CSR - the Cuckoo’s Egg in the Business Ethics Nest
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Corporate/collective moral responsibility is a thorny topic in business ethics and this paper argues that this is due a number of unacknowledged and connected epistemic issues. Firstly, CSR, Corporate Citizenship and many other research streams that are based on the assumption of collective and/or corporate moral responsibility are not compatible with Kantian ethics, consequentialism, or virtue ethics because corporate/collective responsibility violates the axioms and central hypotheses of these research programmes. Secondly, in the absence of a sound theoretical moral philosophical foundation, business ethicists have based their ideas on legal and political epistemologies, yet still claim to be ethics-based. Thirdly, research is often driven by an intention to prove that a specific social goal is right, not by open and critical inquiry. Finally, today, corporate/collective moral responsibility is widely accepted as the Truth as most researchers are unaware of any issues because they are untrained in philosophy. The paper identifies the confusion about the epistemic basis as a major impediment for delivering a thick concept of the role of corporations as moral agents. Thus, the paper does not argue against corporate or collective agency as such, but points out an obvious but forgotten paradox: corporate and collective personhood cannot, at the moment at least, be epistemologically grounded in the field in which business ethics claims to operate: moral philosophy.
KeywordsCollective moral responsibility Corporate moral responsibility Epistemology Humanism Milton Friedman
Reflection is an important concept in academia: it is an understanding of one’s own position on important questions and an understanding where this position is situated vis-a-vis the reference community. It is therefore astonishing that, over time, academics, especially in business and economics, have side-lined reflection. The philosophy of science, also known as epistemology, is the academic discipline that gives scientists the structures and language to reflect on where they stand with regard to the important questions. Yet, doctoral programmes in business are devoid of classes on epistemology (Huehn 2016); and business ethics, founded by moral philosophers as a strand within applied ethics (Seele 2018), is now populated with researchers and teachers who lack the epistemic and theoretical basics in moral philosophy. The result is that business ethicists believe their teaching and research focus to be in critical thinking (Seele 2016), albeit unreflected critical thinking. In this essay, I will describe the results of this 40-year development by looking at the most important axiom of the most important research programme (CSR) within business ethics: collective/corporate ethical responsibility.1
The debate in business ethics about collective responsibility is a strange one: it is the big white elephant in the room that most of time is studiously ignored by a mainstream that is not prepared to have a debate about whether or not collectives have a moral responsibility separate from that of the individuals that make up the collective (Hasnas 2017: 90). What is more, most young CSR scholars are not even aware that collective or corporate responsibility is a contested issue. On the rare occasions when the issue is debated, both sides throw arguments at each other that are often mismatched. Why is that? I will argue that there are two main, and a number of smaller, reasons for this inability to communicate. First, epistemology plays no role in structuring the conversation, and the mainstream has subjugated the philosophy of science (often mistaken for metaphysics2) to the goal of their scientific labour (social justice, limiting the power of corporations). That these problems afflict the scientific discourse in business ethics (and not so much in philosophy in general) is not a coincidence. Starting 100 years ago, economists made epistemology a non-topic. And by the 1950s, Milton Friedman (1953) in his collection of Essays in Positive Economics managed to completely free economists from reflecting on what they are doing.
Today, doctors of philosophy in economics are no longer trained in the philosophy of science or in any philosophy for that matter (Huehn 2016). Friedman’s goal was socio-political: to defend individual freedom from socialism. Socialism, Friedman believed, was automatically present in all social sciences that dealt with values. The only epistemic school of thought that allows scientists to build a hypothetico-deductive world free of values (and thus humans) is positivism. The Essays in Positive Economics and his famous 1970 New York Times Magazine piece on how a manager’s only responsibility is to make money for the shareholders are based on the same epistemic approach: positivism. What is more, if one follows Deirdre McCloskey’s reasoning, 160 years before, Adam Smith’s immediate successors used exactly the same tactic on Smith’s value-based economics for the very same reasons.
As I will explain, epistemology without values is empty and a moral philosophical debate without (epistemic) values is an oxymoron. I will also show that the collectivist mainstream in business ethics has followed a very similar path and is almost uniformly positivist in outlook.
Epistemology and Economics
The philosophy of science is a field that saw tremendous intellectual growth between the 1920 and the 1980s. Since then it has been neglected and economic philosophers of science like Mark Blaug (1992, 2002), Uskali Mäki (2002, 2003, 2009, 2014), and Rona and Zsolnai (2018) despair over the primitive methods employed in the business field (Hühn 2017). Moldoveanu and Martin (2008: 91) decry the unwillingness and inability to ask higher order questions: no “Why” questions, only “How” (much) questions are asked by business scholars, they say.
Epistemology asks questions about knowledge: How is and how should knowledge be created (are there rules)? What is knowledge? Are there qualitative differences between knowledge (Truth and truths)? For the purposes of this essay, and in line with Mäki and Blaug (he didn’t write about constructivism), I claim that there are five different schools of thought in the philosophy of science: positivism, naive falsificationism, sophisticated falsicationism, historicism, and constructivism. The first two are very similar and the latter three are also closely related, and I will briefly explain them below in order to set the stage for my discussion of collective responsibility.
Positivism holds that only what one experiences with the senses is what is real. With the help of factual evidence theories can be proven. Thus positivists assume the existence of one Truth that can be established and subsequently cannot be doubted. This has always been considered problematic as facts are sometimes elusive and change over time (earth was flat, now it is round; electrons were little balls circling a nuclear core, now they are just a massless cloud). In the late 1920s, Karl Raimund Popper (1934) not only formulated a coherent critique of positivism but also offered what he saw as the opposite concept: falsificationism.
