LITMIR.BIZ

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own calamities, banks were roundly refusing credit to what would have earlier been deemed viable business propositions.⁷⁹

      Turning to a question raised earlier concerning the personal motivation behind those in hot pursuit of attaining excessive executive compensation, lurking in the background is the specter of homo economicus, the lowest common denominator of human motivation. One writer, reflecting on the matter in the context of the banking industry, questions the wisdom of lavishing so much reward on the business activities of people who depend on “technology to present infinitesimal arbitrage opportunities around the world—which, when aggregated over very large leveraged balance sheets, create massive profits…. A growing undercurrent suggests that in fact these are not terribly useful economic activities…. This system also reinforces money—not values, strategy, culture, or the quality of the institution—as the only reason to work at a bank.”⁸⁰

      Much of the current thinking about pay for performance is devoid of consideration of the sorts of values that emerge from adopting a virtue-regarding outlook. For example, there is little reflection on the character dimension of individuals who appear to be greedy beyond any limits or controls to accumulate as much money as possible.

      It is in light of this void that Aristotle's thought affords a wider and deeper philosophical outlook. For instance, using an Aristotelian lens to look at the significant layouts of funds that typify the “reward me big-time” culture of many corporate executives, there is a peculiar sort of virtue to examine: magnificence. According to Aristotle, what makes you a magnificent person is having the good taste to divert big money appropriately and to advance a laudable end. In stark contrast to a vulgar kind of individual, you are magnificent if you are not being gaudy. That is, you are not showing off your affluence by spending more than circumstances warrant.

      The man who goes to excess and is vulgar exceeds…by spending beyond what is right. For on small objects of expenditure he spends much and displays a tasteless showiness; e.g. he gives a club dinner on the scale of a wedding banquet…. And all such things he will do not for honour's sake but to show off his wealth, and because he thinks he is admired for these things, and where he ought to spend much he spends little and where little, much.⁸¹

      We can perhaps find no better illustration of what Aristotle is talking about by way of vulgarity through tasteless excess than to recall Dennis Kozlowski, the Tyco International CEO who fell from grace due to a string of malfeasances associated with his receipt of unauthorized bonuses and his misappropriation of corporate assets. In the course of his criminal trial we all learned about the details of the US$2 million, weeklong birthday bash (known as the “Tyco Roman Orgy”) for his second wife on the island of Sardinia, complete with dancing nymphs, models dressed as gladiators and Roman servants, a performance by singer Jimmy Buffett and his group (flown in to the tune of US$250,000), a birthday cake in the shape of a woman's body with sparklers protruding from her breasts, and an ice sculpture imitation of Michelangelo's statue of David urinating Stolichnaya Vodka. Kozlowski also was noted for leading an extravagant lifestyle supported by the booming stock market of the latter 1990s and early 2000s. Purportedly, he had arranged to have Tyco shoulder the cost of his US$30 million Manhattan apartment on Fifth Avenue, which included a US$6,000 shower curtain in the maid's room, a US$15,000 umbrella stand, and a US$17,000 traveling toilette box.

      Ironically, Koslowski's defense insisted that he didn't “hide” anything; his self-serving appropriations of corporate resources were open for all to see. So, under his way of thinking, our categories of rational thought appear to have simply vanished: the normal distinction in both law and morality between “appropriation” and “misappropriation” has been repudiated, all in the service of the self-serving greed of the leader.

      At the other end of the spectrum is the petty person that fusses over the smallest details of every financial layout. Listen to what Aristotle has to say about that: “The niggardly man…will fall short in everything, and after spending the greatest sums will spoil the beauty of the result for a trifle, and whatever he is doing he will hesitate and consider how he may spend least, and lament even that, and think he is doing everything on a bigger scale than he ought.”⁸² In the course of steering clear of the excesses of vulgarity and pettiness, you could be magnificent by allocating some of your wealth to the development of public goods, for instance by building a library, being a patron of the arts, or adding a new wing to a hospital. Consider the case of Bill Gates. His foundation contributed US$4.2 billion for ameliorating disease throughout the developing world.

      It is interesting to note that, given the choice between, say, stretching beyond financial means to outfit one's residence with fancy, new-fangled gizmos and keeping to a budget with understated, more durable alternatives, a magnificent person goes for the second of these. “A magnificent man will…furnish his house suitably to his wealth…and will spend by preference on those works that are lasting (for these are the most beautiful), and on every class of things he will spend what is becoming.”⁸³ A suitable modern contrast could be drawn between the homes and lifestyles of, one the one hand, Nicholas Gage (whose gaudy foreclosed Bel Aire mansion was described by a real estate agent as a “frat house bordello”),⁸⁴ and on the other, Warren Buffet (one of the world's richest persons, who still lives in the same modest home he bought for US$31,500 in 1958, yet gives thirty billion dollars to charity).⁸⁵ Yet Aristotle may not have been completely adverse to what is known today as consumerism as one might suppose, given his staunch opposition to the hedonistic life. For Aristotle the bottom line is that your consumption should be balanced, that is, under the guidance of what self-perfection requires.

      Aristotle advances a universal vision of the good life, wherein human fulfillment is coextensive with moral and intellectual virtue. What is particularly noteworthy about Aristotle's treatment of the intellectual virtues from the standpoint of our inquiry into the broader intellectual and cultural implications for business life, is the insight that the highest deployment of the intellect is to be found in the leadership of others and in the philosophical search for truth. To propose such a vision for the life of business sets a higher bar than conventional thinking seems to allow. To adequately grasp some sense of this extended vision necessitates adopting an unconventional mind-set toward commercial life. For that end, it is vital to find a way of seeing business as essentially connected to basic goods of human nature. We shall extend discussion of this point further in subsequent chapters. For now, let us turn our attention to the connection between virtue and character.

       Character

      For Aristotle, a prime concern of ethics is human character. A virtuous person reveals the combined excellence of character and reason. As the following passage illustrates, the character of a person encompasses virtues and vices along with emotions and desires.

      Just and brave acts, and other virtuous acts, we do in relation to each other, observing our respective duties with regard to contracts and services and all manner of actions

      And with regard to passions; and all of these seem to be typically human. Some of them seem even to arise from the body, and virtue of character to be in many ways bound up with the passions. Practical wisdom, too, is linked to virtue of character, and this to practical wisdom, since the principles of practical wisdom are in accordance with the moral virtues and rightness in morals is in accordance with practical wisdom. Being connected with the passions also, the moral virtues must belong to our composite nature; and the virtues of our composite nature are human; so, therefore, are the life and the happiness which correspond to these.⁸⁶

      Thus, although having a virtue means being inclined to behave in a certain way, having a good character amounts to more than just checking off a list of worthy accomplishments. Having appropriate emotions counts too. In other words, a virtuous individual knows what doing the right thing is, and there is some emotional connection to it as well. In this way, character is fused to what a person enjoys.

      We must take as a sign of states of character the pleasure or pain that ensues on acts; for the man who abstains from bodily pleasures and delights in this very fact is temperate, while the man who is annoyed at it is self-indulgent, and he who stands his ground against things that are terrible and delights in this or at least is not pained is brave, while the man who is pained is

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