The Economist on business ethics and profit in Colorado

This column appeared in the Spring 2026 issue of Colorado Biz titled “The Economist: The Ethics of Profit.”

Not long after receiving my MBA, I began teaching at Regis University in Denver.  I was teaching business and economics when the program director asked me to teach a course in Business Ethics to adult undergraduates.

I was surprised by the request and could only relate it to my economics teachings, where I always challenged the notion that good business management should seek to maximize profit.

My view ran contrary to an influential economist of the day, Milton Friedman, who asserted that the only social responsibility of business was to increase profits within the laws of the land.

Friedman’s perspective in the 1970s was a good counterpoint to the simultaneous emergence of Business Ethics as a legitimate academic field in business schools, as we were in the midst of scandals and civil rights movements. The joke of the day was that courses in Business Ethics were clearly an oxymoron.

Having spent my childhood and most of my adult life in the small business realm, I have never seen small business owners obsessed with maximizing profit. The values driving these individuals are as varied as their backgrounds and cultural and religious values.

Furthermore, most understand the need to be customer-centric and perceived as fair to generate repeat business.  In many small businesses, emphasis is placed on taking care of the “family,” whether they be related or simply employees and associates.

This is not to say that improving profitability to benefit owners and employees while sustaining and growing the business is not important. It also suggests loyalty in small businesses, which, while admirable, can limit economic potential. Friedman was not entirely wrong.

Another premise I never agreed with in discussions of business ethics is that profit-seeking is an amoral endeavor.  From the amoral perspective, right and wrong are not relevant considerations in decision-making.

This is nonsense. All organizations, teams, and individuals operate within a social context, which means right and wrong are relevant, even if there are many shades of grey. Ethics is relative to cultural and social settings, and at the very least, one should not assume all businesses share the same values in their dealings.

As I reflect over my career some of the more costly lessons learned include:  big business ethos should be approached cautiously as they have the money and often power; avoid expensive litigation by not letting your principles and emotions get in the way when you have been wronged; do not reward corrupt politicians with favors and bribes, no matter how cleverly they might be masked; pay attention to the legal notion of strict liability regardless of how noble your intent; and be respectful, but not naïve.

My concern with big business results is from their greater short-term bias towards profitability. This realm of the economy, which includes private equity, appears far more likely to embrace Milton Friedman’s ideology.

This is especially true in their research and data analytics of consumer behavior. Corporate America has a significant advantage over small businesses and consumers in its ability to buy access to information and to politicians. For them, amoral ethics is the norm, and only codified ethics through laws and regulations confine them.

Unfortunately, big business is not alone with its amoral demeanor.  Non-profit organizations, especially those with a political mission, are more inclined to look the other way when it comes to borderline exploitive behavior.

A 90-year-old relative who has been living alone with increasing dementia recently moved in with her granddaughter. When getting her affairs in order, it was discovered she was contributing over $30,000 to “worthy causes” annually.  When her mail was transferred, we realized she was getting 10 pounds of mail weekly from political organizations seeking her support to “defeat the enemy” within America.

Not all is bad with Corporate America’s ethics. In fact, larger organizations are far more likely to incorporate diversity, equity, and inclusion (DEI) programs within their business model.

While efforts may have started in the 1970s as part of Civil Rights’ legal mandates, the growth of the DEI movement has been embraced alongside ESG (Environmental, Social, and Governance) reporting.

These energies are now largely ingrained in corporate disclosures and governance of publicly held organizations, and while they may appreciate reprieve from rigid reporting requirements, many public companies have come to appreciate a greater obligation to society despite the current political headwinds.

Why?  I believe Corporate America recognizes that, despite efforts by some to demean the values of diversity, inclusion, and equal treatment, America has become incredibly diverse and is beyond the point of no return.

Populism could easily swing to the left if the right fails to deliver economically and buries our Nation’s founding principles, including democracy.

Besides, research clearly shows that companies that implement DEI strategically do much better by many measures, including greater profitability.