To Popper, positivism was not science, but the opposite thereof because it uses “mythical” inductivist logic and not deductivist logic. His swan metaphor explaining the modus ponens / modus tollens argument became instantly famous and convinced many scientists. It is illogical to affirm the consequent by having a hypothesis that says, all swans are white, therefore the next swan I will see is white. Instead, a hypothesis/theory needs to give the conditions under which the scientist is prepared to accept that it has been falsified: denying the consequent is the only logical way to practice science. His stated goal was to find a demarcation criterion between science and non-science and to him it was the theoretical falsifiability in an intersubjective experiment or through observation.
Popper quickly enlarged the list of criteria that scientists had to follow in order to be deemed scientists, because a single failed experiment is very rarely accepted as the conclusive refutation of a theory. Using the swan logic, a theory cannot be proven by observing millions of white swans and it cannot be falsified by observing one black swan because it may have been an abnormal duck, or a dirty swan or one dyed by a hostile scientist. Popper’s naive falsificationism was not welcomed with open arms because it was prescriptive in nature and it did not really provide scientists with what Popper had promised in the beginning: a single hard criterion for what science was, and a clear method for producing it.
Instead, Popper had to invoke “academic decency” and a host of other criteria. His approach was delivered, what many considered, a deadly blow by two mathematicians in the form of the Duhem Quine Thesis. Pierre Duhem and Willard Quine argued that Popper was nothing but a reformed positivist himself since he assumed that facts cannot prove a hypothesis but the very same facts can disprove it. Popper, they said, naively assumed that facts are mini-Truths, and did not see that facts are theories themselves, or are at the very least theory-dependent phenomena and not discoverable nuomena. This opened a Pandora’s box in the philosophy of science because the one true demarcation criterion, cold hard facts, was gone.
Popper’s student, Imre Lakatos tried to save Popper’s basic approach by mixing in Kuhnian ideas and created the Method of Scientific Research Programs (MSRP). Lakatos (1976) acknowledged that theories, he called them research programmes, are integrated but constructed from different hypotheses/assumptions. He split the hypotheses up into core hypotheses (the axiomatic base that all members of the research programme subscribe to) that are protected by a belt of less important theories, the auxiliary hypotheses. Auxiliary hypotheses can be exchanged when they are refuted, but the replacements must enlarge the range of phenomena the research programme covers or enhance the predictive power of the research programme. A positive problem shift is the sign of a growing and healthy research programme, a negative problem shift that of a decaying one.
Thus, Lakatos’ and Kuhn’s ideas are very similar. While in Kuhn’s theory a paradigm3 was voted out by the majority of scientists, Lakatos still had some (weak) suggestions as to what research programme or paradigm was superior and should be voted out. Both acknowledged that facts are theory-laden and therefore open to interpretation by the community of scientists: science had become a social undertaking and, suddenly, debating was at the centre of both models and the conditio sine qua non for science.
A very important part of Kuhn’s paradigm concept was the so-called gestalt switch: the individual scientist either believes in paradigm A or paradigm B; the switch from one to the other is abrupt, which implies that no scientist can believe in both because the hardcore hypotheses are incommensurable. The gestalt encompasses the whole research programme but it is held together by what Lakatos called the hardcore hypothesis/hypotheses. Directly connected to the paradigm incommensurability was Kuhn’s idea that debates between members of different research programmes were extremely difficult because of different beliefs and languages. Only within a paradigm could members converse easily because they used the same concepts and shared the same basic beliefs.
What I will argue is that collectivist ethicists are in two different paradigms without even knowing it, and that this has impeded progress in CSR tremendously. Moral philosophers usually fall into one of three approaches to ethics: virtue ethics, consequentialism or Kantianism. Attempts at mixing these paradigms are met with swift resistance. Claus Dierksmeier (2013), a Kant scholar, recently argued that Kant not only had a fully developed virtue ethics, but also that it was fully compatible with his deontology. Daryl Koehn (2014) responded swiftly, reminding readers of the “substantial and possibly irreconcilable differences” between proper Aristotelian and Kantian virtue ethics. What this episode shows is that paradigmatic purity is valued when it comes to the three approaches, except when we are dealing with collective/corporate responsibility. This is because business ethicists from all three research programmes are also members of the collective/corporate responsibility research programme that includes Corporate Social Responsibility and Corporate Citizenship, and are willing to sweep differences between the paradigms under the rug.
I argue that the three moral philosophical research programmes have hardcore hypotheses that not only do not support collective/corporate responsibility, but also expressly oppose it. What aggravates the situation is the fact that the collective responsibility research programme relies on extra-disciplinary theories in critical areas. I will show where in CSR and business ethics in general legal and political ideas are used to gloss over and plug major theoretical holes. Consequentially, not only is an inter-paradigmatic debate impossible, but the intra-paradigmatic debate is just as confused because it is in fact inter-paradigmatic as well. To use a simile: imagine a physicist using the concept “creation” in the biological sense of procreation and meaning it literally, with other physicists not even being aware that two particles producing a third particle does not involve creation of life. The difference between dead and living matter would go unacknowledged and the debate would consequently be nonsensical. This is what is happening on a daily basis in business ethics.
If business ethics wants to be an applied ethic it needs stick to the epistemic values, modes of inquiry and language games that the ethics research programme provides, and it needs to be clear which axiomatic base is used. Yet, instead of using the theoretical framework provided by either virtue ethics, Kantian ethics and/or consequentialism, it has used bits and pieces of all three paradigms, and political and legal concepts, and has created a patchwork research programme named Corporate Social Responsibility. The consequence is an unstructured debate. A recent reader on the topic brought together 10 scholars and let some argue in favour, and some against, collective responsibility. The editor starts his conclusion, “Individualist theories argue correctly for extensions of legal responsibility...” (Orts 2017: 206) How can a moral philosopher argue “correctly” with legal arguments?
