Abstract
Business Ethics and Catholic Social Thought begins with a provocative question: ‘Can a religion whose founder taught love of neighbor give moral approval to profit seeking business firms in a global economy?’ (p. 1). This volume, which arises out of the ongoing work of the Institute for Advanced Catholic Studies at the University of Southern California, is a collection of ten essays exploring this question. The contributors are a highly accomplished group of scholars from fields such as theology, philosophy, economics and business. Each chapter is thoughtfully crafted, nuanced, and careful in not over promising what the tradition can deliver.
Chapter 1, ‘CEO Perspectives on Morality and Business’, sets the stage. Regina Wentzel Wolfe presents a summary of interviews of three CEOs of enterprises of varying sizes and industries which establish the importance and relevance of the issues addressed in later chapters. The subjects are candid about the challenges of living out the implications of Catholic values in their own business contexts, acknowledging that doing so may leave them vulnerable to competitors who don’t share their moral commitments. They are also realistic about the challenges of creating value for all stakeholders simultaneously and acknowledge the necessity of tradeoffs and priorities.
The second chapter ‘Commerce and Communion in the History of Christian Thought’, by Jennifer Herdt, presents a carefully and insightfully constructed historical account of the thought of the Franciscans, John Calvin, and Adam Smith. All displayed remarkable continuity regarding ethics, trade and economics including concern for the poor, wealth/property as stewardship and regarding trade as God-ordained when practiced for the sake of the common good. In addition to bracketing the first chapter with past perspectives, Herdt's essay establishes the point that connecting theological/moral reflection and economics is neither new nor novel. Long before economics came to be regarded as ‘value free’, the disciplines were regarded as deeply integral.
In chapter 3, ‘Practical Wisdom and Management Science’, Andrew Yuengert describes significant blind spots (gaps between theory and practice, business science and business ethics, personal ethics and business norms) within ‘management science’; techniques that represent a manifestation of the technocratic worldview that seemingly dominate business decision making and education. Yuengert then makes a compelling argument for the need for virtue ethics, especially ‘practical wisdom’ to step into these gaps if business is to be placed into the service of the common good. One important insight is the author's distinction between techniques and practical wisdom, the latter having to grapple with contingency (like tradeoffs in actual decisions) and formative effects on the actor.
In ‘What are Agency and Autonomy and What Difference Do They Make for Business?’ (chapter 4), Gregory Beabout contrasts business people who are motivated by making money with those desiring to make a social impact. The former operate from within the constraints of MacIntyre's concept of ‘Morality’ (detached, universal, Kantian) (p. 72) that promotes a divided life and fails to provide a basis for adjudicating between competing ends (i.e., profit vs. communal and individual flourishing). In contrast, those seeking to make a social impact operate from a richer (Neo-Aristotelean) ‘moral grammar’ (p. 76) that considers virtue and purpose (individual and communal flourishing) and reflects membership in a community of practice. Beabout provides the example of two former students, business-people seeking to promote integral development and the common good, as embodying this richer account.
Mary Hirschfield's contribution (‘What is the Technological Paradigm and Must Business be Structured by it?’) in chapter 5 builds upon Pope Francis's moral critique of capitalism in Laudato si’ to challenge the finance/profit maximization model of business. Hirschfield contrasts ‘The Creation Paradigm’ (nature as a gift to be seen and understood only in a web of relationships) with the dominant Technological Paradigm (characterized by control, quantification, autonomy, exploitation) that provides a foundation for the pure efficiency model of capitalism defended by the likes of Milton Friedman. The Technological Paradigm distorts our stance toward nature from stewardly dominion to exploitation.
In chapter 6, ‘The Institutional Insight underlying Shareholder/ Stakeholder Approaches to Business Ethics’, Kenneth Goodpaster and Michael Naughton develop a distinctive faith-based understanding of the purpose of business institutions. The authors critique both the shareholder primacy and stakeholder models as too ‘thin’ because they are both grounded in a framework of individuals maximizing their own interests, thus diminishing any kind of moral obligation to serve a common good. The authors then turn to Catholic Social Teaching to define the common good as ‘integral human development’ (p. 129), ultimately rooted in humankind's existence as a community of persons (implied by our creation in the Trinitarian image of God) and the larger telos of the kingdom (‘reign’) of God. Based upon this thicker conception, the authors distinguish between allocative and ‘participative goods’ (pp. 132–34) (the latter do not diminish, but actually grow when shared). They then explore implications for business leaders, particularly the imperative to keep focus on the common good as the principle that gives specific content to the institutional role of business in society.
The seventh chapter—‘How Consumers and Firms can Seek Good Goods’—by David Cloutier is a highly provocative and enriching chapter on the topic of defining ‘good goods’. The author rejects the idea that merely meeting consumer demand qualifies as ‘value creation’ (p. 160) in a moral sense. He moves well beyond the usual categories of defective and overtly harmful goods and devotes a significant portion of the chapter to addressing futile goods defined as ‘those that satisfy artificial new needs and do not direct their possessor to higher levels of human flourishing’ (pp. 145–46). Cloutier also discusses human responsibility (i.e., status signaling, consumption as a goal in itself) and producer agency (shaping consumer choices through marketing) and the larger context in which both operate (the influences of choice architecture, investment capital and effects of collective decisions).
