Basically, it's a case study related to philosophy and business. I have attached the files so you can get the better idea of what case study is about. basically we have to choose a philosopher and con

2 Aristotle’s Economic Ethics Claus Dierksmeier and Michael Pirson C. Dierksmeier et al. (eds.), Humanistic Ethics in the Age of Globality © Palgrave Macmillan, a division of Macmillan Publishers Limited 2011 Aristotle’s Economic Ethics 33 2.2 Aristotle’s theory of life Aristotle knew that if one’s only goal is to make as much money as possible, a reasonably clear- cut code of conduct can easily be derived from this premise. He felt, however, that to outline a theory of such behavior was precisely what sound economic thinking was not about ( Pol I, 11, 1258b, 33–34). The rules of mere money- making (chrematis- tike ) he found simply too “tiresome to dwell upon ( ...) at greater length” ( Pol I, 11, 1258b 34). His predominant interest, instead, was with what should rightfully be considered economics ( oikonomia): the concern for morally adequate individual and public household management ( Pol IX, 1, 1256b, 40 – 41). In other words, the very way in which Aristotle deals with economic affairs is at odds with the modern separation of economics from ethics and all other concerns of life. He therefore dis- cusses economic and business questions as subordinate subjects within his treatise on politics, which itself is worked out in the overall frame- work of his ethics (Koslowski, 1993, 51–53). And Aristotle’s ethics rests upon a ( teleological ) theory about life that ascribes to each living entity a certain goal ( telos) to which it strives.

Plants, for example, need specific environments (such as soil, water, and sun) but will, given these conditions, prosper and flourish pre- dictably in a certain way. They thereby realize their genetic program or what Aristotle calls their “final end” ( PA I, 641b, 34 –39). Human beings and organizations strive towards ends, too. However, everything human does not simply follow a predetermined path but relies greatly in its course upon human freedom and agency. Outward conditions can hamper the development of human life, of course, but failure in human affairs also stems from misguided inner direction. The possibility of affecting one’s own well- being negatively, such as through turpitude and vice, is inherent in every human being and organization. For suc- cessful self- management, a ( teleological) concept of what constitutes true well- being (as an end) and of what brings it about (as means) is therefore needed.

In all sciences and arts the end is a good; and the greatest good and in the highest degree a good in the most authoritative of all – this is the political science of which the good is justice, in other words, the common interest. ( Pol III, 12, 1282b, 15–19) If economics forms part and parcel of Aristotle’s political science, the proper management of economic affairs can be seen as central to his 34 Claus Dierksmeier and Michael Pirson overall concerns (Dyck and Kleysen 2001, p. 562). What, then, is the contribution of the economy to the overall project of human life? What constitutes economic welfare? What ends should business organiza- tions pursue? What are the right ways to measure economic success? To answer these questions, we need to consider what constitutes value in human life. Reflecting upon what people commonly consider as good, or as a good, makes it clear that most things are valued not absolutely but relatively. Most goods are held in esteem because they serve a cer- tain function, because they are being employed as means to other ends and goods. Aristotle concludes, If, then, there is some end of the things we do, which we desire for its own sake (everything else being desired for the sake of this), and if we do not choose everything for the sake of something else (for at that rate the process would go on to infinity, so that our desire would be empty and vain), clearly this must be the good and the chief good.

(NE I, 2, 1094a, 17–23) What is this ultimate goal of human life? According to Aristotle, one thing is clear from the beginning, “wealth is evidently not the good we are seeking” ( NE I, 7, 1096a, 6). The answer instead has to be gleaned from the natural faculties of the human being ( NE I, 7, 1097b, 33).

