The circuit-breaker:
Ethics and the limits of technique
by Simon Longstaff
Introduction
An increasing number of people are coming to accept that the debate about business and professional ethics is of importance.
Yet how would genuinely concerned individuals feel if it was suggested that, even with the best intentions, they ran a grave risk of reinforcing the root of the problem that they sought to solve? Without wanting to sound too pessimistic a note, it is exactly this possibility that will be explored in this paper.
The thesis to be argued is that whilst substantive issues in business and professional ethics are starting to receive what seems to be adequate attention within Australia, there is a corresponding failure to deal with even more fundamental issues of relevance.
It is suggested that this is so because the dominant form of rationality employed by a modern society does not easily accommodate the type of reflection that typically occurs when considering how to deal with ethical dilemmas. This leads either to the processes of ethical reflection being devalued as too imprecise, or to a situation in which most people try to manage problems in ethics so that an acceptable 'solution' is found. It will be argued that this second approach actually leads to the inadvertent reinforcement of the very conditions that gave rise to the original problem.
This is not to suggest that there is any lack of sincerity on the part of those engaged in the discussion in Australia. Nor is it to suggest that the response by people overseas has been any better. Rather, it is argued that the difficulty which this paper anticipates is one faced by any culture that is distinctively 'modern' in its outlook.
On a more optimistic note, the paper goes on to suggest that those in business and the professions have an opportunity to redress this situation and, perhaps, to lead the way in developing a more open and therefore appropriate response to the peculiar challenge that ethical reflection poses for a modern plural society.
That is the bare outline of the matters that will be discussed below. The aim of the following sections is to add some flesh to the skeleton by recounting a relatively familiar story. Available time and space only allows for a brief synopsis. Perhaps the broad cast of the narrative will be understood and excused when it is explained that the story to be told is about ourselves and our apparently unquenchable thirst for certainty.
PART 1: background
One of the issues that has unsettled thinkers since the dawn of recorded time and up until the present is the problem of how, and about what, a person can be certain. This flows, in part, from the common observation that everything seems to be in a state of flux.
On the one hand, one need only look at the seasons, or the passage of a human life or the turning of the heavens to see that very few things which can be observed directly (if any), remain the same indefinitely. Yet, if this is so, then how are we to claim knowledge of the world? At best, everything must be considered to be provisional.
On the other hand, there is something of a conundrum in that whilst observations suggest that everything is subject to change there is also an intuitive feeling (again based on observation) that the patterns of a changing world are reasonably predictable. Heraclitus, and his follower Cratylus, might have been correct to say that we can never step into the same river twice. However, even an acknowledgment of this point does not prevent people from being confident that when the Spring comes and the snows thaw then the river will rise. And at an even more basic level each of us goes to bed with the fairly uncontroversial belief that the sun will rise in the morning.
Thinking about such matters opens a 'Pandora's Box' of questions touching on the nature of the reality that we encounter. Just what is the world made out of? Why is there something rather than nothing? What is the foundation for reality? And so on!
These are some of the enduring questions of metaphysics. Before proceeding, a word of reassurance. This paper does not set out to be a 'potted history' of metaphysics. The strategy employed to avoid this outcome has been to exercise a degree of licence by focusing on a selection of key events - of which the most important was a 'watershed' in the way in which Western or, more properly, Modern society characteristically thinks about the world.
Whilst admitting that the following rendition of events is simplistic (almost to the extent of being a caricature), it nonetheless captures an essential point. This is that the 'watershed' involved a clash of two major 'world views' - one essentially medieval in outlook (but incorporating many features of thought developed in the classical age) and the other belonging to the period which would come to be called 'the Enlightenment', the precursor to our own modern era. It will be argued that this 'watershed' marked a distinction in the way Western society chose to answer questions about the ultimate guarantee of certainty for what people claimed to know and understand.
In the medieval scheme of understanding, revelation and reason both placed God at the heart of all things, as the literal guarantee for their existence. Reference to and wide-spread belief in an omnipotent, omniscient, omnipresent being, existing outside of time and space, suggested that there was indeed a sure foundation for existence and hence some hope of true knowledge. Yet, despite drawing on the best of available evidence (including a selection from the arguments of the ancient Greeks), medieval philosophy was still regarded, by a growing number of critics, as being essentially speculative and hence unsatisfactory when measured against emerging standards for ensuring certainty.
It is against this background that the meditations of the great French philosopher and mathematician, Renee Descartes, should be assessed. While Galileo was wrestling with the problem of developing a scientific method which inevitably challenged some of the dogmas of the Church, Descartes was blazing a philosophical trail that would eventually find Man being hailed as the foundation for all meaning and reality.
Without meaning to do so, Descartes opened a door through which others marched in time, ready to declare that Man was not just at the centre of the Universe but its very heart. How did he do this and what was the impact of his solution? Above all, Descartes was the enemy of uncertainty and error. Building on the mathematical principles of his analytical geometry, Descartes sought to explain the world in all its variations as a place of certain mechanical principles that were clearly and distinctly amenable to scrutiny by Man's defining faculty; namely, his reason.
In search of certainty, Descartes devised and applied a method by which his reasoning was subjected to the most severe of tests. Nothing that could be the subject of error or doubt would be allowed to remain unchallenged; nor would it be allowed to figure in his determinations. Allowing that his senses might be deceived, Descartes proceeded to discount as reliable even the most obvious evidence of his senses. Thus, the process of reflection whittled away all doubtful (and therefore extraneous) propositions. Finally, Descartes found himself to be left with one famous and apparently incontrovertible proposition: Cogito ergo sum (I think therefore I am).
Here, at last, was the emergence of the self-certain subject who, being absolutely sure of his own existence (but not necessarily sure of any others'), was now competent to work outwards in order to conceptualise and articulate the mechanical principles at work throughout the Universe. But above all, with mathematics as the 'Queen of the Sciences", human beings were now entitled to feel confident in their ability to calculate.
It is important to understand the significance of Descartes' work in influencing the way in which the world has developed since his time. On the one hand there have been great intellectual labours as people have sought to uncover and, where possible, correct his errors. On the other hand, Descartes gave added impetus to scientific endeavour and in doing so helped to reinforce the foundation for a belief that the application of 'scientific method' would ultimately make the secrets of the Universe, and its workings, entirely penetrable to the mind of Man; a belief burning bright in the hearts of men like Francis Bacon whose life's work was to have culminated in the (unfinished) work entitled, The Great Instauration of the Power of Man over the Universe.
A further perspective
The apparent triumph of Cartesian certainty over scepticism needs to be put back into perspective. For example, it has been argued that discussion of a notional 'watershed' can be deceiving in that Descartes was really doing nothing more than help to rejuvenate older ways of looking at the world.
For example, Aristotle's scheme of classification in Biology established a scheme in which each living thing was classified according to its place within the appropriate genus, phyla and so on. On this argument, a kind of 'calculative rationality' can be seen to have been at work for centuries; only waiting for an opportunity to manifest itself in a more perfect form. As has been suggested above, the medieval view was just as interested in determining questions with great certainty. In addition, 'pre-Enlightenment' thinking was fond of utilising various taxonomies and categories.
The difference in the two periods may be found in the fact that the medievals relied on the existence of a great, and ultimately mysterious, God and a church vested with the power and wisdom that is thought to flow from Divine authority. Taken as one, this meant that medieval society could rest against a final bulwark which reduced the need for independent verification and calculation. Although the Modern world is superficially so different, it can be argued that either side of the 'watershed' represents a different attempt to quench the thirst for certainty. Relying less on the need for faith and more on each person's capacity to exercise a public, measurable form of reason, the moderns may have hit upon a more 'perfect' response.
With regards to this, the German philosopher, Martin Heidegger, suggested that the most perfect form of "calculative rationality' can be understood in the following terms:
This perfection consists in the completeness of the calculable certification of objects, of calculating with them, and of the assurance of the calculability of the possibilities of calculation.
