Use the attached article to discuss the topic of business ethics. “How Can Business Ethics Strengthen the Social Cohesion of a Society?” Respond to the following questions:Summarize the article a

How Can Business Ethics Strengthen the Social Cohesion of a Society?

Georges Enderle 1,2 Received: 30 July 2015 / Accepted: 29 April 2016 / Published online: 11 May 2016 The Author(s) 2016. This article is published with open access at Springerlink.com Abstract The essay aims to show how business ethics— understood as a three-level approach—can strengthen the social cohesion of a society, which is jeopardized today in many ways. In the rst part, the purpose of business and the economy is explained as the creation of wealth de ned as a combination of private and public wealth that includes natural, economic, human, and social capital. Special emphasis is placed on the implications of the creation of public wealth which requires institutions other than the market and motivations other than self-regarding ones. In the second part, the question of what holds a society together is discussed through different approaches:

enlightened self-interest, a new game-theoretical approach, and the concept of the common good advanced by Catholic Social Teaching, followed by my own proposal. The third part presents several perspectives for business ethics to strengthen social cohesion of a society (a) by focusing on the purpose of business and the economy to create natural, economic, human, and social capital; (b) by advancing public goods that stand the test of ethical scrutiny; and (c) by securing human rights conceptualized as public goods.

Keywords Business ethics Capital (natural, economic, human, social) Human rights Potential and limitations of market institutions Self- and other-regarding motivations Public goods Social cohesion Wealth creation For the social cohesion of a society, the so-called ‘‘public goods’’ are of vital importance. This is the topic to be explored in this essay. The question about what holds a society together is, without any doubt, extraordinarily complex. It is posed with great urgency when we believe that social cohesion is jeopardized or even is in the process of falling apart. We can identify these crisis experiences at different social levels. In our city or community, we are perhaps incapable of xing infrastructures which are falling into disrepair or overcoming extreme social inequalities. In our country, we are not able to secure a decent livelihood for ethnic and religious minorities. In the European Union, we cannot nd a common ground to address the challenges of refugees from the Middle East. And worldwide the necessary cohesion is lacking for commitment to effective policies against the threat of climate change. These examples illustrate with clarity that we are faced with a huge number of problems—political, economic, sociologi- cal, psychological, legal, moral, and others. They are con- nected to each other and can be found in many societies and on different levels—from the local to the global level. The social cohesion of a society is a daunting problem of enormous complexity and signi cance. We do not have to be alarmist in order to realistically perceive and urgently warn about the endangerment to and crumbling of social cohesion.

The problem is far more comprehensive than we could solve from a business ethics perspective. Nevertheless, within its limitations, business ethics is challenged to face this problem:

How can it strengthen the social cohesion of a society? To address this question, I begin with de ning the key terms of social cohesion and business ethics in the following & Georges Enderle [email protected] 1 John T. Ryan Jr. Professor of International Business Ethics, Mendoza College of Business, University of Notre Dame, Notre Dame, IN, USA 2 Business Ethics Innovation Group, Shanghai Academy ofSocial Sciences, Shanghai, China 123 J Bus Ethics (2018) 150:619–629 https://doi.org/10.1007/s10551-016-3196-5 way. Social cohesion is understood—according to Dick Stanley—as ‘‘the willingness of members of a society to cooperate with each other in order to survive and prosper.

Willingness to cooperate means they freely choose to form partnerships and to have a reasonable chance of realizing goals, because others are willing to cooperate and share the fruits of their endeavours equitably’’ (Stanley2003, p. 5).

This de nition may suf ce for time being and will be dis- cussed later on in this essay.

The second term, business ethics, stands for business and economic ethics and is meant in a comprehensive and differ- entiated sense, as it has evolved in recent years under the in uence of globalization. It covers the whole sphere of eco- nomic life from the ethical perspective and includes both the theoretical elucidation (academic discipline) and the practical implementation (sound practices of business at all levels). In line with Henk van Luijk’s de nition (van Luijk1997,p.1579) widely accepted by the European Business Ethics Network and beyond (Rossouw and Stu¨ ckelberger2011), the fundamental task of business ethics is to enhance the ethical quality of decision making and action at all levels of business: at the personal (micro-), organizational (meso-), and systemic (macro-) levels. When facing complex issues, business ethics has to adopt a multilevel approach and account for the free- doms and constraints at each of these levels as well as for the interrelationships between these levels.

With this clari cation in mind, the essay proceeds in three steps. First, we focus on the purpose of business and the economy. I propose to de ne it as the creation of wealth in a comprehensive sense, combining private and public wealth and encompassing natural, economic, human, and social cap- ital. Second, we widen our perspective to society at large and ask for an appropriate concept and foundation of social cohe- sion. Different approaches are discussed: enlightened self-in- terest, a new game-theoretical approach, and the concept of the common good advanced by Catholic Social Teaching, fol- lowed by my own approach that emphasizes the importance of public goods. Third, based on the understanding of wealth creation cited above, I offer three ways in which business ethics can strengthen the social cohesion of a society (a) by focusing on the purpose of business and the economy to create natural, economic, human, and social capital; (b) by advancing public goods that stand the test of ethical scrutiny; and (c) by securing human rights conceptualized as public goods.

