Business Ethics Article Review

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

Georges Enderle1,2

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 first part, the purpose of business and the

economy is explained as the creation of wealth defined 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 fixing 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 find 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 significance. 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 defining 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 of

Social 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’’ (Stanley 2003, p. 5).

This definition may suffice 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

influence 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 definition (van Luijk 1997, p. 1579)

widely accepted by the European Business Ethics Network and

beyond (Rossouw and Stückelberger 2011), 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 clarification in mind, the essay proceeds in three

steps. First, we focus on the purpose of business and the

economy. I propose to define 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, finan-

cialization, and threatening environmental catastrophes, it

is urgently necessary to ask about the purpose of business

and 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 defined 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 figures 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 first may concentrate on what is meant by the wealth of

a single nation. What makes a country like Norway ‘‘a rich

country’’? 1

Recent studies of the World Bank, the OECD

and other institutions produced interesting results, which

correct the common fixation 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 Bank 2006, 2011;

Warsh 2006; Stiglitz et al. 2009; UNDP 2010; OECD

2013).

Drawing from this rich literature, a normative purpose

of business is proposed and briefly characterized, while

referring to an extensive discussion by the author in

numerous articles (Enderle 2009, 2010, 2013, 2015a, b).

The Wealth of a Society is a Combination of Private

and Public Wealth

When we undertake to define ‘‘the wealth of a nation,’’ it is

difficult 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

1 Norway ranks as the richest country in the world in 2005, according

to World Bank (2011).

620 G. Enderle

123

excluded. In economic theory, ‘‘public goods’’ are defined

with the characteristics of non-exclusivity and non-rivalry

(see Musgrave 1958; Samuelson 1954, 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 benefit from it without reducing

the benefit 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.’’ 2

When 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’’ (xià

hăi), 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

suffices 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

efficient 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 difficult, 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 sacrifices 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

conflict 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 selfless

engagement for entrepreneurial success, love for the

mother country, solidarity with the poor, and the fight for a

lost cause. In each case, the other-regarding motivation

transcends self-interest, be it for a good or for a bad cause.

2 The 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

definitions of public bads, see Kolstad (2010).

3 Ayn 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,

specifically banks and others, were such that they were best capable of

protecting their own shareholders and their equity in the firms’’

(quoted by Knowlton and Grynbaum 2008).

How Can Business Ethics Strengthen the Social Cohesion of a Society? 621

123

Therefore, other-regarding motivation is a necessary,

though not a sufficient, 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 difficult 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 the formal criteria of private and public goods,

we now turn to the substantive determination 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 report How’s Life? 2013. Mea-

suring Well-Being (2013), I propose to define the wealth of

a society—for example, of a country—as the 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. 4

Economic capital

is composed of ‘‘real’’ and financial 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 definition of wealth (that is close to the meaning of

well-being) involves important characteristics emphasized

by the OECD report (2013) as well. 6

First, 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 definition of wealth includes human beings

as well as things and environmental conditions which

matter to human beings. Thus, it goes beyond the common,

material definition of wealth by taking seriously ‘‘human

capabilities’’ (according to Amartya Sen) and placing

human well-being on the center stage. The definition dif-

fers, though, from the definition 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 definition 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 flows, 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

significance. 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 define the purpose in significantly 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 significance, 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

4 The important concept of natural capital has been emphasized by

The Natural Capital Declaration, a commitment of the finance sector

for Rio?20 and beyond. It defines natural capital as Earth’s natural

assets (soil, air, water, flora, 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). 5

There are a great many concepts of social capital at multiple levels

of human relations (see, for example, Ayios et al. (2014); Kwon and

Adler 2014). After reviewing over 90 books and articles, Kwon and

Adler conclude: ‘‘The basic thesis—that the social ties can be

efficacious in providing information, influence, and solidarity—is no

longer in dispute’’ (p. 419). In this essay, I concentrate on

economically relevant social capital and use Robert Putnam’s

definition which refers to ‘‘connections among individuals—social

networks and the norms of reciprocity and trustworthiness that arise

from them’’ (Putnam 2000, 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

definition of social capital used in this essay differs from the concept

of social cohesion, as becomes clear in the following section.

6 Similarly, the International Integrated Reporting Committee distin-

guishes six types of capital: financial, manufactured, intellectual,

human, social and relationship, and natural (IIRC 2013, particularly

pp. 12–13).

