Constellations, Volume 29, Issue 3, Page 359-374, September 2022.

’Although the empirical and conceptual underpinnings of New Finance have been rigorously tested, its ethical underpinnings have not been explored.’These are seen to derive from the social remoteness of late twentieth century individualism, which needs to be countered by sensitivity to the social context of finance and to the developmental nature of ethical behaviour. The author is Fellow in Finance at Templeton College, Oxford.

There is a gap between self-interest and morality that is caused not only by individual shortcomings but also by the interdependence of the outcome of individual action with the actions of others. If the others can be expected to be ethical this uncertainty about the others’ behaviour is reduced but not eliminated. Failure of economic motivation will be followed by failure of ethical motivation. Christianity or monotheistic religion in general comes into the picture to assure ethical behaviour of being advantageous (...) in the long run. The paper analyses the sequence ethics as compensation of the failure of economic motivation — religion as the compensation of the failure of ethical motivation. (shrink)

ABSTRACT:The notion of “democracy” has become a much-debated concept in scholarship on business ethics, management, and organization studies. The strategy of this paper is to distinguish between a principle of organization that fosters participation and a principle of legitimation that draws on consent. Based on this distinction, we highlight conceptual shortcomings of the literature on stakeholder democracy. We demonstrate that parts of the literature tend to confound ends with means. Many approaches employ type I democracy notions of participation and often (...) take for granted that this also improves type II democratic legitimation. We hold this to be a mistake. We provide examples of the ambiguity of organizational procedures and show that under some circumstances a decrease in the degree of participation may actually increase legitimation because a governance structure that results in higher productivity can provide higher benefits for all parties involved, serve their interests and therefore meet their agreement. Less type I democracy may mean more type II democracy. We believe this to be an important insight for judging the legitimacy of both capitalistic firms and competitive markets. (shrink)

The aim of this paper is to critically review the game-theoretic discussion of Hobbes and to develop a game-theoretic interpretation that gives due attention both to Hobbes's distinction between “moderates” and “dominators” and to what actually initiates conflict in the state of nature, namely, the competition for vital goods. As can be shown, Hobbes's state of nature contains differently structured situations of choice, the game-theoretic representation of which requires the prisoner's dilemma and the assurance game and the so-called assurance dilemma. (...) However, the “state of war” ultimately emerges from situations that cannot be described by any of these games because they represent zero-sum games in which the outcome of mutual cooperation does not exist. (shrink)

This work aligns James Buchanan’s theory of social contract with the structure of Michael Moehler’s multilevel social contract. Most importantly, this work develops Buchanan’s notions of moral community and moral order. It identifies moral community as the vehicle of escape from moral anarchy, where community is established upon a system of rules akin to James Buchanan’s first-stage social contract. Moral order establishes the baseline treatment of non-members by members of a moral community and also provides a minimum standard for resolving (...) disputes that are not resolved by the more robust social contract shared among community members. This work links the multilevel contract to polycentric social order, noting that polycentric systems may promote development of the moral order by enabling experimentation with and emulation of rules and rule systems made available by overlapping and adjacent institutions. (shrink)