Collectivists mix arguments and language from three moral philosophical paradigms, and add concepts from politics, sociology and jurisprudence. To use a Lakatosian framework, the result is a purportedly ethical research programme that is not based on moral philosophical theory and whose hardcore hypotheses are from political science and legal theory.
CSR seems to be open to any researcher who supports the goal of business ethics as stated by Schudt’s (2000): Taming the corporate monster. However, CSR claims to be an applied moral philosophy (business ethics), despite its hardcore hypothesis being rejected by ethics theory. This major epistemic flaw is papered over by its great economic success. CSR is a booming industry for academics and practitioners alike; there are many opportunities to make a career, even for the majority of researchers who have no training and no interest in moral philosophy (Seele 2016, 2018, Huehn 2016). By claiming to be an applied moral philosophy when its epistemic base is not, CSR prevents its growth towards a thick concept and is just getting wider. This aggravates the situation. It has become difficult to delineate the borders of CSR as even supporters of the collectivist view admit (Carroll 1999): anything can be CSR (if it supports certain goals). In this paper, I suggest that in order to have a meaningful debate that does not cover the same ground again and again, it is important to define the research programme by more than just a socio-political goal.
Thus, the contribution of this paper is not a complete review of the arguments for and against collective/corporate responsibility. This is impossible within a short (or even a long) paper, and even the landmark book by David Rönnegard (2015) had to leave out aspects (for instance, practical arguments against collective responsibility). The intended contribution is to offer a new angle, the epistemic view, on the issue so that researchers can identify their axiomatic bases and make an informed decision about how to contribute to the development of an ethical theory of corporate social responsibility. Secondly, the paper argues that the members of the research programme have dropped philosophical rigour and honesty in favour of promoting a socio-political goal. Whenever inquiry is limited to supporting a goal, the quality of debate suffers because science is in danger of becoming ideological.
Collective and Corporate Responsibility
It is well-known phenomenon that when even conscientious, mindful and responsible individuals comes together, there is a possibility that individual responsibility may altogether disappear (Zimmerman 1985). Who has not been in a situation where a group of people unwittingly blocks the entire width of the pavement, and are even slightly affronted if one wants to pass them? This seems to be the starting point for Manuel Velasquez’s work (1983, 2003). He very forcefully, albeit with very different arguments than I (he focuses on practice, I focus on theory), tried to “debunk corporate moral responsibility” partly because “in at least some such cases no member of the corporation is responsible for what the organization has done” (2003: 535). If one takes the mainstream business ethics argument seriously, in reality it leads to a clearly unethical situation where unethical actions of individuals have no consequences for those individuals. Velasquez’ contribution was one of the last published in a major business ethics journal, but I agree with him that this topic is too important to not be debated.
Velasquez, the applied ethicists, and Lewis, the more theoretically inclined moral philosopher, put forward what I like to call the Anscombe Argument: this is ethics without values and therefore anti-ethical (1958). It is maybe the heaviest accusation there is in moral philosophy.4
"If I were asked to put forward an ethical principle which I considered to be especially certain, it would be that no one can be responsible, in the properly ethical sense, for the conduct of another. [...] For if we believe that responsibility is literally shared, it becomes very hard to maintain that there are any properly moral distinctions to be drawn between one course of action and another. All will be equally good, or equally evil, as the case may be."
Where does this disconnect between the mainstream in business ethics and in ethics come from? One source may be the normal divide between an applied ethic and the more foundational ethical theories, but I think the more relevant reason for the disconnect is that all social sciences have gradually become more ideological, more political and have sacrificed epistemology: the goal is considered to be good (to reign in especially large corporations’ power) so let us not talk too much about the structure of our theory (Hühn 2015; 2016). Velasquez and Lewis point to the danger in this sort of thinking where the ethical end justifies the use of any epistemic atrocity: if the theoretical foundations of a research programme are a “mess” that nobody understands, the research programme might run into serious problems. To be sure, theories and actions should be connected, but if the intended actions determine the illogical and incomplete structure of the underlying theories, we should expect problems in both actions and theorising.
All scientific theories rest on axioms and most axioms contain values. In the social sciences in particular it is impossible to not have value statements in the axioms. Even economics, a purportedly ‘positive’ and thus value-free science, has values in its axioms: man is (should be) always radically selfish. Thus, I am not criticising the fact that all approaches to business ethics contain in their axiomatic base values such as social justice, equality etc. What I am pointing out is that it is epistemologically problematic to consider business ethics to be part of moral philosophy when the methods of inquiry and explanation employed are unclear and almost exclusively from outside the field of ethics. Not only are the resulting theories ‘thin’ and inconsistent, but progress is also seriously hampered, and practice negatively affected.
By 2007, Copp responds to critics of collective moral responsibility in an even more abrupt fashion: “I rely on the common sense idea that history reveals many examples of collective action.” These undefended leaps of faith from legal to ethical logic and from goal to theory have negative consequences; one of them is that the scientific debate grinds to a halt at the very start. If the individualist side does not accept a leap of faith, they are considered unethical because they are not unquestioningly supportive of the ethical goal of the research programme. Yet, questioning is how scientific progress happens and if questioning is not allowed, research programmes become thin ideologies. Just like very few economists are aware that the homo economicus axiom is an ethical statement and instead believe this axiom to be the unquestionable Truth (Rona and Zsolnai 2018), very few business ethics scholars understand that they mistake the ethical for the political and legal and thus view collective moral responsibility as the Truth. Science is, according to Blaug (1992, 42) “the only self-questioning and self-correcting ideological system man has ever devised.” By his definition CSR is, at least in part, not a science any longer.