Whatever our private idiosyncrasies, certain capabilities are common to us all. In our most common faculties lie natural objectives. The quest for (goods such as) food, shelter, defense, and procreation, we share with animals. In addition, human beings seek communication, edu- cation, and cultivation (Pol I, 2, 1253a, 10 –39). Yet even these higher goods can be declared functional; they are not necessarily sufficient in themselves, nor are they necessarily sought after universally. Happiness, however, is universally pursued, and, moreover, is sought for its own sake. For formal reasons, it must therefore be declared the ultimate good of human life ( NE I, 7, 1097a, 28 –37). But what, materi- ally, constitutes happiness? Aristotle’s theory is not a hedonistic the- ory. His term for happiness ( eudaimonia) denotes a well- ordered state of affairs. Aristotle does not extol subjective states of euphoria, received passively through the senses. Rather, eudaimonia describes an objective state of being, to be attained by rational activity ( NE I, 7 1098a, 3– 8).

Individuals are “happy” (well- ordered) when they rationally harmonize their outer and inner world so as to live self- sufficiently (NE I, 7, 1097b, 15–16). Not fortune or fortunes, but a communal and virtuous lifestyle makes for happiness. Aristotle’s Economic Ethics 35 Yet striving for eudaimonia is not to the same as achieving it. After all, to declare happiness one’s goal does not translate into a very specific pro- gram of action. So how, concretely, is happiness realized? Aristotle shuns an axiomatic answer, since he disagrees with the (Platonic) assumption that one could “deduce” morality from principles (Koslowski, 1993, p.

26). Rather, one must work from experience and develop an understand- ing of different customs and mores (NE VI, 8, 1142a, 13) so as to learn, gradually and habitually, to employ wise judgment in the management of one’s affairs. The good life can neither be defined nor attained in abstraction from the communities we live in (Wijnberg, 2000, p. 334).

We need the example of real people ( phronimoi) who excel in judgment and wisdom. By observing how they master life we gain the requisite normative orientation and by imitating them we develop our own char- acter ( NE VI, 4, 1140a, 24; VI, 13, 1145a, 13).

2.3 Intrinsic and moral relations to material goods According to Aristotle, it is only by working out a shared understanding of what constitutes a good and dignified life that we can, as a society, form an adequate notion of the necessities of life, and hence what we should demand from the economy (Solomon 2004, p. 1027). Most of our pursuits require the intelligent use of resources and benefit from social cooperation. Humans come together in cooperative units, such as households and city- states (today we would add “corporations” to the list), in order to organize common efforts and to manage shared interests. For Man is by nature a political animal. And therefore, men, even when they do not require one another’s help, desire to live together; (although) they are also brought together by their common interests in proportion as they severally attain to any measure of well- being.

This is certainly the chief end, both of individuals and of states. ( Pol III, 6, 1278b, 18 –24) For Aristotle the function of economics ( oikonomia) is to demonstrate how to govern such public and individual households ( oikoi) through adequate norms ( nomoi) of conduct. It makes sense to extend this theory of individual and public household management to the management of today’s corporations as well, since they too are communities in which common purposes are pursued by organized efforts (Wijnberg 2000, p. 334). Of course, the differences between a modern, shareholder- 36 Claus Dierksmeier and Michael Pirson oriented corporation and ancient households means we cannot treat them exactly the same. Yet as social organizations they also have certain structural features in common that allow us to transfer some insights about the successful management of one to the other. All households and organizations, for instance, must acquire the material necessities for their pursuits. As a sub- goal, therefore, the pursuit of wealth re- enters Aristotle’s theory. Hence, the “first question” in economics is “whether the art of getting wealth is the same as the art of managing a household or a part of it, or instrumental to it (...)” ( Pol I, 8, 1256a, 3–5). Aristotle’s answer is quite blunt:

There are two sorts of wealth- getting, (...); one is a part of household management, the other is retail trade: the former necessary and hon- orable, while that which consists in exchange is justly censured; for it is unnatural, and a mode by which men gain from one another. ( Pol I,10, 1258a, 38 –1258b, 2) It would, however, be wrong to stamp Aristotle as “anti- business” on the basis of such quotations (Collins 1987, p. 567). In fact, compared to many of his contemporaries, and especially in direct comparison with his teacher Plato, Aristotle comes across as quite “pro- business.” Plato, it is true, aimed for unity- through- identity in the state and strove for commonality in all things. He was therefore suspicious of the exclu- sive nature of private property and advocated communistic lifestyles.

