Philosophy of Management and Sustainability : Rethinking Business Ethics and Social Responsibility in Sustainable Development 9781789734546, 9781789734539, 9781789734553

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PHILOSOPHY OF MANAGEMENT AND SUSTAINABILITY

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PHILOSOPHY OF MANAGEMENT AND SUSTAINABILITY: RETHINKING BUSINESS ETHICS AND SOCIAL RESPONSIBILITY IN SUSTAINABLE DEVELOPMENT

JACOB DAHL RENDTORFF Roskilde University, Denmark

United Kingdom – North America – Japan – India – Malaysia – China

Emerald Publishing Limited Howard House, Wagon Lane, Bingley BD16 1WA, UK First edition 2019 Copyright © 2019 Emerald Publishing Limited Reprints and permissions service Contact: [email protected] No part of this book may be reproduced, stored in a retrieval system, transmitted in any form or by any means electronic, mechanical, photocopying, recording or otherwise without either the prior written permission of the publisher or a licence permitting restricted copying issued in the UK by The Copyright Licensing Agency and in the USA by The Copyright Clearance Center. Any opinions expressed in the chapters are those of the authors. Whilst Emerald makes every effort to ensure the quality and accuracy of its content, Emerald makes no representation implied or otherwise, as to the chapters’ suitability and application and disclaims any warranties, express or implied, to their use. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library ISBN: 978-1-78973-454-6 (Print) ISBN: 978-1-78973-453-9 (Online) ISBN: 978-1-78973-455-3 (Epub)

This book is a contribution to the work of eco-ethica. Therefore, it is dedicated to the memory of two of my friends and colleagues. First, Professor Tomonubo Imamichi (1922–2012), a wise and thoughtful philosopher who was the founder of the eco-ethica Symposium, creating a unique environment for intercultural philosophical reflection on global ethics. Second, but even more important, the cosmopolitan philosopher and world intellectual, Professor Peter Kemp (1937–2018): director of the Center for Ethics and Law, Copenhagen, president of the World Congress of Philosophy (2008), a great scholar of philosophy in the European tradition, a powerful public intellectural, and an important colleague and inspiratory of my work in philosophy, ethics and sustainability.

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Contents

Preface

xiii

Acknowledgments Introduction

xv xvii

Part I  From CSR and Business Ethics to Sustainable Development Goals (SDGs) Chapter 1  Ethics and Justice in the International World: The Problem of Globalization and the Need for a Cosmopolitan Spirit 3 1. Toward a Critical Philosophy of Globalization 2. Globalization, Misery of the World, and Struggle for Recognition 3. Globalization as an Expression of Hypermodernity and World Culture 4. Criticism of Globalization and Hope for an Exit from the Crisis 5. Hope of Cosmopolitanism in the Age of Hypermodernity

4 6 10 12 15

Chapter 2  Sustainability and Business Ethics in a Global Society

19

1. Methodology of Sustainability and Business Ethics 2. The Values of Business Corporations 3. Application in the Different Fields of Sustainability and Business Ethics 4. International Legal Developments of Business Ethics and CSR 5. Integrity, Trust, Accountability, and Legitimacy

19 21 22 24 26

viii   Contents

Chapter 3  Ethics of Administration: Towards Sustainability and Cosmopolitanism 1. Changed Conditions for Administration Ethics: the Competition State 2. Challenges to Administration Ethics: Crisis and Corruption 3. Values of Administration Ethics: Cosmopolitanism and Sustainability 4. Theoretical Framework for Administration Ethics 5. Urgent Issues for Administration Ethics

29 30 31 35 36 39

Chapter 4  Corporate Social Responsibility, Sustainability, and Stakeholder Management

43

1. Sustainability and Corporate Citizenship 2. The Concept of Corporate Social Responsibility 3. Corporate Social Responsibility in Stakeholder Management 4. Institutional Theory and Stakeholder Management

43 44 47 49

Chapter 5  Business Sustainability and the UN Sustainable Development Goals (SDGs)

53

1. From the Millennium Goals to the SDGs 2. The Challenge of the SDGs 3. Criticism of Sustainable Development and SDGs 4. From Sustainable Development to Transformation Toward Another Economy 5. Civil Society and Partnerships for the SDGs

54 54 59 60 62

Part II  Philosophy of Management and Ethical Economy of Sustainability Chapter 6  Philosophy of Management and Ethical Interdependence in the Anthropocene Age 1. Epistemological Foundations of Anthropocene Ethics 2. The Anthropology of the Interdependence of Man and Nature 3. The Natural and Socio-cultural Interdependence of the New Climate Regime 4. Resilience Management and Governance at the Anthropocene Age 5. Toward a New Geopolitics of Sustainability

67 68 70 73 76 77

Contents    ix

Chapter 7  Environmental Catastrophe and Challenges to Ethical Decision-making 1. The Challenge of Fukushima for the Environment 2. Fukushima as a Symbol of the Logic of Technology in Modernity 3. Political Economy and Responsibility after Fukushima 4. Ethical Complexity Thinking in Organizational Decision-making Chapter 8  From the Financial Crisis to a New Economics of Sustainability

79 79 81 84 88 91

1. Ethics in Economic History 2. The Neo-liberal Concept of Economics 3. Welfare Economics and the Criticism of Neo-classical Concepts of Rationality 4. The Ethics out of Economics 5. Economic Anthropology and the Foundations of Rationality 6. Mixed Rationality of Economic Decision-making

98 100 105 109

Chapter 9  Ethical Economy and the Environment

111

1. The Concept of an Ethical Economy 2. The Need for an Ethical Economy Today 3. Application of an Ethical Economy: Ecology, Sustainability, and Capitalism 4. Beyond Anthropocentric Environmental Ethics 5. From Ethics to Law 6. The Balanced Company 7. Toward a Research Agenda for an Ethical Economy

112 114

Chapter 10  The Concept of Equality in Ethics and Political Economy 1. The Concept of Equality in Ethics and Political Philosophy 2. Equality and Distribution of Wealth 3. Conceptions and Perspectives for Ethics and Political Economy

92 94

117 120 123 125 126 127 127 130 136

x   Contents

Part III  Foundations of Philosophy of Management, Ethics, and Sustainability Chapter 11  The Dark Side of Sustainability: Evil in Organizations and Corporations

143

1. Hannah Arendt: The Banality of Evil 2. Detailed Analysis of Eichmann’s Banality of Evil 3. Moral Blindness in Institutions and Organizations 4. Responsibility and Reflective Judgment 5. Evil in Modern Philosophy

143 146 152 157 159

Chapter 12  The Ethics of Integrity: A New Foundation of Sustainable Wholeness

161

1. Integrity in Business and Politics 2. Integrity as Existential Subjectivity 3. Integrity as a Virtue 4. Integrity as Organizational Integrity 5. Integrity as Practical Judgment

162 163 165 167 168

Chapter 13  Recognition between Cultures as the Foundation of Ethical and Political Sustainability

171

1. Recent Definition of Recognition: Paul Ricœur’s Philosophy 2. Origins of Recognition: Hegel and Kojève 3. The Gift as a Recognition: Marcel Mauss 4. French Thought of the Impossibility of Recognition and the Gift 5. American Reintroduction of the Problem of Recognition 6. German Reformulation of the Problem of Recognition 7. Hermeneutical Reintroduction of Recognition: Paul Ricœur 8. From Recognition to Acknowledgment: Patchen Markell 9. Toward What Kind of Sustainable Recognition between Cultures? Chapter 14  Philosophy of Management in the Hypermodern Experience Economy 1. Creativity, Sustainability, and the Experience Economy 2. Subjectivity and the Concept of Experience 3. What Kind of Society Made the Experience Economy Possible? 4. What is the Morality and Ethics of the Experience Society?

