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A Kantian Theory of Capitalism

Published online by Cambridge University Press:  05 October 2020

Norman E. Bowie
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Extract

Some years ago Ed Freeman and William Evan wrote an article offering a Kantian stakeholder theory of corporate responsibility. Ed was kind enough to allow Tom Beauchamp and me to publish that previously unpublished piece in the second edition of Ethical Theory and Business. That article has appeared in every subsequent edition. But a Kantian theory of stakeholder relationships is not, I believe, a complete Kantian theory of the modem corporation. I believe Ed originally intended to expand that paper into a larger project but Ed’s philosophical interest in pragmatism has distanced him from Kantianism and his writings in stakeholder theory have gone in a different direction. Indeed in this postmodem feminist anti-foundationalist age, Kant is very much out of fashion. Since I am always out of fashion I had no trouble promising Ed I would complete the Kantian piece of the project. This essay is the condensed version and a partial fulfillment of my promise. A Kantian always keeps his promises.

Type
Section II
Information
Business Ethics Quarterly , Volume 8 , Issue S1: The Ruffin Series Special Issue No.1 , 1998 , pp. 37 - 60
Copyright
Copyright © Business Ethics Quarterly 1998

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References

Endnotes

1 This revised version of my 1994 Ruffin lecture owes significant debts to a large number of people. I received thoughtful comments from those attending the Ruffin lecture, as well as those attending the Society for Business Ethics meeting in Boston in December 1994. Unfortunately it is not always possible in those circumstances to remember who asked which question. I also discussed the ideas behind this paper on two occasions with my colleagues in the Department of Strategic Management and Organization—once in a department seminar and once in Larry Cummings’ research in organizational studies group. I have acknowledged the specific contributions that I can remember but I know this version has been enriched by some to whom I cannot give proper credit. Geoff Bell, a PhD student in the Carlson School and Bryan Frances, a PhD student in philosophy have provided written substantive and editorial comments. Richard DeGeorge, William Frederick, and Robert Frederick also provided considerable feedback. Finally I have benefitted by the exchange of views between Ed Hartman and one of my commentators, Andrew Wicks.

2 It should be noted, as Richard DeGeorge has reminded me, that Kant thought all three formulations of the categorical imperative are equivalent. Thus if an action violated one formulation, it violated the other two. In this essay I make no attempt to defend Kant's equivalence thesis.

3 However, Kirk Hart informs me that Kant was familiar with the work of Adam Smith.

4 Solomon, Robert C, Ethics and Excellence: Cooperation and Integrity in Business, (Oxford University Press, 1992).Google Scholar

5 The classic criticism in this regard is Lawrence Blum's Friendship, Altruism, and Morality. Two defenders of Kant are Marcia Baron, “The Alleged Repugnance of Acting from the Motive of Duty” Journal of Philosophy 81, 1984 pp. 197-220 and Hampton, Jean, “Rethinking Reason,” American Philosophical Quarterly 29 (1992) pp. 219–236Google Scholar.

6 Kant, Immanuel, Foundations of the Metaphysics of Morals 1785 (New York: Macmillan Publishing Company, 1990), p.38.Google Scholar

7 The ideas in these two works have been incorporated into several later papers including “International Business, A Universal Morality and the Challenge of Nationalism” in Business Ethics: Japan and the Global Economy, Thomas W. Dunfee and Yukimasa Nagayasu, eds. (Boston: Kluwer Academic Publishers, 1993), pp. 95-114 and “Economics and the Enlightenment” in Ethics and Economic Affairs, Alan Lewis and Karl-Erik Warneryd (eds.) (New York: Routledge, 1994).