Aristotle, however, advances a political model of unity- in- diversity, and accept s it a s pa r t of hu ma n nat u re to wa nt to have s e c u re d a nd s e c lude d areas of self- realization. He acknowledges and even endorses ... the pleasure, when a man feels a thing to be his own; for surely the love of self is a feeling implanted by nature and not given in vain, although selfishness is rightly censured; this, however, is not the mere love of self, but the love of self in excess, like the miser’s love of money; for all, or almost all, men love money and other such objects in a measure. And further, there is the greatest pleasure in doing a kindness or service to friends or guests or companions, which can only be rendered when a man has private property. ( Pol II, 5, 1263a, 40 –1263b, 4) So, for Aristotle private property is an essential “part of the house- hold, and the art of acquiring property is a part of the art of managing the household; for no man can live well, or indeed live at all, unless he Aristotle’s Economic Ethics 37 be provided with necessaries” ( Pol I, 4, 1253b, 23–25). Whereas Plato mistrusted commercial relationships because the grammar of prices does not express the semantics of true value, and thus engages the mind to an untruthful world, Aristotle has a rather positive view of commerce and the social relationships it engenders (Schonsheck 2000, p. 905). He views trade as a relation where, at least potentially, both partners can find benefit ( NE V, 5, 1133b15–20, IX/2, 1164b13–23). It is not from anti- commercial sentiment, consequently, that he argues against some forms of reta il t rade, but f rom a v iew upon what const it utes a n appropr iate, as opposed to an excessive, pursuit of wealth. Economic assessments have to be based on a critical evaluation of our needs; the quantity of mate- rial goods we consume must be in proportion to the specific quality of what a good life requires. Economic analysis is thus not free- standing; success in both business and economics cannot be defined by quanti- tative parameters alone but must operate with reference to qualitative criteria (Wijnberg, 2000, p. 333). Economics is therefore fundamentally welded to the moral and political discourse of society (Nussbaum 1990, p. 59). For Aristotle, there can be too much or too little of nearly everything; too much or too little sunshine for a plant, too much or too little food for an animal, and indeed, too much or too little wealth for a person ( EE III, 4, 1231b 31). For some, the idea of too much wealth may seem o dd . I s not t he acc u mu lat ion of prop e r t y t a nt a mou nt to stor i ng up f r e e - dom and well- being? Aristotle warns against these assumptions. In all realms of life, he advocates moderation and measure, defining virtue as the rational pursuit of a mean between harmful extremes. Excess, in other words, is bad in itself. What constitutes excess depends, however, on a number of factors. Aristotle illustrates the point with an oft- cited example, referring to the very high meat consumption of Milo, a well- known wrestler of his time. It may be that, given his exercise schedule and physique, an enormous amount of meat intake is “good” for Milo; for everybody else it would be bad, because it would be excessive (NE II, 6, 1106b, 5). Applied to the pursuit of wealth , this notion leads to the following characteristics:

The man who is more pleased than he ought to be by all acquisition and more pained than he ought to be by all expenditure is mean; he that feels both feelings less than he ought to is prodigal. (...) And since the two former characters consist in excess and deficiency, and where there are extremes there is also a mean, and that mean is best, (...), it necessarily follows that liberality is a middle state between 38 Claus Dierksmeier and Michael Pirson prodigality and meanness as regards getting and parting with wealth.

(EE III, 4, 1231b, 31–39) 2.4 Extrinsic and social relations to material goods Wealth, then, is for Aristotle not an end in itself but a means to the good life: a subordinate end (NE I, 5, 1096a, 6). As a functional good, wealth “consists in using things rather than in owning them; it is really the activity – that is, the use – of property that constitutes wealth” ( Ret I, 5,1361a, 23). Consequently, wealth is to be evalu- ated in terms of how it facilitates the well- ordered or happy life.