(Heidegger, 1974, p. 213)
The trouble with this 'perfect' expression of 'calculative rationality' is that it never seems to achieve its goal of ensuring greater certainty. This is because the human horizon seems to be forever receding. Philosophers like Nietzsche have argued that those individuals who can escape from the herd are able to approach the horizon. But even they can not resist the force which he calls the "will to power". In practice, certainty only comes when all elements of the world have been subdued and made amenable to human control. The elements are thereby rendered predictable.
But this sort of control only comes at a cost. The first cost is generated in attitudes to the world around us. In order to be consistent, the self-certain subject is driven by a dominant form of rationality to see Nature as something to be mastered and possessed, as a raw substrate to be utilised in order to meet human needs. The second cost is, perhaps, less obvious as it involves a threat to those types of thinking which are labelled 'irrelevant' because they do not accommodate precise articulation and verification. There is then a danger that alternative ways of looking at the world will be marginalised and ultimately lost.
The wholesale application of 'calculative rationality' encourages the development of technique. There is a corresponding elevation in the importance of expertise, specialisation and the seeking out of 'technological' solutions to all problems, irrespective of whether or not they are amenable to calculation.
Finally, one should recognise that as a way of thinking about the world and of going about one's business, 'calculative rationality' has a tremendous ability to gather adherents.
And this is for two especially powerful reasons. Firstly, it works. Expressed in its most easily recognisable form, as science and technology, the application of 'calculative rationality' has led to amazing discoveries that have, in many cases, resulted in undeniable benefits for humankind. One need only think of improvements in medicine, agriculture and so on to see just some of the boons to have flowed from this distinctive world view. The second reason for its success is that 'calculative rationality' appears to operate in such a way that a number of goods can be delivered without ever closing off questions about the 'good life' itself.
Society takes the optimistic view that left to their own devices scientists and technologists will make discoveries that will guarantee eventual human happiness and liberation. Whether or not this still holds true, and its significance, will be examined below. However, it should be evident that this apparent neutrality makes the whole approach attractive to a liberal perspective which stresses the individual's right to determine his or her conception of the 'good".
There is perhaps one slight irony in the fact that science and technology is so closely associated with the operation of ‘calculative rationality’. This comes from the fact that scientists now accept that there is inherent uncertainty written into the fabric of the Universe. Despite this, most scientists continue to apply a method derived from the first principles of 'calculative rationality'. And, in the case of science, this is exactly as it should be. The trouble only really begins when the same techniques are applied in other less suitable fields of enquiry and endeavour.
The triumph of technique: beyond science and technology
It should be stressed that Descartes was not alone in his capacity to influence the future, nor was he the only one to apply the modern principles of 'calculative rationality' that emerged triumphant from the clash with the medieval world view. One need only look at figures such as Machiavelli and Hobbes to see a corresponding picture. For example, as in the case of Machiavelli:
As Isaiah Berlin has emphasised in his book Against the Current, Machiavelli's shocking originality lay in his divorce of political behaviour as a field of study from the traditional moral and theological world-picture, and in his argument that as part of the normal human situation "entire systems of value may come into collision without the possibility of rational explanation".
(Townsend, 1991, p. 1)
Max Charlesworth (1990, p.3) has argued that Machiavelli had a 'mechanistic' view of politics and was consequently untroubled by the fact of seemingly intractable forms of opposition. According to Charlesworth, both Machiavelli and Thomas Hobbes saw events in politics as being driven by political forces that clash as different individuals and groups jostle for power. If one knows the respective force at the disposal of one side or another then the outcome can be calculated. Politics is just like any mechanical system based on the interplay of forces. It flows from this that it is as foolish to apply moral considerations as it is to the results in a tug-o-war.
The other great exponent of a system which seems to be capable of regulating itself, as if according to discernible laws, was Adam Smith. Smith's famous conception of the 'invisible hand' contemplates a true science of economics in its prediction that self-interest will consistently do the job of ensuring the good of the society as a whole.
In more recent times there is the example of Karl Marx, and his close adherents, who believed that the principle of dialectical materialism represented the discovery of a law sufficient to justify the claims that social science really could be considered a fully-fleged and genuine science of Man. The implication in this was that it was now possible to predict the outcome of history with certainty. On such a view, people were self-certain. But were they free?
Subsequent history would seem to suggest that neither Machiavelli, Smith or Marx were correct. Yet, in a surprising number of cases, their methods of analysis are still applied to practice. Each of these thinkers has had a decisive impact on the world in which we now dwell. Each of them applied a kind of reasoning that was thought to facilitate calculation and certainty.
Finally, these great theorists saw themselves as champions of liberty, and did so without ever really considering the possibility that their very way of thinking about the world might prove to be a barrier to resolving one of the most distinctively human sets of problems; namely those arising in the field of ethics.
Of these successors to Descartes, much could be said. However, more detailed comment will be reserved only for the ideas of Adam Smith. Before moving on, it should be stressed again that there are obviously many parts of the story still left untold. However, it is hoped that enough has been said to establish the general theme of this paper.
Into the present: the professions
So, what might all of this have to do with the current state of debate in business and professional ethics? At one level, society has reformed a previously popular, but naive, view that the fate of progress could be left in the hands of self-regulating professionals who would ensure that wisdom prevailed in the production of unalloyed goods.
The current view is not so much a reflection of doubt about the prevailing level of expertise as it is a realisation that there are social questions that professionals may no longer be able to answer; either because they are not really interested in doing so or because they lack the ability.
To take but three examples: there is a recognition that questions about the place of genetic engineering in our society cannot be answered by the application of scientific method. If a just outcome is desired when making political decisions affecting the whole community in a democracy, then it is unlikely that it will be sufficient to adopt a Machiavellian perspective in which the result is dictated by the most powerful individual or group. Likewise, there are serious questions concerning whether or not the 'invisible hand' is quite the predictable mechanism that it was thought by some to be; especially if regarded as the sole legitimate means by which the good of the whole community is to be secured.
Yet, it is suggested in this paper that many people continue to look at the world through the lens of 'calculative rationality'. Whilst there is undoubtedly a change afoot, it's not so long ago the medical practitioners were being castigated for failing to view their patients as whole people. Instead each patient was reduced to a series of parts demanding the attention of specialists. People were reduced to an assemblage of hearts, lungs, lymph nodes, brains and so on. Having noticed a move back towards a more 'holistic' approach it is still important to register the existence of what may be a countervailing trend which takes the process of reduction a step further. This is the stage commanded by the bio-physicist and molecular scientist. At this level the somewhat abstract notion of the person is in danger of being supplanted by the constitutive codes recorded on the double-helix of DNA.
But medicine is too obvious and easy a target when trying to show that there is an existing tendency for the essence of technology to hold sway. What of other professions like accountancy and the law? It is at least arguable that many accountants and lawyers practice as if their work required nothing more than that they apply their skills and technical expertise.
- Step 1: Identify the problems?
- Step 2: What do the standards or laws require?
- Step 3: Tick that box, follow that rule, apply that precedent!
In such cases good technicians can rely on the capacity of 'calculative rationality' to generate what appears to be a neutral perspective. The argument goes that, "One is not called upon to judge, but to apply the skills and techniques of the profession in the service of the client in respect of his or her wants".
As will be argued below, this rationalisation is sometimes applied even when the professional reasonably believes that what the client wants is not in his or her interest (let alone those of others who might be adversely affected). So it is that one encounters techniques applied for the purpose of 'creative' accounting. And so it is that one can converse with barristers who argue that, in securing a 'just' outcome, it is less important that the truth be revealed than that the technical rules of evidence be followed.
