What are the ethics of moonlighting? Today I would like to deal with two interrelated problems on moonlighting and ethical corruption. The first is what circumstances lead to the phenomenon of moonlighting in the first place, and whether there is any just way for companies to limit the off-work activities of people when they are not being paid by the company for that time. The second is what sort of ethical dilemmas can easily result from moonlighting, giving the example of a fellow named Emil Korner.
It would appear that the leading cause of moonlighting is the need for employers for a greater salary than their day job provides. Despite the fact that moonlighting can lower one’s productivity, it is sometimes a necessary decision economically. Is it not short-sided for companies to try to skimp on overhead (not paying their workers a fair market wage) while neglecting the effects of moonlighting strategies on the productivity of those workers? Is it unjust for companies to try to regulate the activities of their employees for those hours where they are not being paid, even if those activities can affect their performance on-the-job (what is the boundary line between the rights and freedoms due to employees as free individuals)? Is it unjust for employers to seek to prohibit moonlighting in those professions (like teaching or engineering) where they are paying less than competitive wages for their employees, or even in some cases (like private schools in the South) less than livable wages?
In many cases moonlighting is an indirect way of increasing one’s salary without the doubtful and risky search for promotions or other jobs altogether. That said, companies are not often very interested in letting employees have the freedom to conduct personal business without restraint even in off-work hours. Some companies are even unwilling to have their employees seek education off-hours. But do they have the right to stop it, or to sanction employees for such activities? If employers claim certain power over those they hire, do they not also take upon themselves certain responsibilities towards providing for the well-being of those employees? One does not gain privileges and rights without also taking on the responsibilities. One cannot externalize the risks and internalize the profits, not if one wishes to behave justly.
Nonetheless, it does appear as if moonlighting is related to corruption. This is especially true the higher one gets in corporate affairs. Though the moonlighting of ordinary employees is the most heavily punished and watched, it is the moonlighting of higher income and status workers whose moonlight appears more closely related to greed than the survival-oriented moonlighting of ordinary front-line employees that is the most dangerous to corporate and social ethics. In order to examine these potential threats of corruption, let us examine the case of one Emil Korner .
Emil Korner was an intelligent and ambitious German officer in the late 1800’s German Army. Due to his origin (he was not a Prussian, and his father had never ‘turned the major’s corner’ in the army of his state’s army) and his lack of political connections he sought an ambitious posting outside of Germany in order to ensure his wealth and place. So he took the opportunity to reform Chile’s army in the image and likeness of Germany’s successful Reichswehr. He asked for (and received) a two-grade promotion so he could move from Captain to Lt. Colonel and thus ensure that he achieved a higher rank (and salary and prestige) than his father had ever managed. His arrival as the head of Chile’s War Academy allowed him to mix and mingle with the elites of the German citizens of Chile involved in business and politics in the area, and he married a young lady who was from a politically active family of German descent, and led him to ‘betray’ the Chilean government and support the Parliamentary rebels in the 1891 Chilean Civil War (his wife’s family was on that side as well). Despite the rebuke of his ruler, Kaiser Wilhem II, his double-dipping was not over. In fact, it had barely begun.
Korner’s use of moonlighting was exceptionally clever. He received a paycheck from the Chilean military as an officer. He also received a 1% gross commission on all Krupp arms sales in Chile (which influenced him to endorse Krupp products for arms deals as an official agent for both sides of the deals–a clear conflict of interests). Additionally, Korner received land and salaries from the Chilean Parliament in support of finding and sponsoring German immigrants to remote territories in the Zona Austral, making Korner a land speculator as well as a general and a part-time arms dealer. Clearly, we are dealing with moonlighting on a massive scale here.
What makes it so problematic is that Korner’s corrupt dealings filtered down the lower ranks, as those soldiers whom Korner trained and led learned from his example and not only from his doctrine. Lesser officers also moonlighted by selling the army shoes or horse feed on the side, often of substandard quality, but keeping the money and profits of serving in the military ‘in the house.’ The entire political and military establishment of Chile became corrupt, leading to a growing politicization of the military and eventually the overthrow of the Chilean Republic in 1925 under General Ibañez. The corruption of Chile’s elites and military though its ‘moonlighting’ had very dangerous consequences for Chile.
We might therefore examine that an employer might want to be more sensitive about the well-being (and salaries) of its workers if it wants to keep that sort of corruption from affecting its operations. Treating workers well, paying them well, showing them honor and respect might prevent them from looking elsewhere for the honor and remuneration they do not receive in their day job. Additionally, if a company wishes to avoid corruption from unethical moonlighting, it needs to start at the top by providing an example of respect, honor, and moral rectitude. An employer cannot enforce high standards of ethics if it does not practice them from the highest levels of management. Paying lip service to ideals is not enough to have them become the way a company or agency operates .
So, let us conclude that moonlighting may present many ethical dilemmas that companies are wise to condemn. Nonetheless, there are at least two overriding concerns and responsibilities that companies possess if they want to avoid the corruption that can result from conflicts of interest present in some moonlighting opportunities. For one, companies must supply both the material (salary, benefits) and motivational needs (honor, respect) of their employees at all levels so that employees do not have temptation or reason to ‘stray’ and become disloyal. Second, management from the top down must provide a good example of moral rectitude and consistency of standard so that there are no mixed messages or double standards being applied that condemn ‘double dipping’ from front-line employees while endorsing or accepting it for their superiors. The same standards are to apply to all. Only if those conditions are met can a company forbid moonlighting with clean hands and demonstrate moral excellence.
 Supporting documentation can be found in my unpublished essay “The Puzzle of Chilean Prussianization,” available upon request.