622 G. 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, in A

Theory of Justice (1971) and Political 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’’ (Voyé 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 title Order 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. 7

The OECD

report (2011) defines social cohesion in a very broad sense:

‘‘A society is ‘cohesive’ if it works towards the well-being

of all its members, fights exclusion and marginalization,

creates a sense of belonging, promotes trust, and offers its

members the opportunity of upward social mobility’’

(OECD 2011, 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).

Influenced by numerous reports of international organiza-

tions, this definition, while rather comprehensive, in my

view, lacks precision and consistency.

Dick Stanley presents a fine 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 defined 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. (Stanley 2003,

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 affinity 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 first

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

7 See 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 Corporate Citizenship (2008), and The

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) (Kaufmann 1988, pp. 244 ff.; see also Luetge 2013,

pp. 251–335). The economic actors (households, firms) act

rationally if they maximize their own utility or profit,

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

firms). As Franz-Xavier Kaufmann writes in the

Handwörterbuch der Wirtschaftswissenschaften (HdWW),

the homo oeconomicus can take three different meanings:

(1) It is a real-typical reconstruction of empirical economic

behavior. (2) It defines 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 justified 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 difficulty capturing

clearly the changing conditions of action. The time horizon

in which the maximization has to take place is difficult 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 book Social Choice and Individual

Values (Arrow 1951/1963).

Despite all these problems, it is astonishing how much

the homo oeconomicus has not only survived but even

flourished 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 maintain

that 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

(Luetge 2015, 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 briefly 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 influenced 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

definition can be found in the Pastoral 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 fulfillment … [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,

624 G. Enderle

123

and even of the general welfare of the entire human

family.

Four aspects of this definition 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 Brieskorn 2010, 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 fulfillment’’). 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 defined in substantive

terms? Based on the encyclical Pacem in Terris (1963) by

John XXIII and confirmed by the Second Vatican Council,

these conditions encompass all human rights as promul-

gated in the Universal Declaration of Human Rights in

1948 and specified in the International Covenants and

Conventions of the United Nations. With unequivocal

clarity, Catholic Social Teaching today affirms the totality

of human rights as defined 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 Constitution Gaudium 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 defines 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 significant 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 defined 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 clarification 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 definition of the public good implies

that it can be ‘‘good’’ (positive) or ‘‘bad’’ (negative). 8

To

illustrate, a stable, efficient, fair, and reliable financial

system is valued as positive, while an unstable, inefficient,

8 Examples 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

conflict-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 conflicts,

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—fig-

uratively speaking, because they are sitting in the same

boat. Not only the benefits 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 significance 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

clarification. The most important answer, of course, must

be given in practice.

We have defined 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 profit and much more precise than the

so-called ‘‘creation of values.’’ The significance 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

and better—in other words, it is about ‘‘ethical innovation

in business and the economy’’ (see Enderle and Murphy

2016). More specifically, 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 firms, 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 capital requires—among many other challenges—the reintegration of the finan-

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 efficient investments in people for

the enhancement of their health and education.

• Creating social capital means strengthening and expanding trust in interpersonal relations through

honest business behavior, which, at the same time,

needs to be secured by fair and efficient 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 goods should be clarified and deepened for a better understanding of public wealth.

The structural presuppositions and consequences

implied in this concept are to be openly explored and 9

These perspectives, along with active involvement of the world’s

religions, are further developed in Enderle (2011).

626 G. Enderle

123

explained. The institutions and motivations necessary

for the creation of public goods deserve extensive

discussion.

• Because the definition of public goods is of a formal nature—defined by non-exclusivity and non-rivalry—

ethical evaluation is 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 to strike a

reasonable balance between both. The potential and the

limitations of both basic institutions need to be clarified

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 specifically, 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 defined 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 fields, 30 human rights have been identified as relevant

for business (UN 2008): 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 (UN 2011), 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 being should be 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

person should not diminish the enjoyment of this right by

another person and that the enjoyment of different human

rights should not compete 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 definition 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 briefly outlined that pertain to ‘‘corporate responsi-

bility’’ as defined 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 find 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 defined normative

ethical task, I conclude by conceptualizing human rights as

public goods. Indeed, business ethics is facing very new

and exciting challenges.

Open Access This article is distributed under the terms of the Creative Commons Attribution 4.0 International License (http://crea

tivecommons.org/licenses/by/4.0/), which permits unrestricted use,

distribution, and reproduction in any medium, provided you give

appropriate credit to the original author(s) and the source, provide a

link to the Creative Commons license, and indicate if changes were

made.

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