"Because a corporation is not a self-sufficient agent, Copp (1979: 185) points out it cannot be a self-sufficient moral agent [...] after noting that a collective is not a moral agent, and that moral attributes do not automatically transfer across constitution relation, Copp goes on to assume (simply and without argument) that the actions of a collective can still be morally obligated."
Ethics Theory and Collective Responsibility
And this individual focus of ethics has thousands of years of history for a very good reason: it is simply more real than the counter-position. Once again, Downie (1969: 66) makes this point very succinctly:
"The bearer of responsibility is individuals, because that is all there is - nothing else can literally be the bearer of full responsibility. [...] To begin with, there is what is presumably a metaphysical issue about the being of groups. Some may think this is not a real issue, but one that is relevant to politics and morals. I do not. If it is a real issue, it is an issue in the philosophy of science, or pure metaphysics, but not morals. The question for morals is always and fundamentally cast in individual terms: what is this, that, or the other person to do." (2002: 179-180; my emphasis).
This is, in a nutshell, the argument of moral philosophers against collective responsibility: we do not need it, and it is epistemically flawed.
"I wish to argue, for the theses that the actions and non-moral responsibilities of some collectives are not analysable in terms of those of its members; but that if a collective is morally responsible for something it does, its moral responsibility is analysable in terms of the moral responsibilities of individuals, including some who may not at a give time be members of the collective."
András Szigeti (2015) also laments the absence of a debate on this very important topic and the paper’s title gives voice to his frustration: “Why Change the Subject? On Collective Epistemic Agency”. And the change of subject has been very successful. Michael Phillips (1992) in a paper in the Business Ethics Quarterly explains how “the three conceptions of the corporation” make the case for corporate personhood. A purely legal view in an ethics journal!
"In the mid-1960s and 1970s the field of business ethics saw a basic shift in emphasis from personal responsibility to corporate responsibility [...] the notion of corporate responsibility has come to be a dominant concept in the field of business ethics since that time".
I propose that the reasons why there is such a wide consensus for avoiding the topic can be found in political convictions rather than philosophical analysis. Just like Milton Friedman (1953) pushed completely absurd axioms for economics (the F-Twist being the crassest example) because he regarded the social justice agenda as a surrogate for communism, many eminent business ethics scholars view the ideology of economism (Huehn 2008) as inherently evil and believe that the only way to fight its extreme individualism is to push the opposite: decisive collectivism. The ethical end justifies the unscientific means and, as a consequence, a very necessary open academic debate does not happen.
One of the unintended consequences of not firmly grounding the debate about corporate person in ethical theory is that is has kept Friedman’s (1953, 1970) epistemologically absurd position (business has nothing to do with values) alive. His individualist stance on moral responsibility is supported by the vast majority of moral philosophers and the general public’s moral instincts, while the business ethicists have manoeuvred themselves into an epistemic corner where they are forced to argue against their own guild. The result is that Friedman’s fundamentally immoral argument (Ghoshal 2005) cannot be countered by business ethicists with moral philosophical arguments. Business ethicists employ political arguments, essentially validating Friedman’s accusation that CSR is driven by a political agenda and not by ethics theory. I suggest that to rectify this very unfortunate situation, should be reason enough to again look at the moral philosophical foundations of corporate moral responsibility. But there are many more problems.
For instance, the fact that business ethics education rests on teaching the “Holy Trinity” (Wankel and DeFillippi 2002: 225): Kantian ethics, consequentialism, and virtue ethics, which are individualist, while the arguably most important business ethics research programmes (CSR, Corporate Citizenship) all rest on the assumption of collective moral responsibility. This creates a strange situation in business ethics classes, as they are generally constructed as critical thinking classes (Seele 2018). Seumus Miller (2007: 390; my emphasis) explains where this lacuna comes from: “I take it that the notion of moral responsibility in play here is pre-theoretic in character; no particular theory of moral responsibility is being presupposed”. So in business ethics classes, when it comes to CSR etc., ethics theory is not employed. Thus, in business ethics classrooms, instead of questioning theories, students are trained to be uncritical of the foundational idea that corporations have moral personhood. I find this troubling and believe that this is another very good reason to get our theoretic house in order.
To make the argument that virtue ethics, which is based on the character of the individual, and is even more individualist and inward-looking than the two Enlightenment theories, seems even more difficult.
"Enlightenment is man's emergence from his self-imposed nonage. Nonage is the inability to use one's own understanding without another's guidance. This nonage is self-imposed if its cause lies not in lack of understanding but in indecision and lack of courage to use one's own mind without another's guidance. Sapere aude! "Have the courage to use your own understanding," is therefore the motto of the enlightenment." (Kant 1784).
The following remarks are not meant to explain all the finer points of the collectivists’ argument, but rather to explain the general logic and critique it from an epistemic angle.
The arguably two most important contributions to the collectivist school of thought are those by Philip Pettit and Peter French. Both are philosophers, but both have two different fields of special expertise. Pettit is the Rockefeller Professor of Politics and Human Values, and French’s university website describes him as having “an international reputation in ethical and legal theory”. In the late 1970s and early 1980, management scholarship starting applying different theoretical lenses (politics, psychology, sociology, etc) to management theory. Famous contributions were Bolman and Deal’s (1984) Reframing Organizations and Gareth Morgan’s (1986) Images of Organization. Since business policy is the old name for strategy (it was still in use then), Ed Freeman’s applying political theory to management was not a radical step; especially since Henry Mintzberg had already published two books on the subject (1979, Mintzberg 1983). Freeman was probably surprised that his political view of strategy served the business ethics community as a stepping-stone into mainstream management. But that is exactly what happened. Since then, business ethics has based its arguments in favour of corporate moral agency on either political or legal grounds or a combination thereof.
