Why is philosophy relevant to business? The short answer is: because philosophy is relevant to everything—science, law, religion, politics, ethics, art, sports, life. That’s why there is a philosophy of each of these things. But people don’t always realize this, because they take their assumed philosophy for granted, as if it’s just unquestionable common sense. Real philosophy interrogates these assumptions, subjects them to criticism, and if necessary reforms them. The unphilosophical life is not worth living, to paraphrase an old saying—it is too prone to glibness, self-delusion, and dangerous dogma. Plato took philosophy to be the indispensable foundation for the state for this very reason. The American Constitution is a piece of philosophy.

We can usefully divide philosophy into four parts: theory of knowledge, nature of reality, human nature, and value theory. Theory of knowledge (epistemology) is concerned with arriving at the truth, with justification and reasons for belief: this is at the heart of every human enterprise. You have to know the truth if you are to act appropriately: error will make you act wrongly. But knowledge is hard because the world is complicated. It is not easy to marshal evidence, weigh reasons, and come to a rational conclusion. This is where epistemology helps, because if offers insight into the nature of justification (logic is part of it): fallacies can be avoided, non-sequiturs exposed, and solid arguments constructed. Philosophers are better at this than anyone else—it is their specialty. And business is no different from other areas: it too requires rigorous reasoning and well-founded conclusions. To put it crudely, you have to be able to out-argue your competition, in the sense that your decisions have to be smarter than theirs.

By “the nature of reality” we mean large-scale features of reality—how the world works. From a business perspective, causation is a vital factor: what will cause what and why. If you make a decision it will have consequences, which are causally determined; you have to be able to anticipate these consequences. This means you have to trace causal paths. You have to know what the laws of nature are. What was the cause of the economic collapse? What causes climate change? What causes people to buy iPhones? Causation is more than mere correlation: it penetrates to the basic mechanisms of the universe. Philosophers have analyzed causation extensively. Causation matters in the law, in science, in manufacturing, and in social trends. You need to be clear about how it works.

Philosophy also studies human nature: is it innate or acquired, is it fixed or flexible, what kinds of motivation govern human behavior? A popular theory has it that humans are hedonistic machines always out to maximize pleasure (economics typically takes people to be solely concerned with maximizing personal utility). This ignores altruistic motivations, which are just as real (if less common). The problem is that human nature is difficult, not much is known about it, and behavior is unpredictable. This is why you find that pop psychology is, well, popular—it offers simple generalizations based on dubious theories and the latest psychobabble. Philosophy can act as a corrective to this false psychology, questioning simplistic stereotypes, urging caution. It can also help to articulate solid science as well as psychological commonsense.

Value theory belongs to the practical side of philosophy: what is good and right, what ought to be done, what constitutes human flourishing. There is a wealth of reflection on these questions since the days of Socrates (and taking in other traditions): everything from utilitarianism to deontology (duty-based morality). Since everyone must be concerned with value—with what is good—it is vital to have a solid grasp of the principles governing it. For instance, we must always distinguish instrumental value from intrinsic value, and recognize that values can conflict (e.g., individual freedom versus social harmony). It is foolish to make ethical decisions without understanding ethics (Ayn Rand is not the authority on ethics!). Businesses must be ethical, both because that is the right thing to do but also because unethical conduct will lead to eventual disaster (as so many high-profile cases have shown). Proper ethics must be part of corporate culture—as of every other area of human life.

This is just a taste of what philosophy has to offer. Why is it not already part of business culture? The answer is that it is, but in unsophisticated form, because everyone has a philosophy whether they know it or not. If philosophy were routinely taught in high schools, its importance would be generally recognized (as it is in some cultures). Why is not taught in high schools? Could it be that it is not because philosophy lacks relevance but precisely because it is too relevant? Philosophy is a critical disciple, questioning the dogmas of the day, a dangerous force for exposing error and cant—so it is better for people not to know too much about it. In any case, it is, or should be, part of the intellectual toolbox of any responsible person, business leaders included.