172 173 175 176 178 180 182 184 185 187 188 189 192 195

Contents    xi

5. Can Critical Management Studies and the Experience Economy Be Combined? 6. Perspectives for Sustainability in Hypermodernity

199 201

Part IV  Responsible Management of Sustainability Chapter 15  The Principle of Responsibility: Rethinking CSR as SDG Management

205

1. Business and Management for Sustainability 2. Sustainability and Corporate Social Responsibility 3. Toward a New Responsibility for Sustainable Development

206 210 217

References

221

Index

237

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Preface

The argument for a new Philosophy of Management and Sustainability of this book is based on participation in the discussions of the international symposium for philosophy and ethics, eco-ethica, founded by Japanese philosopher Tomonobu Imamichi (1922–2012). Imamichi invented the discipline of eco-ethica in the 1960s that since 1980 achieved high recognition with its annual international symposium on eco-ethica gathering philosophers from all over the world to discuss philosophy and ethics in a cosmopolitan perspective. I was generously invited to participate in the annual eco-ethica Symposium by my friend and colleague professor Peter Kemp (1937–2018), president of the World Congress of Philosophy and the International Federation of Philosophical Societies (FISP) (2008), and president of the International Tomonobu Imamichi Institute of Eco-ethica from 2004. The discipline of eco-ethica is an attempt to revolutionize ethics and philosophy in order to respond to the challenges of science and technology. Since the power of humanity over the world is increasing with the mastery of new technology, our ethical responsibility is much higher and far-reaching. Eco-ethica deals not only with individuals, but also as a new philosophy of the technological age, it also deals with the subject of collective responsibility and focuses on an ethics for groups, organizations, corporations, institutions, and governments (Imamichi, 2009). This is a subject, that is essential to eco-ethica, due to the close relation between technological and organizational power, but a topic has been largely neglected, and a growing ethical concern which nevertheless has become increasingly important with the emergence of the contemporary ethical challenges of technological civilization. The chapters of the book have been developed within the discipline of ecoethica as a contribution to the Annual Symposium of Eco-ethica since 2004 with focus on such a need for such a collective responsibility and ethics for groups, organizations, corporations, institutions, and governments. We can say that the source of inspiration of the book is the philosophical concept of ethics of sustainability as proposed by the discipline of eco-ethica. Here, it is important to remember that eco-ethica not only means bioethics or environmental ethics, but also it is defined as a general ethics of the need for the good life on the planet. In this perspective, philosophy of management and sustainability as a part of the search for responsible collective ethics and group ethics is an important contribution to eco-ethica. Indeed, I have discussed and defended my point of view on philosophy of management and sustainability in discussion with the other philosophers in the

xiv   Preface symposium, who each year had 15–20 distinguished participants. These discussions have helped to improve the final version of the book and contributed to shape the argument and philosophical approach to ethics, politics, economics, and management, which is presented in the book. Thus, previous versions of the chapters have been published in the Journal of the eco-ethica symposium, that is, Acta institutionis philosophiae aestheticae, Vol. 23, 2005 and Vol. 24, 2009, and Eco-Ethics, Vols. 1–7, 2011–2017. Some previous versions of two chapters have been presented in the Icelandic and European e-journal Nordicum – Mediterraneum, Vol. 5(1) and Vol. 8(3). A previous version of one chapter has been published in Journal of Management Policy and Practice, Vol. 19(1), 2018. Previous versions of other chapters have been published in the proceedings of the 25th IVR World Congress: Law, Science and Technology Paper Series No. 112, and in the Finish book series Jyväskylän Yliopisto, SoPhi, Vol. 125. Finally, my books Responsibility, Ethics and Legitimacy of Corporations, French Philosophy and Social Theory: A Perspective for Ethics and Philosophy of Management (2014) and Cosmopolitan Business Ethics. Towards a Global Ethos of Management (2018) are important for the development of the argument in this book. The project of Philosophy of Management and Sustainability can therefore be considered as a part of my work on business ethics and corporate social responsibility and in particular as a part of the general project of eco-ethica. Imamichi proposed new virtues to cope with our existence in the technological conjuncture. We need to accomplish the classical virtues of justice, courage, loyalty, humility, and responsibility with the new virtues of philoxenia (love for strangers), punctuality, cosmopolitanism, and not least mastery of technology (Imamichi, 2009). In particular, the cosmopolitan responsibility in globalization with economic and social challenges is important. Indeed, I understand this book as contribution to find such new virtues for management and leadership in the time of responsibility for the environment and for the future of humanity in advanced technological culture. Both Professors Tomonobu Imamichi and Peter Kemp have been great sources of inspiration for the chapters of this book and contributed enormously to ethics and philosophy of technology and sustainability. I am therefore very happy to be able to dedicate this book to honor their memory and to other participants in the Symposium of eco-ethica who during the years helped to improve my argument and position in the field of Philosophy of Management and Sustainability.

Acknowledgments

Many people have in one way or another contributed to the improvement of this book. I would like to thank the regular participants in the annual symposium on eco-ethica who have contributed with discussions and criticisms of the previous versions different chapters of this book since 2005. Regular participants in the annual symposium on eco-ethica include Tomonobo Imamichi (1922–2012), Tokyo; Peter Kemp, (1937–2018), Copenhagen; Peter McCormick, Paris; Noriko Hashimoto, Tokyo; Manuel B. Dy, Manilla; Sang Hwan Kim, Seoul; Nam In Lee, Seoul; Pierre-Antoine Chardel, Paris; Robert Bernasconi, Memphis, David Rasmussen, Boston; Bengt Kristensson Uggla, Stockholm; Bernard Reber, Paris; Patrice Canivez, Lille; Zeynip Direk, Istanbul; Jayne Svennungson, Lund; Karen Joisten, Mainz. They have all been present at one, several of most the presentations of chapters for this book at the annual symposium on eco-ethica. My colleagues from the Scandinavian Chapter of the European Business Ethics Network (EBEN) have on the workshops, conferences, and meetings of EBEN been very helpful with comments. Here I will mention Kristian Alm, Oslo; Siri Granum Carson, Trondheim; and Magnus Frostenson, Stockholm. Previous versions of several of the chapters have been presented at the study circles in the Nordic Summer University from 2011 to 2016. Here, I would in particular like to thank Øjvind Larsen, Copenhagen; Giorgio Baruchello, Akureyri; Johan Söderberg, Göteborg; Asger Sørensen, Copenhagen; Arne-Johan Vetlesen, Oslo; Åke Nilsén, Halmstad; Peter Wolsing, Odense; Gorm Harste, Århus; Arto Laitinen, Helsinki; Maria Refer, Copenhagen; Anders Ramsey, Lund; Mikael Carleheden (Göteborg), Peter Aaagaard, Roskilde, and John Storm Pedersen, Esbjerg. Indeed, my colleagues at Roskilde University in the programs of business studies and economics and business administration and social entrepreneurship and management have over the years be helpful with comments and suggestions to different aspects of the book. Here, among many colleagues, I would in particular like to thank Luise-Li Langergaard, Oda Bagøien Hustad, Kirsten Mogensen, Inger Jensen, Poul Wolffsen, Søren Jagd, John Damm Scheuer, Kristian Sund, Margit Neisig, Sameer Ahmad Azizi, Anita Mac, Ada Scupola, Anne Vorre Hansen, Jørn Kjølseth Møller, Poul Bitsch Olsen, Johannes Kabderian Dreyer, and Lars Fuglsang. Finally, I would like to thank my wife Victoria and my children Joachim, Erik, Elias, and Arthur for all their support and help with the different chapters for this book.

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Introduction

The aim of this book about Philosophy of Management and Sustainability is to present the philosophical foundations for business of sustainability. The key challenge is to contribute to rethinking philosophy of management to find a new transition for business and society in the great transition toward sustainable development. Accordingly, this books aims at presenting a philosophy of management for developing in the context of philosophical and ethical reflection on sustainability, ethics, and corporate social responsibility. In this perspective, the book provides philosophical foundations for the reflection on business and economics. Very broadly, we can say that the book presents the philosophical foundations for progressive business models in a more sustainable society. When we discuss the concept of philosophy of management in relation to an ethics of sustainability, we go beyond traditional management thinking and investigate sustainability in the perspective of ethical philosophy. This argument is based on an interdisciplinary perspective on the sciences of management and organization investigating the philosophical theories behind the sustainability studies in relation to finance, organization and leadership, marketing, human relations, communication, legitimacy, responsibility, and ethics. Moreover, being interdisciplinary with focus on philosophical foundations, the book elaborates on the different perspectives from disciplines like business, philosophy, ethics, economics, political sciences, and sociology. More specifically, through the disciplines, keywords of the book are philosophy of management, business ethics, corporate social responsibility (CSR), sustainability, and UN sustainability goals. Accordingly, the book begins with the discussion of the concept of globalization in relation to philosophy, ethics, and justice with the aim of developing a cosmopolitan spirit as the basis for international justice. Globalization was in the beginning an economic concept but with the emergence of global problems of global poverty, environmental degradation, climate change, and global social and political interdependence we need to rethink the concept of justice for the international community at a cosmopolitan level. Is the task of philosophy of management to have an outlook of political philosophy in order to reflect on this other concept of globalization, not only as a Utopia but also as a real alternative for the global community. The dream of another globalization includes overcoming the misery of the world in the struggle for democracy and hope for cosmopolitan justice in the age of hypermodernity.