French also shares this mindset that seems more in line with social activism than philosophical scholarship, and that creates a rather ideological dichotomy: if you are against any part of our theory you are on the dark side because you endanger our political goal and your arguments are “glib”, whereas our goal is good and therefore we “discern the true contours” or reality. The absolute truth claim (there are true contours of reality, we have discovered them) is typical for a positivist approach to epistemology as Huhn (2005: 300) explains: “[To the positivist t] he truth is a structured surface and the scientist – like a blacksmith – uses his intellect (hammer) to beat a metal sheet (theory) into such a shape that it follows the contours of the structured surface. The closer the metal is to the surface the closer the theory is to the truth.”
"...one reason why it is important to recognize the reality of group agents is that this lets us discern the true contours of the moral and political world we inhabit [...] Swaddled in glib conviction that the only social agents are individual human beings, we can look right through the organizational structures that scaffold group agency and not see anything there. We can live in an illusionary world in which comforting mantras of individualist thought make corporate power invisible."
Hasnas’ prose is very sharp and points not only to the tautological character of Pettit’s argument, but demonstrates how it starts with the conclusion. As is typical for positivists (Popper 1934), the antecedent is affirmed and declared unassailable. Scientific debate is normally based on either putting an observation up for debate (“are firms?”) or asking something (“should and can they?”), whereas here the should is, to use a Popperian term, a moral “immunising stratagem” at the base of the research programme. In effect, what the collectivists have done is to locate their research programme within moral philosophy based almost solely on having a value-rich axiom that doubles as a political and social goal, but without taking recourse to the methods and concepts of moral philosophy.
"The strongest argument for the conclusion that corporations should be held morally responsible for their actions has been advanced by Philip Pettit. Pettit's argument proceeds in two steps: arguing first that corporations are fit to be held morally responsible, and second that, given this fitness, they should be."
Some prominent scholars, among them Thomas Donaldson and Patricia Werhane (Hasnas 2012: 184) seem to be uncomfortable with this exercise in “scientific marketing”. Werhane, for instance, tries to support the political goal of CSR, without supporting the theory of corporate moral responsibility unconditionally. Lampert (2016: 95) argues that corporate responsibility advocates the conflation of corporate moral responsibility and corporate legal responsibility, and believes that to be unproblematic. Yet, as Rönnegard (2015), Koehn (2017), and Ciepley (2017) point out, today’s firms are not anymore chartered by the State (to serve the public good) and the “implicit contract” is very different from the old “explicit contract” (Lampert 2016: 95). Werhane (1985) is aware of this epistemic hole and Lampert writes, “This is why Patricia Werhane, though largely sympathetic to social contract theory, is yet led to caution us, ‘The theory assumes that corporations are moral agents, but it is less clear as to what this agency entails’ (1985: 46)”. Patricia Werhane has always had a strong interest in history and epistemology, and I interpret her caution to mean that ethics is about human action and, if ideas or legal constructs are reified, this construct might turn out to be a deus ex machina that turns on business ethics and destroys it from within.
There is a structure for any science, and the logical structure for ethics I propose is: epistemic beliefs --- > epistemology--- > moral philosophy (with three research programmes virtue ethics, deontology, consequentialism)--- > legal philosophy--- > law. Pettit, List, and French disregard that structure and thereby prevent meaningful dialogue and hinder scientific progress. Let us now take a brief look at Pettit’s and French’s legal theories of ethics.
List Pettit’s Legal Argument for Collective Moral Agency
That is clearly not much of a debate. But for collectivists, legal theory is just a welcome launch pad for their arguments as they have set their sights much higher: “What is needed is a Reality Theory that identifies a de facto metaphysical persona not just a sociological one.” This is an interesting statement in many regards as French acknowledges that neither legal nor sociological theory is enough for giving personhood to corporations: a ‘metaphysical’ logic must be found. Before we look into this metaphysical argument, I would like to point out how brazen the collectivists argue in order to cover obvious shortcomings. Just one page later, French starts a new part of his paper like this:
"The primary difference between the Fiction and Reality Theories, that one treats the corporate persons as de jure and the other as de facto, however, turns out to be of no real importance in regard to the issue of moral personhood of a corporation."
Biological existence is not necessary for the existence of personhood? The two Enlightenment approaches to ethics and virtue ethics are based on “rational sentient beings” and, unless “being” does not necessitate a living human being, French has just generously thrown out the foundational axioms of two major approaches to ethics in a half sentence in brackets. Then, “Inclusive neutral definition of a moral person” sounds very much like an emotivist rhetorical concept to me. Any concept that claims inclusiveness deserves critical appraisal simply because definitions are about excluding, about defining borders between different phenomena and nuomena. But maybe the inclusive is meant more to add a warm social connotation to what follows so that it is acceptable to those only superficially interested in moral philosophy and more interested in the social goal? And what follows is a “neutral moral person”; a contradiction in terms if there ever was one. Depersonalising morality and making ethics “neutral” seems to be equivalent to arguing for ethical amorality.
"Two helpful lessons however, are learned from an investigation of the legal personhood of corporations: (1) biological existence is not essentially associated with the concept of a person (only the fallacious Aggregate Theory depends upon the reduction to biological referents) and (2) a paradigm for the form of an inclusive neutral definition of a moral person is provided: "a subject of a right".