Wealth cannot be maximized, all else being equal, because the pur- suit of wealth changes the inner and outer conditions in which it takes place: there are opportunity costs to its quest. Other endeavors are not undertaken; other – worthier – ends might not be pursued (Lowry, 1987, p. 234). To Aristotle, these higher ends are, internally, the striving to perfect oneself, and externally, active participation in one’s political community. Whether an increase in wealth is ben- eficial can therefore not be answered in the abstract, but always by a concrete analysis of the foregone alternative uses of one’s time and energy. A crucial question to a modern reader is, how much is enough, and how much would be too much, for the good life (Bernstein et al., 2000; Hawken et al., 2000)? Aristotle proposes the formula that everyone should “have so much proper t y as w ill enable him to live not only tem- perately but liberally; if the two are parted, liberality will combine with lu x u r y; te mp e ra nce w i l l b e a sso c iate d w it h toi l” ( Pol II, 6, 1265a 29–35).

To achieve a balance of wealth that realizes this goal, the government has to intervene in the economy. Although Aristotle does not dwell much on the thorny technical aspects of this issue, such as questions of the just measure and proportion of taxation, he makes clear that he means to facilitate fairness in opportunity through distributing and redistributing goods to those who have the most talent to use them ( Pol III, 12, 1282b, 35–1283a, 2). Legislation, however, can only provide the political framework; it cannot make individuals or households “good” without their active contribution. A functioning political community also relies on self- moderation on the part of individuals and households. There are sat- isfaction points for each economic unit. To strive beyond those in the pursuit of wealth is evidence of a harmful desire of wanting ever more ( pleonexia ), that is, people show no moderation mostly because they Aristotle’s Economic Ethics 39 l a c k v i r t u e o r fol low a he d o n i s t ic c o nc e p t io n o f t he go o d ( NE V, 1 , 11 2 9 b 9- 1130a, 13). Since their desires are unlimited they also desire that the means of grati- fying them should be without limit. Those ( ...) seek the means of obtaining bodily pleasures; and, since the enjoyment of these appears to depend on property, they are absorbed in getting wealth ( ...). For, as their enjoyment is in excess, they seek an art which produces the excess of enjoyment; and, if they are not able to supply their pleas- ures by the art of getting wealth, they try other arts, using in turn every faculty in a manner contrary to nature. ( ...), some men turn every quality or art into a means of getting wealth; this they con- ceive to be the end, and to the promotion of the end they think all things must contribute. ( Pol I, 9, 1257b, 31–1258a, 18) Aristotle also had a keen sense that such limitless pursuit of riches on the part of some impoverishes others and undermines society ( Pol VII, 1, 1323a, 35–1323b, 10). Property, while generally private, should there- fore in its use also “be in a certain sense common” ( Pol II, 5, 1263a, 25), he concluded, because society – as the enabler and guarantor of our possessions – has a stake in them.

Like the sailor, the citizen is a member of a community. Now, sailors have different functions, for one of them is a rower, another a pilot, and a third a look- out man, a fourth is described by some similar term; and while the precise definition of each individual’s virtue applies exclusively to him, there is, at the same time, a common defi- nition applicable to them all. For they have all of them a common object, which is safety in navigation. Similarly, one citizen differs from another, but the salvation of the community is the common business of them all. (Pol III, 4, 1276b, 21–29) Excessive riches are bad not only intrinsically but also extrinsi- cally insofar as they contribute to the separation of the citizen from their community (Kasser and Ahuvia, 2002; Putnam, 2000). The poor become too destitute to participate in political functions, while the rich have the opportunity to opt out of their communal duties. It is from this angle that wealth in moderation seems best for all “for in that con- dition of life men are most ready to follow rational principle” ( Pol IV, 11, 1295b a, 5– 6). Aristotle calls on the lawgiver to moderate and mediate, because, according to his terse statement “The equalization of property 40 Claus Dierksmeier and Michael Pirson is one of the things that tend to prevent the citizens from quarrelling” (Pol II, 7, 1267a, 37–38).

