What are Ethics?

← Chapter 3 Overview Questions? Contact an Instructor — Mon–Fri 10am–5pm (954) 764-0254

Man is a social animal. For most of us, we are raised in social groupings and live our entire lives in social settings. Ostracism or exile is one of the harshest punishments imaginable, whether it is a formal banishment or simply that our social clique no longer considers us “part of the old gang.” Most of us like to think that we are civilized — but that word simply means to live in a city, that is to say, among many other fellow human beings. Which raises a point that has been addressed by philosophers from time immemorial: “How are we supposed to treat those we live with, and how should we expect them to treat us?”

This chapter will examine the nature of ethics, consider the parties to whom the agent owes an ethical duty, and identify a few ethical yardsticks against which our actions can be measured.

In practical terms, ethics is a system or code of principles that directs our actions towards others. Not surprisingly, the foundational ethical standards that apply to the financial services agent in his or her interaction with customers or represented companies are the same that serve as the building blocks of the earth’s great religions: the Golden Rule.

The Golden Rule Across World Religions

The Golden Rule maintains that each of us should treat others as he or she would wish to be treated. It appears as a cornerstone of the world’s great religious and philosophical traditions:

Judaism

“Thou shalt regard thy neighbor as thyself.”

Buddhism

“Hurt not others with that which pains yourself.”

Islam

“No one of you is a believer until he loves for his brother what he loves for himself.”

Hinduism

“Good people proceed while considering that what is best for others is best for themselves.”

Christianity

“Do unto others as you would have them do unto you.”

Confucianism

“What you do not want done to yourself, do not do to others.”

Modeling our actions towards others — our customers and companies, in this case — on what we want for ourselves is not only eminently fair, it is also essential for a civilized society.

Limited Resources & Why Ethics Matter

In a society in which you were the only member, there would be little need for ethics. You would be the beneficiary of all of its goods as well as the bearer of all of its burdens. It is the fact we don’t exist alone — and that goods exist in limited supply while burdens seem unlimited — which makes a system of ethics essential. Limited goods must be distributed and burdens shared, and that means we will disagree. The important question is how that disagreement should be resolved.

There are two fundamental means of dispute resolution:

✘ Force

If I use force to resolve a dispute — by brandishing a weapon or making a threat — I may carry the day, but at great cost. My use of force has probably destroyed any possibility of an enduring relationship. The next time a similar dispute arises, my adversary may use a larger weapon. With the loss of the possibility of relationship, the value of my life is sorely diminished.

✔ Reason

If I choose to use reason instead of force to resolve disputes and thereby promote relationship, the most palatable principle to everyone is the Golden Rule: I will treat you the way I want you to treat me, and I want you to treat me as you would treat yourself.

Assuming that you have a healthy self-image and therefore treat yourself well, the Golden Rule becomes the most rational method of dispute resolution. Taken to the next step, it is the very core of fairness and the fundamental element of professionalism. It is this fairness that is the basic character of any viable system of ethics.

← Chapter 3 Overview Questions? Contact an Instructor

Next → Ethics versus Compliance