The Purpose of Business and the Economy: The Creation of Wealth as a Combination of Private and Public Wealth On facing the multiple challenges of globalization, nan- cialization, and threatening environmental catastrophes, it is urgently necessary to ask about the purpose of businessand the economy and to examine different notions of wealth. What is meant by wealth is often very simple—the equivalent of ‘‘a ton of money’’—and the purpose of business and the economy is said to be ‘‘to make as much money as possible.’’ Or the purpose is de ned very vaguely—for example, as ‘‘creating value’’—so that it is interpreted in multiple and contradictory ways. Therefore, it seems appropriate to investigate the questions of the purpose of business and the economy and the concept of wealth in both a critical and a constructive way.

The concept of wealth carries multifaceted meanings.

As Robert Heilbroner (1987, p. 880) writes, ‘‘wealth is a fundamental concept in economics indeed, perhaps the conceptual starting point for the discipline. Despite its centrality, however, the concept of wealth has never been a matter of general consensus.’’ Concerning the concept itself, it gures prominently in Adam Smith’s book,An Inquiry into the Nature and Causes of the Wealth of Nations(1776/1976), but is conspicuously absent from Gunnar Myrdal‘s book,Asian Drama: An Inquiry Into the Poverty of Nations(1968) and is complemented with its opposite in David Landes’s book,The Wealth and Poverty of Nations. Why Some Are So Rich and Some Are So Poor (1999).

In order to explore and examine the concepts of wealth, we rst may concentrate on what is meant by the wealth of a single nation. What makes a country like Norway ‘‘a rich country’’? 1Recent studies of the World Bank, the OECD and other institutions produced interesting results, which correct the common xation on the Gross Domestic Pro- duct (GDP) as the decisive and often only indicator of the economic situation of a country. These publications develop a much richer and more realistic understanding of the wealth of a country (see World Bank2006, 2011; Warsh2006; Stiglitz et al.2009; UNDP2010; OECD 2013).

Drawing from this rich literature, a normative purpose of business is proposed and brie y characterized, while referring to an extensive discussion by the author in numerous articles (Enderle2009,2010,2013,2015a,b).

The Wealth of a Society is a Combination of Private and Public Wealth When we undertake to de ne ‘‘the wealth of a nation,’’ it is dif cult to deny that wealth should encompass both private and public goods or assets, that is, endowments of two types: those that can be attributed to and controlled by individual actors, be they persons, groups, or organizations, and those from which no actor inside the nation can be 1Norway ranks as the richest country in the world in 2005, according to World Bank (2011). 620G. Enderle 123 excluded. In economic theory, ‘‘public goods’’ are de ned with the characteristics of non-exclusivity and non-rivalry (see Musgrave1958; Samuelson1954,1955). A classic example is national defense (in a democratic setting).

When it is established, no one can be excluded from it.

Moreover, one person can bene t from it without reducing the bene t of it for another person; in other words, the ‘‘consumption’’ or ‘‘enjoyment’’ of one person does not rival the ‘‘consumption’’ or ‘‘enjoyment’’ of another per- son. In contrast, a private good is characterized by the attributes of exclusivity and rivalry.

These two formal criteria of the public good apply also to a negative public good, or as it can be called ‘‘public bad.’’ 2When a region is struck by an epidemic disease (like Ebola), no one can (in principle) be excluded, and the risk of infection for one inhabitant of that ravaged region does not reduce the risk of infection of another inhabitant. (On the contrary, it might even reinforce the risk for the other person).

Of course, this brief characterization of private and public goods needs more explication, which I will provide later on. At this point, it is important to understand that the wealth of a society, ranging from the local up to the global level, be conceived as a combination of private and public wealth—not just as an aggregation of private wealth. This means that the creation of private goods depends on the availability of public goods, and, in turn, the creation of public goods is dependent on the availability of private goods.

To illustrate this thesis, I would like to mention an example from China’s recent history. When, in 1978 after the death of Mao Zedong, Deng Xiaoping launched the economic reform and opening-up of the country, the Chi- nese people were called upon ‘‘to jump into the sea’’ (xia` ha i), that is, to leave the security of state-owned enterprises and run the risk of opening and operating their own busi- nesses. In the following decades, the introduction of the market economy has proven, by and large, to be very successful (which, of course, does not deny the downsides of this economic development). A decisive factor of suc- cess was the so-called ‘‘Deng Xiaoping effect’’ (Yasheng Huang). Although no well-established rule of law to protect private entrepreneurs existed, the Chinese trusted that Deng Xiaoping would not deceive them, but rather that he would acknowledge and support their efforts. Thus, it is fair to conclude that the existing public good of trust in Deng Xiaoping was a crucial factor of success for private entrepreneurial initiatives in China’s economic reform.On the other hand, it also holds true that the creation of public goods depends on the creation of private goods. It suf ces to recall the multifaceted private contributions to the creation of public wealth, which are provided in busi- ness, education, research and development, arts, health care, in the form of taxes and in many other areas.

