Golden Rule and Business Ethics

[This extensive publishing of chapter eight of Jeffrey Wattles Golden Rule was done with his permission.]

The Golden Rule of the Fatherhood of God and the Brotherhood of Man

The late nineteenth and early twentieth centuries in America were times of great economic expansion and inequality, opportunity and abuse, times of American power and of world war. Early scientific doctrines of evolution were being used to gain understanding of the human species and social life, and the result was a profound challenge to traditional religion. Does religion render a person less fit for the rigors of competition, or does real religion empower a person to deal in a progressive way with those very challenges? As that debate went on, America was a center of a dynamic, religiously motivated golden rule movement, affecting society, politics, economics, business, and interfaith relations. Many enthusiastic individuals chose the rule as their motto; a popular literature on the rule arose; many a store was called “Golden Rule Store”; it was the custom to bestow on exemplars of the rule the nickname “Golden Rule.” Authors expounding the maxims for the exercise of a given craft would dub their principles “golden rules,” and many books carried titles such as Golden Rules of Surgery. A Golden Rule Brotherhood was formed with the intention of unifying all the religions and peoples of the world. During this period the golden rule came to symbolize a wholehearted devotion to the service of humankind. (Wattles 1996, 90)

This movement, which spread beyond the boundaries of Christianity, held the conviction that all men and women are brothers and sisters in the family of God, and they formulated the essentials of religion in the gospel of the fatherhood of God and the brotherhood of man. The phrase “brotherhood of man” was used to include, not exclude women. Since the struggle to synthesize religious idealism with scientific realism had become especially urgent, the golden rule became caught up in the debate. Does living by the rule render the individual needlessly vulnerable to rugged, evolutionary competition and conflict, or is the rule itself a vehicle of evolutionary progress? (Wattles 1996, 90)

There had been a growing sense that each individual is akin to every other human being. The fabric of humanity had been torn by religious wars between Christians and Muslims during the Middle Ages and between Protestants and Catholics during the early modern period. Europeans disgusted with the slaughter turned toward tolerance, especially since it was clear that professing a religion was no guarantee of morality and that some atheists lived highly moral lives. In the eighteenth century, Hume had proclaimed that every person has a spark of benevolent sentiment toward humanity, and Kant and others attempted to distill universally acceptable basics of religion and morality. In the nineteenth century, at all levels of culture, religious and secular humanitarianism flourished. Beethoven’s Ninth Symphony used Schiller’s “Ode to Joy,” which reads, in translation: “Joy, beautiful divine spark. . . . your magic binds together what convention had strictly divided; all men become brothers where your gentle wing rests.” Leo Tolstoy (1828-1910) abandoned the life of a Russian nobleman and the privileges of literary success for a life in some ways like that of a peasant. He defined art in terms of its capacity to arouse the feeling of the fatherhood of God and the brotherhood of man. His radical application of the Sermon on the Mount and his critique of luxury and oppression stimulated the idealism of many others throughout the world. (Wattles 1996, 90-91)

Among German theologians, Albrecht Ritschl ( 1822-1889) drew on Kant for a conception of the kingdom of heaven as the organization of humanity through moral action inspired by love; Ritschl’s influential student Adolf Harnack ( 1851-1930) used historical study with the aim of separating the kernel of original Christianity from the husk of associated Greek philosophic dogma. Painstaking scholarship enabled Harnack boldly to read between the lines of the New Testament text and to discover afresh Jesus’ persistent tendency to speak of religion in terms of family life. He presented the teachings of Jesus as, in sum, the fatherhood of God, the brotherhood of man, and the infinite value of the individual soul. With this conception of religion, the golden rule would find new meaning and historical vitality. In interreligious relations, the new conception of religion reached an historic high-water mark at the World’s Parliament of Religions, organized in Chicago in 1893 by Presbyterian minister Dr. John Henry Barrows in conjunction with the Columbian Exposition. It is not surprising that the most frequently mentioned principle of morality at the parliament was the golden rule. Praise for the rule came from representatives of Confucianism, Judaism, and Christianity. The golden rule was perhaps the most widely shared commitment among all the religions; and it came to symbolize the participants’ commitment to live the warm brotherly and sisterly unity that most of them had experienced together during their days of the parliament. (Wattles 1996, 91)

