South African Investment and Utilitarian Principles

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South African Investment and Utilitarian Principles

“Utilitarianism is a general term for any view that holds that actions and policies should be evaluated on the basis of the benefits and costs they will impose on society” (Velasquez, 2010, p. 59). The Ford Pinto example (Velasquez, 2010, pp. 60-61) calculated utilitarian benefits as a straight-line computation based upon monetary values which were placed on costs and benefits and making a decision based upon where the scale showed the greatest net financial returns. In such a computational process, posing the question as to whether utilitarian benefits (financial return) outweigh injustice and moral rights violations presupposed that justice and morality are for sale, to be bought and sold at whim. However, this application of utilitarian principles is faulty and such a posed question would be fallacious. The utilitarian standard of morality is, “a moral principle, that is, that claims that something is right to the extent that it diminishes social costs and increases social benefits” (Velasquez, 2010, p. 59). The key here is that social costs and benefits are distinct from financial costs and benefits. In some cases, applying such a moral question requires one to choose the lesser of evils; this opens the door for debate as to which choice that should be. Such a debate occurred regarding the Caltex project in South Africa during the 1970’s and 1980’s (Velasquez, 2010, pp. 58-60). There can be no question that the South African government at that time was guilty of human rights violations and incredible injustice. However, what was Caltex’s part in that? Caltex was criticized as actively supporting the South African government’s policies; support for these policies was based upon taxes paid to the government and locally refined oil being sold to the government (“Student Guide,” 2009, p. 41). Certainly, providing money and supplies did in fact provide some assistance to the government. Therefore, choosing to continue business in South Africa is to choose an evil. For a utilitarian decision, that evil choice must be weighed against the other option; pulling out of South Africa. “Texaco believes that continuation of Caltex's operations in South Africa is in the best interests of Caltex's employees of all races in South Africa. . . . We are convinced that the resulting dislocation and hardship would fall most heavily on the nonwhite communities” (“Student Guide,” 2009, p. 40). Studies done at the time showed that pulling out of South Africa would do more than hurt the government; it would also hurt the very people the move was meant to help. Therefore, choosing to pull out of South Africa would also be an evil choice. Debate raged over which choice was the lesser of evils by people on the scene and those with access to far more relevant data than are available for this report. With any certainty, one can only say the correct answer was far from clear-cut. In search of the best answer, three separate sets of resolutions were proposed to Texaco stockholders. The first set of resolutions simply proposed terminating all business in South Africa. There was enough question as to the efficacy of this proposal that while it received a lot of attention, it was voted down (“Student Guide,” 2009, p. 41). This move would have been detrimental to all involved: 1) clearly the company would lose considerable revenue, 2) the government would lose some measure of funding and a larger percent of its resources, and 3) the people of South Africa would lose jobs, benefits, income, and an improving standard of living. For these reasons, management was correct in feeling this was not an appropriate course of action. The second set of resolutions proposed withholding sale to South African military or police, directly in violation of South African law. While this proposal received a higher approval rating than the first, it was voted down as well (“Student Guide,”...
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