Cloutier provides insightful suggestions and examples of how marketing (and Catholic business school textbooks) could be prepared in ways (legitimate connection between product and lifestyle and authentic anthropology) that reflect a proper ordering of goods (vs. the usual psychological and demographic methods). He exercises much care in acknowledging the dangers in drawing hard lines and refrains from placing specific products and services into the futile category, but instead develops norms requiring practical wisdom to guide consumers and producers in avoiding them.
In Chapter 8, ‘Are Businesses Responsible for the Moral Ecology in Which They Operate?’, Martin Schlag addresses the obligations of business for renewal of our moral ecology. Building a case based upon a ‘first person’ vs. ‘third person’ (judge or impartial observer) approach, he invites Christian business people to consider the tria munera (prophet, priest and king) of Christ in order to renew culture. But, rather than following an increasingly popular (in America) ‘Benedict Option’ (that begins with denunciation of culture), Schlag endorses what he cleverly calls ‘The Benedict Project’ (pp. 172–74) that begins with affirmation of what exists (while recognizing its brokenness) and attempts to heal culture from within.
In ‘The Social Mortgage on Business’ (chapter 9), Edward Kleinbard builds on Pope John Paul II's metaphor of a social mortgage to establish the intrinsic social function of private wealth. He then makes a case for the power of the state to correct for inequities caused by ‘luck’ (p. 186) and enforce the social mortgage through taxation. While relying on the IMF and OECD's case for ‘inclusive growth’ (p. 182) (higher taxes can lead to higher growth if invested in the human capital of lower income households), he acknowledges that growth can be damaged if taxation is applied too vigorously. Thus, the author argues taxes should be directed at individuals benefitting from firm wealth as a form of ‘social insurance’ (p. 196) to fund greater and more inclusive economic growth. While the author makes a compelling case, this chapter seems to take a subtle shift in tone by making very specific policy recommendations.
In the final chapter, ‘When are Market Decisions Morally Legitimate?’, K.J. Martijn Cremers develops criteria for the moral legitimacy of market transactions. Cremers argues that they: (1) need to satisfy transactional justice; (2) should contribute to the ‘shared goods’ (information sharing, risk sharing and discipline sharing) of market competition and (3) must be subject to cooperation with all stakeholders (or at the very least, avoid an adverse impact on them) (p. 203). To justify the need for these external criteria, Cremers exposes the insufficiency of assumptions underlying the popular economic argument that, on their own, efficient markets serve the public interests.
These brief descriptions fall far short of illustrating the worthiness of the chapters included in this volume. Each essay makes a significant contribution to a growing body of literature that provides religious grounding and direction for an ethical re-imagination of the purpose and obligations of business institutions and their leaders.
The chapters I personally found most illuminating were Herdt's (chapter 2), Goodpaster and Naughton's (chapter 6) and Cloutier's (chapter 7). Herdt's historical perspective revealed interesting surprises, including the legitimizing of merchants by Franciscans; Calvin's rejection of wealth as an indicator of divine favour; and Smith's lack of belief that the unfettered pursuit of self-interest would by itself lead to a flourishing society. I greatly appreciated Goodpaster and Naughton's care in defining/grounding the concept of common good in explicitly theological constructs. Cloutier's essay was refreshing in its attempt to develop guidelines to help us define morally good goods and services and its attribution of shared responsibilities (applying to both consumers and producers).
One of the primary strengths of the book is its interdisciplinary nature. Together, the authors address an impressive breadth of topics with theological depth and through an array of disciplinary lenses. The contributors also have a sense of realism about the challenges presented by competitive markets, something that is often missing in books on this and related topics. For a volume that is the product of a conference, the overarching framework and arguments are highly cohesive. It is readily apparent that the contributors read each other's work. Every author refers to and makes explicit connections to several other essays in the book, smoothing out some of the bumps that would be typical of an anthology.
The authors are all even-handed in their treatments and embrace business (albeit reformed visions of it) as an important institution to advance the common good. For the most part, they also exercise restraint in avoiding narrow prescriptions or establishing definitive models. Instead, they wisely call for the need for practical wisdom to live out theological ideals in the concrete realities of business.
As a Protestant trained in Social Ethics, I found the book to be ecumenical in spirit and tone. Reading it made me long for more shared dialogue among Christians from different traditions, as there are parallel conversations happening in Protestant circles. Content-wise, I would like to have seen more attention directed at obligations for the well-being of employees and the natural environment, but perhaps those are subjects of gatherings and/or volumes to come. This book succeeds in its aim and moves an important conversation forward. It is a rich and helpful resource to those looking for theological guidance on how business can serve the common good.