The Burden of Ethics

About the successful communication between ethics and economy

A Word with Many Meanings

“Ethics” is not a word that clearly defines a concept. There are many different types of ethics. First and foremost, our understanding of “ethics” is determined by a neurologically intact brain (people who tend to violence have a malfunction of the pre-frontal cortex). If the hardware is intact, our moral behaviour and its ethical foundation depend on where and what we have learned by way of ethics and morals – in the family, on the street, in church, in certain philosophical faculties at university, in a group of equally-minded people, in an enterprise where values were practiced, or elsewhere.

When talking about ethics in an enterprise, however, “ethics” seem to be universally used in the same sense. Used as “company ethics”, it seems that “ethics” have always had a clear meaning. Apparently, all that remains to be done is transfer the common concept to an enterprise. This idea is wrong. It misleads in that it insinuates that there is one universal type of ethics and that “company ethics” is always what an enterprise wants or should have.

Ethics of Attitude and Ethics of Responsibility

The diversity of ethics is drastically apparent as soon as we categorize with Max Weber. Then we get the significant difference between ethics of attitude and ethics of responsibility.

“But there is a profound difference”, says Max Weber in his paper on Politik als Beruf of 1919, “if you act according to a maxim of attitude ethics – religiously spoken: ‘a Christian does the right thing and relies on God for success’- , or according to that of responsible ethics: namely that everyone has to take responsibility for the (foreseeable) consequences of his behaviour. “No matter”, continues Max Weber, “how well you outline the consequences of his behaviour, such as increased reactionary potential, more repression of his class, or less influence for his class, to an adherent of attitude ethics it will not make any impression. If the consequences of something he has done with the right kind of attitude are detrimental, then for him the responsibility is not with him, but with the world, the stupidity of others, or – the will of God who created us all in this way. A believer in responsible ethics, on the other hand, takes just those average shortcomings of people into consideration, he does … not even have a right to take their goodwill and perfection for granted, and he will not see fit to unload the responsibility for the predictable consequences of his behaviour on other people’s shoulders. He will say: these consequences will be attributed to my behaviour. ‘Responsibility’ is something the believer in attitude ethics only feels towards the flame of a pure way of thinking. For example, he will see to it that the flame of protest against the unfairness of the social order will not burn down. Giving that flame new nourishment at all times is the entire goal of his behaviour. Judged by its potential success, his behaviour may be irrational and can and must only have exemplary value.“

The Strong and Weak Sides of an Ethics of Attitude

Attitude ethics is the common name for an ethics based on pure reason, religion and strict principles. It deduces principles for our behaviour from pure contemplation or belief and underlines them rationally or religiously. In doing so, it is true to the unalienable right to universality of our ethical attitude. Moreover, it has legal-philosophical relevance, because it strictly demands its own legal application without exceptions

However, by demanding absolute validity based solely on ratio or religion instead of empirical data and usefulness, there are times when this ethics have their own dynamics. Dynamics which some persons and groups often find they can no longer morally feel at home with. Most of the global conflicts we have to face these days are due to the fact that the conflicting parties have different ethics of attitude and are not prepared to tolerate each others ethics. An Islamic suicide assassin has a perfectly clear ethical conscience when committing his atrocity.

An ethical approach based on an individual’s attitude is not particularly good at encouraging people to accept all that is alien and different, which is the basic requirement for endurance and tolerance. Mostly, strong supervision and control is necessary in order to promote principles individuals often to not identify with. Moreover, these abstract concepts based in ethics of attitude can cause a person to see him- or herself as remote from ethics, law and order. In such a system, the moral needs of an individual are not stisfied, he will consider the ethical system as something alien.

From early on, the adherents of a “virtuous ethics” (as opposed to “rational ethics”) have been critical towards the “unethical” as seen in the principle-based ethics. Elizabeth Anscombe from the philosophical faculty of Cambridge University, for example, rigorously demanded in her essay Modern Moral Philosophy of 1958 that the terms moral obligation and moral duty be part of the index. Her idea was to include words around which modern moral theories have been developed and which are part of utilitarian and Kantian moral philosophy.

Strong and Weak Sides of an Ethics of Responsibility

Using an ethics of small steps, such as propagated in the responsibility-based concept, you will not fall victim to the aforementioned unsolvable situation. The individual person with his or her sense of responsibility is the centre of attention and thus morally satisfying. It is an empirical ethics: instead of demanding abstract and purely rational considerations, seeing expected consequences of your behaviour is relevant in each individual case before you apply a principle. An ethics of responsibility promotes the development of moral consciousness. Also, many of the economical market concepts based on the general well-being are already oriented towards the categories of responsibility (sustainment, sincerity, appropriateness, economical use of sources, and many more).

However, sometimes the concepts based on an ethics of responsibility are said to adhere to the principle “all is well that ends well”. That includes the suspicion that usefulness for some is their main goal.