Hence, understanding the wealth of a society as a combination of private and public wealth, some basic assumptions are implied. I would like to highlight two assumptions with far-reaching implications. First, we know that the institution of the market is, by and large, pretty ef cient in creating private goods—that is, after all, why Deng Xiaoping introduced a kind of market economy in China. We also know from economic theory that a market will fail in creating public goods. Although many public goods have a material side, it is extremely dif cult, if not impossible, to put prices on them in order to make supply and demand function properly. As a consequence, other- than-market institutions are needed for the creation of public goods. It is well known that Elinor Ostrom devel- oped other institutional forms in order to solve ‘‘the tragedy of the commons’’ (pointed out by Garrett Hardin in 1968), for which she received the Nobel Prize in Economic Sci- ences in 2009.

The second basic assumption implied in the thesis of the wealth of a society as a combination of private and public wealth concerns motivations: self-interest cannot but fail when it comes to the creation of public wealth. Why?

Whoever is engaged in creating public goods cannot expect, realistically speaking, a reward equivalent to the time and effort put into such engagement. In many cases, one has to accept or at least put up with sacri ces in one form or another. Strictly guided by self-interest alone (as advocated, for example, by the Russian-American philosopher Ayn Rand 3), one can support or tolerate the interests of other people only to the extent that they do not con ict with one’s own interest. Therefore, in order to create public goods, another kind of motivation is neces- sary that takes the interests of other persons, groups, organizations, states, and other entities at least as seriously as one’s own interest. As economic history shows, moti- vations can take a huge variety of forms such as sel ess engagement for entrepreneurial success, love for the mother country, solidarity with the poor, and the ght for a lost cause. In each case, the other-regarding motivation transcends self-interest, be it for a good or for a bad cause. 2The term public bad is used in economics as the symmetric of the term public good because of its characteristics of non-exclusivity and non-rivalry and its negative impact on people and nature. Air pollution is an obvious example of a public bad. For current de nitions of public bads, see Kolstad (2010). 3Ayn Rand inspired Alan Greenspan, Chairman of the Federal Reserve of the United States (1987–2006), over several decades until his hearing in the U.S. Senate on October 23, 2008 when he admitted:

‘‘I made a mistake in presuming that the self-interest of organizations, speci cally banks and others, were such that they were best capable of protecting their own shareholders and their equity in the rms’’ (quoted by Knowlton and Grynbaum2008). How Can Business Ethics Strengthen the Social Cohesion of a Society? 621 123 Therefore, other-regarding motivation is a necessary, though not a suf cient, reason for creating public goods, and ethical evaluation is still required for creating positive public goods. When global public goods or bads are at stake (like in the case of climate change), other-regarding motivations are especially dif cult to mobilize. One may, therefore, expect the world’s religions to help strengthen the motivations for (positive) global public goods (Enderle 2000).

The Wealth of a Society Encompasses Natural, Economic, Human, and Social Capital After discussing theformalcriteria of private and public goods, we now turn to thesubstantivedetermination of wealth. In doing so, I use some concepts of economic theory which may sound a bit strange to non-economists—concepts such as capital, consumption, investment, and opportunity costs.

These concepts can help to capture complex problems more precisely without yielding to a kind of economic imperialism.

In line with the OECD reportHow’s Life? 2013. Mea- suring Well-Being(2013), I propose to de ne the wealth of a society—for example, of a country—asthe total amount of economically relevant private and public assets includ- ing natural capital, economic capital, human capital, and social capital. Natural capital consists of the natural resources minus environmental burdens. 4Economic capital is composed of ‘‘real’’ and nancial capital. Human capital stands for human beings’ health and education. Finally, social capital—as trust relations according to Robert Put- nam—indicates the level of trust between human beings. 5 This de nition of wealth (that is close to the meaning of well-being) involves important characteristics emphasized by the OECD report (2013) as well. 6First, not only eco- nomic capital but also natural, human, and social capital are of economic relevance. However, this does not mean that they are only important in economic terms; rather, they can be intrinsically valuable as well. Consequently, public goods can be relevant not only for wealth creation but also for other non-economic purposes.

Second, this de nition of wealth includes human beings as well as things and environmental conditions which matter to human beings. Thus, it goes beyond the common, material de nition of wealth by taking seriously ‘‘human capabilities’’ (according to Amartya Sen) and placing human well-being on the center stage. The de nition dif- fers, though, from the de nition of human development by the United Nations Development Programme, which seems to identify the ‘‘real wealth of nations’’ only in human beings (and not also things and nature important for human beings). In a nutshell, the de nition proposed here aims at taking seriously and expressing the bodiliness of human beings.

Third, as in the report of the Stiglitz-Sen-Fitoussi Commission (2009) and in the OECD report (2013), the concept of capital refers to stocks and ows, embracing not only economically relevant stocks of capital at a certain point in time but also changes of capital stocks over a certain period of time. In this way, one takes into account, for example, both wealth and income, and both stocks of natural resources and changes thereof.

