&gt; First &quot;business&quot; has no concept of &quot;ethics&quot;. This is one of the classic market externalities which leads to non-pareto-optimal outcomes.<p>Ethics can be modeled as an externality, but they don&#x27;t have to be.<p>Hypothetically, let&#x27;s say investors <i>were</i> taken to task publicly every time one of their investments blows up - not a simple company shutdown, mind you, but when the company is later proven to be doing really shady, unethical things. Ultimately, this would result in a tangible cost to the investment firm, because investment firms value their brand. In the long run, they would adapt, and take steps to guard against this risk before making investments.<p>Is that ethics? Or is it just the market acting efficiently, by pricing in the risk-adjusted expected future costs?<p>You can look at it either way, but at the end of the day, it doesn&#x27;t really matter. Whether or not businesses have a concept of &#x27;ethics&#x27;, they can be forced to act as if they do, which amounts to essentially the same thing.