September 17, 2008
Law, Morality, and the Corporation
Posted by Ned Snow

I am thinking about selling my old Toyota.  It runs great, but there’s one slight problem: after sitting overnight, it emits a horrid blue smoke when I start it up; apparently a piston seal has ruptured (or something like that, according to my mechanic friend).  The problem doesn’t affect performance…yet, but it will certainly be costly to repair.  So here is my conundrum: Should I disclose this fact to an interested buyer?  This question I pose as one of morality—not legality.  My own view is that if I offer this for sale to an individual, I must disclose.  Caveat emptor does not excuse my Kantian obligation.  But what if I trade it in at a car dealer?  Does that same moral obligation apply to a corporation?  The little that I know about both the problem and the dealer assures me that the dealer would never discover my dark secret.  And even if the dealer did discover it, I can’t imagine that the dealer would ever disclose it to any unsuspecting purchaser.  My gut instinct—without any second thought—is that I have no moral obligation to disclose to the dealer.  All’s fair against the corporation.

I can’t help but wonder, however, whether I should re-think this decision in view of the broader moral issue.  My decision seems to imply that morality dictates that with respect to corporations, I only need obey the law.  No overbilling of corporate clients and no stealing towels from Marriot.  Yet that same moral code tells me that the law does not always reflect what is the good and right thing to do.  To be moral, sometimes you need to do more than the law requires.  Morality dictates good Samaritan conduct.  Where my dealings are with a corporation, however, that do-more-than-the-law-requires aspect of morality doesn’t kick in like it does when I’m dealing with an individual.  My question, then, is whether it should.  Should I act morally virtuous in dealing with a corporation, just as I should when dealing with an individual?  On the one hand, it seems that the corporation is a market player that needs no looking out for; its very nature precludes any need for it to be watched over by those holding no stake in its welfare.  It is a creation of the State.  On the other hand, moral actions eventually affect human shareholders; the moral imperative that compels me to deal altruistically with individuals would therefore seem to apply when I deal with an institution that represents the interests of several individuals.  Any thoughts? 

I continue to ponder this question as I decide whether to disclose the ruptured piston seal to the car dealer.  Next time I’ll buy a Honda.

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