FROM RELIGIOUS ETHICS TO BUSINESS ETHICS: ARTHUR NASH

Two sides of the American golden rule movement are represented by Arthur Nash ( 1870-1927) and J. C. Penney ( 1875-1971) respectively. Each wrote an autobiography from the perspective of a successful Christian business leader offering advice concerning the practical, moral, and spiritual principles of living that had proven themselves through years of personal experience in the competitive arena. Nash, whose story is recounted here in more detail, participated in the social drama of urban Christianity during the years surrounding World War I, and his application of the rule is religiously motivated from the start. Penney, by contrast, was a traditional, rural and small-town man who followed the golden rule as a moral principle and achieved success in business without religious motivation until his evangelical conversion later in life. (Wattles 1996, 97)

Is religion a sphere apart from business activity, or should there not be continuity between one’s religion and the way one conducts one’s business? As a bridge of continuity between religion and business was being built by those whose primary motivation was religious, it was found that the bridge could be traversed by others whose primary motivation was economic. In some cases, the intertwining of religious and business ideas resulted in an ambiguity that has lent itself to cynical interpretation. If Jesus could be popularly portrayed as the greatest advertiser and salesman in history in Bruce Barton 1924 bestseller The Man Nobody Knows, business writers could also promote religion as a tonic that would inspire an individual to conduct relationships in a way that should conduce to prosperity. Many unwitting secularists painted a veneer of religious idealism on their enterprises. (Wattles 1996, 97)

Although Arthur Nash had some tendency to let the rise and fall of his business affect his confidence in the evident, practical worth of religious principles, he remains one of the most sincere of the exponents of the golden rule as the guide to business relationships. Nash was born in a log cabin in Indiana in 1870, the eldest of nine children of strict Seventh Day Adventist parents. He referred to his parents as having a “stern, rigid, uncompromising” faith and “great and sterling character.” He was educated in Adventist schools and seminary and was sent to Detroit as an instructor in a school for Adventist ministers and missionaries. His refusal to conform to denominational boundaries led to conflict and the first of his two breaks with Christianity. He left Detroit and did not return for years. When he did, however, he was touched by the plight of the unemployed there, and with the help of others was able to open a laundry in which he was able to provide many jobs for poor people. Church people began to send him their business, and he met the Christian woman who would be his wife and the mother of his three children, and who convinced him that his objections to Christianity were not to the religion of Jesus but to the very lack of it. Inspired again, he reentered the ministry with the Disciples of Christ. But when in a funeral service he eulogized a man of considerable character who had no professed religion, he was asked to resign his ministry. He then found work to support his family selling clothing—and did very well at it. In 1909 he moved to Columbus, Ohio, started manufacturing men’s clothing, began to prosper, but lost nearly everything in the flood of 1913. He then moved to Cincinnati and was able to organize the A. Nash Company in 1916 with sixty thousand dollars in capital, making made-to-order suits for individual clients. A short while after the Armistice was concluded, he acquired ownership of the small shop that had been making his garments under contract. (Wattles 1996, 97-98)

Then came the breakthrough, the pivot of this narrative. Nash took over the limping business of a man who had leased floor space in the building of the A. Nash Company. The tenant had run a sweatshop in the depressed clothing manufacturing industry of Cincinnati. When payroll time for his new employees came around, Nash realized that some fine and vulnerable people were only earning four dollars per week. He had recently become impressed with the kind of world that could result if people would only practice the golden rule, and he had been giving speeches to that effect. He thought of raising wages substantially, but his son, freshly disillusioned from having participated in the war in Europe, resisted the idea. They had lost four thousand dollars during the previous fiscal year, but Nash decided he would close up shop rather than exploit people to stay in the clothing business. The stockholders agreed to close the company, and Nash agreed to make up their losses, but he decided to pay a living wage until they went out of business; he would put whatever capital remained as a down payment on a farm where he would at least have the satisfaction of honest earnings. He went in to announce the decision to the small group of workers. The speech is worth quoting in full (Wattles 1996, 98):

“Friends, you have heard no doubt that we have bought this shop, and I have come in to get acquainted with you. No doubt, too, you have heard a great deal about the talks that I have been giving during the War about Brotherhood and the Golden Rule, while pleading the cause of Christianity and its affiliation to my conception of true Democracy. Now I am going to do a bit of talking to you. First, I want you to know that Brotherhood is a reality with me. You are all my brothers and sisters, children of the same great Father that I am, and entitled to all the justice and fair treatment that I want for myself. And so long as we run this shop [which to me meant three or four months longer], God being my helper, I am going to treat you as my brothers and sisters, and the Golden Rule is going to be our only governing law. Which means, that whatever I would like to have you do to me, were I in your place, I am going to do to you. Now,” I went on, “not knowing any of you personally, I would like you to raise your hands as I call your names.”

