Abstract
This chapter defines moral capital in the general sense of capital, and discusses the basic characteristics and forms of moral capital. Furthermore, it stresses that moral capital is different from the traditional concept of capital which reflects or criticizes the capitalist social system and its economic relations as posited in Marx’s theories on political economics while the morality which is in scientific terms or meets the demand of the times has capitalist attributes when it exerts a spiritual influence on the formation and increment of value.
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Notes
- 1.
The systematical and complete interpretation of “moral capital” in my book Moral Capital in 2000 brought about the attention from academic circles on moral capital theory and provoked heated discussions during which, the author expounded the existing legitimacy and operating mode of moral capital by a series of theses and meanwhile answered the questions and doubts from other researchers. See Business Ethics in China Yearbook (2000–2013).
- 2.
Wang (1999b).
- 3.
Wang et al. (2005, Chaps. II, III and IV).
- 4.
Wang (1999b).
- 5.
Some people doubts whether the view that morality promotes profits advocates the materialization of morality. Actually the materialization of morality is a pseudo-concept. According to the fundamental ideas of modern natural science, the word “material” does not have a specific definition. What’s more, in different disciplines, especially in natural and social sciences, material is signified and described differently; but generally, it refers to a substance with given volume and weight. From the perspective of natural science, a material is composed of elementary particles like molecules, atoms, electrons and ions; while from the perspective of social science, according to historical materialism, material is a philosophical category which indicates objective reality with objective reality as its essential characteristic. It does not exist upon our feelings, but can be reflected by man’s brain. In this sense, the materialization of morality, or turning morality as a spiritual phenomenon into a material, is scientifically impossible. Moreover, materials of morality materialization fall into mixtures made from chemical materials, and morality as a spiritual phenomenon could never have chemical properties. Besides, materials always exist in certain states of matter, and all materials in the objective world, from huge ones like the universe and celestial bodies, to very tiny ones like molecules, atoms and electrons, vary a lot in their three basic states—solid, liquid and gaseous states, none of which can be directly converted from morality. In other words, any ‘field’ accessible to materials has nothing to do with morality. It can therefore be concluded that morality cannot be materialized, and it is impossible for morality to exist as a material. As for the oft-cited transformation from the spiritual (including moral spirits) to the material, this actually refers to the “externalization” (affecting the shapes and characteristics) of spirits into materials, or the “externalization” of moral spirit, which plays the role of guidance and restriction, into materials with moral attributes. For example, while red stoneware can be made into a teacup (teapot), however, neither the material nor the product can be transformed from morality. Besides, the shape, characteristics and quality of the teacup (teapot) are designed to meet the needs of man and society, and its practicability and durability are largely attributed to the producer’s moral concepts of caring for consumer needs and being responsible for consumers. In addition, the market share of the teacup (teapot) also often depends on the moral spirit contained therein, or its externalization degree of moral spirit. The profit-promoting function of the morality, which, through guidance and restriction, helps companies to obtain more benefits or profits, but does not suggest the materialization of morality. Some believe that the concept of moral capital will cause morality to fall victim to “instrumentalization”. Actually the “instrumentalization of morality” is a pseudo-proposition which is untenable. Therefore, the morality which is used as a tool to make money is nothing of the morality that accords with the demands of the times and pursues the good, instead, it follows the evil and is actually the pseudo-morality or even the wicked morality. Sacrificing morality for money is a temporarily abnormal phenomenon in particular social contexts. If morals are considered as the terms or means of trades, it means morality or conscience can be exchanged or transacted, which is of course unimaginable. People with common sense would never think like this. Moreover, studying and expounding the economic value of morality has no necessary logical relation with the instrumentalization of morality.
- 6.
My colleagues and I have, from different perspectives, defined “moral capital” as follows: 1. Moral capital means the morality that can be put into production and increase social wealth in the production process. 2. Moral capital refers to all symbols of ethical value which can, in the course of economic operations, help creating surplus value or new value mainly through customs, beliefs and social opinions, thus maintaining and increasing the value of economic goods. 3. Moral capital refers to morality’s ability to provide profitable productive services. 4. Moral capital refers to morality’s function as a tool to create profits or promote economic development. The above definitions, in most cases, all try to stress that morality, with the function of promoting man’s progress and harmonious interpersonal relationships, can help businesses achieve rational production and create more profits. Wang (2009b).
- 7.
It’s only a hypothesis for illustration. Man becomes “living labor” as long as he participates in production.
- 8.
This is the summary of the opinions of American economic ethicists made by Lu (1999, p. 46).
- 9.
Sison (2005, pp. 62–85).
- 10.
Schultz (1990, p. 71).
- 11.
As Sison said, “Without moral capital, capital in other forms is likely to turn from the advantages of a company into the source of its decline.” Sison (2005, p. 56).
- 12.
North (2002, p. 21).
- 13.
Paine (2004, pp. 25–26).
- 14.
In this case, “business operation” is understood in a wide sense, including various business operation and the entire processes thereof. In some sense, “business operations” are a synonym of economic activities.
- 15.
Moberg (2003, p. 195).
- 16.
Sison (2005, p. 121).
- 17.
Paine (2004, pp. 215–221).
- 18.
Sison (2005, p. 217).
- 19.
Wang (1999a, p. 67).
- 20.