xviii   Introduction The foundation of philosophy of management in globalization can be found in my comprehensive theory of responsibility, ethics, and legitimacy of corporations in a globalized society. In the book, I present this approach as based on an ethical liberalism or a “communitarian Kantianism.” This approach to business ethics and philosophy of management is inspired by the philosophy of Paul Ricœur with his vision of “the good life with and for others in just institutions.” In close connection with this ethical ideal, we can mention the four ethical principles for protection of the human person: autonomy, dignity, integrity, and vulnerability. This philosophical theory of business ethics concerns both micro- and macro-levels of society. Accordingly, it is possible to apply philosophy of management and business ethics to ethics of administration. This book argues for the importance for an ethics of sustainability for public administrators and policy-makers. Public administration ethics includes reflections on the ethical theories, principles, and dilemmas of public organizations, corporations, and institutions, including the state, regional, and municipal administrations and bureaucracies, including ethical dimensions of the work of courts, police, and military. We need to provide the philosophical and ethical basis for good and just decision-making in public administrations. Together business ethics and public administration ethics can be integrated in general philosophy of management, focusing on responsibility, and sustainability in private business and public administration. An important concept for coining the ethical responsibilities in private organization and public administration is the vision of corporate citizenship and the corporation, organization, or institution as a good corporate citizen. In order to realize good citizenship in private and public leadership and administration, we can emphasize the need for stakeholder management to ensure the ethical and sustainable legitimacy of private business or public organizations. It is in this context that philosophy of management and ethics focuses on the great transition toward sustainable development. With the starting point in the Brundtland Commissions groundbreaking report on Our Common Future from 1987, the book provides a philosophical interpretation of sustainability and sustainable development. In order to rethink philosophy of management in the transition toward sustainable development, we discuss the philosophical implications of the UN sustainable development goals (SDGs) in the world Agenda for 2030, decided by the UN in 2015. The book discusses the implications for new business models based on the SDGs. Moreover, the question is how management can make sense of the SDGs for more responsible business. Thus, the promotion of the SDGs for business is an important focus of discussion for contemporary reflections of philosophy of management and business ethics. Thus, new technological challenges to sustainability are important for philosophy of management in order to develop an ethical economy of sustainability. Therefore, we move on to analyze the philosophical dimensions of the ethical interdependence in the Anthropocene age. Philosophy of management deals with advanced technological and economic systems that face a necessary transition toward circular and ecological and more environmentally friendly economic

Introduction    xix systems. Today, the ontological and epistemological reality of philosophy of management is the condition of the Anthropocene age, where human beings live in conjunction with technology and have great power to modify their natural environments. A paradigmatic case of the environmental challenge to sustainability in the age of the Anthropocene is the treat of environmental and social catastrophe and disaster. The book presents the catastrophe of the nuclear plant in Fukushima in Japan in winter 2011 as an important example of the challenges for philosophy of management and leadership facing the fragility and paradoxes of technology and ethics in the age of the technological conjuncture and life in the Anthropocene age. The environmental disaster reminds us about the importance of an ethical economy with focus on transition toward sustainable development. Thus, we need to develop an ethical economy. The challenges of sustainability means that philosophy of management needs to develop a more responsible concept of economic systems and markets. Therefore, the book presents an argument for the need to take seriously the close relation between ethics and economics as a challenge to the crisis of market economics based on individual profit maximization without concern for social and environmental sustainability. This ethical economy implies a transformation of business and its stakeholders with new demands for ethical concern of businesses toward their stakeholders. The global environmental challenge of sustainable development must deal with the current changes and disruptions of traditional business systems by working for an ethical economy that can be the basis for progressive business models. The challenges of technological civilization to find more sustainable life-styles require philosophical reflection in order to develop new business models for sustainable business. We need to rethink our concepts to establish new practices of pro-social business, social entrepreneurship for innovative ideas of sharing, and ecological and circular economy. Here, the book aims to provide the basis for the use of philosophical reflection as a method to capture the theoretical foundations and practical implications for leadership, governance, organizations, and organizational processes in pro-social businesses. However, we should not forget the social dimensions of the challenge of the great transition toward sustainable development. Therefore, the book considers the concept of equality as essential to the ethics of political economy as an important dimension of the reflections on the ethical economy. As suggested by the SDGs of the UN, global equality is an important element of the effort to create a sustainable future for humanity. After having presented this framework, the book goes deeper with a perspective on the philosophical foundations of the perspective on sustainability and management philosophy. We present after this the challenge of moral blindness in management and business administration as a challenge to ethics and philosophy of management. Moral blindness and evil is the dark side of sustainability and it challenges our efforts to rethink sustainability in the light of philosophy of management and ethics. In contrast to moral blindness and evil in organizations, we need an ethics of integrity and recognition. The ethics of integrity represents a new foundation

xx   Introduction of sustainable wholeness. Integrity can be defined as the cardinal virtue of ecoethics, as the foundation of other virtues of justice, courage, loyalty, humility, and responsibility. We can say that integrity is the condition of all the other virtues. Integrity refers to virtuous personal identity and character. The ethics of recognition moves the ethical economy and the concern for integrity into the realm of social and political sustainability. The problem of recognition also refers to the relation to the other person in culture and society. This is the foundation for social and political justice of political and economic equality in democracy and society. Accordingly, recognition is an essential concept for understanding social and political community in philosophy of management. The context of the ethical economy and the transition toward sustainability is the hypermodern experience economy, where there is an ongoing transformation of business and its stakeholders with new demands for authenticity by employees, consumers, and society. The global environmental challenge of sustainable development must deal with the current challenges of the experience economy where the technological conjunctive between humans and society, include the emergence of new technological innovations like artificial intelligence, robots, and digital economies. Nevertheless, the experience economy also represents an opportunity for new philosophical reflection in order to develop new business models for sustainable business. Accordingly, the book presents the concept of the experience economy in hypermodernity as the sociological and philosophy foundation for contemporary business ethics and philosophy of management. In conclusion, we present the new concept of responsibility and CSR that emerges with effort of rethinking business sustainability with the SDGs. This is the concept of CSR that captures the need for new progressive business models, integrating CSR in SDG management. Thus, the book contains three main sections: (I) From CSR and business ethics to SDGs; (II) Philosophy of management and ethical economy of sustainability; and (III) Foundations of philosophy of management, ethics, and sustainability. Part I presents the movement from CSR and business ethics to the SDGs with focus on the current transformations of CSR and business ethics toward SDG leadership and philosophy of management of the SDGs. The chapters of this section deal with the following topics: (1) Ethics and justice and globalization; (2) Sustainability and business ethics in a global society; (3) The ethics of administration and sustainability; (4) CSR, sustainability, and stakeholder management; and (5) Business sustainability and the UN sustainable development goals (SDGs). Part II presents the philosophy of management and the ethical economy of sustainability. The reality of the Anthropocene and the technological challenges of contemporary society require a new ethical economy with focus on sustainability and responsibility. The chapters of this section deal with the following topics: (6) Philosophy, management, and ethical interdependence; (7) Environmental catastrophes and challenges to ethical decision-making; (8) From financial crisis to new economics of sustainability; (9) Ethical economy and the environment; and (10) The concept of equality in ethics and political economy. Part III presents the foundations of philosophy of management, ethics, and sustainability with focus on basic concepts that can justify ethical reflections

Introduction    xxi in philosophy of management. Important are the concept of moral blindness, integrity, and recognition. In addition, a condition of the search for sustainability is the hypermodern experience economy. The chapters of this section deal with the following topics: (11) The dark side of sustainability: Evil in organizations and corporations; (12) The ethics of integrity: A new foundation of sustainable wholeness; (13) Recognition between cultures as the foundation of ethical and political sustainability; and (14) Philosophy of management in the hypermodern experience economy. Part IV presents the new concept of responsibility related to the changed concept of sustainability with the SDGs. It contains Chapter 15: The principle of responsibility: Rethinking CSR as SDG management. With this, we can say that the aim of the book is to provide education for a sustainable world in business and management. Social and environmental sustainability implies the development of a new understanding of the relation between human beings and nature. The new concept of sustainability that we need should go beyond brutal anthropocentrism reducing nature to an object of utility and exploitation for human beings. Nevertheless, it should also be critical towards an eco-centric concept of nature leaving no room for humanity in its natural environment. Today, we need to acknowledge the multiplicity and complexity of the relation of humanity to nature, which is expressed in the concept of the Anthropocene, where nature is both subject and object of human existence. The argument for sustainability in this book mediates between economic and ecological concepts of sustainability. As such, education for sustainability in business implies learning to act for the sustainable development goals making sustainability an integrated part of human virtues and education. An ethical culture of sustainability overcomes the brutal exploitation of nature by integrating human beings and nature in education for sustainable integrity in nature and society. Accordingly, this is a fairly abstract philosophical book about philosophy of management and sustainability. Nevertheless, even though the book is an academic book, it has a wide appeal because it discusses the philosophical basis for sustainability, management, and leadership. Thus, this book is not only directed toward colleagues in philosophy of management, but the book is also for practically oriented business people and administrators, and people who are concerned about sustainable development. I think that eventual readers and not least university students could use the book as a theory and philosophy book to understand the philosophical and ideological foundations for use of the concept of sustainability in business. The book would therefore be able to serve as core adoption, reading list, and library reference according to the needs of each student.

