Why Businessmen Are More Honest Than Preachers Politicians, and Professors

By Lee, Dwight R. | Independent Review, Winter 2010 | Go to article overview
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Why Businessmen Are More Honest Than Preachers Politicians, and Professors

Lee, Dwight R., Independent Review

Notwithstanding regular reports of dishonest businessmen in the daily news, businessmen deserve more respect for their honesty than they receive. (1) Granted, businessmen are not always as honest as we would like them to be, and some of them are simply crooked. The business community would certainly be a strange place for Diogenes to search for a completely honest man. But would his search prove more successful elsewhere? In considering the honesty of businessmen in our imperfect world, the relevant question is, compared to whom? So in making my case, I compare the honesty of businessmen with the honesty of preachers, politicians, and professors. I conclude that businessmen are, on average, the most honest (or least dishonest) of the bunch.

My case for businessmen's relative honesty is not that they arc more virtuous than preachers, politicians, and professors. Instead, the argument is based on the constraints on those under consideration who might seek to profit from dishonesty. Businessmen are more honest than preachers, politicians, and professors because they have the least to gain from dishonest claims about the benefits their products provide.

Businessmen versus Preachers

When businessmen make claims about their products that are not true, consumers can discover the fraud. Preachers do not suffer this disadvantage when making claims about their most important product. No one can "test drive" a preacher's most important promise and come back from the afterlife to report on the experience. This lack of feedback allows preachers to make truly amazing claims that are central to the package of products they are offering. I am not saying that these claims are false. Given the lack of verifiable evidence, I have no way to know. But neither do the preachers or their customers know. So preachers have less need to worry about the truthfulness of their claims than businessmen have. Indeed, a preacher in most religious franchises who is publicly honest about the lack of evidence for the fundamental claims on which his religion is based is unlikely to look back on this honesty as a good career move.

Businessmen are as anxious as preachers to convince potential customers of the superior value of their products. And some are always willing to make unsupportable claims if they think they can get away with them. But consumers are alert to this fact and justifiably skeptical of the claims businessmen make, and businessmen are aware of this skepticism and know that consumers can obtain feedback on the truthfulness of advertising claims, either from personal experience or from the experience of others. This awareness motivates businessmen interested in long-run survival to back up their claims with credible assurances of the quality of their products. They provide these assurances by establishing business arrangements that severely penalize dishonesty. Firms can establish such arrangements in a number of ways, and their presence or absence in itself provides important information to consumers.

Businessmen make investments with little salvage value and offer attractive introductory offers to establish long-term relationships with customers that can generate long-run profits from repeat business. They put such investments and long-run profits at great risk by their attempts to capture immediate (but ultimately lesser) profits by not keeping promises about product quality, promptness of delivery, or customer service. A reputation for honest dealing is one of the most valuable assets a businessman can have, and the only way to acquire it is by establishing a consistent record of honesty. Having acquired a reputation for honesty, a businessman has a strong incentive to avoid misrepresentations that might quickly destroy even the best reputation.

To create consumer confidence that products will perform as advertised, businessmen provide money-back guarantees and service warranties, which also create incentives for businessmen to provide products that live up to their promised performance.

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