I read the first name. Under it was written: Sewing on buttons—$4.00 per week. I looked straight before me at the little group, but saw no hand. Then I looked to my right, and there saw the old lady I have referred to holding up her trembling hand. At first I could not speak, because, almost instantly, the face of my own mother came between that old lady and myself. I thought of my mother being in such a situation, and of what, in the circumstances, I would want someone to do for her. I hardly knew what to say, because I was aware that when I went into the shop, that after agreeing to stand all of the loss entailed by the liquidation of the company, I could not go too far in raising wages. It seemed to be my obvious duty to salvage something for the boys who were coming home from military service, and for the daughter just entering the university. But as I looked at that old lady, and saw only my mother, I finally blurted out: “I don’t know what it’s worth to sew on buttons; I never sewed a button on. But your wages, to begin with, will be $12.00 a week. (Wattles 1996, 98-99)

Nash continued through the list, giving equal 300 percent raises for those earning the least, and raising the highest wages from eighteen to twenty-seven dollars. It was not a move made out of ecstasy, but in blunt lucidity about what it would subtract from the money he would have to invest afterward in a farm. For months thereafter he gave little attention to the clothing business, but when he needed to see how it was doing financially, he was surprised: their little business was putting out three times the quantity it had done the previous year. He then learned that after his little speech the Italian presser had concluded that if he were the boss and had just spoken like that to his employees and raised their wages, he would want his employees to “work like hell.” And that is exactly what they did. Soon the shop had more orders than it could handle. Encouraged, Nash turned his business into a laboratory for the application of the golden rule, and the business prospered greatly. (Wattles 1996, 99)

Nash’s leadership with the golden rule led to many changes in his business. He proposed a profit-sharing plan; the workers chose to take their benefits in the form of higher wages. By 1923 the workers owned nearly half of the company stock. The best-paid employees petitioned to extend the distributions based not on the wages but on time worked. “The higher-paid workers, therefore, on their own motion thus relinquished their claim to a considerable sum of money in order that the lower-paid workers, whose need was greater, could be better provided for.” Nash continued to raise wages, limited the profit of capital to 7 percent, and reinvested remaining profits in the extension of the business. He lived simply. When Nash proposed to withhold bonuses from those who had worked less than six months (since an employee had joined for a short time and left right after receiving a bonus), the workers insisted that the golden rule indicated assuming sincere motivation in every employeeand they prevailed. Nash and the workers agreed that the consumer should play a role in the setting of prices, and consequently their prices were drastically cheaper than others’ (sixteen to twenty-nine dollars for a suit instead of fifty to a hundred). They also agreed to return extra profits to the customer in the form of better goods and extra trimmings. And they proposed, during a time of unemployment, to take a wage cut and make additional work for the unemployed in Cincinnati. They had abundant sunshine and fresh air and a healthy vapor heating system, and they remodeled their plant according to a schedule that the group agreed to. The work week was reduced to forty hours, and Nash was resolutely opposed to overtime. Every change was either proposed by one of the workers or thoroughly discussed in a company meeting. Nash supported labor unions; his firm unanimously agreed to make no clothes for a firm fighting a union and looked askance at someone taking a striker’s job; but he thought there was a better way to safeguard the rights of workers, and so he had no union in his plant. An experienced factory observer visited Nash’s workers and concluded that he was watching piecework, so rapid was the labor; but those people were working for an hourly wage. In one room, however, workers were taking such painstaking care with their work, the observer was sure they were on an hourly wage; but they were in fact the only one’s getting paid by the piece. Even during hard economic times they continued to grow from around $132,000 in 1918 to $3,750,000 in 1922. (Wattles 1996, 99-100)

Nash became widely known, and in 1923 he published an autobiography, proclaiming the golden rule as his cardinal principle, telling of his path to success, and reproducing two appreciative commentaries. After writing the triumphant account of his spiritual, social, and material success, the former preacher finally had a national pulpit that could not be taken from him. (Wattles 1996, 100)

In a posthumous 1930 edition of his book, completed by an associate, we learn the rest of the story. As a result of his renown, Golden Rule Nash became overcommitted to travel and speechmaking, and during the last four years of his life his business, now grown quite large, began to weaken in sustaining its original spirit. As Nash came to employ not a few hundred but 140,000 employees, the service motive did not permeate as thoroughly as before. Previously he had estimated that 90 percent of his workers identified with the spirit of his undertaking, and the other 10 percent worked alongside them faithfully. But now some people began to take advantage of the looser system of control; some subordinate executives did not keep pace with their leader. Favoritism, discrimination, and poor workmanship became noticeable, and morale slackened as Nash was away much of the time on speaking engagements with dinner clubs, lodge and church conventions, and chambers of commerce. (Wattles 1996, 100)