Interestingly, in Aristotle’s thinking being too rich is just as prob- lematic, if not more so, as being poor. To be sure, Aristotle has no illu- sions about poverty’s inducements to vice. Yet the infractions of law caused by poverty are petty: They do not endanger society at large.

Not so with the felonies of the rich. Their “ambition and avarice, almost more than any other passions, are the motives of crime” ( Pol II, 9, 1271a, 16 –17). “The fact is that the greatest crimes are caused by excess and not by necessity. Men do not become tyrants in order that they may not suffer cold; and hence great is the honor bestowed, not on him who kills a thief, but on him who kills a tyrant” ( Pol II, 7, 1267a, 12 –16). All in all, the state should act as an enabler of personal perfection in communal interaction. Against the view voiced by some sophists in his time (and by today’s libertarians), that the state should be conceived merely as an insurance against violence and fraud, Aristotle states:

But a state exists for the sake of a good life, and not for the sake of life only: if life only were the object, ( ...) brute animals might form a state, but they cannot, for they have no share in happiness or in a life of free choice. Nor does a state exist for the sake of alli- ance and security from injustice, nor yet for the sake of exchange and mutual intercourse; (...). whereas those who care for good gov- ernment take into consideration virtue and vice in states. Whence it may be further inferred that virtue must be the care of a state which is truly so called, and not merely enjoys the name. ( Pol III, 9, 1280a, 31–1290b, 9) Yet a state, understood in this light, cannot arise from the calculus of barter. The public covenant is more than the inflation of the logic of private contracts to the proportions of a social contract: a state is not a mere society, having a common place, established for the prevention of mutual crime and for the sake of exchange. These are conditions without which a state cannot exist; but all of them together do not constitute a state, which is a community of families and aggregations of families in well- being, for the sake of a perfect and self- sufficing life. (...). The end of the state is the good life (...).

( Pol III, 9, 1280b20 –1281a, 1) Aristotle’s Economic Ethics 41 2.5 Consequences for the philosophy of business and management We are now at a point where we can fully understand and appreci- ate Aristotle’s distinction, mentioned earlier, between chrematistike and oikonomia , which is central for our application of his theory to contemporary questions of business and economics. Money- making and wealth- getting (chrematistike ) are acceptable as long as “there is a boundary fixed” ( Pol I, 8, 1256b, 27–34) through a purpose- bound and socially embedded household- economy (oikonomia). Yet taken out of this context, the pursuit of wealth typically knows “no limit of the end” and acquires “riches of the spurious kind” ( Pol I, 9, 1257b, 28). Aristotle is fully aware that the unaccustomed eye, when looking at business transactions, cannot always easily make out which is which: “natural” versus “unnatural” chrematistike . In Aristotle’s terms; we might speak of an “embedded” as opposed to a “nonembedded” pursuit of wealth.

Since from the outside we cannot always assess correctly the (moral or immoral, “natural” or “unnatural”) end a given transaction serves, self- regulation becomes all the more important (Block, 1996; Davis et al., 1997; Donaldson and Davis, 1991). Legislation alone is futile when decision- makers on all other levels do not concur and rein in their chre- matistic impulses in favor of genuinely oikonomic goals (Pol I, 9, 1257b, 31–1258a, 5). Aristotle’s distinction between these two quite opposite orientations of economic pursuits provides a very helpful tool for thinking through contemporary dilemmas in the field of business ethics, corporate social responsibility, management theory, and social entrepreneurship. This is particularly the case, in our judgment, when it comes to questions of corporate self- regulation and corporate governance. Crucial, in our eyes, is not so much Aristotle’s commendation of specific business practices in household management but rather his overall condemnation of a view that privatizes the realm of economic life and severs it from moral or political concerns. Economic life, to him, is contextualized ab ovo.