8 Kant, op. cit., p.46.

9 Williamson, Oliver, “Corporate Governance,” Yale Law Journal, 93 (1984), pp. 1197–1230.CrossRefGoogle Scholar

10 Freeman, R Edward and Evan, William M, “Corporate Governance: A Stakeholder Interpretation,” The Journal of Behavioral Economics, 19 #4 (1990) pp. 357–359.Google Scholar

11 I have indebted to Bryan Frances for this point.

12 Kant, ImmanuelLectures on Ethics 1775 (New York: Harper Torch books, 1963), pp. 160-61.Google Scholar

13 Ibid., pp. 177, 181, 185.

14 Although admittedly Kant wants a job to provide more than a living wage. A living wage is a necessary but not sufficient condition for a “good” job.

15 Kant, op.cit., p. 184.

16 Again I indebted to Bryan Frances for the formalization of this argument. The argument has been reformulated after Robert Frederick pointed out the earlier version's inadequacies.

17 Although business ethicists have not emphasized meaningful work, some are giving it attention. Joanne Ciulla and Al Gini have both made important contributions. My own thinking on this topic has evolved from discussions with my graduate student Kathryn Brewer.

18 I am not claiming that the only way one can gain autonomy and independence is through work that provides wages sufficient for independence. One can gain self-respect by being a priest or by being an impoverished artist. One can also gain respect by identifying with a group or cause. However if work in corporations is chosen and is to be morally justified, then something like the arguments I have attributed to Kant are necessary. I am grateful to Tanya Kostova for raising this issue.

19 DePree, Max. Leadership Is An Art (New York: Dell Publishing, 1989), pp. 23, 32.Google Scholar

20 Roddick, Anita, Body and Soul (New York, New York: Crown Publishers Inc., 1991), pp. 22–23.Google Scholar

21 Several of the ideas in this section are taken from my article “The Firm as a Moral Community” in Morality, Rationality, and Efficiency: New Perspectives on Socioeconomics, Richard M. Coughlin, Ed. (Armonk, New York: M.E.Sharpe Inc., 1991), pp.169-83.

22 Immanuel Kant's Foundation of the Metaphysics of Morals, Lewis White Beck Trans. (Indianapolis: Bobbs Merrill Inc., (1787] 1969).

23 Rawls, John, A Theory of Justice (Cambridge, MA: Harvard University Press, 1971), pp. 521-23.Google Scholar

24 Oliver Williamson, op. cit., pp. 1197-1230.

25 R. Edward Freeman and William M. Evan, op. cit. pp. 337-359.

26 These formal principles will only work if those who have substantive ethical disagreements agree that a process solution is ethically superior to insisting on the moral correctness of one's position. As Bill Frederick has pointed out to me, it is unlikely that this will always be the case. Consider the opposing sides in the abortion debate. There is no willingness by some partisans in the debate to allow the issue to be settled on procedural grounds, e.g., by decisions of legislative or judicial bodies. At present I see no way to escape this difficulty.

27 Greenberg, Jerald, “Organizational Justice: Yesterday, Today, and Tomorrow,” Journal of Management V. 16, #2 (1990) p. 424.CrossRefGoogle Scholar

28 Leventhal, G.S., “What Should Be Done With Equity Theory,” in Gergen, K. J., Greenberg, S. M. & Willis, R.H. (Eds.) Social Exchange: Advances in Theory and Research (New York: Plenum, 1980) pp. 27–55.CrossRefGoogle Scholar

29 Bies, R. J.. & Moag, J. S., “Interactional Justice: Communication Criteria of Fairness,” in Lewicki, R. J., Sheppard, B. H. & Bazerman, B. H. (Eds.) Research on Negotiation in Organizations V 1 (Greenwich, CT: J Al Press, 1986), pp. 289–319Google Scholar and Tyler, T. R. & Bies, R. J., “Beyond Formal Procedures: The Interpersonal Context of Procedural Justice,” in Carroll, J (Ed.) Advances in Applies Social Psychology: Business Settings (Hillsdale, NJ: Lawrence Earlbaum Associates, 1989), pp. 77–98Google Scholar.