As these conceptual considerations show, a thorough and well thought-out concept of wealth is of extraordinary signi cance. Some important aspects have been explained; others cannot be addressed in this essay, but are discussed elsewhere (see author’s references). An especially intriguing topic for further exploration beyond this essay is the study of poverty and economic inequality in light of this comprehensive notion of private and public wealth.

Already in his day, Adam Smith saw in the creation of wealth the purpose of business and the economy. Today, we can de ne the purpose in signi cantly broader and richer terms. It goes without saying that only a minority of the population and only a few responsible leaders in sci- ence and politics probably share this notion. However, despite its signi cance, it should not be overvalued. It is always embedded in the societal context where other equally or even more important purposes matter: demo- cratic control of power, responsible promotion of 4The important concept of natural capital has been emphasized by The Natural Capital Declaration, a commitment of the nance sector for Rio?20 and beyond. It de nes natural capital as Earth’s natural assets (soil, air, water, ora, and fauna), and the ecosystem services resulting from them, which make human life possible. The signatories of the declaration wish to demonstrate their commitment to the eventual integration of natural capital considerations into private sector reporting, accounting, and decision making, with standardiza- tion of measurement and disclosure of natural capital use by the private sector (www.naturalcapitaldeclaration.org).

5There are a great many concepts of social capital at multiple levels of human relations (see, for example, Ayios et al. (2014); Kwon and Adler2014). After reviewing over 90 books and articles, Kwon and Adler conclude: ‘‘The basic thesis—that the social ties can be ef cacious in providing information, in uence, and solidarity—is no longer in dispute’’ (p. 419). In this essay, I concentrate on economically relevant social capital and use Robert Putnam’s de nition which refers to ‘‘connections among individuals—social networks and the norms of reciprocity and trustworthiness that arise from them’’ (Putnam2000, p. 19). Social capital can be simultane- ously a private good and a public good and can have ‘‘a dark side’’ (meaning restricting freedom and encouraging intolerance), which is examined from an ethics perspective by Ayios et al. (2014). Thus, the de nition of social capital used in this essay differs from the concept of social cohesion, as becomes clear in the following section. 6Similarly, the International Integrated Reporting Committee distin- guishes six types of capital: nancial, manufactured, intellectual, human, social and relationship, and natural (IIRC2013, particularly pp. 12–13). 622G. Enderle 123 knowledge and arts, careful dealing with nature, and other purposes.

What Holds a Society Together?

Having determined more precisely the purpose of business and the economy as the creation of wealth, we now focus on the question how the social cohesion of a society can best be conceptualized. The question is not new; but in recent years it has solicited a great deal of discussion. This should not come as a surprise when we realize the enor- mous pressure of globalization on our societies and their pluralistic fragmentation. Early on, John Rawls urged, inA Theory of Justice(1971) andPolitical Liberalism(1993), that our pluralistic (democratic) societies needed an ‘‘overlapping consensus,’’ or a common ethical ground, if they were to be stable. The Institute for Social Ethics of the Swiss Federation of Protestant Churches celebrated its 25th anniversary in 1996 with a conference on ‘‘Social cohe- sion—Put into question’’ (Voye´ et al.1998). A few years ago, the Rottendorf Foundation at the Munich School of Philosophy of the Jesuits invited scholars to a symposium on ‘‘What holds a society together? The jeopardized deal- ing with pluralism’’ (Reder et al.2013). And the new book by Christoph Luetge (2015) has the titleOrder Ethics or Moral Surplus. What Holds a Society Together?

There is a great variety of concepts related to social cohesion, particularly in the literature of sociology, while the term itself is much less frequently used in the literature of political philosophy and business ethics. 7The OECD report (2011) de nes social cohesion in a very broad sense:

‘‘A society is ‘cohesive’ if it works towards the well-being of all its members, ghts exclusion and marginalization, creates a sense of belonging, promotes trust, and offers its members the opportunity of upward social mobility’’ (OECD2011, p. 51). Social cohesion consists of three different, equally important components: (a) social inclu- sion (measured by such aspects of social exclusion as poverty, inequality and social polarization); (b) social capital (combining measures of trust—interpersonal and societal—with various forms of civic engagement; and (c) social mobility (measuring the degree to which people can or believe they can change their position in society).In uenced by numerous reports of international organiza- tions, this de nition, while rather comprehensive, in my view, lacks precision and consistency.

Dick Stanley presents a ne and differentiated discus- sion of the concept and model of social cohesion as it has unfolded in the Canadian government’s Social Cohesion Research Network:

Social cohesion is de ned as the willingness of members of a society to cooperate with each other in order to survive and prosper. Willingness to cooper- ate means they bqfreely choose to form partnerships and to have a reasonable chance of realizing goals, because others are willing to cooperate and share the fruits of their endeavours equitably. (Stanley2003, p. 5) This concept contains three key components. First, the willingness and capacity of people to cooperate with each other in the diversity of collective enterprises that members of a society must do in order to survive and prosper. It also implies a willingness on the part of partners to share the fruits of their cooperation fairly. As cooperation takes place at all levels of social activity, social cohesion is the sum over a population of individuals’ willingness to cooperate.