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Part I From CSR and Business Ethics to Sustainable Development Goals (SDGs)

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Chapter 1

Ethics and Justice in the International World: The Problem of Globalization and the Need for a Cosmopolitan Spirit Our time is the time of globalization. Today globalization has become a concept that concerns the universalization of languages and cultures in a world that is emerging as “One World” (Rendtorff, 2017).1 Yet, in the beginning, the concept of globalization has been an economic concept (Brown & Held, 2010). It was a concept that – in the economic and social debate – posed a challenge to the traditional concepts of the economy. In the current situation, the idea of globalization marks the break with a paradigm of the national state and with all its institutions as well as globalization represents the emergence of an international and cosmopolitan system that goes beyond the state system. There are even economists who think that this rupture implies the emergence of a new paradigm of the inter­ national economy where we must describe the global interaction rather than the system of the national state. We can say that we should propose a political and economic science that is truly cosmopolitan. In addition, it is up to us to define the content of this new cosmopolitan science of global ethics of sustainability in relation to ethics and international justice (Held, 1995a, 1995b). Although we started with a narrow state system and an international economy after the Second World War with an economy without many multinational companies, we are now in the situation of a global economy where the market economy with the end of the cold war has become truly international. This is why we need a new theory of international relations, which also raises the problem of sustainability as a problem of ethics and justice at the international level. In the same way, globalization also poses a challenge to developing economies, being both a threat and a possibility for these countries and cultures. When ­talking about the countries of the Middle East and Africa and in the area of g­ lobalization, it would also be necessary to go beyond the paradigm of the national state. It is necessary to think of the Middle East and Africa in the process of integration 1

Previous versions and preparatory works for this chapter include Rendtorff (2017b).

Philosophy of Management and Sustainability: Rethinking Business Ethics and Social Responsibility in Sustainable Development, 3–18 Copyright © 2019 by Emerald Publishing Limited All rights of reproduction in any form reserved doi:10.1108/978-1-78973-453-920191001

4    Philosophy of Management and Sustainability in a cosmopolitan system, that is to say, a search for a sustainable C ­ osmopolis where all cultures meet in a specific country. One aspect of this g­ lobalization is the critical relation to companies that can operate anywhere in the world (Rendtorff, 2009). It is globalization with the fatal consequences for the happy life of people in local cultures and countries. One can speak of the accumulation of the circulation of goods and capital, which implies the intensification of poverty in developing countries in the Middle East and Africa. So, it is a challenge for a philosophy of global globalization to think of ­justice for the cosmopolitan society that goes beyond the level of the national state (Beck, 2001). In this situation of the globalization of the economy with its potential con­sequences of the worsening inequality in the world we could say that we are looking for a democracy and publicity at the global level that can take into account the possibilities and limits of economic globalization in relation to political and democratic stability. It is the political philosophy’s duty to think of this other globalization, not only as a utopia for the world, but also as a realistic and current alternative vision for international society. The dream of another globalization is expressed in the search for international and civil governance structures that can give meaning to globalization and help to manage the free flow of goods and capital. But, it is above all a problem of security and political stability. We need a vision of democratic integration of countries and cultures into the international system. This is the vision not of exclusion, but of the respectful integration of the Middle East and Africa into the processes of globalization that goes beyond military and war ­conflicts and political instability. We want to take an attempt to make a critique of globalization from the dream of another globalization that goes beyond poverty and international economic inequality, described by the French economist Thomas Piketty (Piketty, 2014). Based on this problem, this chapter will present a vision of another globalization by discussing globalization in relation to the democratization of national and international governance. It is about proposing a project of philosophy of globalization that is moving toward a cosmopolitan ethical vision of international justice of relations between countries and regions of the world.

1. Toward a Critical Philosophy of Globalization In his book Power and Counter-Power in the Age of Globalization (2003) and What Is Cosmopolitanism? (2006) Ulrich Beck describes the process of globalization in a way that can help us to offer this vision of a critical philosophy of globalization. We can say that with globalization we are confronted with the ­ecological, humanitarian, food, and military catastrophes of the world and above all that is why we need a reflexive space where we can confront globalization with a new critical philosophy. At the same time, we see the rise of nationalism in the ­Middle East, Africa, Europe, the United States, and around the world. Therefore, we must go beyond border policy and develop a transnational policy and a vision of a philosophy of globalization that can think of global sustainability and ­cosmopolitan justice (Beck, 2006).

Ethics and Justice in the International World    5 This philosophy of globalization must study the consequences of globalization and the philosophical dimensions of interconnectedness and the growing institutional interdependence of the world, as proposed by the English professor David Held (Brown & Held, 2010). We should study how globalization expresses a historical transformation of the modern world in which we can observe that what is national is no longer national, but is part of the Cosmopolis as is the case with all the major cities of the world. Following this, inspired by Ulrich Beck, we can say that cosmopolitanism is a fact of history. Beck calls this a cosmopolitan realism. He defines cosmopolitan realism as follows: Realism, that is, cosmopolitan Machiavellianism, responds in particular to two questions. First: how and by what strategies do the players in the global economy impose on states the laws of their action? Secondly, how can states, in turn, reclaim a meta-politicalpolitical power to impose a cosmopolitan regime on global capital that also includes political freedom, global justice, social protection, and environmental preservation? (Beck, 2003, p. 12) In other words: How to overcome realism and move toward international justice? Beck speaks of the need for a new global political economy that includes the space of the transnational economy on one side and the international political world beyond the national state policy on the other side. The need for this cosmopolitan social theory is reflected in the many signs of globalization that Beck describes: “Climate change, environmental destruction, global financial risks, population migration, and the anticipated consequences of nanotechnology and genetic innovations” (Beck, 2003, p. 12). Moreover, we could add other cosmopolitan issues of poverty, inequality and all the problems of neo-colonialism in the world. Beck argues that we will have to overcome the division of the world by the state and culture to find a “cosmopolitan common sense” of accepting otherness that goes beyond ethnic, national, and religious differences to create an international cosmopolitan consciousness. It is this search for the cosmopolitan spirit that Beck calls the second modernity. In addition, we can add that it is the duty of a new program of philosophical reflection to confront this new cosmopolitan modernity and think about its ethics, politics, and justice (Beck, 2006). Nevertheless, what kind of questions will we have to ask in order to analyze cosmopolitan modernity in a philosophical way? In particular, we can mention the issues of power and struggle for freedom and equality in the world. Moreover, in the present situation the importance of finding a peaceful solution to military conflicts in the Middle East is important to mention. As a result, Ulrich Beck wonders what are the foundations of legitimate domination in the era of globalization? Both terrorists, local wars and military policy have become international, and the question of perpetual peace is emerging once again with great force. One would think that it is precisely the duty of the new cosmopolitan thought not to end with “The Clash of Civilizations” but, as Beck says,

6    Philosophy of Management and Sustainability it would be necessary to find a cosmopolitanism according to the great philosopher Immanuel Kant who does not manifest himself in an idealistic sense, but in a realistic sense of cosmopolitanism in common sense (Beck, 2003, p. 17). Such a cosmopolitan Realpolitik must take transnational dependencies seriously and transform and open national democracy to the situation of globalization. We must rethink economics and democracy beyond the national state. The cosmopolitan modernity is particularly confronted with the overflowing national borders caused by the globalization of the economy and it is the duty of the philosophy of globalization to think about the social and cultural consequences of this economic globalization (Beck, 2006). We can emphasize that the second modernity has proposed a meta-­ transformation of the economy and the politics of the state (Held & McGrew, 2007). We can talk about the meta-games of world politics. These are institutions and organizations on a global scale that will need to be the subject of philosophical reflection. ­Globalization expresses a transformation of second-rate modernization beyond the national welfare state. The neoliberal agenda was the liberation of the economy beyond the national state and left an empty space for international governance. Today, one should analyze the consequences and possibilities of action from that. Faced with the upheaval of the world by the free movement of capital Beck proposes “the counter-power of global civil society” (Beck, 2003, p. 33). Among the elements of this civil society, one can think of the political consumer, Beck sees the consumer society as the real world society: “The consumer society is the truly global society” (Beck, 2003, p. 35). Political consumers are a counter-power to the global economic society. At the same time, we can talk about going beyond the national state toward an international civil society that could be defined as the society of globalization. Beck says, “The counter-power of states develops through the transnationalization and cosmopolitanization of these same states” (Beck, 2003, p. 39). Beck also shows how terrorists as the antithesis of economic globalization are global players. Likewise, the international alliance against terrorists has been inter­ national even though it is not very effective. Therefore, from the point of view of this globalization movement, philosophical reflection and social thought about ethics and political justice must provide the frameworks for understanding this inter­nationalization of political and social events and actors who all work at the global and international level (Beck, 2006).