30 Greenberg, op. cit., p.406.

31 R. J. Bies, “Identifying Principles of Interactional Justice: The Case Of Corporate Recruiting,” in a paper presented at the Academy of Management Chicago 1986.

32 Sheppard, B. H. & Lewicki, R.J., “Toward General Principles of Managerial Fairness,” Social Justice Research V.1 (1987) pp. 161-76.CrossRefGoogle Scholar

33 Greenberg, op.cit., 410.

34 Crosby, F., Relative Deprivation and Working Women (New York: Oxford University Press, 1982).Google Scholar

35 Major, B. and Konar, E., “An Investigation of Sex Differences in Pay Expectations and Their Possible Causes,” Academy of Management Journal, V. 27 (1984) pp. 777-92.Google Scholar

36 Greenberg, op. cit., p.418.

37 Kant, Lectures on Ethics, p.2

38 Mahoney, Joseph T., Huff, Anne S., and Huff, James O., “Toward a New Social Contract Theory in Organization Science,” Journal of Management Inquiry V.3 #2 (June 1994), 153-68.CrossRefGoogle Scholar

39 Alex Taylor III, “The Auto Industry Meets the New Economy,” Fortune, Septembers, 1994, pp.52-60.

40 Philip Bromiley and Larry L Cummings, “Transaction Costs in Organizations with Trust,” Working Paper, Strategic Management Research Center, University of Minnesota.

41 Brian Dumaine, “The Trouble with Teams,” Fortune, September 5, 1994, p.87.

42 Immanuel Kant, Foundation of the Metaphysics of Morals, pp. 9, 15-16.

43 Ibid., pp. 13-14.

44 See Papers on the Ethics of Administration, N. Dale Wright (ed.) (Provo, UT: Brigham Young University Press, 1988, pp.97-120 and Business Horizons 34 #4 (July-August 1991), pp.56-65.

45 Andrew Stark, “What's the Matter with Business Ethics,” Harvard Business Review (May-June 1993).

46 Solomon, Robert C., A Passion for Justice (Reading, MA: Addison Wesley Publishing Company, Inc., 1990).Google Scholar

47 Frank, Robert, Passions Within Reason (New York: W.W. Norton, 1988) p 253.Google Scholar48 Fortune, October 3, 1994, p. 122.

49 From James O’Toole, Vanguard Management: Redesigning the Corporate Future, (Doubleday, 1985) as quoted in “A Theological Context of Work,” Michael Naughton and Gene R. Laczniak, Journal of Business Ethics 12 (1993), p. 992.

50 John Stuart Mill, Principles of Political Economy 1848 in Collected Works Volumes II and III (Toronto: University of Toronto Press, 1965).

51 Hume, David, “Of Refinement in the Arts,” in Essays: Moral Political and Literary, 1752, Miller, Eugene (ed.) (Indianapolis: Liberty Classics, 1987).Google Scholar

52 Donaldson, Tom, The Ethics of International Business (New York: Oxford University Press, 1989).Google Scholar

53 DeGeorge, Richard, “International Business Ethics,” Business Ethics Quarterly V.4 #1 (January 1994) p.3.Google Scholar

54 Frederick, William C., “The Moral Authority of Transnational Corporate Codes,” Journal of Business Ethics 10 #3 (1991) pp. 165-77.CrossRefGoogle Scholar

55 Adam Smith, The Wealth of Nations in Heilbroner, R (ed.) The Essential Adam Smith, (New York: W.W. Norton & Company, 1987), p. 281Google Scholar.

56 Kant, Immanuel, “What is Enlightenment,” (1784) in On History, Beck, Lewis White Trans, and Ed. (Indianapolis: The Bobbs Merrill Company, 1963), p. 23.Google Scholar

57 Albert Hirschman, “Rival Interpretations of Market Society: Civilizing, Destructive, or Feeble,” Journal of Economic Literature XX (December 1982) pp.1463-1484.