Morality and ethics are so fundamental to our society that breaking the rules of appropriate ways of interacting with one another has a financial cost.
We have a popular blogger here in South Carolina who, when he launched his site, avoided political issues that had a moral or ethical tone. When he wrote about policy, he focused on government spending, taxes and the financial aspects of the failures within the public school system. My message to him has always been that morality and ethics are so fundamental to our society that breaking the rules of appropriate ways of interacting with one another has a financial cost. In other words, immorality is expensive.
Here are a few examples I have come across:
Unethical behavior is bad for business. National Public Radio (NPR), not to be mistaken for American Family Radio, ran a story several weeks ago about a new study from researchers at Mississippi State University. The findings indicated that firms whose executive leadership had ethical lapses (caught lying or having sexual affairs were the most prevalent) experienced a decline in stock value of 10-15 percent. That included firms where CEOs lied about their golf scores or falsified their resumes. For example, when Scott Thompson, the CEO of Yahoo! was caught lying about earning a computer degree from Stonehill College, the company lost $390 million.
Immoral behavior is expensive for the taxpayer. A British study conducted periodically pegs the cost of family breakdown in the United Kingdom. The most recent study, estimates that cost to the taxpayer in the form of increased government services at £48 billion ($62 billion) per year, up from £37 billion ($47 billion) when the study was first conducted in 2009. Palmetto Family in cooperation with Professor Ben Scafidi on a similar study of South Carolina government expenditures found a $469 million per year cost to SC taxpayers due to divorce, unwed childbearing and family breakdown.
Marriage problems in particular hurt American business. Researchers writing in The Journal of Marriage and Family over 20 years ago (1996) calculated that work loss associated with marital problems costs business $6.8 billion per year. That’s $10.92 billion in 2018 dollars.
Business is waking up to the danger of immoral behavior on society. Google shocked the world when it stopped accepting ads for pornography. Less shocking but nearly as encouraging is their more recent crackdown on ads that feature porn. Perhaps Google has learned how damaging pornography is to real relationships and that objectification of women is just plain wrong. I’d like to think that they believe America has reached the limit of the amount of pornography it can process. Or maybe like some legislators, they see pornography and its poisonous fruit as a public health risk.
The common thread in these stories is that the ancient truths of scripture work for everyone, not just those who profess Christ. Theologians call it “Common Grace.” The rain falls on the just and the unjust. Sometimes the effect is positive, like when folks who are clearly immoral or unethical still manage to produce beautiful music or sink an impossible winning putt in a major tournament. But the rules work the other way as well. Lying about your accomplishments, cheating on your wife, breaking up your family – these things have consequences for you, your company, your neighbors and our government.
As for my blogger friend, he now proudly emphasizes the issues of life, faith and religious freedom. (He will say he always has.) He even gives us the nod once in a while.
God’s common grace continues to flow and we are grateful.
Dr. Oran Smith
Senior Policy Advisor