2. Globalization, Misery of the World, and Struggle for Recognition Thus, it would be necessary to universalize the categories of thought that were more or less limited in the framework of the national state. The themes of critical philosophy should be developed on a world scale in order to understand the global problem of sustainability from the philosophical point of view. For example, Ulrich Beck also shows us how the society of risk has been generalized and globalized in the second modernity and how it has become a category of globalization that requires cosmopolitan governance (Beck, 2006). While the economic

Ethics and Justice in the International World    7 risks, even if they have a large collective scope of unemployment and destruction of the economy of the society, remain directed toward individuals, the ecological and climatic risks concern the whole planet. According to Beck, it would be necessary to develop a new conception of the critical theory, which implies that the theory criticizes not from the perspective of nationalization but in particular from the globalization, that is to say a new critical theory of a cosmopolitan point of view. Thus, we can add to Beck that this new theory of globalization must be a cosmopolitan philosophy that develops our notions of democracy and justice at the scale of the globalized risk society. We can also find the foundation of the need for such philosophical reflection in other social thinkers. Zygmunt Bauman and Anthony Giddens, for example, are two sociologists who take the same starting point as Beck at the same time as they propose a new vision of globalization. In the sociology of Bauman, we find a development of critical and pessimistic ideas present in the reflection on globalization. With Bauman’s notion of the blurring of everything in Liquid Modernity (2000), we could say that we are facing a third globalization that indicates that we are in a fluid world. We are also in a world of multiple liquid; technological fuzziness; transformation of the relationship between private and public, according to Bauman. Globalization is becoming a world without solidity. For example, new information technologies are contributing to this situation. We can mention the problem of speed, which is characterized by the acceleration of possibilities. In addition, the deterritorialization marks this change. In the urban environment, it is a question of finding a way of living and going beyond the liquid living ­conditions. Moreover, also military instability and terrorism in the Middle East are a recent example of how traditional categories of understanding the world are being dissolved. According to Bauman in Globalization: The Human Consequences (1998), ­globalization produces despair and inauthenticity. Vagrants, immigrants, refugees, and tourists can be mentioned as desperate cosmopolites seeking authenticity in their movement in the international space. According to Bauman, globalization is the age of disorientation and loss of cohesion in one’s personal life. In this conception of globalization, it is part of a critical thinking of globalization to find new ways of inhabiting the world in the vagueness of urbanity in the process of globalization. Bauman’s approach is very important as a critical foundation for the need for a critical reflection on globalization that involves a cosmopolitan point of view showing what Bourdieu called “the misery of the world” (Bourdieu, 1993). One could say that the philosophy of globalization must start from social theory with a view to concrete research on domination and social destruction. Anthony Giddens is more optimistic than Bauman and Bourdieu. He sees the possibility of liberalization of individuals in relation to the domination of ­tradition. According to Giddens in Runaway World: How Globalization is ­Reshaping Our Lives (1999), the loss of national tradition can be a condition for the democratic emancipation of the individual. It is almost like a kind of enlightenment of the individual that allows reflection and self-liberation. Thus, there is a force for democratization and liberation of the world involved in the

8    Philosophy of Management and Sustainability concept of globalization. Giddens tells us how the critical philosophy of globalization should not forget the emancipatory potentialities of globalization, while globalization is becoming a condition of possibility for the true liberation of the individual. We can link this with the reflections of critical philosophy on the theme of recognition. For the American political economist Francis Fukuyama, it can be said that liberal globalization is a phenomenon of the end of history as a struggle between the great political ideologies of Marxism and liberalism. Globalization marks the victory of economic liberalism. Thus, for Fukuyama, the end of history is characterized by a double movement: first the homogenization of liberal society and culture of the West (Fukuyama, 1992). Then, the persistence of peoples and particular cultures in the countries of the world; for example, Islamic culture, the Middle East, and North Africa, the other countries of Africa, and the particular culture of the Asian world that combines economic progress with the traditional values of society. Thus, the end of history is a strong movement toward the universalization and homogenization of the world. Because of the death of politics in the traditional sense, it is also a movement toward the end of the state as such. At the same time, we see peoples’ awareness of their own identity as perfect peoples. Therefore, the struggle of recognition persists as a historical movement even if the debate is less present in the countries of the West. It is the struggle of recognition as a result of decolonization. Therefore, for Fukuyama, the great challenge of current thinking is the combination of universal development with the emergence of confrontation between increasingly different cultures, that is, in the global battle of recognition we need to find the recognition as equal of different people from different cultures. Therefore, in a stable political society with well-functioning market economic structures, recognition should be combined with trust in people and institutions (Fukuyama, 1995). In a current reflection, Fukuyama talks about the end of the end of the “Narrative of the West” (Fukuyama, 2016). The future of Western civilization is uncertain. According to Fukuyama, the United States and Europe are in a new political reality with nationalism in Europe, expressed among others by the Brexit and by the rise of the new right with the election of Donald Trump as president in the United States. One can even talk about the rise of society of the “postfactual” politics where disillusioned voters uncritically follow populist politicians. This poses a great challenge to democratic political institutions that had experienced consensual stability after the end of the cold war and ideological struggles against the totalitarian regimes of the twentieth century. According to Fukuyama, the current development of neoliberal and post-fact society represents a de-­ institutionalization of the West and this accentuates the post-factual spirit that resembles fluid post-modernity in the sense that there is no longer any objective truth. In p ­ articular, trust in political institutions is in decline and it is very dangerous, according to Fukuyama, who emphasizes that the political order depends on legitimate, just, transparent, stable, and democratic political institutions (Fukuyama, 2011, 2014). Nevertheless, with the post-factual society we experience the decline of trust and the emergence of cynicism and opportunism of political actors.

Ethics and Justice in the International World    9 Thus, we experience a post-factual modification of the struggle for political power that adds a great deal of complexity to the reflection on ethics and the justice of recognition of cultures on the scale of cosmopolitan society. In the philosophy of recognition the thinker of the tradition of German critical theory Axel Honneth in Die Kampf um die Anerkennung also emphasizes the struggle for recognition as fundamental in international politics. He emphasizes that recognition in a post-traditional ethic is found through a struggle for the autonomy of freedom. There is a quest for autonomy in the struggle for recognition, which is a way to combat the pathologies, injustices, and alienation of modern society on a global scale. For Honneth, we should not ignore confrontation and opposition in the social space (Honneth, 1992). The struggle for recognition affirms social difference and thus, it represents a critique of the social order. In his social theory of recognition, Honneth emphasizes that the struggle for recognition is an important dimension of the normative expectation and moral integration of society. Without recognition, society would have humiliated and alienated the identity of the individual. Social integration necessarily takes place through the institutionalization of forms of reciprocal recognition in the struggle for social integration. The struggle for recognition represents a dimension of identity and recognition represents the normative expectation behind the idea of communicative action. One could say that recognition becomes necessary from the experience of the unjust in institutions. With the notion of Identity Politics, the American philosopher Nancy Fraser in the book Scales of Justice (2009) defines the problem of recognition in a situation of identity politics where social groups deplore recognition as a means of to be integrated into the political community. She emphasizes, like Fukuyama, that recognition does not only mean retribution in the economic order but in particular recognition in the order of culture where recognition means the right of a culture where a people can see its particularity recognized by the community in the world. Yet Nancy Fraser reminds us of a problem of recognition in the situation of political decline. It shows us that the struggle for the recognition of cultural difference in a society based on identity has become the main issue of identity politics. As such, the struggle for recognition goes beyond traditional politics as a minority struggle to be recognized. Thus, the challenge of recognition is to find an expression of social and political justice with a tolerance of minorities. According to Fraser – which could be a criticism of Fukuyama – politics should not turn away from discursive deliberation toward the struggle for the recognition of identity politics. One could say that democracy must be based on deliberative discursiveness rather than on the struggle of identity recognition. The generosity of hospitality is more important than respect for recognition, as Hannah Arendt pointed out (Markell, 2003). In the context of the Middle East and Africa, it may be emphasized that the reflexive and critical but also friendly and comprehensive relationship is important for the self-realization of the individual in the process of cosmopolitan globalization. Perhaps, it would still be necessary to have a critical look at the struggle for recognition. According to Habermas, it is necessary for the struggle for

10    Philosophy of Management and Sustainability recognition to be replaced by the communicative action of mutual understanding going beyond community and ethnic belonging (Habermas, 1981). It would be necessary to go beyond the struggle for recognition toward a more dialogical and respectful recognition such as that manifested in the hermeneutical encounter with its openness to the understanding of others. Thus, with the words of Paul Ricoeur, we could say that the critical philosophy of globalization becomes a critical hermeneutics of self-return from the distance in which one meets the other in the double dimension of community belonging and critical and universalist distanciation (Ricœur, 1969, 1986).