Once again, it must be accepted that not all lawyers would speak in this way. Nor would there be many accountants who would distort their reports. However, it should be observed that many accountants and lawyers find themselves very uncomfortable when drawn away from the relative comfort of rules, standards and laws. Perhaps it is the case that the greater the clarity, predictability and certainty, the happier the condition of the average lawyer or accountant.
Into the present: business
The same application of 'calculative rationality' can be found in the recent history of business. Indeed, it may be that business provides the most complete example of how the principles apply. Many people in business see their job as being to maximise profits by ensuring the efficient use of resources.
Business-people will frequently talk and act as if management involves the application of various techniques. One need only recall the period of 'Scientific Management' to see an obvious example of how an approach based on 'calculative rationality' can be developed and applied.
Alternatively, one can consider the significance of an infamous case involving the Ford Motor Company of America. As De George (1986, p. 195) reports, the company conducted a cost-benefit analysis to determine whether or not to rectify a design fault in a vehicle. The Ford Pinto was known to be susceptible to exploding when rammed from behind. Executives sought to calculate the cost of paying damages for loss of life and for injury and then compare it with that of giving effect to a new, and safer, design. To be fair to Ford, nearly every manufacturer will find it necessary to complete a cost-benefit analysis when considering just how much the safety of the product should be weighed against costs of production which ultimately flow on to the consumer. The problem is that the consumer seldom has the opportunity to decide this matter for him or her self.
At another level, there is the fact that so many enterprises refer to their personnel as 'Human Resources'. This may seem to be a fairly trivial concern. However, what does the use of such language signal about the way in which people are being considered?
Heidegger would have argued that the use of such terminology is entirely to be expected in a world in which 'calculative rationality' causes people to see everything as if an object to be ordered up and stockpiled, as if an object for calculation. It may be objected that modern theories of management have moved far beyond a conception of personnel as being nothing more than cogs in a machine. One wonders sometimes if this is true, especially given that many work practices continue to be employed even though they seem to have been designed to allow people to service and apply new technology, rather than the other way around.
Even so, how would the argument of this paper be affected by the evidence of progress in areas such as Total Quality Management? Without wanting to decry any development which places a greater emphasis on the importance of personal relations and broad participation in the world of work, it still needs to be observed that the principles of Total Quality Management are most frequently deployed as a management tool. That is, TQM is, itself, a 'technological' solution and is therefore unlikely to usher in a genuinely new alternative that can challenge 'calculative rationality' as the dominant (if not exclusive) way of thinking about problems in business and their solutions.
Indeed, this is the source of the concern outlined at the start of this paper. The trouble with 'calculative rationality' is that it is self-validating. Its pre-eminent position as a form of rationality is ensured for as long as it can continue to drive a process in which solutions are evaluated according to criteria that are only judged successful if they 'meet' the standards of ‘calculative rationality’. This self-referential 'loop' makes for a very powerful survival mechanism. Thus, if society faces a problem created by technology, then the normal response is to find a technological solution. The self-certain subject does not recognise that this technological approach has a limit. No matter how intractable the problem seems to be, it is always thought to be just a matter of time until a new and clever solution will be discovered or invented.
This may be a very good point at which to pause in order to address and therefore prevent a possible misconception about my general attitude to technology. Firstly, the argument of this paper should not be read as a denial of the utility of technology. There is no intention to prepare the ground for a resurgence of Luddite philosophy. As noted above, technology is a great boon to humanity. How could a person sitting at a word-processor to write this paper offer a convincing argument to the contrary?
It should also be noted that it is not being suggested that any person is in error or to be blamed if found applying the principles of 'calculative rationality' per se. After three hundred years or so this type of thinking has been built into the common processes of everyday life. And it is this, in itself, that gives rise to some of the problems to be considered in the next section of the paper. 'Calculative rationality' has been phenomenally successful and this may have deferred a critical assessment of its relevance to life as a whole. It is therefore important to raise the issue of its apparent immunity to criticism and to suggest that there are other ways of looking at the world which tend to be ignored or marginalised when compared to ‘calculative rationality’. These are forms of thinking that are used in aesthetic appreciation, or in intense religious experiences or, it will be argued, when encountering an ethical dilemma.
It will be argued that ethical dilemmas cannot be dealt with by the application of ‘calculative rationality’. It is part of this argument that attempts to solve problems in business and professional ethics by applying 'technique' will ultimately prove to be self-defeating. The suggested reason for this is that an exclusive reliance on 'calculative rationality' tends to remove the foundations for trust and hence the ethical dimension itself. Paradoxically, if this happens then even the security of knowledge generated by science and technology is put at risk.
PART II: ethics
Thinking in and about ethics does not occur in a vacuum. Consequently, the processes of thought are not immune to the same intellectual influences at work in the rest of the community. However, it will be argued that, despite this, the area of ethics has proved to be infertile ground for the successful application of ‘calculative rationality’.
The difficulty of achieving certainty in the field of ethics is something that many people find difficult to accommodate. In turn, this leads to a situation in which thinking about ethics can be devalued as imprecise and therefore as failing to meet the more 'acceptable' standards that are associated with the application of ‘calculative rationality’.
All of this obviously requires further explanation and perhaps the best place to begin is with a discussion of the nature of ethics itself. Many people recoil from such a discussion believing the topic to be inherently laden with inaccessible theory. Whilst much philosophical discourse is necessarily complex, there is an equal amount of debate that is perversely obscure. Like any group of specialists, philosophers tend to cling to an arcane vocabulary that may be precise for a few while being impenetrable to the many. All of this is especially vexing when it comes to ethics because the impression can be given that the discussion of ethical theory is remote from the experiences of daily life.
Nothing could be further from the truth. Ethics (as opposed to meta-ethics) is and always has been a practical study to do with the actions of people both individually, and more particularly, within society. Although there will be debate about the founding question in ethics, many would express it in the same form as allegedly used by Socrates; namely, "What ought one to do?". As will be seen such a question is immensely practical in its import - giving rise to a whole host of other questions ranging from: the nature of 'goodness' itself, through to the more precise issues to do with one's respective duties and obligations.
Ethics is not the same as morality. While sometimes conflated, one way of understanding the difference is to think of various systems of morality as being distinct voices in a conversation which aims to answer the founding question, "What ought one to do?". These voices include those arising from various religious traditions as well as those which have been enunciated by philosophers and other theorists. On this model there is a Jewish voice providing answers to the fundamental question, just as there is a Christian voice, a Muslim voice, a Hindu voice, a Buddhist voice and so on. Very few voices remain univocal as each has its own subset of competing themes. Nor is each voice necessarily exclusive of all cadences in the others. Indeed, many of the traditional moralities share much in common, including reference to an ultimate source of verification in the form of a revealed God.
The developing train of thought in ethics is marked by the same 'watershed' that was described when discussing some of the early phases in Enlightenment thinking. Prior to the change in focus occasioned by the thinking of people like Descartes, it would have been tantamount to heresy to suggest that ethical questions could be answered without any reference to God. As will be recalled, it was generally believed that all things (including values) depended on God as the ultimate foundation for their very existence.
The certainty of this view had been reinforced as a result of the extraordinary achievements of men like St Thomas Aquinas who in a brilliant feat of intellectual endeavour managed to meld the apparently irreconcilable Aristotelian and Augustinian systems of thought. Surely, it was thought, if such a synthesis was possible then there was justification for belief in the truth of principles sanctioned by both divine revelation and the reason of Man. And on this foundation stood the Natural Law.
The challenge of Enlightenment thinking saw the maintenance of emphasis on what humankind could know and verify independently. However, the significance of a founding God was diminished. This is not to suggest that the relevance of God's role in establishing the norms for human life was discounted, as if overnight. Just as in other walks of life, the common stock of conceptions maintained a place for the sacred, and this holds (perhaps in smaller measure) even unto the present day. However, the absolute sovereignty of God's will was placed under threat as a curious amalgam of scepticism and a desire for certainty progressively led thinkers towards Nietzsche's ultimate position that Man was the source of all values and that God was dead.