Second, social cohesion should not be confused with social order, common values, or communities of interpretation because they can also be achieved in an authoritarian society or a beleaguered community through coercion and exclusion, out of fear or hatred without free choice of the members. Third, there is an af nity between social cohesion and liberal social values such as freedom, equality, tolerance, respect for diversity, and human rights.

Social cohesion guided by liberal social values engenders fair social outcomes, which, in turn, strengthens social cohesion.

This concept of social cohesion appears to be particu- larly appropriate from the perspective of business ethics and moral responsibility. According to De George (2010, chapter 6), acting in a morally responsible manner means to be capable of acting (causing the result of action) and to do it knowingly and willingly; in other words, it means not to be forced to do it, to have a choice, to know what one is doing, and to do it deliberately.

Based on Stanley’s concept of social cohesion, we now discuss different approaches of its foundation. The rst approach deals with the individualistic model of the neo- classical economic theory that is also used in the so-called order ethics. The second, game-theoretical approach goes beyond the neoclassical model and opens up promising new perspectives, which can rectify the weaknesses of the individualistic model. The third approach portrays the concept of the common good advanced by Catholic Social Teaching. Finally, I explain more extensively why public 7See above references and literature cited in Stanley (2003) and OECD (2011). The term social cohesion is absent in the indices of Lexikon der Wirtschaftsethik[German Encyclopedia of Business Ethics, 1993],A Companion to Business Ethics(1999),The Blackwell Companion to Philosophy(2003),Encyclopedia of Ethics(2001),The Blackwell Encyclopedia of Management. Second Edition. Business Ethics(2005),Encyclopedia of Business Ethics and Society,The Oxford Handbook of Corporate Social Responsibility(2008),Hand- book of Research on Global CorporateCitizenship (2008), andThe Oxford Handbook of Business Ethics(2010).

How Can Business Ethics Strengthen the Social Cohesion of a Society? 623 123 goods are of decisive importance for the social cohesion of a society.

Is Enlightened Self-interest on Its Own a Solid Foundation?

In the neoclassical economic theory, rationality and the motivation for economic activities are characterized with the notions of the ‘‘homo oeconomicus’’ and its intellectual descendant ‘‘REMM’’ (resourceful, evaluative, maximizing man) (Kaufmann1988, pp. 244 ff.; see also Luetge2013, pp. 251–335). The economic actors (households, rms) act rationally if they maximize their own utility or pro t, respectively. This concept of rationality is based on action theory by focusing on various options for action, while the conditions of actions are assumed to be relatively stable. It presupposes methodological individualism that traces all actions back to individual decisions (of households and rms). As Franz-Xavier Kaufmann writes in the Handwo¨ rterbuch der Wirtschaftswissenschaften (HdWW), the homo oeconomicus can take three different meanings:

(1) It is a real-typical reconstruction of empirical economic behavior. (2) It de nes the norm of rational economic behavior. (3) It is the analytical starting point for decision- theoretical calculations.

Accordingly, the critique of the homo oeconomicus can be threefold: (1) The concept is a bad real-typical reconstruction and can be refuted in multiple ways (which has been undertaken by behavioral economics). (2) The norm is questionable because it can hardly be justi ed by reasoning. (3) The analytical method is of little explica- tive value.

In addition to these criticisms, methodological individ- ualism can be put into question because the relevance of collective actors is left out of account or even contested.

The action-theoretical approach has dif culty capturing clearly the changing conditions of action. The time horizon in which the maximization has to take place is dif cult to determine. Finally, the aggregation of the utilities of indi- vidual actors to a ‘‘social welfare function’’ is practically not possible, as many years ago Kenneth Arrow demon- strated in his famous bookSocial Choice and Individual Values(Arrow1951/1963).

Despite all these problems, it is astonishing how much the homo oeconomicus has not only survived but even ourished in economic sciences and beyond. How can this construct—in spite of all this questionableness—provide a solid foundation that holds a society together?

A partial rescue attempt of the homo oeconomicus has been undertaken by Karl Homann and recently by Luetge (2015). They acknowledge the criticism that the homo oeconomicus fails if it is understood in the real-typical and normative sense (points 1 and 2). However, they maintainthat this construct is appropriate and can be useful for analyzing certain problems (point 3). Luetge advocates the thesis that the homo oeconomicus provides a solid foun- dation for addressing the problem of a basic order of society, that is, an ‘‘order ethics.’’ The attitudes and behaviors guided by enlightened self-interest would indeed hold a society together in the global and pluralistic context (Luetge2015, especially pp. 176–177).

Luetge develops his provocative thesis in careful steps and in discussions with a number of noted philosophers.

Unfortunately, I cannot present my comment here; but, at least, I would like to brie y indicate my criticism, which primarily presents two reasons that speak against his thesis.

First, methodological individualism is based on an indi- vidualistic and western anthropology, which does not take collective phenomena seriously in an adequate manner.

Second, this approach fails when we consider the kind of goods that are at stake. Social cohesion of a society is a central public good. Therefore, its creation and mainte- nance cannot be motivated—as explained above—by mere self-interest, even if it is enlightened. Required are also other-regarding motivations, which take seriously the interests of the society as a whole.