3. Globalization as an Expression of Hypermodernity and World Culture On the other hand, the critical philosophy of globalization must also be confronted with the trivialization of the life-world that results from the destructive dimensions of globalization. In this perspective, globalization is often described as the destruction of the authentic dimensions of human life because it is the economic market that becomes dominant in the time of globalization. The philosopher and sociologist Gilles Lipovetsky speaks of world culture as an essential dimension of what he calls the hypermodernity of globalization. According to him, we no more live in a post-modern society only, but we have moved on to live in a hypermodern consumer society (Lipovetsky, 2006a). In this society, we have different relationships between society and citizens as consumers. The hypermodern society expresses a metamorphosis of the liberal culture. We live in the mass consumer society that has become global and universal. We can speak of a new system of consumption in the hypermodern age. What characterizes hypermodern society is the development of world culture, that is to say a situation where the world is dominated by a global culture of market, media, and culture. The time of hypermodernity is thus determined by neoliberal globalization and the technological revolution. Lipovetsky describes in the paradoxical happiness three phases of the development of the consumer society: (1) the time of the years from 1880 to the Second World War; (2) the period from 1950 to 1970; and (3) the time of the years from 1970 to the 1980s in which the consumer society developed. Since the 1980s, we have arrived at the hyperconsumption society. It is a society of unlimited democratization of consumption. The second phase was the generalization of the consumer society characterized among other things by the generalization of products for women. This consumer society produced products of comfort and well-being marked by a new dynamic of individualization. In particular, we can observe a de-traditionalization. With the development of the hyperconsumption society, we are facing an individual-centered society. It is a society centered on the individual’s ability to organize his space-time in an individual way. With individualization, we are in the society of hyperconsumption, which is characterized by a break with the ­conformism of the society of the class. Although there are class differences, there is no real class culture. The individual as a consumer is emancipated from institutions and also from society. One can speak of a turbo-consumer, a deregulated

Ethics and Justice in the International World    11 capitalist consumer as liberated in the global society of hyperconsumption. In particular, we can mention the global logic of the extension of brands as an example of the ideology of hyperconsumption. What is important is the global advertising that makes the world dream. Consumers these days are unfaithful and they are captivated by brands. Today the global consumption of brands follows the logic of the experiential. It is ­emotional rather than statutory. Hyperconsumption is the renewal of sensations. It is a like a strong trip of desire for buying. The hyperconsumer wants to relive his emotions and rejuvenate his aging. On a world scale, the hyperconsumer constantly exceeds its limits in space-time. In addition, everything is marked by ­commercial logic. The spatio-temporal logic of consumption opens up a new ­culture of well-being at the global level. One could speak of a psychologization, sensualization, and spiritualization of well-being. At the same time as he describes the worldwide generalization of the consumer society, Lipovetsky stresses that this society does not represent nihilism. With the consumer society, we have discovered a new conception of the responsible citizen. Consumers build their identity through consumption. The society of hyperconsumption contains an opening to ethics. This society incorporates morality into consumption. It is a paradox that there are also opportunities for the planet with hypermodern consumption, for example, in ecological and social marketing and in the search for corporate social responsibility. In his book with Jean Serroy Culture-world. Response to a Disoriented Society Lipovetsky discusses the globalization of culture. The argument is that the very meaning of culture has changed very deeply (Lipovetsky & Serroy, 2008). The authors mention the phenomena of fashion, advertising, tourism, art-business, the star-system, urbanism as aspects of the world culture that expresses a generalized techno-capitalism, cultural industries, global consumerism, media, and digital networks. What is happening is that the hypermodern society manifests itself as a cultural hypercapitalism. For example, international brands, media entertainment, TV screens as phenomena of world culture that respond to the consumerism and general disorientation of the time. The orientation of a world culture is what helps to find coherence in a fragmented and complex society. This is why we are currently experiencing a “revenge of culture.” Lipovetsky says that the globalization of culture has been made possible by the free movement of capital, goods, and people. The individualism and nar­cissism of hypermodern society are the causes of this transformation toward world culture. It is a paradox that the modern individual has access to a lot of information at the same time as the world becomes more and more complex. World culture meets our need for global and universal orientation. The consumer society is marked by great individual and collective disorientation. Because of the growing individualization, the individual no longer depends on a collective at work, in the family or in society and that is why the search for a unifying culture world becomes so common. Because art has become a commercial object and because there is no longer any cultural belonging in the individual mass society, we need a global belonging of culture as it is the case of homogenization of different images of McDonald’s and its specialties by country.

12    Philosophy of Management and Sustainability Lipovetsky thinks we have entered the era of “glocalization” by difference to “globalization.” And he thinks that we have found the solution of the exit of our identity crisis which passes by the affirmation of the necessity of the culture: In the disoriented world of hypercapitalism, culture must be seen as the privileged tool which makes possible self-realization and self-improvement, openness to others and access to a less onesided life than that of the buyer. World culture is thus an element of self-seeking in hypermodern society. In a book on art and economics, also with Jean Serroy The Aestheticization of the World. Living in the Age of the Artistic Capitalism (2013) Lipovetsky speaks of an esthetic capitalism, another name for capitalism of hyperconsumption, which expresses a new development of the second modernity, hypermodernity. This is in agreement with the post-factual society because everything is ambivalent. According to Lipovetsky, the human being of the hypermodern society is a “reflexive, anxious, schizophrenic homo œstheticus” who seeks the good life, which is never­theless undermined, and threatened (Lipovetsky & Serroy, 2013, p. 32). Indeed, hypermodern society is both reflexive and emotional-esthetic. With the experience economy, there is an aestheticization of the economy where the industrial and cultural and esthetic dimensions blend into artistic and creative capitalism. With aesthetic capitalism, there is a logic of generalized aestheticization in consumption, in the entrepreneurial logic. Lipovetsky calls this logic of generalized estheticism a movement toward a trans-aesthetic society where aesthetics becomes the central value in all dimensions of society. With this analysis of the hypermodern and trans-aesthetic society, Lipovetsky shows how it is the duty of a critical philosophy of globalization to emphasize the phenomena of cultural capitalism at the time of generalized hypercapitalism with the dominance of the world of hyperconsumption. If the philosophy of globalization is to dream of another globalization based on respect for the ideal of real sustainability and ethical justice of cosmopolitan thought, it must work with a critique of the destruction of good life visions, being aware of emergence of reflexive homo œstheticus in the generalization of hypercapitalism in globalization.

4. Criticism of Globalization and Hope for an Exit from the Crisis We can also mention the fact that globalization, after the financial crisis and the fall of the economic market since 2008, was in a situation of global crisis which is as much a crisis of the economic market as a crisis of the economic situation and of world culture. In the current situation with the crisis aggravated by the emergence of post-factual politics, one may wonder if there is a possibility of a new thinking of globalization? Indeed, the challenge of post-factual politics is to think differently. It can be said that ethical responsibility for sustainable development forces us to come out of the worsening financial, political, and

Ethics and Justice in the International World    13 environmental crisis of the global community. Even in the face of the post-factual ideological struggle, the post-crisis situation must be considered as a possibility of the emergence of a genuine cosmopolitanism that leads us toward emancipation and dialogue on the future in the international community. To get out of the global crisis the problem is to deal with the current global financial crisis that can be described as a crisis that is part of a process of transformation of contemporary capitalism (Rendtorff, 2009, 2016). With the globalization of capital and the aggravation of inequality as a result of hereditary capitalism (Piketty), we have a globalization of crisis insofar as financial, social, and ecological instability is globalized. This is linked to geopolitical, military, tyrannical, and democratic tensions at the global level. With the financial crisis, we have also experienced a social and economic crisis. This social crisis is particularly evident at the international level where the differences between poor and rich countries will be more and more serious. Currently, there are for example millions of people who are marked by social degradation and environmental and social hunger and despair in the world. In the Middle East, the war is blending with the worsening economic crisis, and this increases poverty. In Africa in particular, in its post-colonial situation this poverty is shown in its internal conflicts between tribes and ethnic groups, in the number of refugees who are the result of wars and the general impoverishment of the countries following exploitation through the international economic markets. The ecological and environmental crisis is also global in scope both in the ­Middle East, in Africa and in Western countries in Europe and the United States. We can mention that the ecological crisis is also a climate crisis that makes it necessary to rethink the notion of sustainable development in the age of the Anthropocene (Rendtorff, 2015d). Since Stockholm in 1972 and Kyoto in 1992, the problem of tons of CO2 and uncontrollable climate development has not been solved. Global warming in the future looks like a fact. We need international models to solve the environmental and climate crisis. With this perspective, the crisis is primarily a crisis of the exploitation of natural resources. How to get out of the crisis? How to spot finances? Milton Friedman’s neoliberalism is one of the cornerstones of the crisis, as neoliberalism was the driving force behind the international development of globalization. It should be transformed into a more active role of the state in the spirit of Keynesianism. Many voices suggest a greater role for the state in moving out of the privatization–liberalization–­ stabilization vision that has been dominant. This is accompanied by the criticism of the over-indebtedness of unemployment in the United States that has replaced the social model Keynesian. It is the duty of a visionary philosophy of sustain­ ability and globalization to overcome the neoliberalism of the post-factual ­society by formulating another vision of globalization that integrates a socialization of the market with the concept of “ethical balance” in the political reflection on justice in globalization (Rendtorff, 2013a, b). We can see that the financial crisis of Western countries is influencing all over the world. The liberalization of the world market and finances can have a destabilizing effect everywhere. This represents a risk for the financial markets because of their interdependence (Harribey & Plihon, 2009, p. 68). One aspect of the global