Although open to the accusation of picking obvious targets, it may be useful to demonstrate the way in which 'calculative rationality' can be seen to have exercised its influence on two apparently different post-Enlightenment voices in the conversation about ethics. The effect is probably most obvious in the case of the development of Utilitarianism. Utilitarianism has an ancient pedigree drawing on notions first articulated by the Epicureans. At its heart is a concern to choose to do those actions or apply those rules that maximise pleasure and/or minimise pain.
The influence of 'calculative rationality' can be seen most clearly when one considers the means by which Utilitarians seek to determine a course of action based on a proper appreciation of the overall balance of pleasure and pain. To do this they quite literally employ a 'Utilitarian Calculus' which factors in the respective elements of pleasure or pain (or in some variations, interests, needs etc) for particular individuals and groups and is then used to determine a result for the proposal under consideration. In its crudest form, those action or rules that the calculations show to provide a net balance of pleasure are agreed to be morally commendable and therefore to be allowed or required.
Having recognised the possibilities inherent in this theory its progenitors did not lie idle. Certain of the validity of their reasoning, adherents sought to apply the principles. This was attempted on a spectacular scale when Bentham's successors, people like James Mill, Trevelyan and Macaulay, participated in the government of nineteenth century British India.
One of the most serious criticisms of Utilitarianism is based on the observation that some of its apparent consequences appear to be intuitively unjust. For example, a raw Utilitarian Calculus may lead to an outcome in which one innocent person is sacrificed to protect a number of others - the reasoning being that the individual's sacrifice involves less pain in total than that of the combined wellbeing of the others. Some Utilitarians believe that such difficulties can be overcome by looking at rules rather than specific acts and by considering preferences rather than units of pleasure and pain. Whatever the case, for the purpose of this paper the significant point relates to the use of a calculus supposedly designed to provide a technique for achieving certainty when considering issues in ethics.
One of the great 'secular' alternatives to Utilitarianism is represented by a tradition most closely associated with the name of Immanuel Kant. Kant's approach is in many respects closer to the tradition of rationalism that flows most directly from Descartes. As with the earlier Natural Law theorists, Kant argued that human beings can be distinguished from other creatures because of their capacity for rational reflection. This capacity is allied to a potential to escape the bonds of physical necessity by virtue of our having a 'will' that is free. Kant argued that the only perfectly good thing is a perfectly good will.
It is clearly not possible in a paper such as this to give a complete outline of Kant's theory. However, one of the salient features is that Kant proposes a series of steps which must be followed if any course of action is to confirm with what he calls the "categorical imperative". This imperative is one that ought to be obeyed for no reason other than that it is required by duty. One should not consider the consequences of an action, only the form of the reasoning that has (or has not) been satisfied.
Thus, Kant proposes (amongst other tests which will not be considered fully here) that we should act so that the principle of our action could be willed to be a universal law. In practical terms this leads; for example, to the application of a principle of non-contradiction which works as follows. Kant argues that it is always wrong to tell a lie. Part of his reasoning is based on the fact that if oneself to lie then it must be allowed for everybody. And if lying is allowed for everybody then there will be no foundation for truth or falsehood at all. If this occurs then the whole notion of 'a lie' will disappear and this, of course, will invalidate the original principle because it will have established the grounds for its own contradiction or inapplicability.
The first encounter with Kant can be a little confusing. Yet, it is quite obvious that some of the implications of Kant's position are as intuitively unsettling as those that flow from Utilitarianism. For example, if asked a direct question by a group of thugs bent on violence, then Kant's absolute prohibition against lying would have a person answer truthfully and reveal the whereabouts of a potential and innocent victim.
The other somewhat surprising similarity with Utilitarianism is that Kant's theory also seeks to provide a rational system that will provide the basis for a certain determination of what one ought to do. To be fair to Kant and the other moral philosophers, they are quite explicit that it is wrong to treat people as means to another person's end. Instead they argue that each person is an end in him or her self.
This is quite different to that element in 'calculative rationality' that tends to encourage a perspective in which all things other than the individual are considered as if to be an object or commodity. However, whilst the importance of this should be given full weight, it is maintained that the central features of 'calculative rationality' are still at work in ethics. It reveals its hand in every attempt to construct a system for the resolution of ethical issues and dilemmas. This would perhaps be of little import except for the fact that 'calculative rationality' has shown itself to be spectacularly unsuccessful in dealing with the most common denizen on the landscape of ethics; the ethical dilemma.
The significance of the ethical dilemma
One of the most discomforting realisations to arise when listening to the conversation about ethics is the fact that many of the voices provide answers that appear to be mutually incompatible. This can be especially disturbing for those who look for a new Aquinas who can draw together the different points of view, and so create a new synthesis.
The fact that the synthesis has not yet been achieved leads some to conclude that disagreement is bound to persist indefinitely. Those who support the principles of relativism argue that this is no bad thing and that each point of view must be considered to be as valid as any other. Once again this strikes many people as being an intuitively curious perspective to adopt. Surely, it is argued, the gratuitous torture of innocents is wrong in any culture. The mere fact that someone says that his or her culture allows for this is felt, by many, to be an inadequate reason for turning a blind eye.
The techniques of 'calculative rationality' appear to be impotent in the face of such a collision of values. Indeed, theorists in some cultures argue that the application of the principles of 'calculative rationality' is a distinctively "Western' ploy that is consequently tarnished with the stains of "neo-Imperialism". There is probably a stronger argument to suggest that the use of 'calculative rationality' is not so much a tool of the West as it is a feature of Modernity itself (Blake, 1992, pp. 39-50). On this argument there is a clash of world-views similar to that which occurred in Europe in the sixteenth century.
The scope of dilemmas isn't confined to the clash of systems of thought. As nearly every person will be able to attest to as a matter of personal experience, ethical dilemmas can occur within a framework of values. A simple example may suffice. Most would agree (again at an intuitive level, at least) that a person should always tell the truth. There would be a similar acceptance of the principle that one should not cause another person harm. So what is to be done when to tell the truth would be to cause harm? It is in these and other situations that the 'grey' area of ethics is seen to emerge. An ethical dilemma is exactly that - a dilemma.
In terms of the overall argument of this paper, it is significant that 'calculative rationality' has been unable to provide a system or technique of reasoning capable of providing a 'knock down' argument in favour of one particular ethical framework, or as a means for adjudicating between competing claims, or as a solution to genuine ethical dilemmas.
However, one of the curious things to emerge from this is that many people come to doubt the value of ethical reflection itself, rather than that of ‘calculative rationality’. As is frequently the case, a false dichotomy is created in which one element is compared to another with the basis of comparison automatically favouring one side. In this case 'calculative rationality' is known to deliver the goods in nearly every area of human endeavour: "If it doesn't work in ethics then there must be something wrong with ethics!".
There follows from this a danger that the solution proposed by Machiavelli and Hobbes will be that which is adopted in the current circumstances. That is, ethical considerations will be set aside in favour of accepting that the contest between opposing forces is the only mechanism worthy of serious consideration. This is the formula that "Might is Right".
The relevance for business and the professions
It has been argued that the conduct of business and the professions in Australia (or any country like it) is more than likely to be influenced by the fact that most thinking is of a form which reflects the structure of ‘calculative rationality’. It has also been argued that the subject of ethics abounds with dilemmas of a kind that are unable to be resolved by the application of techniques that are designed to ensure predictability and certainty through control.
Yet, much of the response to the problem of ethics (most particularly in the 1980s) has been to try to apply techniques that will 'rectify' the situation. These techniques are focused on the development of various sets of rules and regulations that are largely designed to provide increased certainty for those most directly concerned as well as security the community at large.