In order to overcome the approach based on self-interest alone, Juljan Krause and Markus Scholz propose a team- oriented model rooted in game theory (Krause and Scholz 2016). The game-theoretical model aims at capturing the key problems in negotiations among many stakeholders for common, above all, global standards. The actors can switch between two types of reasoning—the I-modus and the We- modus. The kind of agreement is in uenced by the extent to which the actors are willing to argue from the standpoint of the group. In my view, this model presents a promising approach for better understanding of the creation of public goods.

How Solid is the Concept of the Common Good in Catholic Social Teaching?

The common good is a key concept in Catholic Social Teaching and involves various connotations. An important de nition can be found in thePastoral Constitution on the Church in the Modern World‘‘Gaudium et Spes’’ (1965, no. 26):

[The common good] is the sum of those conditions of social life which allow social groups and their indi- vidual members relatively thorough and ready access to their own ful llment…[T]oday [it] takes on an increasingly universal complexion and consequently bqinvolves rights and duties with respect to the whole human race. Every social group must take account of the needs and legitimate aspirations of other groups, 624G. Enderle 123 and even of the general welfare of the entire human family.

Four aspects of this de nition deserve to be emphasized particularly: First, the common good pertains to the conditions of social (or societal) life, not to the substantive goal of all people in society (described in German as ‘‘Gemeingut’’). Therefore, the common good is an instru- mental value (‘‘Dienstwert’’), not an intrinsic value (‘‘Selbstwert’’) (see Brieskorn2010, p. 157). Second, these conditions are necessary for both social groups and their individual members in order to achieve their respective life plans (‘‘their own ful llment’’). Third, the common good encompasses the totality of those social conditions. Fourth, because of globalization (i.e., the increasingly close interdependence worldwide), all these conditions concern all humankind.

How are these social conditions de ned in substantive terms? Based on the encyclicalPacem in Terris(1963) by John XXIII and con rmed by the Second Vatican Council, these conditions encompass all human rights as promul- gated in the Universal Declaration of Human Rights in 1948 and speci ed in the International Covenants and Conventions of the United Nations. With unequivocal clarity, Catholic Social Teaching today af rms the totality of human rights as de ned above, although many Catholics and people outside the Catholic church are not aware of this fact or do not want to note or live up to it.

Given this concept of the common good, we now ask what it implies for our question regarding the social cohesion of a society. In contrast to the anthropological assumption of the homo oeconomicus, Catholic Social Teaching makes the assumption that humans are relational beings. Relations to other human beings are constitutive for the identity of the person, prominently asserted by the Pastoral ConstitutionGaudium et Spes(No. 12): ‘‘[For] by his innermost nature man is a social being, and unless he relates himself to others he can neither live nor develop his potential.’’ This basic anthropological assumption forms the foundation for social cohesion of any society and excludes both individualistic and collectivistic conceptions.

Therefore, motivations exclusively driven by self-interest, even if it is enlightened, are incompatible with the rela- tionality of human beings. It goes without saying that people can and often do act by disregarding or violating their relationality.

As stated above, the common good de nes the condi- tions under which social groups and their individual members should be able to pursue their life plans. They hold for every society from the local to the global level and consist, to a signi cant extent, of human rights. Having said this, still two important questions remain: First, to be more precise, what kinds of society do we have in mind?And second, of what kinds of goods are these conditions composed?

As one may suspect, I propose to conceptualize the social conditions as combinations of private and public goods. Having done so, it will be easier to determine more precisely the society or the societies to be considered.

The Creation and Maintenance of Public Goods Provide a Solid Foundation for the Social Cohesion of a Society As explained above, public goods are de ned with the characteristics of non-exclusivity and non-rivalry. In order to create and maintain them, collective actors are neces- sary, who are guided by motivations that take the interests of other persons and social actors seriously at least to the extent that they account for their own interests.

At this point, some further clari cation of the concept of public goods is in order. In particular, I mention three aspects: First, while private and public goods can be dis- tinguished with great clarity thanks to the characteristics of non-exclusivity and non-rivalry, many mixed forms can occur between these two poles—according to the degrees of exclusivity and rivalry. To illustrate, the software pro- gram may be of minimal rivalry because its use by one engineer hardly affects the program when used by another engineer. However, the legal protection of intellectual property prevents outsiders from using the program.

Another example is ‘‘the tragedy of the commons’’: If no cattle are excluded from grazing on the commons, a large number of cattle may ruin the pasture despite the small rival consumption of each individual cow.

Second, there exists a large variety of public goods which are not limited to given political, social, cultural, or other boundaries. For example, the impact of a nuclear power plant situated at a national border reaches far into the neighboring country. The criterion of the extension of a public good is the extension of its impact on people and nature.

Third, the formal de nition of the public good implies that it can be ‘‘good’’ (positive) or ‘‘bad’’ (negative). 8To illustrate, a stable, ef cient, fair, and reliable nancial system is valued as positive, while an unstable, inef cient, 8Examples of positive public goods are physical infrastructure, access to vital information (transparency), rule of law, basic health care and education, social capital (trust in interpersonal relations and social institutions), human rights (civil, political, economic, social, cultural), relatively corruption-free business practices, relatively con ict-free (peaceful) environments, safety in the transportation system, liberal prerequisites for innovation, etc.