Sison (2005, p. 28).
- 21.
Fukuyama (1998).
- 22.
Recommended case: Ping An Insurance (group) Company of China was established in Shekou, Shenzhen in 1988. As the first joint-stock insurance company in China, it has developed into a personal financial and life service conglomerate with insurance, banking and investment as its business pillars, with core financial business and internet finance developing side by side. Ping An has been listed on both the main board of the Stock Exchange of Hong Kong Limited and Shanghai Stock Exchange. The benefit of and cooperation with shareholders matter a lot in the development of Ping An, and corresponding communication channels have thus been built. 1. For shareholders, Ping An focuses on whether company's business grow stably and continuously; standardization and improvement of corporate governance; and whether risk prevention and internal control are effective. Corresponding communication channels include: General Meeting of Shareholders; annual/mid-year performance release/domestic and overseas roadshow; daily investment bank meeting/securities companies' strategy meeting; daily company research; and email/phone communication. 2. For clients, Ping An focuses on innovation in service channels and products; whether convenient and thoughtful service experience are available; whether financial services producing social benefits are provided; and whether financial services can make life better. Corresponding communication channels include: digitalization channels such as website, WeChat and apps; online financial and life services platforms; theme activities such as Fortune's Day and Car Owner's Day; 95511 service hotline; NPS and customer satisfaction surveys; various customer service activities; VIP service activities; and wealth and health management. For employees, Ping An focuses on healthy and positive working environment; convenient and efficient working channels; reasonable salary, benefits and benefit plans; personal development platforms and promotion potential development; and skill training and convenient training channels. Corresponding communication channels include: Kuai Le Ping An app, Cai Ku app, and Employee Representatives' Meeting; EAP platforms like employee training hotline “622111” and training email box; employee development interactive platform; O2O interactive learning platform, “Zhi Niao” mobile training platform and F2F training platform; TV-based morning gatherings, electronic internal magazines, intranet and internal emails; and performance management and communication mechanism. For society and environment, Ping An focuses on innovate internet technologies to reduce carbon footprint and protect environment; use of financial leverage to facilitate sustainable development of environment and society; and support to poor and vulnerable groups and participation in public welfare activities. Corresponding communication channels include: exploration into internet platforms and public welfare crowd funding; community service activities; internal and external volunteer organizations; mobile public platforms including microblog, WeChat and apps; communication with NGOs through regular visits, telephone conferences and emails; and crossover cooperation and resources utilization. For partners, Ping An focuses on team building and capability improvement for agents; increase of partners' operational efficiency and profitability; and establishment of long-term and stable partnerships. Corresponding communication channels include: talent training programs and SAT communication channels; cooperation with banking, medical care and real estate industries, and open, transparent and fair procurement; 1 Qianbao partners and Lufax's financial asset trading platform; and business communication and comprehensive assessment platforms. (Resource: http://about.pingan.com/index.shtml).
- 23.
Collected Works of Karl Marx and Friedrich Engels (1995, p. 247).
- 24.
Wang (2009a).
- 25.
For the concept of rationality, different disciplines and schools have different definition. In my view, “real rationality”, as quoted by Koslowski from Blaise Pascal, “it needs the tact of geometry and also the skills of wisdom” ( See Koslowski 1997, p. 6). That is, the development of rationality needs both calculation and wisdom, and morality is the ultimate component. Or to say, rationality shall be understood from both economic and ethical perspectives.
- 26.
Sison (2005, p. 41).
- 27.
Sun Tzu. Art of War.
- 28.
Wen Jiabao. Sep. 28, 2008. Q&A at World Economic Forum. People’s Daily.
- 29.
Actually, proprietors with a high level of moral consciousness tend to create profits faster. Adam Smith says that those having money to lend are willing to lend money to moral and honest people, for their money is much safer in the hands of honest people. Smith (2009, p. 267).
- 30.
Sison (2005, p. 50).
- 31.
In this case, the “break-neck leap” by Marx means commodities need to be sold to realize their value. Actually, moral capital in all forms is finally embodied in moral products, which will be meaningless without the “leap”. In this sense, I call the manufacturing of moral capital as “a key leap” of moral capital in the production sphere.
- 32.
Wang (2000b).
- 33.
Paine (2004, pp. 3, 7).
- 34.
In this case, “human needs” refer to the physiological, psychological and social needs of man.
- 35.
Wang (2000a).
- 36.
Li (1995, p. 3).
- 37.
In this case, institutions are understood at the macro-level, meso-level and micro-level, and do not only mean basic social institution at the macro-level.
- 38.
Wang (2011).
- 39.
“Capital in general” means that capital create new profits and benefits, or increase value in production process. In other words, capital, no matter in what form, has the function of creasing value, which is the common nature of capital, or capital in general. Marx said that “Capital in general is the common regulations shared by different kinds of capital, or regulations which make a certain amount of value capital.” Collected Works of Karl Marx and Friedrich Engels (1979, p. 444).
- 40.
“Particular capital” means in the capitalist society, surplus value created by capital is expropriated by capitalists, which shows the nature of capitalism where wage labor is exploited by capital.
- 41.
Luo (1998).
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Wang, X. (2018). What Is Moral Capital?. In: The Theory of Moral Capital. Springer, Singapore. https://doi.org/10.1007/978-981-13-0478-1_3
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