The use of codes of conduct (sometimes mistakenly labelled as codes of ethics) is increasing throughout industry sectors and the professions. Is there any significance in the observation that in the case of industry and commerce such codes are frequently 'designed' by individuals in the legal department or by someone delegated the task within the office of the Company Secretary? Or that at other times a consultant is asked to research and design the code which is then delivered to the company as a 'product'? Having been approved by a management committee (and occasionally by a sub-committee of the board) the code is delivered to the personnel of the enterprise.
In some cases, employees are required to sign the document in order to record the fact that the code has been received (and presumably understood). This process is sometimes augmented by training sessions designed to explain the code and its requirements. And in many cases this is where the process ends. The enterprise is now deemed to be 'ethical' (or at least to have covered itself in case of enquiry). The evolution of the process along the lines just described is not all that unusual. Many people feel the process to be incidental to the real function of an enterprise.
As a consequence, the cheapest and most immediate approach is that which will be adopted. It is not intended to criticise those individuals who thinking that matters to do with ethics are susceptible to a quick fix". It is quite likely that the alternative point of view has really never occurred to them. There are, of course, exceptions where the process is far more considered and involves a thorough review of principles, systems, institutions, customs, practice and so on - a review which ideally involves those affected.
None of this is meant to denigrate the importance or usefulness of codes. However, questions must be asked about a process that is often performed as if just the latest in a series of management techniques. Codes have a place, but they are no substitute for a more complete reappraisal of the ethos of an organisation.
In the case of the professions there is a related but different issue to be considered. Many people consider that the ability to exercise self-regulation is one of the defining characteristics of a profession. There are a number of other defining characteristics, some of which it can be argued are of greater significance. A
professional commitment to public service immediately comes to mind. Yet, there is a perception that many professionals equate the topic of professional ethics with an exclusive reference to the rules of the profession. The rules provide a relatively steady framework in that they are frequently expressed in a code of conduct, which may include rulings and the like. It is, in fact, relatively unusual to find documents that are recognisable as codes of ethics. Perhaps the closest to be published so far is that issued recently by the AMA.
It must be asked whether a 'rule based' system of ethics is really adequate by itself. Just as codes have a valuable role to play in industry and commerce, so rules and regulations have an important role to play in the life of the professions. There is, however, a problem when these rules become a substitute for personal judgement and responsibility. And this is a real risk.
Business and the professions are affected by decisions made at the 'macro' level where governments, their creatures and like institutions are able to operate. There is frequently an under-estimation of the power of such bodies to establish norms that trickle down to the most fundamental units in society.
That is one reason why it is important that governments be especially sensitive about the kinds of signals that their actions generate. Part of this awareness involves the government in having the means to correctly 'read' the constituency's 'de-coding' sequences. If politicians and other decision makers are allowed or forced to be too remote, then the de-coding process may be compromised with the result that another type of self-referential 'loop' will be created. Given that Machiavelli's principles are more or less in place (both in a domestic and international form of realpolitik) then it is again likely that the 'loop' will be fed by considerations of what works - and not necessarily by an appreciation based on other ways of looking at the issues. Thus, one encounters the response that regulation and surveillance ought to be increased in order to protect the common good.
Each level of response is designed to apply familiar techniques capable of achieving some sort of control over a troubling phenomenon. However, the troubling phenomenon may itself be a product of the very forces in thinking that are now applied in the form of a 'solution'. Here again is the case in which a fateful circularity operates as technique is applied to the undesirable consequences of ... technique.
It follows from this argument that the well-known 'excesses of the 1980s' were not just an aberration in which the greedy and rapacious took control. An analysis of the power of greed to motivate people will be part of an explanation. However, why did greed manage to gain a foothold? Why were the moral sensibilities of so many people apparently silenced? Why did a number of professions stand back and allow a number of their members to become 'guns-for hire", ready to do almost anything to satisfy the wants of the highest bidder? In short, why did a few unscrupulous individuals receive the support of what Henry Bosch has aptly described as a "cast of thousands' ?
PART III: disengagement
One part of the answer must relate to the history of how work has been structured since the full blossoming of the Industrial Revolution and then up until the recent past. It is argued that one effect of the way in which the world of work was organised was the creation of a breach between the values applied and experienced by people at their place of work as compared to those holding good in the world beyond.
It is significant that this breach occurred within the lives of many individuals and, through them, within society itself. This breach was exacerbated by a climate of opinion based on a fairly common perception that an employee's worth was able to be defined according to his or her capacity to serve the interests of the enterprise. Thus, the employee came to be seen as a functionary called upon to perform certain specified tasks as part of a 'scientific' approach to industry and commerce.
To understand the effect of this one must consider that a factory worker employed on a production line fixing 'grommets' to 'widgits' was unlikely to have much reason for engaging his or her values. Even if not anaesthetised by a regime of mind numbing toil, the factory worker of old was not going to be asked for an opinion on matters of concern to the employer (let alone those touching on issues with an ethical dimension).
The same could be said for the condition of those white collar workers situated in firms organised along strict lines and levels of hierarchy. In such circumstances it was easy to 'tune out' and leave value questions to those on a supposedly higher plane. Although the chances of encountering a dilemma were proportionately greater in the upper reaches of management, it was probably also the case that the occupants of these positions gave as little thought to questions of values as did those 'below' them. If one happened to be at the top then there was a call to apply one's values. Then it was possible to rely on precepts learned during one's education at home and school, on the advice and example of mentors, on familiarity with the conventions of accepted custom and practice.
Management principles have advanced since those days (or so the community is told). However, it is essential that one uncover the principles that drive the new processes. What does one do if it turns out that the legacy of a world-view in which 'calculative rationality' dominates has been imprinted on a whole sub-culture within the world of industry and commerce?
Technique turns in upon itself
Can 'calculative rationality' sustain itself indefinitely? Or is there a risk that the dominant way of thinking about the world will in some way undermine its own foundations. If this should be the case, then it will be extraordinarily unfortunate if other approaches have been lost to the modern world.
Then again, a glance at the precipice may stimulate a new but entirely futile attempt to achieve even better techniques of control. But is it possible that 'calculative rationality' is loosening its own foot-hold? The argument in support of this contention is based, in part, on a paper by Bella and King (1989) in which they argue for the importance of what they term "common knowledge of the second kind" and, in particular of trust. The general thrust of their argument is to establish that much of that which we regard as knowledge is, in fact, only considered as such because it is taken on trust. That is, people rely on the expertise of those who warrant that the knowledge is true. This type of knowledge, which is frequently repeated and 'known' by most people only on the word of others, is called "common knowledge of the first kind".
On the other hand, "common knowledge of the second kind" is that which is 'known' through direct involvement with a thing-in-itself, or through participation in a shared practice. Bella and King (ibid, p. 419) give the example of our experience of our coming to know "water' by drinking it, splashing in it and so on. In a similar vein :
words like push, pull, life, see, hear and many others only gain their meanings from practices and involvements that we both participate in.
(Bella and King, ibid)
The ticklish point to be grasped here is that given that experts can disagree about what should be counted as knowledge, and given that there is a competition of ideas, then most people have to rely on the fact that the whole process of negotiation about knowledge is being conducted by people who can be trusted to seek the truth. That is, the community assumes that there is a climate at work in which the 'experts' really care about what is said in the name of knowledge.
If such communities truly care about their claims, then they will not cover up their disagreements and inconsistencies. Indeed, they will be drawn to them because they care about what they say. But such communities, whether they be scientific, religious, professional, educational and the like, must participate within a history of care, for only then are their claims worthy of trust.
