Business Ethics and Human Capital

Brett McNeill
Professor Karen Killinger
December 4, 2014

Business

ethics

can

different individuals.

be

many

different

things

for

many

It can even represent different meanings

for a single individual at different stages of that individuals

life.

When

containment

confronted

of

costs

vs.

with

the

contrasting

investment

in

human

ideas

of

capital

my

kneejerk reaction is to think of my personal situation in which

the

lack

of

professional

my

employers

attention

instituted

makes

me

feel

training

and

otherwise

underappreciated.

This

reaction is an oversimplification, however.

I believe in capitalism and the personal responsibility it
demands.

There is knowledge and experience to be obtained for

those willing to seek it out.

I believe that a modern developed

society, such as the United States, doesnt operate on one end

of the spectrum or the other, unlike what we see in developing
countries through the use of cheap labor.

The use of cost

containment strategies and human capital development vary from

business to business and industry to industry.

Cost containment

is necessary for the survival of a business and ultimately the

society it services and the people it employs.
employees

is

an

invaluable

unexpected success.

tool

that

skills

Economic

theory,

or

see

business

to

This investment is not a rule, but a tool

at the disposal of business managers.

extensive

can

Investment in

training

according

to

to

be

Adam

Not every job requires

effectively
Smith,

accomplished.

demands

that

any

economic resource be used to the point at which the marginal

cost of that resource be equal to the marginal benefits obtained
by it (125).

In this instance it is not economically viable to

invest in entry level employees in the same way as in the people

who manage them.
It has been my experience that investment in human capital
is

more

often

than

who

mentor

employees
growth.

not
or

directly

related

otherwise

to

create

the

an

surrounding

environment

of

This investment does not necessarily cost more than a

given employee makes to only accomplish their tasks and provides

relationships

that

make

job

worth

working.

John

D.

Rockefeller Jr. argues The soundest industrial policy is that

which has constantly in mind the welfare of the employees as
well

as

investment

the
in

making

of

employees

profits.(224)
must

be

health of the business in mind.

idea

economically

with

this

used

He

also

deliberately,

believes
with

the

Andrew Carnegie relates this

quote

Much

better

this

great

irregularity than universal squaler. (215)

The laws surrounding human capital and containment costs
are among some of the most poignant of the day.

I view minimum

wage and job safety and EPA pollution regulations as being among
the

relevant

social

ethical

topics

surrounding

the

argument.

There are many laws that protect the interest of employees that

are directly related to human capital investment.

I believe the

minimum

the

wage

issue

to

be

directly

tied

to

responsibility of a capitalistic societys members.

personal
There has

to be some distinction between employed peoples to determine

their

value.

Capitalism

demands

competition,

but

that

competition doesnt begin and end with only product offering.

The people behind the products have the freedom to choose selfimprovement which garners human capital investment, or choose
complacency.

A company cannot pay employees more than consumers

are willing to pay for the value of their work and proceed
sustainably.
an

Laws in place that protect employees safety are

instance

where

containing

capital are congruent.

costs

and

investing

in

human

Training employees is expensive and the

cost of injured employees by way of lawsuits and time off work

is extensive.
implementing

The costs that may seem excessive up front in

safe

practices

are

offset

by

the

savings

of

employee health and public goodwill.

Though

the

ideas

of

cost

containment

and

human

capital

investment may be contrary in the context of one way or another,

they are actually complimentary practices that all successful
companies use to one degree or another.

Works Cited
Carnegie, Andrew. The Gospel of Wealth, Foundations of
Business Thought. 214.
Rockefeller, John D. Jr. The Personal Relation in Industry,
Foundations of Business Thought. 224.
Smith, Adam. The Wealth of Nations, Foundations of Business
Thought. 125.