Companies as a Place where an Ethics of Responsibility can Flourish

It is to be feared that the ethics of attitude will be introduced in enterprises as codices and conduct concepts. They will possibly be called “company ethics”. Even though it has realized the structures of democracy where the reaching of decisions is concerned, this ethics of attitude, which might also be called ethics of principle or, less rigorously, ethics o rationality has not only the aforementioned formal disadvantage, but also another, content-based one: the expectations of value awareness in enterprises have had little or no influence when the decisions were made. There is a reason for this: as a matter of course, considerations based on ethics of principle – such as we can also find in Immanuel Kant’s ethics of attitude – have often been composed in the confines of private studies, rather than applied to practical situations. Ethical concepts based on rationality and attitude therefore often remain purely academic disciplines. Managerial considerations have had little or no impact on the discussions of a normative ethics in this sense.

Moreover, in a rationality based on ethics of principle it is generally agreed that the presence of empirical experience, such as could be obtained by entrepreneurial practice, is irrelevant for philosophical research. In other words, the condition for this kind of rationality is that the philosophical dispute alone guarantees truth and the validity of ethical principles. Empirical experience in enterprises cannot be helpful, let alone necessary.

That makes it possible for norms to be introduced in companies under the name “company ethics” that have not been wanted. They might even be detrimental to the economic success and ignore existing concepts oriented towards responsible leadership by substituting them for more abstract and less suitable principles.

These disadvantages are so substantial that a re-orientation towards the traditional concepts of responsible economic planning and behaviour is necessary. It is incorrect to say that there is a lack of ethical and moral awareness in enterprises just because their principles are not based on the academic philosophical dispute. Naturally, from the viewpoint of an academically legitimate ethics of attitude, their ethics seems the one and only possible approach. The more rational an ethical concept is, the more it turns out to have been exclusively generated rationally and without experience. The question whether external concepts – such as based on values derived from practical managerial behaviour – are necessary is not one that a person concerned with an ethics of attitude or principles ever asks.

In the same manner, a person believing in the ethics of responsibility will not ask whether his behaviour should be based on absolute principles after having evaluated to the best of his ability what possible consequences his actions might have. The natural approach of managerial thinking towards ethics is the ethics of responsibility or calculated consequences. It is already inherent in a professional economic theory.

In order not to let “company ethics” remain just a transformation of abstract disputed theories of academic interest in the ethical dispute, the ethical implications already belonging to company-oriented thinking must be made part of the discussion. Naturally, in an enterprise we already find the requirements for an ethics based on the far-reaching field of responsibility. This will save us from falsely believing that economic thinking and behaviour contain no ethics. One might suspect that the burden of ethics in economical enterprises is also the result of the contradicting concepts of ethics based on attitude versus responsibility. In economic thinking – in particular in managerial behaviour – there is also an ethics. However, it is not the academic kind of ethics. Company ethics is a process during which structures derived from entrepreneurial values take part in the ethical dispute.

What matters is not that either an ethics of attitude or of responsibility is declared the one and only way to safe this world. What matters is that we have to see how our own point of view makes us blind towards all others. Wherever the concept of an ethics based on attitude is applied, the general understanding is that you have all you need and certainly an empirically oriented concept based on the awareness of possible consequences is unnecessary. People adhering to this concept see behaviour based on economic principles not as behaviour based on another set of ethics, but rather as “unethical” behaviour per se. On the other hand, managers who, for economical reasons, have introduced the idea of evaluating the possible consequences long ago, do not take kindly towards a set of extra rules introduced as “company ethics”. What we are talking here is two ethics completely disregarding each other and considering themselves complete.

What should be Demanded

While discussing ethics of enterprises our society must also take into consideration that directors have a duty to build values, and that they have actually started doing that duty some time ago. Company ethics must not be understood to mean a one-sided superimposition of academic concepts on a company. It should also be characterized by including entrepreneurial practice and standards into the dispute about ethics. The search for a plausible company ethics first needs the answer to the question: how do economical categories, standards and behaviour grown in companies already contain standards for ethical behaviour and how can these be strengthened? Thus, one-sided aspects of the academic ethics still maintaining that economic behaviour is always goal-oriented and therefore will never meet ethical requirements can be corrected. (see: Michael Köhler Gerechtigkeit als Grund der Politik: “The solution must be based on a theory of humanity which … brings the economy back to its serving function.”)

Company ethics in our sense includes the argument that economic and utility-oriented concepts are certainly ethically relevant from the practical side into an ethical dispute which has so far denied the validity of exactly this argument. (Let us just cite one passage from the Handbuch der Ethik in place of all it represents: “The economic reductionism transfigures the ‘Market Morals’ as sufficiently promoting the common good. In the neo-classical (welfare) economy, this market-metaphysical fiction of the common good has been rationalized by means of utilitarian ethics. Even though the utilitarian social utility principle, which to this day nourishes the belief in economic growth as magic formula for solving almost all economic and social problems, has later been re-interpreted into a ‘pure’ economics (paretianic economics), the categorical blindness of economics for the difference between (pareto) efficiency and justice has changed but little.” S. 293)

KJG (translated by EG)

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