Why businessmen are more honest than preachers politicians, and professors.

• Author: Lee, Dwight R.
• Position: REFLECTIONS - Viewpoint essay

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.

As the interstate highway system expanded during the 1950s, people began to travel far from home more frequently. This travel made them increasingly vulnerable to dishonest businessmen who knew that customers with an out-of-state license plate were unlikely to provide repeat business. Far-sighted businessmen saw this situation as a profit opportunity and responded by creating nationwide chains in industries such as restaurants, motels, and automotive repairs that give consumers something they value--assurance of honesty. A customer from Rhode Island may never again visit a Burger King in Fargo, South Dakota, or need another oil change at Pep Boys in Salt Lake City, Utah. But those chains understand that they will lose the customer's business no matter where he lives if they are not truthful with him when he is a thousand miles from home.

Judging the quality of some goods and services can be difficult, even after they have been experienced. How does someone know that he really needed the car repair for which he just paid, for example, or if he even got it? A repair may solve an obvious problem, but how does one know if it was solved by the expensive repair shown on the bill, inasmuch as it might have been solved by simply tightening a screw? This difficulty in certifying service explains a common arrangement that motivates more honesty in the car-repair business. Car dealerships typically have repair shops as part of their business. The profitability of dealerships depends on their customers' satisfaction with the cars they buy, and much of that satisfaction depends on reasonable charges for dependable service and repair. (2)

These arrangements and practices obviously do not motivate complete honesty, but they do improve business honesty because consumers can get information about the truthfulness of business claims while they are still able to act on it. Without that ability, businessmen would be as indifferent to the truth when advertising their products as preachers are when advertising theirs. Similarly, if people were able to test-drive religious doctrines to compare their delivery of eternal bliss the same way that they can test-drive cars to compare their delivery of a smooth fide, they might be confident that preachers would promote their product as honestly as...