(Bella and King, ibid, p. 420)
The argument then proceeds to demonstrate how it is that the process of giving weight to considerations that are 'external' to a tradition of care can, of itself, erode the very foundations for participating in practices involving 'knowledge of the second kind'. Bella and King warn against allowing functional justifications to usurp the place of those that are internally related to such practices as caring and trusting. Thus, it is argued that people who are involved in relationships only so that they can 'get something out of them' need to be distinguished from others whose involvement allows them to participate in ways that will reinforce their understanding of what specific practices actually mean. On this argument, questions of motivation assume great importance.
Bella (a Professor of Civil Engineering) and King (an Associate Professor of Management) argue that our major ethical theories suffer from the influence of an ideal that, in a crude form, leads people to "detach human intentions and actions from their social contexts". This comes about because of the application of an ideal imbedded at the heart of 'calculative rationality'; an ideal that makes possible the capacity to calculate about and with objects. This is the ideal of "scientific detachment".
In the exact sciences, the false ideal of scientific detachment is perhaps harmless, for it is in fact disregarded there by scientists. But we shall see that it exercises a destructive influence in biology, psychology and sociology, and falsifies our whole outlook far beyond the domain of science ... We need an alternative ideal which gives attention to the personal involvement of the knower in all acts of understanding.
(Polanyi, M., 1958)
Paradoxically, where functional justifications are provided for all decisions, then there is even the risk that the ground for concepts such as 'caring' and 'trusting' will erode to such an extent that even the basis for 'calculative rationality' will be put at risk. Just how successful will calculation be in a situation in which there is no basis for trusting the raw data? How will the desire for certainty and the urge to control be served in such circumstances? It is against the background of these questions that can appreciate the significance of the following:
To borrow a phrase from Joseph Weizenbaum's Computer Power and Human Reason: From judgement to Calculation (1976) "We can count, but we are rapidly forgetting how to say what is worth counting and why". Thus, in a world where 'calculation' dominates judgement, our paradox is that while we 'know' that human beings are essential, we cannot say why.
(Bella and King, opcit, p. 428)
So what?
Perhaps the reason for the 'excesses of the '80s' owes more to a progressive loss of engagement in practices that generate an understanding of, and familiarity with, the ethical dimension of life than it does to any sudden change in personal or institutional ethical standards. It is at least open to argument that people in business and the professions suffered (and continue to suffer) from a genuine case of what has been termed the "moral muteness of managers' (Bird and Waters, 1989) . If this is so, then it is also possible that this state of muteness is the almost inevitable result of allowing functional concerns (which are of paramount importance in 'calculative rationality') to apply in areas, such as ethics, where they have no proper purpose or relevance.
The process of disengagement is not just a matter of people adopting an incompatible mind-set. The effects of 'calculative rationality' can also be seen in some of the key structures which shape practice in business and the professions. One can gather a lot about the orientation and values of an organisation by examining the characteristic ways in which people are remunerated, trained and selected for advancement.
Some organisations use criteria which reward performance as an absolute indicator of merit. Under such an arrangement, people are encouraged (either explicitly or implicitly) to watch the bottom line and achieve results by any effective means. The structure of rewards can lead a person to disengage their conscience, or quarantine their personal values, suspend their judgement and treat means and ends as if they were unrelated.
Disengagement from practices needed to sustain an ethical community can occur under the influence of another factor that has an ancient pedigree. In the Republic, Plato argues for a scheme of social arrangement based on the rational division of labour. Under such a social and economic division (which Plato sees as mirroring the segmented nature of each person), authentic ethical reflection is left to the elite 'Philosopher Kings'. Such reflection is to be theirs because they are imbued with the capacity for a superior form of reflection. That is, they have specialised in their particular area of expertise.
This pattern of division of labour has, for much of the time since Plato, informed the economic and social spheres of the West. Where thinkers, in the classical world, believed there to be a case for developing a broader set of capacities and interests it was usually only allowed (or even practical) for those privileged enough to enjoy the means to enjoy a reflective life (usually supported through the exertions of slaves). Later periods have seen the ideal of the cultured generalist discussed with approval. Our society still seems to look fondly on the notion of the 'Renaissance Figure' - a person equally at home in the worlds of the Arts and Sciences.
However, the relentless logic of 'calculative rationality' has, for the most part, brought society to believe that efficiency and control are best achieved by specialisation. But what of the dangers of over-specialisation?
In the area of management, Rob Ferguson, of Bankers Trust Australia, has argued against what he has called the "Barbarians of Specialisation". Ferguson (1991) sees the person who specialises in one area as being like the individual who goes to the gym every day only to exercise one muscle. Such a person is bound to become lop-sided. This observation comes from a man who jointly manages a highly successful bank.
The significance of this is that a move to encourage a broader perspective need not be at the expense of 'efficiency', or more importantly, of effectiveness. This holds true across the board, and it is now being recognised that the change to multi-skilling can help when re-developing structures for competitive enterprises. However, Ferguson's point is not just that people need to have a better balance of work-relevant skills. Rather, he makes a convincing case for encouraging interests that will help a person to flourish and not simply perform better.
The professions also suffer from the effect of over-specialisation. As noted above, medical practitioners are now recognising the importance of seeing the patient as a whole person. This may mean looking at the person through a series of lenses that are not just ground to the 'index' of medicine. It is the same in the case of lawyers and accountants - especially when it comes to their ability to discuss broad ethical principles. Whilst it is usually possible to discuss ethics with individuals or small groups, there is considerable difficulty when the number of participants increases. The response is then frequently along the lines: "I'm not qualified to judge x. I am only qualified to practise y. My duty is to my client. I just follow instructions."
Statements such as these can be compared with those made by people in business who will tell you that, "The business of business is business. The only thing that matters is the bottom line. Our job is to generate profits for the shareholders, and so on".
There is, of course an argument to be made for the point of view that people should 'stick to their knitting'. It has been made by influential thinkers as diverse as Plato and Milton Friedman. It might be observed that to the extent that people value their autonomy, so ethics must be the concern of each person and not that of notional ‘experts’. The problem is that, if followed by people in business and the professions, then they not only risk becoming 'lop-sided' but also add to the danger that vitally important shared practices will disappear.
PART IV: the way ahead - are there any lessons for management?
One of the difficulties facing those who would traverse the ethical landscape with a sense of easy familiarity, is that has been a reduction in the number of institutions able to provide effective guidance and preparation for the journey. This reduction has been, in part, due to a loss of respect for the relevance of many of the institutions that have had a traditional role in the process of ethical formation. Casualties include: the churches, schools and even the earlier established range of family types. This is not to say that the work of such institutions provided the total stock of values to be carried through life.
On the contrary, providing that there is some capacity for ethical reflection, and a desire and opportunity to do so, then values are always open to revision as a life proceeds. Where people are in employment, it is almost certain that the work environment will be one of the most powerful institutions affecting the individual's values. With this in mind, it is important to consider whether management has a proper appreciation of how important questions of corporate ethos may be in terms of their affect on society at large.
When other traditional institutions are weak then those that are strong have a disproportionate influence. It can be argued that great influence implies great responsibility. If this proposition is accepted then influence will be exercised with a conscious sense of the wider implications. Alternatively, the process of forming a corporate culture may be informed by nothing other than instrumental considerations. Another possibility is that an ethos will develop 'by accident". Whatever the process, it is fairly clear that 'custom and practice' at work will have an impact beyond the factory or office door.
It is indeed a curious twist of fate that the reflections in this paper have been made especially relevant by developments in technology. Of particular relevance are those which threaten to limit our capacity to have 'private' values that are reserved for personal application, usually in a non-work environment. An increasing number of changes taking place in the way in which work is organised make value questions into matters of urgent practical importance. It is not just that old techniques are giving way to the new or that an increasing range of manual tasks are being automated. These changes are only to be expected and as such have received adequate analysis. But what has been the effect on ethics?