14    Philosophy of Management and Sustainability financial crisis can be defined by what can be called a “new accumulation regime” which consists of the following: (1) a deliberate policy of deregulation of markets; (2) the budget deficits in sharp increase in industrialized countries; (3) increase in active portfolios managed by international investors; And (4) unbridled financial innovation. In particular, we also see the growing role of international investors. In this context, we can also mention the problem of tax havens and the moral cynicism of international companies. We can emphasize the importance of governance with integrity, social responsibility, and business ethics in the field of business (Rendtorff, 2009, 2013). Indeed, we must rethink our social and ecological vision of the world in order to be able to emerge from the crisis and be able to solve global problems. One may wonder to what extent the system has found its limits. It is the social, ethical, ecological, political limits to economic expansion and the exploitation of the earth’s resources that challenge human rights and social and political rights. There are people who propose the development of a green and social economy that involves state intervention on a global scale. In particular, they believe that the crisis reflects the inadequacy of monetary and state authorities. Banks should be controlled and a new global finance organization created, with much more governance of the international financial market. It is about creating an inter­ national financial architecture based on cooperation. It also implies a new focus on work and working rules at the international level. According to this analysis, it could be said that it is the current duty of a critical philosophy of justice in globalization to critically discuss the causalities of the crisis and political and military instability. The diagnosis of the crisis can help present scenarios for action and overcoming the crisis toward a more democratic international system. In particular, it can be mentioned that the causalities of the crisis imply the neoliberal development of the economic system. Another dimension of this represents the changes in relations between the world’s major powers, for example, the United States and China, but also the relationship of these countries with the developing countries. In addition, one could mention the cultural encounters of different civilizations indicating the “clash of civilizations.” In relation to the military crisis of war and political instability in the Middle East, it is important to confront the power relations that lie at the bottom of the conflict. We should also reflect on the environmental crisis and the climate issues where we experience new inequalities between developed and developing countries. Finally, it should be remembered that the crisis could also be a crisis for  a democratic vision of international relations because it has not been possible to establish a very large space for reflection on international governance ­(Rendtorff, 2016a). With this description of the world situation one may wonder if it is really possible to dream of another globalization centered on ethics and justice. However, we should not stay with the causality analysis. It would be necessary to go beyond this and ask big critical questions. What are the conditions of possibilities for creating a space for reflection and international democratic dialogue? Is there a coincidence of sustainability, ethics, and justice in globalization? What is justice in the age of globalization? Is there a fair globalization or should we stay in the paradigm of the economic globalization of the universalization of the free market?

Ethics and Justice in the International World    15

5. Hope of Cosmopolitanism in the Age of Hypermodernity In his book Citizen of the World: The Cosmopolitan Ideal for the Twenty-First Century Peter Kemp offers us a political philosophy of cosmopolitanism that unites Eastern and Western philosophers by providing a modern interpretation of the concept of cosmopolitanism (Kemp, 2010). For him, the fundamental idea of cosmopolitanism is Immanuel Kant’s concept of the world’s citizen, seen from the perspective of just institutions of international governance (Kemp, 2010). This perspective combines the educational and political philosophy of globalization with the vision of cosmopolitanism in a conceptual and historical perspective. The idea of cultivating humanity for global citizenship rests on the vision of the need to educate young children to be citizens of the world who can face the great problems of humanity for our civilization, namely the problem of the financial crisis, the clash of civilizations, and the need for sustainable development of humanity in order to survive. The central theme of Peter Kemp’s cosmopolitanism is how to educate humanity to face the common problems of humanity. This social and political ideal dates back to ancient philosophy and was an ideal for philosophers such as Diogenes, Cicero, and Seneca. Stoic philosophy has spoken of global citizenship in today’s world. In particular, according to Peter Kemp, Immanuel Kant was also someone who advocated the idea of global citizenship with his vision of political deliberation and fair international governance of republics around the world (Kemp, 2010). With the book of Daniele Archibugi Cosmopolitan Democracy. On the Road to a Global Democracy (2009) we find a response to the search for structures to deal with the problems of globalization that are becoming more and more serious. Archibugi puts us in a historical perspective by asking to what extent one can be a “citizen of the world.” It takes up the old Stoic idea of the citizen in the world by discussing the conditions of possibility of a cosmopolitan democracy. Like Diogenes, one wonders how one can become a “citizen of the world.” With Kant, we can talk about the perpetual peace and the activity of the citizen of the world. According to the dream for another globalization, we can say that demo­ cracy means nothing more than becoming a world citizen. One could say that this dream means the possibility of democracy as well as at the state, interstate, regional, and global level (Archibugi, 2009, p. 21). Such a democracy p ­ resupposes an international reform with much more efficient structures and very strong international institutions of law and politics. What is the problem with this idea of a global democratic process? Perhaps, the content of the concept of democracy or the republican state. One could say that the idea of world government implies a kind of abstract distance from the individual (Benhabib, 2006). Another kind of cosmopolitanism might be a situated cosmopolitanism that, although based on a cosmopolitan point of view, is located in a nation or culture. It is an ethical cosmopolitanism that is very critical of a neoliberal or almost existentialist globalization or a globalization where everything is becoming the same. In addition, there is the danger of aggressive nationalism and this can be an argument for a cosmopolitanism without roots.

16    Philosophy of Management and Sustainability However, there is a danger of a focus on nationalism and this may be an a­ rgument for cosmopolitanism without roots. The problem is: how should the relationship between cosmopolitanism and multiculturalism be conceived? What is important in cosmopolitanism is multiculturalism without culture. The current refugee crisis in Europe shows that it is difficult to overcome multiculturalism with cosmopolitanism. It can be said that cosmopolitanism respects the integration of this respect for multiculturalism into cosmopolitanism. Thus, cosmopolitanism is the right to go beyond one’s national state. Cosmopolitanism is linked to political cosmopolitanism, which can be conceived as a philosophical universalization of the notion of justice and international government, for example within the framework of the United Nations. Hannah Arendt’s work presents a critical discussion of Kantian cosmopolitanism. She presents views on human rights and the rights of the citizen and discusses the possibility of an international tribunal to deal with crimes against humanity. In addition, her philosophy involves a critical response to a naīve “juridification” of international relations as marked by legal structures. Arendt offers a solution for reintegration into the political community after the fight with the false-doers. The international political community needs a dimension of civil society, as proposed by Arendt and here we find a possible mediation of the relationship between the individual, the state and the international community. To solve this, Arendt talks about “Rights to have rights” – the of each human being to be recognized with his or her dignity as having the right to have rights. One could say that this implies an answer to the problem of the dissolution of the individual in globalization: the duty to be oneself, to exist and to participate in the political community is essential to have human dignity. In Cosmopolitans in All Countries. One More Effort (1992), Jacques Derrida discusses the figure of cosmopolitanism in a way that can illuminate this protection of human dignity. This is very important as a defense of philosophical sobriety as a response to the current refugee crisis in Europe. Derrida points out that there is an important distinction between the (polite) city and the state that represents itself in the figure of cosmopolitanism. The question is to what extent there is something like “the cosmopolitanism that the parliament of international writers must be inspired by.” Derrida says that the idea of the safe city must be something other than a chapter of international law but a true notion of hospitality (Derrida, 1992). What is the duty of hospitality for the refugee, for the immigrant, for the foreigner in the city of hospitality? Derrida argues that cities must choose the path of becoming safe havens for foreigners. Derrida talks about a new ethic and charter for safe cities. Derrida refers to the city rather than the state because he wants to find a new figure of the state for cosmopolitanism. Derrida refers to Hannah Arendt who uses the argument that the end of the nation state is the end of human rights and the emergence of the non-state ­(Derrida, 1992). It implies the abolition of asylum rights and the massive arrival of shelters. Derrida moves the discussion to the city rather than the state. Indeed, with Arendt, he agrees that a world government cannot solve the problem that there is no international law beyond the states. Derrida opposes cities to confederations, federations and states. With the right of asylum of the revolution,