Examples for negative public goods (‘‘public bads’’) are multiple forms of environmental degradation, corruption, military con icts, epidemics, dysfunctional governments, decay of infrastructure, etc. How Can Business Ethics Strengthen the Social Cohesion of a Society? 625 123 unfair, and unreliable system is considered a ‘‘public bad.’’ This dual-sidedness of public goods, which, of course is often not so straightforward, prompts or even forces those affected by the public good/bad (or the representative of those affected) to take a stand and make a decision— g- uratively speaking, because they are sitting in the same boat. Not only the bene ts of a positive public good but also its opportunity costs must be taken into account. This dual-sidedness is a challenge and an opportunity to strengthen the social cohesion of a society with the help of providing public goods and preventing public bads. An interesting perspective for further research is the question how Catholic Social Teaching with its principles of soli- darity and subsidiarity can provide valuable guidance for identifying and addressing issues of public goods.

How Business Ethics Can Strengthen the Social Cohesion of a Society After considering the purpose of business and the economy and the signi cance of public goods for wealth creation, the answer to the initial question of this essay unsurpris- ingly arises—at least in brief outline and with conceptual clari cation. The most important answer, of course, must be given in practice.

We have de ned the purpose of business and the economy as the creation of wealth in a comprehensive sense. It encompasses all economically relevant private and public assets including natural, economic, human, and social capital. It is, therefore, by far more substantive than the maximization of pro t and much more precise than the so-called ‘‘creation of values.’’ The signi cance of public goods for public wealth has been particularly highlighted because, in our public debates today, the comprehension of these truly public affairs is getting lost, which threatens and undermines the social cohesion of societies. This danger- ous development is especially threatening given the enor- mous challenges of globalization.

Business ethics, however, while exposed to these chal- lenges, is not without help. It can strengthen the social cohesion of a society from the local to the global level in multiple ways. I identify the following three sets of opportunities and tasks: regarding the substantive notion of wealth, the formal concept of public wealth, and the comprehension of human rights as public goods. 9 Creating Natural, Economic, Human, and Social Capital As the OECD report on well-being (2013) explains, the sustainability of well-being over time requires preserving all four types of capital while taking into account the dis- tribution of these capitals among the population. Business ethics should take inspiration from this valuable frame- work, persistently raising the question of the purpose of business and the economy in economic sciences as well as in business and economic practice and offering well thought-out answers at all levels of action: at the individ- ual, organizational, and systemic levels. At stake is the ‘‘creation’’ of wealth, which means making something new andbetter—in other words, it is about ‘‘ethical innovation in business and the economy’’ (see Enderle and Murphy 2016). More speci cally, ethical innovation pertains to each type of capital:

•The creation of natural capital—consuming less natural resources and burdening less of the environment—has to be taken seriously, with great consistency at the level of individual actors such as consumers; at the level of enterprises, investment rms, and consumer organiza- tions; and at the systemic level where, driven by a culture of sustainability, environmental laws and reg- ulations are to be set up and implemented.

•The creation of economic capitalrequires—among many other challenges—the reintegration of the nan- cial services sector into the real economy in order to play (again) a serving role in the creation of wealth in a comprehensive sense.

•As for the creation of human capital, the health care and the educational systems should not be considered to be primarily huge national expenditures. Rather, they should be treated as ef cient investments in people for the enhancement of their health and education.

•Creating social capitalmeans strengthening and expanding trust in interpersonal relations through honest business behavior, which, at the same time, needs to be secured by fair and ef cient institutions.

Fostering the Comprehension of Public Wealth Business ethics should systematically develop and explain the central importance of public wealth and demonstrate its relevance for the creation of natural, economic, human, and social capital.

•The concept of public goodsshould be clari ed and deepened for a better understanding of public wealth.

The structural presuppositions and consequences implied in this concept are to be openly explored and 9These perspectives, along with active involvement of the world’s religions, are further developed in Enderle (2011).

626G. Enderle 123 explained. The institutions and motivations necessary for the creation of public goods deserve extensive discussion.

•Because the de nition of public goods is of a formal nature—de ned by non-exclusivity and non-rivalry— ethical evaluationis indispensable. ‘‘Good’’ and ‘‘bad’’ public goods should be distinguishable.

•Because wealth of a society is conceived as a combi- nation of private and public wealth, it is crucial to understand their mutual dependence and tostrike a reasonable balance between both. The potential and the limitations of both basic institutions need to be clari ed and examined of the market required for the creation of private wealth and of the collective actors necessary for the creation of public wealth—ranging from the local to the global level.

Conceptualizing and Securing Human Rights as Public Goods In order to strengthen the social cohesion of a society, business ethics, generally speaking, is called to help create wealth in a comprehensive sense while particularly advancing public wealth. More speci cally, I propose to conceptualize human rights as ‘‘good’’—ethically bind- ing—public goods.