In other words, Aristotle sees the individual not as a burgher first and a citizen later, but casts him immediately as a political being. The house- hold is therefore, to Aristotle, not an economic entity first and then a political community: He initially conceptualizes it as an integral unit of the polis. Likewise, we think, one should view the corporation not as a profit- machine first and then ask how such “mechanical monsters” (Solomon, 2004, p. 1033) suddenly come to have social responsibilities. 42 Claus Dierksmeier and Michael Pirson Rather, from the outset, we should view firms as corporate citizens with social responsibilities.

Aristotle’s framework also allows us to lose the unproductive divide between selfish and altruistic transactions in business (Dyck and Kleysen, 2001, p. 563). By their very nature, business organizations are committed to the interest of their members while servicing the greater community that enables their activities (Solomon, 2004, pp. 1024 –1028).

The requirement for ethical conduct in the business field, consequently, neither entails undue self- sacrifice, nor requires ordinary men to behave like saints. It only demands that we realize what the corporation, in fact, is: a social institution, where behavior is modeled, customs are shaped, and people engage in forms of conduct with moral and political signifi- cance (Wijnberg, 2000, p. 340). To take the perspective of virtue and a philosophy of the good life in the business context is therefore “a way of understanding or (re)conceiving what management is, not as a way to pass moral judgment on it” (Dyck and Kleysen, 2001, p. 565). Turning a profit and creating wealth, teaches Aristotle, are not the same. It is the latter that legitimizes and limits the former. From this angle, we can extend to the modern corporation the qualified approval of the pursuit of profit that Aristotle accords to all households (Collins, 1987, p. 570). For the latter a pursuit of profit is acceptable when it is not excessive, does not harm the community, and when it remains subordi- nated to the pursuit of goals that are economic and not merely chrematis- tic in nature. The same can be said for corporations.

Viewed in that light, the currently prevailing norms and laws ( nomoi) for business are strongly influenced by chrematistic ambitions. Scholars in economics and management suggest that businesses and their man- agers adhere to maximization paradigms. Having one objective which can be maximized has long been hailed by system theorists and econo- mists as the only viable strateg y ( Jensen, 2002). In Aristotle’s view, such separation of the financial and the political realms signals danger. For him, business is part of society and this embedded status needs to be reflected in all strategic decision making. Thus, oikonomic goal- setting processes encompass ecological, social, financial, and intergenerational concerns. Oikonomic businesses aim at the creation of overall well- being rather than the isolated satisfaction of a special interest group.

Maximization strategies are inherently flawed, according to Aristotle, because they are excess- oriented; truly oikonomic strategies are, by con- trast, virtue- based and moderation- oriented.

Maximization of any kind precludes moderation and stands in the way of achieving the golden mean, unless the calculus of maximization Aristotle’s Economic Ethics 43 is tied to the goal of eudaimonia . The traditional view of neoclassical economics is that if profit is pursued, the utility of everyone increases as a consequence. With utility as a surrogate for happiness, profit maxi- mization seems causally linked to increases in happiness, theoretically.

Yet, in practice, such a clear- cut causality does not exist. Already in Aristotle’s times it was evident that wealth and well- being were nei- ther causally related nor even highly correlated. It is precisely for this reason that Aristotle distinguishes between the notions of hedonic and eudaimonic happiness. The former, induced by the senses and pleas- ures, is short- lived, and can often be achieved through the possession of wealth. Produced by virtuous behavior, the latter aims at excellence in all its dimensions, is less immediate but longer- lived, and cannot be procured through wealth. Recent findings demonstrate that wealth and well- being are only correlated up to a certain wealth level. Easterlin (2001), for example, notes that GNP growth and growth in well- being are actually disconnected in developed societies. Layard (2005) states that beyond a certain income level, well- being is influenced mainly by social factors rather than by income. Biswas- Diener et al. (2004) find that a materialistic attitude and a focus on income have a high negative correlation with individual happiness. Having said that, it is also evi- dent that poor people who lack basic amenities such as shelter are very unhappy. In Aristotle’s words: “No man can live well, or indeed live at all, unless he be provided with necessaries” ( Pol I, 4, 1253b, 25–26).

