Moral purchasing

Ethical purchasing (or moral purchasing or ethical sourcing or moral boycott) refers to the application of criteria reflective of a morality (or, in the terminology of ethics, a theory of value) to an individual, family, union, or other group's (corporation, university, government) purchasing decisions.

Table of contents

1 Spending as morality

2 When is "moral" not "ethical"?

3 Collective moral choices in business

4 Collective moral choices in government

Spending as morality

Certain trust criteria, e.g. creditworthiness or implied warranty, are considered to be part of any purchasing or sourcing decision. However, these terms refer to broader systems of guidance that would, ideally, cause any purchasing decision to disqualify offered products or services based on non-price criteria that do not affect the functional, but rather moral, liabilities of the entire production process. Paul Hawken, a proponent of Natural Capitalism, refers to "comprehensive outcomes" of production services as opposed to the "culminative outcomes" of using the product of such services. Often, moral criteria are part of a much broader shift away from commodity markets towards a deeper service economy where all activities, from growing to harvesting to processing to delivery, are considered part of the value chain and for which consumers are "responsible".

Some argue that "Shopping is more important than voting", and that the disposition of money is the most basic role we play in any system of economics, some theorists believe that it is the clearest way that we express our actual moral choices, i.e. if we say we care about something but continue to buy from parties that have a high probability of risk of harm or destruction of that thing, we don't really care about it, we are practicing a form of simple hypocrisy.

When is "moral" not "ethical"?

Notably, the adjective "ethical" is much more common amongst industry or voluntary groups or non-government organizations, while the adjective "moral" has actually been reflected in commissions and in proposed legislation, e.g. in Maine, U.S.A., in unions (as "moral boycott") and among professional purchasing and sourcing agents:

FreeMarkets Insider Feb., 2002, notes in its sourcing column that "Though certainly not a traditional purchasing-related article, "The Moral Advantage" definitely merits printing out and circulating among colleagues. There is a tendency to ignore or to downplay the moral dimension of one's work. And yet that dimension is always present. Don't read this article now. Save it for a time when you can give it the attention it deserves." The article itself notes that 80-90% of businessmen in the United States follow some sort of "restrictive morality, usually associated with a spiritual tradition, e.g. Christianity. Although it is difficult to read causality into such trends, it may be that choosing "moral" behavior is often considered the role of individuals (by choice) and governments (by force), while "ethics" is considered a professional or non-governmental organization's responsibility. In other words, an individuals "moral fiber" or "moral core" must determine what ethical criteria they pay attention to, so the choice is "aesthetic".

Collective moral choices in business

However, ethics being the science of morality, there are many attempts to deliberately systematize the criteria of informing the buyer of what they are involved in, in the entire production process, and these are more commonly referred to as "ethical" endeavors:

Dominic A. Tarantino, Chairman of Price Waterhouse World Firm in 1998 described Social Accountability 8000 as "the first ever universal standard for ethical sourcing. SA8000 is an initiative of the Council On Economic Priorities, a New York based research organization. It provides a common framework for ethical sourcing for companies of any size and any type, anywhere in the world. SA8000 sets out provisions for issues such as trade union rights, the use of child labor, working hours, health and safety at work, and fair pay." However, it does not address broader issues of ecological or bribery or other issues which may require more consumer or executive restraint. Tarantino further argues the need for moral leadership:

"Pricing, products and services are no longer the sole arbiters of commercial success... it is business that must take the lead in taming the global frontier. Business must take the lead in establishing rule of law in emerging markets. Business must take the lead in stopping bribery. Business must take the lead in bringing order to cyberspace. Business must take the lead in ensuring that technology does not split the world into haves and have nots."

Collective moral choices in government

Many people would disagree with this view, and would argue that a citizen's proper expression of moral choice is via voting for parties and candidates in government. Accordingly, in democratic countries, most people consider themselves to some degree responsible for the decisions governments make about what to buy on the people's behalf, e.g. pacifist nations such as Costa Rica refuse to buy military weapons or equip armies suitable even for self-defense, similar nations such as Japan keep their forces small, and some, e.g. New Zealand refuse to allow nuclear ships or weapons into their ports.

