Many businesses do things that are legal, are in fact good business practice, but which are shown later to have bad effects for society. In some cases, these effects are huge. For example, the contribution of fast food cooking and recipe practices to obesity and heart disease only came to light 40 years after the founding of the fast food industry. And tobacco was only shown to cause cancer hundreds of years into its trade.

If these had caused immediate obesity or cancer, they probably wouldn’t have succeeded in the market. But human beings have an odd quirk: if the effects of something don’t happen quickly, we discount them in favor of immediate gratification. Our compulsion to eat that extra cookie (like I did last night) is immediate, and we act on it much more than we act on the hypothetical, imaginary future world in which we have added a few inches to our waistline.

Then we came up with science and started uncovering these longer-term cause and effects. If a new product were to be introduced that was known to have such negative health effects by triggering short-term gratification impulses, I’d like to think we wouldn’t rush to embrace it.

But even if we’ve gotten smarter (debatable), there’s an even trickier question: some things are fine when done individually, but disastrous when everyone does them. Skipping college is a great example. We’re living in a moment in history where our college costs, educational outcomes, and job prospects are such that it makes very little economic sense for most people to go to college. There’s just no way they can get a job that can pay back their tuition, and we don’t provide enough national educational assistance or reimbursement to encourage people to go unless it has a direct effect on their future income. (Let’s leave out for a moment the recent studies that show that many 4-year colleges are nothing but an extended party and don’t seem to teach very much.) For any one person this makes sense. When an entire generation does it, 20 years later we’ll have a workforce unsuited for anything but manual labor and jobs as check-out clerks. Bad check-out clerks, I might add.

Outsourcing is another place where the individual benefit leads to bad things societally. Any one company can be more profitable through outsourcing. When all companies start doing this, however, it leads to higher domestic unemployment and the gradual deskilling of our workforce. Why would anyone put in the time and effort to develop a skill when they can’t compete with $3/day people of similar skill overseas?

Our economic system is clearly set up to reward the individual, short-term decisions. Sometimes that produces the larger good outcomes, and sometimes it doesn’t. If we as businesspeople are concerned about our larger societal outcomes, how can/should/could we change the system to deal with (a) profitable short-term gratification businesses that have long-term negative effects, and (b) individual incentives that lead to rational individual behavior, but when everyone does them, larger Very Bad Problems?

Do we have any responsibility to address those two flaws in the system? If so, how? If not, then how should we handle the very real societal problems that result?