Ethics and the Future of Capitalism

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Laszlo Zsolnai & Wojciech W. Gasparski (eds.) Ethics and the Future of Capitalism. Transaction Publishers, New Brunswick (U.S.A.) and London (U.K.), 2002. (This book may be available at: Amazon)

The volume addresses the ethical problems of the capitalist economy with special reference to globalization. Contributors include one of the world's most successful capitalists and philanthropists George Soros; founder of INSEAD, Olivier Giscard d’Estaing; economists Andrew Brody, Ferenc Rabár, Lubomir Mlcoch, and Stefano Zamagni; culture historian Jörn Rüsen; philosopher Peter Koslowski, and business ethicists Edward R. Freeman, Wojciech W. Gasparski, and Laszlo Zsolnai. The book suggests that the business ethics and the future of capitalism are strongly connected. Capitalism will sustain if a less violent, more caring form of it is created.

In Chapter 1 George Soros' criticism of “market fundamentalism” is introduced. Andrew Brody, Olivier Giscard d’Estaing, Ferenc Rabár, and Jörn Rüsen discuss and develop further Soros’ main argument that laissez-faire capitalism undermines the very values on which open and democratic societies depend. The instabilities and inequalities of the capitalist system could feed into nationalistic, ethnic and religious fundamentalism. It is exactly why we should prevent a return to that kind of fundamentalism by correcting the excesses of market fundamentalism.

In Chapter 2 Peter Koslowski emphasizes that capitalist economy can show the individuals the relative prices and the optimal allocation of resources but cannot relieve them of the choice between goals and values. For this reason there is a need for reembedding business, the market, and economic motivation into ethical and social norms. Capitalism should be reembedded in the ethics and culture of a society.

In Chapter 3 Lubomir Mlcoch focuses on the problematic of Czech style capitalism. Mlcoch argues that introducing laissez-faire capitalism without respecting the cultural norms and institutional settings of a society necessarily leads to great inefficiency and enormous social losses.

In Chapter 4 Stefano Zamagni investigates the role of civil society in relation to the market and the state. He shows that civil society is based on reciprocity whose role is vital in the functioning of advanced market economies. Reciprocity ties may modify the outcome of the economic game either by stabilizing co-operative behavior of the agents or by altering endogenously the preferences of the agents themselves. Civil society can contribute significantly to the development of capitalism.

In Chapter 5 Edward R. Freeman’s ideas about stakeholder capitalism are introduced. He argues that stakeholder relationship is a key to understand the functioning of business in the today’s world. Stakeholder capitalism allows the possibility that business becomes a fully human institution that asks managers to create value for all stakeholders.

In Chapter 6 Wojciech Gasparski introduces the praxiology tradition in the debate about ethical aspects of capitalism.  He states a “triple E” criteria for judging economic actions, namely effectiveness, efficiency, and ethics. A well-functioning economy should satisfy all these criteria simultaneously. Some religious perspective is provided to defend the “triple E” model.

In Chapter 7 of the book, Laszlo Zsolnai explores the conditions of ethical and social acceptability of profit making. He argues that profit is ethically acceptable if it is produced by activities that in aggregate do not violate the applying ethical norms. Profit is socially acceptable if it is produced by activities that in aggregate do not cause harm to the stakeholders. Hence non-violence emerges as a necessary condition of acceptable business practices.