent countries and on the living conditions of the global poor.
Where does this leave firms? Should they follow the formula Singer recommends for individuals? Or are there ethically relevant differences between individuals and businesses that allow or require the latter to depart from doing the most good?
There are at least three differences between individuals and firms that should be considered in such a discussion.
First, firms have a greater capacity to inflict severe harm on large numbers of people. Many of us think we have a special responsibility not to harm others, even if that means forgoing benefits of similar magnitude that we could have provided to many more. Others, in particular utilitarians, disagree. The distinction between harming and failing to benefit others may not make a big difference for most individuals, because they have limited means to harm others. Unless someone has access to an extremely destructive technology, such as chemical or biological weapons, an individual is rarely in a position to inflict severe harm on large numbers of people.
Firms are different. They control technologies and materials that are not available to most individuals. For example, a multinational corporation may find it profit-maximizing to dump toxic waste in a poor country with low life expectancy, thereby severely harming people in the area. The company, or its owners, could then donate the additional profit to charities. If these charities are highly effective in helping the global poor, the overall benefits of doing so may outweigh the harm done to the victims. Is it nonetheless wrong for a firm to do severe harm to a group of people? Most advocates of corporate social responsibility would answer in the affirmative. They think firms bear a special responsibility for the harms they cause.
Second, firms can violate the basic rights of people in a way most individuals cannot. For example, they employ large numbers of people whose lives they fundamentally shape. Are firms therefore particularly responsible for the rights and welfare of their employees?
Suppose a firm sets up a sweatshop in an underdeveloped country lacking adequate worker protection laws and enforcement. Management hires a number of workers in an area with high unemployment and requires them to work sixty-five hours per week under unsafe conditions. The wage it pays is just enough to prevent the workers from starving.
Firms bear more responsibility than individuals to do good.
Many advocates of corporate social responsibility would argue that the firm does something morally wrong by violating its employees’ rights to safe working conditions and a living wage. An effective altruist may disagree, instead contending that firms have a duty to give jobs to people in the first place, and only later are they required to make sure these are safe jobs that pay decently. But what if the two duties are in conflict because firms can create more jobs by paying poor wages and adopting low safety standards?
Third, one may argue that firms actually have a greater obligation to do the most good than do individuals. This is because firms can do a lot more good without giving up something ethically significant than any individual typically can. Not only do firms command greater resources than most individuals, they also may have special competencies that individuals lack. For example, pharmaceutical companies can save many lives in poor countries by developing new drugs for neglected diseases and charging affordable prices for them. Furthermore, unlike individuals, firms have no personal lives of their own. They could use their resources to do the most good without compromising family relationships, friendships, and projects central to individuals’ sense of who they are. Firms may then have a particularly strong reason to aim at doing the most good, even to the detriment of maximizing profits.
All this is to say that effective altruism could have even greater impact if it did not focus exclusively on individual philanthropy. Firms also need guidance in order to do the most good given claims about their special responsibility both to shareholders and to employees and those who might suffer from their profit-seeking.