Furthermore, governments handle various kinds of drugs in very different ways, e.g. buying out a coca or poppy supply for use in medically approved channels, forbidding trade in marijuana and interdicting its movements, all of which involve some degree of purchasing of arms or violent force. By so seeking to restrict citizens' spending on drugs, they seek both to prevent the use of these drugs and to keep money from the hands of those whose morals they dislike, e.g. armed "terrorist" groups selling drugs to raise funds to buy arms.

A common argument is that governments buy things that the public claims they do not want, but actually do, and so act as collective systems of hypocrisy. Critics of this view argue that the political process, or parties within it, add the hypocrisy for their own benefit, and ignore public will and morality.

Budgeting

On the flipside, governments' budget decisions impact domestic economies in more subtle ways, e.g. by spending more on education, or less on weapons. A particularly key issue is how much government spends on policing and armies:

Usually, this is restricted to governments "purchasing" the services of its own citizens, who share some moral code with fellow citizens, and who believe ideologically in what they are doing. It becomes unclear how the politicians' or government's criteria, the people's criteria, and the actual law enforcement or military officer's criteria, interact. These issues are one focus of political economy which establishes what is deemed to be a valid trade good, how its movements are encouraged, discouraged, standardized or otherwise dealt with. The application of UN sanctions against nation-states is an increasingly common way for nations to standardize the way they encourage or discourage each other's trade, e.g. preventing nations from purchasing weapons of mass destruction, as in the case of Iraq.

Consumer boycott

Outside state action and the political parties that seek to control states, the best known examples of moral purchasing are in the mass consumer boycott, applied against corporations or states offending public morals in some way. These can often be more effective than public policy measures - and over time can come to be strongly reflected as part of public policy, e.g. consumer boycotts of South Africa over apartheid were mirrored in state policy over time, and contributed to the fall of the white regime.

Along with disclosure of ingredients, some mandatory labelling of origins of clothing or food is required in all developed nations. This practice has been extended in some developing nations, e.g. in China where every item of clothing carries the name, phone number and fax number of the factory where it was made so a buyer can inspect its conditions. And, more importantly, to prove that the item was not made by "prison labor", use of which to produce export goods is banned in most developed nations.

Morality as label?

There are other such uses of labels to reassure buyers by indicating when goods are "union-made", "sweatshop-free", "dolphin-free", "organic", "kosher", "halal", "vegan", "free-range" or otherwise morally desirable. In this sense the label serves as a marker or token of some reliable validation process, some instructional capital, much as does a brand name or a nation's flag. It also signals some social capital, or trust, in some community of auditors that must follow those instructions to validate those labels. Theoretically, any such label could be false, and any such auditor or inspector could be bribed or misled. One inhibitor to wider use of more standard labels is low trust and inability to validate truly global standards for what such labels might mean.

Over time, some theorists suggest, the amount of social capital or trust invested in nation-states (or "flags") will continue to decrease, and that placed in corporations (or "brands") will increase. This can only be offset by retrenched national sovereignty to reinforce shared national standards in tax, trade, and tariff laws, and by placing the trust in civil society in such "moral labels". These arguments have been a major focus of the anti-globalization movement, which includes many broader arguments against the amoral nature of markets as such.

Global morality?

In "The Global Markets As An Ethical System", John McMurtry argues that there is no purchasing decision that does not itself imply some moral choice, and that there is in fact no purchasing that is not ultimately moral in nature. This mirrors older arguments, especially by the Anabaptists, e.g. Mennonites, Amish, that one must accept all personal moral and spiritual liability of all harms done at any distance in space or time to anyone by one's own choices. Accordingly purchasing for vanity or status is abhored and shunned. This theory is echoed in some modern eco-villages who adopt very similar stances, effectively blocking all goods that do not satisfy their moral criteria at the village gate, and relying on internally produced food and tools as much as possible.

A parallel and distinct argument is that for ethical investing, which seeks similarly to impose social or ecological criteria on investing rather than purchasing behavior. This has historically focused on representative boards, disclosure of dealings with possibly-repressive governments, and avoidance of investing in weapons, tobacco, alcohol, or nuclear technology. Usually, the corporations that ethical funds invest in must also agree to some minimal standards of moral purchasing, i.e. refusing at least to buy or deal in or merge with companies that handle those various dangerous items.

External links

Chairman, Price Waterhouse World Firm, on "Good Corporate Behavior"