Nash’s resolution of the problem led to an expansion of his management philosophy. At first he approached a group of ministers and invited them to examine every phase of his operation and to report any situation where the teachings of Jesus could be more truly put to work. They refused, deferring to his greater experience in business. At length he decided to turn to a union. Previously, despite his sympathies with the union movement, Nash had endeavored to treat his workers so well that they would feel no need for a union. The enmity between labor and management, especially in the clothing industry, had been strong during the previous decade; now, however, in December of 1925, he turned to the Amalgamated Clothing Workers Union, on account of its sustained dedication to the skills of the trade and to the welfare of the workers. The union’s technical competence, which Nash had previously rejected as deadening, proved most helpful. New methods accounting, inventory management, and finance were introduced. Thus many techniques of scientific management that he had scorned as mere mechanical substitutes for human cooperation were introduced, and he found that they in fact constituted the very extension and application of the golden rule itself. The business weathered a slump and emerged stronger than ever; sales for 1926 were fourteen million dollars. The workers owned most of the stock. It became evident that the supreme desire to apply the golden rule did not enable Nash to discover by himself every step of forward progress that he needed to take. He needed the union to show him that techniques he had opposed were in fact required by his own purposes. Nonetheless, it was by following the golden rule that he came to the union and thus to accept ideas he had previously rejected in the name of the rule. (Wattles 1996, 100-101)

He founded the Nash Journal as a forum for popular and inspirational tidbits of wisdom, business advice, editorials, news of the company and the world. In one of his rare forays in the direction of philosophy, Nash responded to an article in which his company’s success was explained in terms of the golden rule plus other factors of business judgment. He challenged the separation of the golden rule from good business judgment. (Wattles 1996, 101)

In order to perfectly live the Golden Rule, one in business, to begin with, would be compelled to buy his merchandise in such a way that he would be dealing with the seller on the basis of the Golden Rule, as well as buying for his customers on the basis of the Golden Rule. The thought I want to bring out, is that we have left most things religious and spiritual down in the boggy swamps of sentimentalism. The efforts of the church in the past have not been directed as much as they may be toward educating and equipping men and women to live large and full lives. Whatever success has come to the A. Nash Company in living the Golden Rule has come because there has been enough business knowledge to enable us to live it to just that degree, and whenever we have failed in exercising the very highest and keenest business judgment on a truly ethical basis, it has been because we did not have sufficient insight to understand our obligation measured by the Golden Rule. . . . In other words, perfect and infallible living of the Golden Rule would require infallible mentality and undaunted courage. (Wattles 1996, 101)

Nash’s book argued that religion is needed for the socially effective practice of the golden rule. Any acceptable economic success must be based not upon profit-hungry manipulation but upon good relationships between those involved. Acting in accord with the golden rule is required in order for a business enterprise to flourish in its social relations, since the rule stimulates improved service. The practice of the rule in business should not be regarded as suicidal; often it is an aid to success. Religious motivation is usually necessary to motivate the wholehearted practice of the golden rule. Therefore, religion is essential for the flourishing of business and consequently for the flourishing of society and of civilization. In sum, Nash used the rule as a symbol of his Christian ideals of brotherhood and service and as a method to discover new ways of treating his workers and his customers well. (Wattles 1996, 102)

FROM BUSINESS ETHICS TO RELIGIOUS ETHICS: J. C. PENNEY

J. C. Penney experienced the golden rule during his early years more as a symbol of the rigorous, edifying, and self-denying morality of his “good and dedicated” father rather than as a symbol of the spiritual example of his “unselfish and saintly” mother. The son of a Primitive Baptist preacher (and the grandson of a preacher), the third child of twelve children (six of whom survived to adulthood), growing up on a farm, Penney recalls learning self-reliance by having to earn the money for his clothes beginning at age eight. He ran errands. He raised pigs. But when the neighbors complained about the smell, his father obliged him to stop raising pigs—an early lesson about the unwelcome implications of living by the golden rule. The boy turned to growing watermelons, spending the last nights before harvesting in the field with a dog and a shotgun to protect his crop. He took them to the county fair to sell them, and set up his wagon close to where the crowds were entering. Sales were becoming brisk when his father interrupted and ordered him to close down and go home. The lad had unwittingly broken the norm of selling along with other merchants who had set up inside the fair and had paid for a concession to do so. This was his second hard lesson about the implications of the golden rule. (Wattles 1996, 102)