In other words, metaphysics does not help either side because it can be, and is being, used by both collectivists and individualists to argue for and against any given point. But what invoking metaphysical arguments does is to give the arguments respectability and weight. Again, I am not saying that this is necessarily bad, but that what I believe to be wrong is to try to plug holes in one’s ethics theory framework with completely arbitrary metaphysical arguments: business ethics must be also based on ethical theory. As Dewey (1926: 669–673) points out, whether a party argues for or against corporate personhood is fully dependent on the political intentions of the authors. But the collectivists have legal precedence and the political megatrend on their side, and this has allowed them to advance their cause by muddying the epistemic waters, and maybe even becoming muddled themselves: “Unfortunately, the human mind tends toward fusion rather than discrimination, and the result is confusion” (Dewey 1926: 670).
"The fact of the case is that there is no clear-cut line, logical or practical, through the different theories which have been advanced in behalf of the 'real' personality of either "natural' or associated persons. Each theory has been used to serve the same ends, and each has been used to serve opposing ends."
This very much sounds as if French is affirming the consequent in a classical tautological equivalence. And indeed, in the next chapter, he simply asserts that individuals that have entered responsibility relationships are members of a “moral community” (211). How does one enter a moral community “through promises, contracts, compacts, hirings, assignments, appointments, by agreeing to enter a Rawlsian original position, etc.”? This is pure rhetoric, as French equates agreements between two individuals and between individuals and groups. I think social psychologists and anthropologists would disagree on epistemic grounds.
"No special arrangement needs to be established between parties for anyone to hold someone morally responsible for his acts or, what amounts to the same thing, every person is a party to a responsibility relationship with all other persons as regards the doing or refraining from doing certain acts" (211).
What is more, French is disarmingly honest and says the “CID Structure works [a] miracle”“(212).7 How does it perform this miracle? Organisational theorists will recognise the basic elements of French’s argument from uncounted definitions of what an organisation is. For instance, Argyris and Schön (1996: 8) define the difference between a mob and an agency through defining criteria that the latter fulfills:
"...is not accomplished if attributing intentions to a corporation is only a shorthand way of attributing intentions to the biological persons who comprise e.g. its board of directors. If that were to turn out to be the case then on metaphysical if not logical grounds there would no way to distinguish between corporations and mobs. I shall argue, however, that a Corporation's Internal Decision Structure (its CID Structure) is the requisite rediscription device that licences the predication of corporate intentionality." (French 1979: 211)
Argyris & Schön (1996: 9), however, are very clear that this is a political process:
"(1) devise agreed-upon procedures for making decisions in the name of the collectivity, (2) delegate to individuals the authority to act for the collectivity, and (3) set boundaries between the collectivity and the rest of the world.”
Their model of organisational learning is based on the individual learning and it is only via the individual that the organization is learning. They are very careful not to turn the individual into a de-individualised construct. In fact, they argue that it is only through deviant individual actions that the organisation learns. French, like all collectivists, destroys the individual and with it the very concept of responsibility: simply because one is employed by an organisation, one must be responsible for all of its actions. If that were not the case, one would have to decide on a case-by-case basis whether and how much responsibility can and should be assigned to an individual.
"When the members of the mob become an identifiable vehicle for collective decision and action, they become, in the ancient Greek sense of the term, a polis. Before an organization can be anything else, it must be "political," because it is as a political entity that the collectivity can take organizational action."
Thus, French’s CID Structure is very old wine (organisational structure) packaged in old bottles (organisational structure as the primary decision-making mechanism) with new labels (“CIDS”). At least since Max Weber argued that rational-legal authority creates a bureaucracy (a term used for all modern organisations until the late 1980s), organisation theory has taken this politico-legal stance on decision-making. The organisation’s structure is the primary means through which any organisation structures it collective decision-making. French picked up this very basic idea, dropped the all-important notion of the hierarchy, and simply postulated it to be grounded in ethics. It is also interesting to note that Weber feared that the very same structures that French uses to give the corporation a personality would “dehumanize” (1946: 215) it and destroy the soul in every individual (1909: 127).
French’s and Pettit’s ideas were met with open arms because they allow business ethicists to more robustly and generously apportion moral responsibility to (especially large) companies. I would argue that this is a morally very dangerous course. Morality requires us to look closer at what really happened in every single case and not simply amalgamate individuals into an amorphous mass that has been declared to be a “moral community”. The categories in which we argue should be connected to the categories in which we think as the languages of different categories are different. If business ethics wants to argue the twin case for corporate moral responsibility and corporate personhood, it must do so in the language of ethics. That can include freer forms of language like metaphors, but it cannot solely rest on metaphors, and that is essentially what the collectivist approach boils down to.
Let me repeat my main argument again, before drawing some conclusions for collective responsibility research. Business ethics scholarship has been driven by a politico-legal goal of protecting society from powerful actors and has cast epistemic considerations aside. Matt Teichman (2014) summarises a podcast by Pettit, saying that “Pettit argues that [...] we more or less have to assume that corporations can be held responsible”. Scholarship in this view is in the service of fulfilling a political goal: the theory must be adapted so that it proves the goal. How that goal is achieved does not matter: if theories (virtue ethics, deontology, consequentialism) have to be twisted out of recognition, so be it.
At least two things helped this type of goal-oriented scholarship: protecting the less powerful from soulless corporations (a worthy goal that most people can subscribe to), and the complete openness of the CSR research programme, whose vast majority of scholars have no training in moral philosophy. As a result, the members of the research programme fill concepts like virtue, duty, responsibility, respect etc. with whatever they wish. The situation is aggravated by the fact that many participants are not even trained in legal or political philosophy, let alone in the philosophy of science. Consequentially, the debate in the research programme is like a concert in which there is no audience but thousands of bands playing all sorts of instruments in all sorts of genres.
