What Philosophy Can and Cannot Contribute to Business Ethics

By Capaldi, Nicholas | Journal of Private Enterprise, Spring 2006 | Go to article overview

What Philosophy Can and Cannot Contribute to Business Ethics


Capaldi, Nicholas, Journal of Private Enterprise


This paper has two theses. The first thesis is that many traditional and current notions of philosophy, in general and ethics in particular, cannot help us either to understand or constructively critique the norms of business practice in contemporary commercial societies. The second thesis is that there is a form of philosophical endeavor that is capable of doing so.

Philosophical Failure

Much of the literature of business ethics is produced by philosophers, who are both confused about the nature of their own discipline and who have misunderstand the practice of business. What relates these two shortcomings is one specific and longstanding conception of philosophy (but I hasten to add that it is not the only conception of philosophy). The classical view of philosophy is that it consists in discovering an external structure to which our practice must conform.1 We shall represent this view as (T/P hereafter stands for the view that practice ought to follow theory). What this permits philosophers to do is to proclaim what the alleged external structure is and then demand that current practice conform to that structure. This procedure immediately excuses business ethicists from knowing anything about the actual practice of commerce (or economics, etc.).

Why is this classical view of philosophy confused? There are two reasons. To begin with, it is not the only conception of philosophy. There is a modern view of philosophy in which theory is the explication of practice. We shall represent this view as (P/T). It is modern in the sense that it arose in the post-Renaissance world, specifically in the 17th and 18th centuries.2 (Again, I hasten to add that not all modern and contemporary philosophers adhere to the "modern" view). The second reason why this classical view of philosophy is confused is that there is no consensus on what the alleged external structure is. This is especially the case in that branch of philosophy known as ethics.

Let us examine these points in further detail. Many classical, ethical views presuppose that we must begin with an independently established ethical account and then measure actual practice against that ideal account. Plato alluded to the "Forms" and Aristotle claimed to have discovered a metaphysical teleological biology. This runs the risk at times of reducing philosophy to an ivory-tower exercise in ideology. In addition, classical philosophers had a number of biases. Their first bias was that human fulfillment reaches its zenith in contemplation, not in action and not in imagination.

As a consequence, there was a second bias: specifically, many classical philosophers had an inherent antipathy to commerce in its ancient forms and would oppose it in its modern forms. There was no notion of modem technological and market-driven societies. One of the things that made the U.S. Founding a great experiment was that, following Montesquieu, it was constituted as a large and commercial Republic, not a small and agrarian republic in the classical sense.

The third bias was an adherence to a conception of a collective3 common good that is totally alien to modern commercial societies. Part of the authority claimed by philosophers was that they could see the total picture and that, therefore, they were uniquely positioned and privileged to determine public policy and resolve apparent conflicts. This explains why so much of contemporary business ethics literature sounds like obiter dicta directed to the business community. The clearest example of a position in business ethics that is a contemporary articulation of the notion of a collective common good is the controversial, if not discredited, view known as "stakeholder theory."

There is a fourdi bias-a bias in favor of government planning and regulation of the economy. This results from the fact that the social good is tied to a larger all-encompassing metaphysics.4 If there is a larger metaphysical structure to the universe, and if that structure and all of its subparts including economic activity can be modeled, then it should be possible to plan economic activity. …

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