Independent from the popular scientific literature on management, the subject “business ethics” established itself at the universities. In economic science, however, it has been neglected so far. Leading institutes, such as the EBS or faculties for instance at the universities of Mannheim and Frankfurt have only just started offering compulsory courses in “business ethics” for future business leaders. Here is an overview of one older yet still current and three modern positions:
1. Gerhard Weisser:
In the German speaking countries, economism started being fiercely criticized as early as the early 1930-ies by Gerhard Weisser. He transferred the three aspects “industrial dimension”, “market aspects” and “loss of codes” into the political sphere and demanded philosophical reflexion.
Weisser calls “economism” a “wide-spread opinion” that “believes the postulates for giving our economic life style will and must come from our economic way of thinking”. In 1953, he criticized that economism claims to be a “substitute ethics”.
He tells us that we are practicing economism if we do not question the habit of “economic aspects” being taken as basis for our behaviour, for instance deducing the value of a good company climate from the profit interests of said company. Does an enterprise oriented towards maximum profit act more “economic” than one that does not share this orientation? Should there be business models orientated towards maximum profit at all? It is probably not dogmatic to say that “we are at the threshold of actively shaping social life”, but a lot of knowledge could be gained if we took it for granted in a national economic model:
„Economism is prevalent if national economists think there is a ‚special economic justice’ outside and different from the justice of our normal social life. That means economic interest acquires the role of an interest directly determining our behaviour”.
Weisser’s criticism asks all the questions that led to establishing a differentiated definition of “business ethics”. That is why I want to give a short survey of three models representing the three major streams of modern business ethics in the German speaking countries and show that they can also be interpreted as a discussion of Weisser’s theses.
2. Karl Homann
Karl Homann’s “normative economics“ are a “moral reasoning born from interests”. According to him, the market economy structure with the exchange of goods and service makes cooperative profits possible. That is in the interest of all parties concerned. Apart from their particular interests, the parties concerned are not expected to have their own rationality concerns. They must be totally unburdened as far as morals are concerned: the structures of the economic system are sufficiently equipped to balance the “ethical” harmony.
“Prosperity as the potential of liberty for everyone”. This is the desired goal all members of a society share. Consequently, they view “economics as ethics with other methods”. In this model, the state with its legal system is the basis for making moral economic interactions possible. “The set of regulations is the systematic location for morals in a market economy”. You are moral if you behave in harmony with the system, are effective in every one of the steps you take and play by the moral rules.
„Economic ethics (or business ethics) is about the question which moral codes and ideals can be brought to bear among the existing modern economy and society (of enterprises)“. This is a functionalistic business ethics.
3. Peter Koslowski, Steinmann/Löhr
The “Business Ethics” concept by Koslowski and Steinmann/Löhr considers the business sphere as free of morals. Koslowski even goes so far as to say a “perfect market” makes ethics dispensable: “if you have total competition, you no longer need ethics”. Since that does not happen in real life, you have to demand “ethics as corrective power against economic failure” (market failure). That means that ethical criteria should be introduced or applied “under market economic conditions”.
„As opposed to the approach of normative economics, these ‚requirements’ in the concept of ‚applied’ ethics are, however, not (or at least not consciously) idealized. Instead, they are considered empirical possibilities or limits of moral behaviour of businessmen. A reflection of their normative surface structure is sadly missing.“
Methodically, this leads to an affirmation of the prevailing economic system. The arguments concerning economic pressure as criticized by Weisser are listed. For instance, you can read that the business principle of “profit” – in the sense of maximum profit – “cannot be disregarded on the business level. By demanding “ethics as a corrective measure against economic or market failure”, Steinmann and Löhr, too, pay lip service to the concept of a corrective role of business ethics.
4. Peter Ulrich
With his “integrated business ethics” of St. Gallen, Peter Ulrich offers a third route situated between the two conventional approaches of business ethics as described in “applied ethics” and (applied) “normative economics”. As he understands it, it is a philosophizing rational ethics of business that aims at clarifying the relation between the two competing normative behavioural approaches: on the one hand, we have the normative logic of inter-human relations as explained by modern rational ethics. On the other hand, there is the normative logic of exchanging advantages among individuals that have strictly defined interests of their own, as outlined in economics as an equally common rationality perspective of social behavioural coordinates.
He aims at an ethically integrated idea of rational business practice in the context of a well-structured society of free and equal citizens. „So what matters is that we extend the economic idea of rationality in a way that already includes the ‚rational’ legitimacy as constitutive, rational-ethical requirement. With this, the basic orientation for an ethic integration of economic rationality is achieved.“ The integration issue has its foundation in discourse ethics:
„We can call all behaviour and institutions social-economically rational if a free and mature citizen (could have) decided it as a rationally motivated consensus among all parties concerned for legitimately creating value“.
Referring to Weisser’s economism criticism, Ulrich says:
„The three basic concepts of economism are: the isolation of economic rationality, the absolutization of the cost-value idea and the normative super elevation of the market that makes it a false totality with latently ideological character“.
Ulrich’s approach is an ideology-critical discussion about the prevailing economism. Consequently, he does not shy away from asking the question that Weisser already introduced: how to find meaning in life?
„Finding meaning in life is a task of personal life style in the light of a reflected concept of the good life. It must, however, include a clear idea of just and co-existence in a meaningful society characterized by solidarity“.
„Asking the question of meaning in business makes sense” since it breaks the economic circle and counterbalances it by providing “a basically instrumental view of economy from the perspective of life in the actual world we live in”: “Economy is never more than a means serving higher, literally vital ends”. All economic behaviour must meet the criterion of “serving life”.
EEM
(Translated by EG)
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