The next phase of his life with the golden rule were his early years in business. He learned to sell dry goods. “I concentrated on two points: knowing the stock and exactly where everything was, and giving the customer the utmost in service and value, making only a small profit on each sale. I was particularly interested in the idea of keeping the store sold out of old stock.” He learned how “to add service and value from the woman’s point of view.” He stayed away from the cities, feeling that he knew “how to get close to the lives of small town people, learning their needs and preferences and serving them accordingly.” He liked working where he and those who worked with him “understood our neighbors as readily as they could understand us.” In 1902 he opened a store in Kemmerer, Wyoming, with the sign: Golden Rule Store. He and his wife worked together without any help at first, working hard, too hard, as Penney recalls, from early in the morning to late at night seven days a week. They abided strictly by the golden rule, they were extremely frugal, and they made money. As they began to hire people, Penney never hired anyone who did not have a “positive belief in a Supreme Being”; he selected people with “character, enthusiasm, and energy. ” He had large ambitions: “By our service to our customers we would create in them that spring of sparkling good will which would prompt them to want to help us to serve them.” (Wattles 1996, 102-103)

The last period of his life was marked by his religious conversion. Chronically troubled by his merely external engagement with religion, he had not been able to convince himself wholeheartedly that “it was enough for a man to lead a moral and upright life.” At the age of fifty-eight, having financially overextended himself in philanthropy when the Great Depression hit, this wealthy and successful man was brought to bankruptcy, alcoholism, and despair. Through an evangelical mission in New York City, he found God in a radiant and satisfying way and could then speak anew of the golden rule. “From our spiritual wellsprings come our capacities for unselfishness.” Penney proclaimed that the world must be transformed, would be transformed, and could only be transformed by the spiritually motivated practice of the golden rule, service to all people as one’s neighbors. (Wattles 1996, 103)

As civilization grew and horizons widened, the definition of “brotherhood” took on more exact meaning, and people came gradually to understand the golden rule as a basic principle, applicable to all relationships. In former periods business was identified as secular, and service as sacred. In proportion as we have discerned that between secular and sacred no arbitrary line exists, public awareness has grown that the golden rule was meant for business as much as for other human relationships.

Penny 1950, 52

Thus Penney joined men like Nash and Jones in holding to a religious conception of brotherhood as the basis for the replete practice of the golden rule. (Wattles 1996, 103)

CONCLUSION

The golden rule has functioned to mobilize sympathies, to sustain human dignity, and to express religious experience on a diverse planet in need of unifying ideals. Despite the follies of some of its champions, the rule, interpreted through the gospel of the fatherhood of God and the brotherhood of man, has showed itself a sturdy player in the encounter between religious idealism and scientific realism. (Wattles 1996, 103)

Evolution means progress as well as struggle. Not only does idealism need realism to make its ideals effective, but realism also needs idealism in order to keep pace in a progressive world. The fact that the rule provided a focus for the experience of harmony among members of different religions and the fact that the rhetoric of the golden rule could be an effective lever of reform give hope for the moral sense within the human heart and an incipient spiritual community. How, then, shall the golden rule be applied in practice? There is no formula for finding the proportion of legitimate self-interest in a life dominated by the service motive. There is no formula for determining when a sacrificial deed will have great leverage. Nor is the golden rule a substitute for gifted leadership, though it can contribute the moral focus for inspired leadership and teamwork. (Wattles 1996, 104)

Simply to ridicule the follies of idealism or to expose the scandals of a narrow-minded realism may make people more cynical about the prospect of combining idealism with realism. Pointing beyond cynicism, the biographies summarized here show how some, daring to treat others as they would be treated, found their way. Arthur Nash discovered that his apparently self-sacrificing wage increases won a profitable response from his workers, and they gained national attention for joining religious and moral dynamism with business progress. J. C. Penney respected the rule as a moral constraint on profit seeking and as a guide to service, and in the end also wrote of religiously motivated brotherhood. Samuel Jones, despite relative economic and political success, continued to aim, sometimes unwisely, for social and personal objectives beyond his reach. His sense of the pathos of life’s contradictions was much sharper than that of Penney or Nash. Nash and Penney showed that an individual and a company can flourish with a profound commitment to the rule. Jones, however, also showed that a society transformed by the practice of the rule is a long way off. (Wattles 1996,104)

~ ~ ~

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s