Martin (2005) argues that once a person passes the point of being able to afford “the normal cost of everyday life,” more wealth may increas- ingly be accompanied by less happiness, not more. And with high levels of wealth come increased complications and worries, including con- cerns about losing one’s level of wealth. As a result, the connection of wealth and well- being, once beyond the poverty level, is very unclear. How else, then, can the economy and business be managed to support higher levels of eudaimonic well- being?

Many observers deplore the chrematistic spirit of current day businesses and call for corporations to serve society first and put profit second (Arena, 2004). Business organizations, however, often understand themselves as legally bound to maximize profit (Ballou and Weisbrod, 2003; Jackson and Nelson, 2004). By dint of prevalent governance structures they cater to shareholder interests rather than broader soci- etal concerns. While Aristotle obviously never laid out blueprints for modern busi- ness organizations, based on these structural insights, we can say that businesses operated in line with his oikonomic understanding would be 44 Claus Dierksmeier and Michael Pirson embedded within the political and social fabric of the community, and they would view themselves as servicing society, rather than society serving their financial interests. Such businesses would actively pur- sue strategies that integrate social responsibility, not as an add- on, but as integrative part of their day- to- day operations (see Porter and Kramer, 2006). Moreover, oikonomic organizations would be guided by their overall contribution to societal well- being and thus aim for a balance of different imperatives. Instead of serving one special inter- est group alone, such as shareholders, they aim at serving all their stakeholders and society at large (Layard, 2005; Diener and Seligman, 2 0 0 4). Most i mp or t a nt ly, bu si ness, or ie nte d w it h re fe re nce to A r istot le’s philosophy, should also reflect the overall balance orientation in their gover na nce st r uc t u re, g iv i ng a fa i r representat ion to a l l per t i nent sta ke - holders, including employees, customers, suppliers, and societal coun- cils (Spitzeck and Hansen, 2010). In a word, businesses need to restrain their chrematistic endeavors by aiming towards truly oikonomic goals.

Shareholder value creation is not an illegitimate but a subordinated con- cern for an oikonomic enterprise. From a primary and exclusive objective of business policy the chrematistic aims of profitability are relegated to secondary and morally integrated goals. When looking for business that exemplify the oikonomic character env isioned by A r istot le, soc ia l enter pr ises come to m i nd, as t hey seek to be, first and foremost, socially, ethically, and environmentally respon- sible ( Jackson and Nelson, 2004; Savitz and Weber, 2006). They straddle the usual divide between nonprofit and for- profit organizations. Like nonprofits, social enterprises can organize in pursuit of a wide range of social missions. Like for- profits, they can generate a broad range of ben- eficial products and services that improve quality of life for consum- ers, create jobs, and contribute to the economy (Strom, 2007). Social enterprises seek to bring benefit to all stakeholders, and reinvest their surpluses to advance their social purposes, thus reaffirming the public and societal function of business.

2.6 Conclusion Aristotle predicted some key problems we are facing today more than two thousand years ago. With his guidance we can reorient the dis- course about the role of corporations in society. In pursuit of alternatives to correct the current excessive orientation towards shareholder value that undermines our society’s long- term survival, Aristotle’s theory of qualitative limitations for economic endeavors helps us conceive of Aristotle’s Economic Ethics 45 alternative business organizations that create healthy wealth. Aristotle’s insight into what constitutes wholesome wealth can open new strategic approaches to business that open new opportunities for organizational and societal well- being. Wealth created in a sustainable fashion is con- ducive to the eudaimonic happiness of all stakeholders. Management and leadership in the twenty- first century need to learn that serving society while making financial profits is what will define success in the future.

Any corporation that wants to sustain its reputation and ensure its long- term success needs to understand that. By moving from a merely chre- matistic to an oikonomic perspective, managers can harness their powers to do good while remaining able to do well financially.

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