Kuhn’s inter-paradigm incommensurability is an intra-paradigm incommensurability. In the already mentioned reader on firm moral responsibility, Kendy Hess (2017: 169) argues that there is consensus between individualists and collectivists concerning “that (1) the members of firms have moral obligations, even when acting as members; (2) firms themselves (the-members-acting -collectively) have moral obligations; and (3) a satisfactory account of the moral agency, obligation, and responsibility of firms must address both individualist and holist (extra individual) aspects of corporate practice.” I would argue that (1) is meaningless because it is so broad; (2) is firmly rejected by almost all individualists; and (3) is also rejected by many, for instance by Rönnegard and Velasquez (2017) and John Hasnas (2017) just a few pages later in the same reader. But the problems go beyond issues in communication.
As I have pointed out at the beginning of this paper, the collectivists have fallen into the trap that their arch-enemy, Milton Friedman laid, and here again, their total disregard for basic epistemic standards leads not only to inconsistency, but forces a conclusion on them that goes against that which they wanted to achieve.
"Therefore, corporations should have the right to vote only if they possess autonomy, normative judgment, and self-control. But these three capabilities are precisely the ones that the proponents of corporate moral agency claim that corporations do possess."
However, these theoretical problems can, for a time, be ignored if scholarly consensus considers them detrimental to the main thrust of the research programme, and if there are ample career opportunities. What cannot be ignored so easily are the practical problems or, more precisely, scholars’ responsibilities towards practice. And practical problems stemming from faulty theories are much more relevant in the human-centred sciences than in physics because of double hermeneutic: atoms do not care about a theory, whereas humans actually might change their behaviour because of a theory (Giddens 1984; Ghoshal 2005; Elster 2007). Moral philosophers in business ethics have a responsibility to have a sound theoretical base. Good intentions are simply not good enough or, sometimes, even dangerous for practice.
I would argue that for 60 years there has not only been much progress, but that things have also gotten more confused as ever more convoluted constructs have been grafted onto traditional ethics theory. In the collectivists’ world ‘the corporation’ can be “responsible when no corporate member is responsible” (Rönnegard and Velasquez 2017: 24), and uninvolved employees who were never involved nor contributed actively are morally responsible for a ‘corporation’s’ actions. Let us look at and examine some concrete examples where collective responsibility is the moral logic.
The moral argument for bombing German cities during WWII was that the German civilians living in these cities had collective responsibility for the actions of their government because they (the collective) had voted for the NSDAP. The last free elections in pre-war Germany were held in November 1932. The NSDAP won 33% of the votes. Yet, despite the fact that in the last 60 years the idea to assign collective responsibility to collectives (even future ones) has gained currency, the willingness for acting on that moral principle has actually decreased. Recently, very few argued that the city of Raqqa, the former capital of the Islamic State (IS), should be bombarded indiscriminately despite the fact that its inhabitants supported the IS by a large margin. Another example is the current rules of engagement for US troops in Afghanistan. These include that enemy combatants (i.e. terrorists, who are, unlike regular soldiers, not even protected by the Geneva Conventions) cannot be shot at if they stand in front of a civilian building. Finally, the Obama Administration refused to bomb the fuel trucks of the IS because the truck drivers working for the militant group were considered non-combatants.
It seems that the concept of collective responsibility is less accepted in practice than it was before, despite the idea having become part of the axioms of especially consequentialist philosophers. This is a very surprising conclusion. Why is that?
The answer that this paper developed is that we need to differentiate between the political, legal and the moral collective responsibility, and that the collectivists have not done that. The moral argument has not changed, what has changed is the political dialogue that leads to action. Now as then, moral reasoning refuses to accept the logic that individuals who have not contributed actively to a situation should be treated the same way as individuals who have, and that there is such a thing as moral responsibility of an idea. Politically, the situation has changed: the Nazis were viewed as an existential threat and there was a wide coalition that supported the bombing of German (and Japanese) cities to end the war sooner rather than later, and maybe also as retribution. Instead of clarifying an issue, philosophers have managed to muddy the waters even further.
Thus even Marxists, i.e. the philosophers of the collective, have a serious problem with obscuring real relationships by talking about groups of individuals, because it can lead to the dehumanisation of our theories and our actions. They differentiated between causal and moral responsibility. But like any other research programme in the social sciences, Marxism also decided to discard Lukacs’ admonition: his famous essay was not directed at the philosophers of capitalism, but at “vulgar Marxists”.
"Its basis is that a relation between people takes on the character of a thing and thus acquires a ‘phantom objectivity’, an autonomy that seems so strictly rational and all-embracing as to conceal every trace of its fundamental nature: the relation between people. It is beyond the scope of this essay to discuss the central importance of this problem for economics itself."
Where does this strong pull towards de-individualising ethical theory come from? What do “vulgar Marxists”, Chicago schoolers, Kantians, consequentialists and even some virtue ethicists have in common? This paper suggests that the scientification of philosophy has played a very important role: axioms, rules, laws, principles must be exceptionless to be considered scientific. One law for all. What many legal philosophers overlook is the fact that the law needs to be interpreted and applied to specific situations. That is a judge’s job. Even perfect laws have a wide margin. Aristotle’s admonition that “[i] t is the mark of an educated man to look for precision in each class of things just so far as the nature of the subject admits; it is evidently equally foolish to accept probable reasoning from a mathematician and to demand from a rhetorician scientific proofs” (NE I, 1094b.24) has been thrown over board in favour of being ‘scientific’.
