Joseph Heath’s effort to develop an adversarial ethic for business begins by noting some reasons why competitions―be they in business, in sports, or some other sphere of modern society―are ethically so puzzling. Basically, they are deliberately imposed collective action problems that are specifically designed to disincentivize cooperation and which often permit behavior that would, “. . . in other contexts, typically be regarded as anti-social.” (Heath 359) This sounds like a toxic brew, and it’s easy to see why competitions are often something we want to avoid. What’s puzzling is that, despite these features, many competitions are considered morally permissible and even desirable. But, “. . . why would society want to inflict this peculiar sort of collective action problem upon people?” (362)
Heath suggests an answer. He claims that “. . . the reason that ‘society’ favors competition in certain areas of life has everything to do with the externalities that are generated. The difference between healthy and unhealthy forms of competition is that, in the former case, the external benefits outweigh the losses incurred by the competitors, while in the latter case they do not.” (362)
Curiously, Heath illustrates this distinction by contrasting athletic training with the use of performance enhancing drugs, where the former characterizes healthy competitions and the latter unhealthy ones. He claims that training “. . . usually improves the athlete’s overall health, whereas performance enhancing drugs have serious adverse health effects in the long run.” (362) The reason this is puzzling is that Heath’s distinction between healthy and unhealthy competitions turns on all the externalities these competitions produce, not just their effects on participants. In fact, he explicitly defines positive externalities as “benefits to people other than those directly involved.” And while it’s true that the use of performance enhancing drugs constitutes a net harm for the competitors, whether or not it constitutes a net harm for society at large is anybody’s guess.
The example aside, what about Heath’s claim that society favors competitions on the basis of their externalities? Is this plausible? In my view, no. In fact, I think it’s so implausible that I doubt Heath actually wants to commit himself to it (his project certainly doesn’t require him to do so). But whether or not Heath holds it, this externality-based view is an interesting idea in it’s own right, so it’s worth discussing what’s wrong with it. Here are three problems.
First, there appear to be counterexamples: Gladiatorial combats, jousting, and flower wars were all objects of positive social attitudes in their time, but the huge costs they imposed on their participants and their debasing effect on spectators makes it hard to believe that they constituted healthy competitions in Heath’s sense. Contemporary counterexamples might include hunting, fishing, eating contests, and environmentally destructive economic competitions.
Admittedly, it’s hard to know that these really are counterexamples. That would require identifying all of the relevant externalities and accurately quantifying their value―hardly feasible tasks! But this gets to a more fundamental problem with the externality-based view: Given how difficult it is to determine the aggregate value of competitions’ externalities with any degree of precision, it’s just not plausible that society’s approval could accurately track whether or not they are healthy in Heath’s sense. How could social attitudes reliably gauge the outcome of such a complex calculation?
The third problem arises when the proposal is applied to competitions involving fans and spectators. Probably a substantial share (the bulk?) of the positive externalities generated by these competitions consists of their entertainment value. But to that extent, the claim that society favors competitions with positive externalities seems to get things backwards. It’s not that society favors competitions because they have positive externalities; rather, competitions have positive externalities because society favors them. In that case, why society favors them remains an open question. I have no idea what the answer is, but I suspect that it’s much more variegated and messy than the externality-based view suggests.
All citations are from Heath’s “An Adversarial Ethic for Business: Or When Sun-Tzu Met the Stakeholder,” Journal of Business Ethics, 72.4 (Jun., 2007).