One part of the answer begins with the fact that management theory has come to recognise the importance of involving all employees in the decision-making processes of organisations. This is, in part, because it is now easier to keep people informed. But beyond this, new technologies require that all workers bring their intellects to bear in the performance of their duties. Flatter management structures, and a new range of opportunities for interaction within enterprises, now make it essential that personnel draw on a value base when considering options. It is increasingly the case that each person employed is now required to have a point of view and to be able to articulate a position that is in accord with it.
This being the situation, it is easy to see that there may be serious difficulties for those who feel uncomfortable with the dominant values of the workplace. Such people are now less able to shield themselves from involvement. That is why it has become so important for companies to involve all of their personnel in the formation of the corporate ethos (or character). This goes beyond being a matter of courtesy. Any manager concerned to develop a harmonious work environment cannot afford to ignore this issue. Understanding this particular effect of 'technological' change leads one to a realisation that the development of a corporate culture requires more than that there be a determination of this matter by a company's board and senior management.
As has been implied in earlier sections, there is no escaping the additional requirement that there be a commitment of resources (mainly in the form of time) so that the culture can evolve in a way that allows for all of those affected to be involved. Such a commitment will be viewed by some as being frivolous expenditure - especially during a recession. However, it can be argued that this is exactly the time to expend resources on restructuring an enterprise so that it is ready to reap the benefits when the business cycle turns. None of this is meant to suggest that management should surrender its right to manage. Nor does it mean that corporations should be at the mercy of consensus politics. In fact, quite the opposite conclusion is suggested.
Those in management positions must come to understand that their role involves an indispensable requirement that they be able to lead. Leadership and management are not necessarily the same thing. Without wanting to outline a comprehensive list of qualities possessed by a leader, it may be suggested that such a list would include an ability and preparedness to persuade others to accept a shared perspective on what is desirable in terms of outcomes and behaviour.
This ability to draw people together in a common understanding and purpose may involve the application of skills and qualities that are different to those thought most desirable in earlier decades. Strangely enough, it may be that improved technology will make it less important that senior managers have special skills in areas of technical competence. 'People-related' skills will become correspondingly more important and in line with Ferguson's approach, the days of the generalist or, even better, the Renaissance figure may be back.
The other approach that will need to be considered by managers is one which involves a much more profound change in approach. In particular, managers find themselves with no other alternative than to question and then abandon an instrumental rationale for addressing issues of corporate character.
A failure to make this radical re-assessment may lead to a loss of the shared practices on which, for example, trust is based. As noted before, 'trust' is a form of 'knowledge of the second kind' and can not be created or re-created by external forces or the deployment of technical expertise. It may seem to be a somewhat fanciful suggestion; however, it is argued that managers should be guided by the combination of reason and intuition when addressing the ethical dimension of their practice. That is, conscience should be allowed to have its say.
The existence of an ethical dimension depends on there being a number of shared practices that give meaning to the terms of ethical discourse. As Professor John Langan has observed:
... we need to understand judgements of conscience not as solitary deliverances from a soul suspended on a rocky precipice in Tartary but as conclusions reached within a social setting. Accordingly, the character of this social setting becomes a matter of pressing concern both for the moralist and for the business person aiming at moral integrity and excellence. It is vitally important that the sources of understanding and judgement not be corrupted, that there be sources of enlightenment and encouragement in the business world. Otherwise, it will indeed turn into a wasteland in which individuals will find themselves unable to sustain common standards.
(Langan, 1992, p. 12)
It is no longer feasible for business to ignore value questions which so persistently inform the human dimension of any enterprise. The fact that such questions have been set aside in the past is unfortunate, that this should continue would betray a blindness to the realities of the present and the possibilities of the future.
The way ahead: the argument from self-interest
The fact that the environment for business is changing in ways that make issues in ethics a matter of importance is seen in research conducted by Korn Ferry when completing the Eleventh Study of Boards of Directors in Australia (1992). The introduction to the report makes for some interesting reading:
This year's Board Study quite interestingly and convincingly shows a number of aspects of board government with regard to ethical safeguards and shareholder accountability becoming the majority view.
(Korn Ferry, 1992, p. 1)
Whilst a number of findings, relating to changes in corporate governance, give grounds for the observation in the Korn Ferry introduction, one of the most interesting is that which relates to how directors rank issues of importance. In terms of this paper, it is significant that directors rate the issue of business ethics as being of third most importance; only exceeded by financial results and cash flow.
This result might be explained by the fact that directors are having their attention focused by evolution in the Corporation's Law. At the same time, business leaders may be coming to realise that the Law is showing signs of changing in ways advocated by the likes of John Green. Green (1992, p. 7) argues in favour of what he has termed 'fuzzy law'. This is Law that will involve:
... probabilities and concepts, not detailed rules. But the concepts need to be clearly expressed, focussed and appropriate ... [and] ... would encourage our business community and our courts to a culture away from technicalities and towards substance.
An emphasis on appropriate concepts (as opposed to strict rules) can lead people to think in new ways. For example, the notion of 'unconscionability' is gaining prominence within the lexicon of business people and those who advise and regulate them. 'Unconscionability' is a general term that derives its meaning on the basis of ethical reflection. So, it could be that the kind of discussion being promoted by Green and as exemplified in the Law Reform of Victoria's recent discussion paper, An Australian Contract Code (1992), is also at work in affecting the way in which director's order their priorities.
Alternatively, it may be that there is a greater appreciation of some of the commercial benefits flowing from the application of principles designed to ensure sound ethical practice. This is the 'good ethics is good business' philosophy.
The trouble with an approach to ethics in which the primary motivation is to secure an extrinsic benefit is that the commitment to ethical behaviour becomes somewhat tenuous - being contingent on ethical practice assisting with the "bottom line". What happens if a person devises a clever way to cheat, prosper and get away with one's reputation intact?
What can be called the 'instrumental' justification for being ethical is exactly that which tends to reinforce a climate based on ‘calculative rationality’. As such, this sort of approach threatens the capacity of an organisation to develop authentic shared practices. None of this is meant to suggest that collateral benefits, such as profits, that flow from ethical behaviour are in some sense tainted. Providing that one is not primarily motivated by the prospect of such benefits then any rewards that flow from right conduct must surely be considered legitimate.
This suggests that there may be a need to address questions about the nature of the market, and the significance of ethical concerns as they impinge upon its operations. Some economists argue from what they perceive to be the position of Adam Smith, that ethical considerations have little or no bearing on the way in which the market functions. Commentators (whether friend or foe of Smith) invariably quote the famous passage from The Wealth of Nations in which it is argued that self-interest is the spring that drives the market towards an outcome that is, ultimately, an expression of the common good.
The problem with discussing the ideas of Adam Smith is that the focus is almost exclusively on his economics at the expense of his moral philosophy. There is a further difficulty in that the two wings of Smith's thinking seem to be incompatible. The following from his moral philosophy gives a sense of the apparent contradiction:
All the members of human society stand in need of each other's assistance...where the necessary assistance is reciprocally afforded...the society flourishes and is happy.
(Smith A., quoted in Goyder, 1987, p. 25)
One way in which to effect a reconciliation is to argue that the successful operation of 'invisible hand' (of the market) presupposes a basic morality which is based on elements such as: full disclosure leading to perfect information, voluntary fair trading, the abolition of anti-competitve processes and so on (see McMahon, 1981). As Davis (1989) has observed:
... in some sense we are contrasting a world in which the notion of 'my word is my bond', a world of high trust, with a world which is purely caveat emptor, which implies very low trustworthy organisations. And the thing that I think economists teach us which bears on our morality is that the first is likely to be a much more productive society in any economic sense, because the entire deadweight loss of inspection, of protection, of insurance and of contracting is held to a minimum.
