Tuesday, February 16, 2010

Is competition conducive to ethical behavior?

from the Supreme Court case NATIONAL SOC. OF PROFESSIONAL ENGINEERS v. U.S., 435 U.S. 679 (1978), speaking of the NATIONAL SOCIETY OF PROFESSIONAL ENGINEERS:

By the same token, the cautionary footnote in Goldfarb, 421 U.S., at 788 -789, n. 17, quoted supra, cannot be read as fashioning a broad exemption under the Rule of Reason for learned professions. We adhere to the view expressed in Goldfarb that, by their nature, professional services may differ significantly from other business services, and, accordingly, the nature of the competition in such services may vary. Ethical norms may serve to regulate and promote this competition, and thus fall within the Rule of Reason. 22 But the Society's argument in this case is a far cry from such a position. We are faced with a contention that a total ban on competitive bidding is necessary because otherwise engineers will be tempted to submit deceptively low bids. Certainly, the problem of professional deception is a proper subject of an ethical canon. But, once again, the equation of competition with deception, like the similar equation with safety hazards, is simply too broad; we may assume that competition is not entirely conducive to ethical behavior, but that is not a reason, cognizable under the Sherman Act, for doing away with competition.


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