The special focus on human rights is suggested for several reasons. In the process of globalization, economies and businesses have expanded far beyond national borders and increasingly been connected both internationally and glob- ally. Through this process, the realm of not only private but also public goods has been enlarged dramatically. With this expansion comes a growing need for universal normative standards for businesses and economies. Since the Universal Declaration of Human Rights in 1948, the ethical (and legal) framework of human rights has developed to a widely accepted, though not undisputed, universal ethical frame- work that has no comparable alternatives. Moreover, in the new millennium, the global concern for business and human rights has considerably strengthened.

With the United Nations Framework and its Guiding Principles for business and human rights, developed under the leadership of John Ruggie from 2005 to 2011, human rights have become a clearly de ned global standard for corporate responsibility, that is, for business ethics at the organizational level. (Of course, this does not exempt states and other actors at different levels from their respective responsibilities.) Based on numerous international cove- nants and conventions supported through many worldwide consultations by the Ruggie team with businesses, civil society organizations, other organizations and experts from many elds, 30 human rights have been identi ed as relevantfor business (UN2008): civil, political, economic, social, and cultural rights, including the right to development. In 2011, the United Nations released the UN Guiding Principles for Business and Human Rights (UN2011), which since seem to have gathered increasing momentum. These devel- opments and their recent impact are reported in the excellent account in Ruggie’s book,Just Business(2013).

My proposal is to conceptualize these 30 human rights as ‘‘good’’ public goods, which, after the considerations presented in this essay, might be rather easy. Non-exclu- sivity means that no single human beingshouldbe exclu- ded from any human right. In other words, all human beings should be able to enjoy all human rights. Non-ri- valry implies that the enjoyment of any human right by one personshould notdiminish the enjoyment of this right by another person and that the enjoyment of different human rightsshould notcompete with each other. In other words, no trade-offs between human rights are acceptable. For example, the right to political participation should not impair the right to freedom of thought, conscience, and religion, nor vice versa; or the freedom of association should not negatively affect the right to non-discrimination, nor vice versa.

Beyond the exclusion of negative impact, one can argue that the enjoyment of any human right by oneself or any person may be independent from the enjoyment of other rights. For example, the right to freedom of movement may not affect the right to freedom from torture. Furthermore, the enjoyment of one right may even reinforce the enjoy- ment of another right. For instance, the right to an adequate standard of living (including food, clothing, housing, and a minimal income) and the rights to work and education can strengthen each other.

The de nition of human rights as ethically demanded public goods obviously has far-reaching implications for the states and intergovernmental organizations because collective actions at multiple levels are required (which is a broad topic area beyond the scope of this essay). For now, three implica- tions are brie y outlined that pertain to ‘‘corporate responsi- bility’’ as de ned by the UN Guiding Principles. 10 First, transnational corporations and other business enterprises are ‘‘responsible to respect human rights’’ and to help ‘‘remedy human rights violations,’’ but not ‘‘to protect human rights’’ which is the ‘‘duty’’ of states. In other words, corporations have to contribute to this kind of public goods, in addition to pro- ducing private goods. Second, contributing to public goods necessitates a motivation that transcends the self-interest of corporations and includes other-regarding motives. There is no pre-established harmony that would coordinate exclusively self-regarding behaviors in order to produce public goods in 10 For an extensive discussion of the UN Framework on Business and Human Rights and its Guiding Principles, see Enderle (2014). How Can Business Ethics Strengthen the Social Cohesion of a Society? 627 123 general and the respect for human rights in particular (see the critique of enlightened self-interest above and Greenspan’s admission in note 3). Third, contributing to public goods is not just a kind of ‘‘charitable donation’’ (or a ‘‘supererogatory’’ work) to society. Rather, a certain set of public goods (such as the rule of law and human rights, social customs, technological knowledge, educational skills, and health conditions) are actually preconditions to producing private goods. Therefore, corporations have a moral obligation to recognize these inputs from society and to ‘‘give back to society’’ their due shares, including respecting human rights and remedying human rights violations. In such a way, the understanding of the wealth of a society as a combination of private and public wealth can clarify and reinforce corporate responsibility for human rights.

The social cohesion of our societies is threatened in multiple ways and at different levels, from the local to the global level. In this essay, I have attempted to show how business ethics can make an important, though limited, contribution to address this challenge. The old, but not less crucial question of the purpose of business and the econ- omy can nd a new and rich answer that proposes the creation of wealth in a comprehensive sense, including natural, economic, human, and social capital and advances particularly public wealth. Different approaches of what holds a society together are discussed: enlightened self- interest, a new game-theoretical approach, and the concept of the common good advocated by Catholic Social Teaching. My own proposal is that the creation and maintenance of public goods provide a solid foundation for the social cohesion of a society. Guided by the purpose of wealth creation and the importance of public goods, busi- ness ethics can unfold a whole program of exciting per- spectives to strengthen social cohesion by creating wealth in this comprehensive sense with a special focus on public wealth. As a more concrete and clearly de ned normative ethical task, I conclude by conceptualizing human rights as public goods. Indeed, business ethics is facing very new and exciting challenges.

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