(Davis, 1989, p. 4)
Another way in which to reconcile the apparent contradiction is to suggest that Adam Smith had a broader conception of what self-interest might involve. In other words Smith may have assumed that the conditions of his society in which shared practices and community values might apply. That is, whilst Smith clearly intended that self-interest should be understood in terms of pecuniary interests, the background against which such things were assessed may have been woven with a rich skein of common and shared ethical precepts. Whilst the earlier quotation suggests this conclusion (as do many other writings by Smith), it is interesting to note that one can even find supporting evidence within the covers of The Wealth of Nations which goes beyond a simple discussion of economics to concern itself, in places, with the habits of the age. For example, given Smith's Scottish ancestry, it is not all that surprising that he warns against personal extravagance. However, this is hardly what one expects from a character who is totally convinced that the 'invisible hand' can be left entirely to its own devices.
Even if Smith (the economist) did have a very restricted understanding of what self-interest might dictate, one can still reflect critically on whether or not a purely economic frame of reference is sufficient when making an informed decision. One can surely argue, with Novak (1982), that the concept of 'self-interest' is not necessarily to be equated with greed or acquisitiveness.
Instead, a broader conception of self interest can apply so that even acts of altruism fall within the concept's ambit. Acts of altruism might be better appreciated in a context where business people recognise that their activities are made possible only because of their enterprises being set in a society which provides the infrastructure on which business depends.
Such an outlook is not to be confused with the instrumental approach questioned above. To show a concern for stakeholders because they are recognised as important in their own right can demonstrate a genuine commitment to ethical practice. It is a matter of 'self interest', of a different order, when people pursue a course of action that is based on a genuine attempt to understand and pursue the proper ends of human endeavour.
Bearing in mind these considerations, it may be that business leaders will need to consider proposals, made by people like Goyder (1987), that there be a re-assessment of the structure of corporations. The particular aim would be to ensure that they better reflect the needs of contemporary society. Goyder argues that 'The Just Enterprise' is likely to need assistance if it is to emerge from under institutional cloaks designed to fit Nineteenth Century requirements. Goyder's proposals are radical in that they include ideas such as the insertion of a "general purposes clause' into the Articles of Association of companies. Such a clause would help to define the duties of Directors so that they could be clearly seen to include an obligation to look beyond the narrow interests of share-holders. Thus a company would evolve into a "wealth creating organism in the service of consumers, employees and the community as well as of the shareholders". There are other provocative suggestions. However, there is not space for them to be considered here.
The way ahead: the role of the professions
If business people are to escape from the temptation to apply technical solutions to the non-technical problems that arise in the area of ethics, then it is likely that they will need to have the support of the professions. To this end, those professionals who work with people in business will need to be far more prepared to act as advisers in support of their client's interests.
This may involve lawyers and accountants in offering advice that is based on a proper appreciation of the distinction between a client's wants and interests. Many people in the professions have suffered from a public perception, based on limited evidence and a degree of prejudice, that they and their colleagues are nothing more than 'guns for hire'. One way in which to correct this mis-conception is for the professions to demonstrate that their preparedness to act consistently, and in concert, so as to play the traditional role of 'gatekeepers'.
This concept need some explanation as it is frequently mis-understood. A professional acting in the role of 'gate-keeper' will ask a client to consider a broader range of options than might be canvassed if only limited instrumental considerations were to be taken into account. It does not follow from this proposition that professionals should substitute their judgement for that of their clients. However, recognition of this fact is not an invitation to remain silent lest the client be offended by the professional's firm adoption of an independent perspective based on ethical considerations. It is to be hoped that such a conception of the role of professionals will be considered to be uncontroversial.
Finally, it should be stressed that professional ethics will need to be understood as involving something more than the rules of professional bodies. Outward form may remain the same. However, as in the case of industry and commerce, an enduring ethical sense may depend on the maintenance of shared practices. To attempt to found these practices on instrumental considerations would be to damn the process from the start. What is worse, if the community were to come to suspect that the exercise was really nothing more than a cynical exercise in narrow self-interest, then the resulting obloquy would be lasting and probably justified.
CONCLUSION
It has been argued in this paper that the response to the problem of ethics in business and the professions is likely to prove inadequate unless there is proper attention given to the process of devising shared practices and understandings and in particular to those that support the development of an appropriate ethos. It has also been argued that current approaches may be fundamentally flawed in that they inadvertently reproduce the very conditions that lead to a loss of any genuine sense of the ethical.
A major strand in the type of thinking which dominates the outlook of the modern world, invites people to solve problems in ethics by the use of codes (especially those imposed on people), by regulation and surveillance; that is, by techniques based on achieving an optimum degree of certainty and control. To the extent that this process is successful then there is a real risk that an authentic sense of the ethical will be further displaced. This is an especially grave risk in a social climate where the traditional institutions are increasingly seen to be vulnerable to the challenge posed by ‘calculative rationality’.
What may be needed is a response based on a conscious recognition of the fact that the realm of ethics is inherently incompatible with the world of calculation and certainty. Indeed, it may be that issues and dilemmas in ethics provide a much needed opportunity to extend thinking beyond the paradigms normally followed in business and the professions.
Part of this process will involve individuals and groups of people in accepting that uncertainty is best understood as an opportunity to exercise one's free will in a creative fashion. It is an opportunity to participate in the formation of communities of understanding based on a common approach to the solution of problems that have no obvious answers. Each approach to an issue will be an invitation to think and not simply to calculate.
It may be that a new orientation of the sort proposed would result in very little outward difference in the way in which the best companies and practices operate. For example, irrespective of motivation and thinking, international best practice may require that there be a much greater involvement of all colleagues in the management of an enterprise. In turn, individuals may come to enjoy the liberation that comes when released from the implied bonds of having always to justify actions according to a standard that may be alien to the task at hand.
This new thinking may allow for a much more 'creative' response as ethics, and even aesthetics (to name but two different perspectives), complement existing frameworks for decision-making. For example, it should become possible to decide against an otherwise profitable course of action for the simple reason that "it is wrong", that "it is incompatible with the values that we subscribe to" and so on.
One should not pretend to be too sanguine about all of this. It must be admitted that there is an element of risk in trying to apply new forms of thinking. When it comes to ethics, there is the added requirement that one be prepared to accept what has been termed the 'Principle of Double Effect':
.. that is, realistically accepting the fact that most right ethical actions have some undesirable spin-off, and attempting to assess when the undesirable becomes ethically unacceptable, or at least trying to mitigate the harmful side-effects.
(Mahony, J. 1989, p. 6)
It should not pass without mention that the creation of space is an indispensable element for creating an ethical sense. That is why too much regulation and surveillance is so counter-productive. The response based on 'technique' fails to anticipate the price to be paid for having achieved control and certainty.
What must be preserved is a space for the exercise of what Aristotle termed phronesis (practical wisdom). It is here that a person can display judgement and not just obedience to authority, to a rule or to a system. It is here that a person can take personal responsibility and experience moral freedom. It is here that a person can reflect on their own answer to the question: "what ought one do?' or equally compelling: "What sort of person ought one be?".
Moral judgement can involve the conscious application of a stock of rules that a person has in store for just such circumstances. As such the exercise can be a very sophisticated process. However, for most people there is a much more intuitive level at which we make assessments about issues to do with right and wrong. This is the realm of conscience, the niggling sense that there are principles that ought not be betrayed. At this level there may be no absolutely rational account for explaining how we feel. It may be enough to say that each person grows up with a fundamental sense of the ethical, even if it is frequently expressed in different ways. The problem arises when people find themselves unable to articulate or live by their convictions and the dictates of their conscience.
How will one judge that a new way of seeing the world is being allowed to find expression at large? Perhaps it will be evident when the open expression of doubt and uncertainty comes to be seen as an example of strength rather than of weakness, when people can do what they believe to be right without having to disguise their motives and when the still voice of conscience is spoken in public.
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discuss this articleDr Simon Longstaff is Executive Director of St James Ethics Centre.
A version of this paper first published in 1993.
© St James Ethics Centre