Is it also foolish to expect research programmes like CSR or corporate citizenship to be firmly grounded in the discipline, moral philosophy, that they claim to be embedded in? Maybe, but before we know how much precision and consistency CSR is able to provide, we need to have a real academic debate about the topic and not change the topic at the first difficulty. This essay’s aim was only to provide arguments for re-starting this much needed conversation. I can see three possible solutions, however, only one is being worked on while the other two are mere possibilities. The first solution would be to acknowledge that one of the eggs in the business ethics nest has turned out to be a big, bold and beautiful bird very different from the others. However, that would mean that important research streams like CSR and Corporate Citizenship would not be able to claim descent from moral philosophy but acknowledge political and legal philosophy as their parent paradigms. This epistemologically clean solution, however, is difficult because it would cause the collectivists to lose the moral high ground in the entrenched political debate.
A more difficult solution would be to develop a new semi-independent ethic for collective responsibility that does not claim direct descent from one of the three ethical theories. Such a research programme has already been started by a small group of scholars. By putting human dignity, a concept that is central to all three approaches in the centre of their theorising, the humanistic management research programme may have been able to set an axiomatic base that is truly integrative. Dignity might be a very good bridge-builder, not only because it has been in use for thousands of years but also because it has a dual character: it is lodged in the individual and humanity as a whole (Melé 2016:41–42). Thus, a humanistic approach to business theory might the best approach to generate and structure a debate about the role of, and the relationship between, individuals and collectives. It is probably no coincidence that the debate is largely driven by philosophers.
In his What is ‘Humanistic’ about Humanistic Management? Claus Dierksmeier describes the epistemic dichotomy between traditional approaches and humanistic management as mechanistic vs. humanistic, and quantitative vs. qualitative, stating that “Human dignity has for centuries been the lodestar of humanistic ethics” (Dierksmeier 2016: 20) and suggesting that ambiguities about the understanding of what human dignity is disappear when freedom is assumed to be the basis for dignity. He draws on Kant to describe (qualitative) freedom as “moral autonomy” and argues that autonomy is not the atomistic autonomy of mainstream approaches, but rather that it is something that humans share. But Dierksmeier (2016: 15) is also very clear that the individual is at the centre of analysis. “On the methodological level, humanistic management theory therefore shifts from 3rd−person descriptions to 1st-person ascriptions, tracking the very attributes and values which people ascribe to themselves.” For Dierksmeier’s, Melé’s, and other humanistic management scholars’ attempt8 to give the old idea of humanism a new epistemic and moral grounding to be successful, the current scholarship would have to become interested in re-philosophising business research - no small feat, but well worth a try. However, the most likely (and least favourable) solution of the three, is that which lies somewhere in the middle; where the mixing, matching, and the “metaphysically” extending go on, albeit without the protagonists claiming to be the legitimate heirs to Aristotle, Kant or Mill. This might happen naturally, simply because new scholars are completely unaware on whose shoulders they stand.
There are two separate ideas about the source of collective responsibility that are often mixed or confused: firstly, the collective responsibility as the aggregate of the individuals’ responsibilities (collective responsibility), and secondly, the collective as a responsibility independent of the individuals’ aggregate responsibility, i.e. the idea that there is an additional moral agent, namely the corporation (corporate responsibility). A detailed discussion can be found in chapter 8 of Rönnegard (2015) or in Rönnegard and Velasquez (2017). I will argue that the three schools of moral philosophy support neither.
The philosophy of science / epistemology and metaphysics (and metametaphysics) are overlapping areas of philosophy. For the purposes of this paper I will assume that epistemology (and philosophy as science) is an applied metaphysics and that metaphysics is far less structured and far less concrete.
In the beginning, he called a paradigm “disciplinary matrix”, a term that while not becoming popular is very close to Lakatos’ research programme.
Bernard Williams (2006: 12) applies it to economic ethics, ethical egoism, and calls it an anti-ethic.
There are two separate ideas about source of collective responsibility that are often mixed or confused: firstly, the collective responsibility is the aggregate of the individuals’ responsibilities (collective responsibility), and secondly, the collective has a responsibility independent of the individuals’ aggregate responsibility, i.e. it is an additional moral agent (corporate responsibility). A detailed discussion is in chapter 8 of Rönnegard (2015) or in Rönnegard and Velasquez (2017). I will argue that the three ethics schools support neither.
I believe it is worth pointing out that Gierke wrote about Genossenschaften (co-operatives) a form of organisation that since its creation in the early nineteenth century had grown exponentially in Germany. In co-operatives the goals of the members and the organisation are far more integrated than in any other form of organisation and thus, it could be argued, comes close to Michael Bratman’s (1987, 1993) or Raimo Tuomela’s account (Tuomela 1993, 2000). A thorough discussion of both scholars’ theories comes to the conclusion that even under the special circumstances they “do not enable the legitimate attribution of moral responsibility to a collective whole” (Rönnegard 2015: 105).
I believe this is what many understand to stand ‘metaphysical’ for: providing leaps of faith and miracles.
Domenec Melé, in the same inaugural edition of the Humanistic Management Journal, echoes many of the same ideas as Dierksmeier and also highlights the dual epistemic character of human dignity: “all humans have a common nature, which gives us an essential equality. But, at the same time, each individual is unique” (Dierksmeier 2016: 42) Melé, a virtue ethicists and Dierksmeier, a Kantian, find a common epistemic value in human dignity.
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Conflict of Interest
The author declares that he has no conflict of interest.
Human and Animal Studies
This is an essay: it did not involve tests on humans or animals.
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