Ethics and Justice in the International World    17 France was opened for the refugees even if this was not always based on humanitarian reasons. Derrida discusses Benjamin’s theory of arbitrary police violence and points to the fact that the state is leaving the problem to the police, who have to throw anonymous immigrants out the door. Only when no states have a name, they have a chance. Derrida says that the concept of refuge city cultivates the notion of h ­ ospitality. He says that ethics as such should be conceived as hospitality (Derrida, 1992). The notion of a safe city is very much related to the notion of hospitality. One could say that the city-hospitality indicates a certain sovereignty of the city. When Kant says that cosmopolitan law must be restricted to this universal hospitality, he refers to this sovereignty. Derrida indicates that the Kantian idea also refers to Pauline hospitality. Nevertheless, there are also limits to the cosmopolitan right of universal hospitality. It is a natural right and not a positive right in the state. Cosmopolitan law is not a right of residence but only a right of access. Derrida insists that hospitality means public space advertising. Derrida, however, insists on going beyond Kant and says that the right of the city is also a right of demo­ cracy to come, that is to say a right indicating another relationship to the world of globalization. With Derrida’s approach, we see an important ethical dimension of cosmopolitan justice that is often overlooked in the discussion of cosmopolitanism when defining cosmopolitanism as the norms of good governance in inter­national organizations. Indeed, it could be emphasized that the development of new forms of governance could involve the individual dimensions as well as the collective dimension (Derrida, 1997, 2008). Thus, the institutions and their capacity for action should be reformed in the interest of well-being at the national and international levels. With Paul Ricœur, one could say that it is “the good life with and for others in the just institutions” (Ricœur, 1990), which represents itself as the goal of the reforms of the international institutions in order to ensure the structures of dialogue quite strong to be the place for mutual recognition of cultures, with a view to making possible measures of common action beyond the limitation in the space of state sovereignty. Cosmopolitan justice builds the visions for the world of the future that implies a global ethics of cooperation. Thus, the fundamental question is how a human world can exist in the future. There is a tension between hope, visions for the future, utopia and responsibility. From the point of view of cosmopolitanism, utopia is a political creation, a world that one can hope for and realize through reformation, not revolution. The vision of citizen of the world is an ideal of education closely linked to sustainability that belongs to a future oriented oncept of utopia that is a guiding star for the global development of the world (Kemp, 2010). This concept of utopia is linked to responsibility in the sense that human beings have responsibility for educating children and for the future of mankind so that there will be genuine life on earth in the future. There is a “the citizen of the world in us all” taking responsibility for the future of humanity and our planet (Kemp, 2010). Here, we should at least adopt a weak concept of sustainable development as a self-evident ethical ideal for the future. Today, the challenge of sustainability with the transition towards an ecological and environmentally friendly society is essential for our hope for the future.

18    Philosophy of Management and Sustainability This vision of the future of cosmopolitanism centers on the idea of the good life of humanity in the context of a sustainable relation with nature and the environment. With our presentation of the challenges of globalization and cosmopolitanism, we can refer to the United Nations as the most important actor for realizing the hope and vision of cosmopolitan ethics and politics. The United Nations is unique since it combines respect for the equal sovereign rights of all states with the protections of the rights of citizens and the concern for global initiatives founded on cooperation and solidarity among states and individuals. Thus, it is not an authoritarian world government, but an international organization facilitating cooperation and mutual problem solving among individuals and states in the international community. The initiatives of the UN are unique since they combine interstate international collaboration with partnerships with private companies and civil society. In this way, the United Nations can contribute to the realization of an ethical cosmopolitanism that works with respect for difference, otherness and mutual dialogue between people and nations. Thus, the idea of the United Nations is the foundation for global cooperation for protection human rights and freedoms everywhere on the globe with the Universal Declaration on Human Rights from 1948, which was a milestone for the universal and cosmopolitan protection of human rights. Followed up by international covenants on civil and political rights (1966) and on social, economic and cultural rights (1966), the United Nations has developed an important language of cosmopolitan protection of human individuals and cultures. Indeed, the United Nations development of a global vision of cosmopolitan sustainability is following up on the work on protection of human rights. The UN Conference on the Human Environment in Stockholm in 1972 was the first step of developing a global strategy for a responsible policy of sustainability integrates the social, environmental and economic dimensions of sustainability with ideals of peace and just institutions all over the globe. A second and very fundamental step was the Brundtland Report from 1987 which combined the policy of sustainability with the human rights declarations in order to give justice to future generations and give them possibilities of a good life on earth. Later followed the Declaration from Rio in 1992, the 2002 sustainability summit in Johannesburg and in 2012 a meeting evaluating the situation twenty years after the Rio meeting. Finally, with the UN conference in New York in 2015, these initiatives on sustainability combined the work on development goals from the 2000 United Nations Millennium goals with the Sustainable Development Goals (SDGs). Here, with the SDGs we face a realization of general political, economic and environmental goals for the world community, addressing the existence of genuine human life on earth in the future.

Chapter 2

Sustainability and Business Ethics in a Global Society In this chapter, I will present the outline of a comprehensive theory of responsibility, ethics, and legitimacy of corporations in the context of sustainability a globalized society (De George, 1999; Rendtorff, 2009, 2018).1 This approach to sustainability and business ethics is based on an ethical liberalism or a “communitarian Kantianism,” inspired of the philosophy of Paul Ricœur, including the four ethical principles of protection of the human person: autonomy, dignity, integrity, and vulnerability (Rendtorff & Kemp, 2000). This normative theory of business ethics approaches ethics at different levels of society, individuals, organizations, and market institutions. Business ethics and corporate social responsibility (CSR) should not only be applied at the level of human personal choices. It is indeed necessary to construct common values and concepts of responsibility for business organizations and institutions in order to justify the old saying that “good ethics is good business” as a reaction to the opportunistic challenge of economic theories of individualist utility maximization (Rendtorff 2005a, b).

1. Methodology of Sustainability and Business Ethics This concept of sustainable business ethics adopts the methodology of business ethics as “critical hermeneutics” combined with an interdisciplinary institutionalist approach to economics and social sciences (Rendtorff, 2009). Critical hermeneutics mediates between structural and intentionalist explanations of causalities of actions in institutional theory (Ulrich, 2008). However, it is important to go beyond mere institutional analysis and proposing a normative perspective of applied ethics and analysis of ethical argument as basis for my approach to business ethics. Ethics has been defined as a normative study about what norms should guide decision-making and CSR in business and economics (Sen, 1987; Solomon, 1997). The normative theory simultaneously works at the micro- and 1

Previous versions and preparatory works for this chapter include Rendtorff (2005a, 2009, 2012a). Philosophy of Management and Sustainability: Rethinking Business Ethics and Social Responsibility in Sustainable Development, 19–28 Copyright © 2019 by Emerald Publishing Limited All rights of reproduction in any form reserved doi:10.1108/978-1-78973-453-920191002

20    Philosophy of Management and Sustainability macro-levels of organizational behavior, business systems, and market structures and influences the political economy of different societies or states. Business ethics includes a critical evaluation of formulations of guidelines and codes of conduct for companies at national and international markets. This broad approach to sustainable business ethics also implies a critical evaluation of neoclassical economics of efficiency and utility and it leads to a broader interdisciplinary, institutional, and historical perspective on the norms and values of corporations. The argument is theoretical in nature, but it would also be necessary to follow up with work on plenty of empirical material, which can be used for case-oriented, qualitative illustrations of the theoretical argument. The approach to this textual material is – according to the method of critical hermeneutics – based on literature review and interpretation rather than quantitative analysis of surveys of dominant values of major actors (Rendtorff, 2009). Although it recognizes the explanatory potential of this tradition, critical hermeneutics does not think that descriptive positivist economics is sufficient. We need discussion about goals and values, and business ethics emerges as a kind of normative economics to accomplish the insights of business economics. Business ethics therefore agrees in considering normative economics a science of conversation based on theoretical arguments about ethical principles, values, and good business practice. Accordingly, a vision of sustainable business should adopt the concept of “integrative business ethics” in order to mediate among ethics, political, and economic rationality (Ulrich, 2008). This integrative approach can be considered as the application of “communitarian Kantianism” and critical hermeneutics as the basis for ethical reflection on the foundations of economics as a truly valuecreating science. In this perspective, business ethics integrates the rationalities of law, economics, and politics in order to promote sustainability and the good life of humanity. Integrative business ethics is not only about external limitations on business activity, but it also implies internal guidance for economic valuecreation. It implies not only a deontology of correct business rules but also an argument for the morality of just institutions of free economic markets (Powell & DiMaggio, 1991). Thus integrative business ethics aims at formulating principles for CSR of the good citizen corporation. Business ethics is defined as a critical practical rationality integrating ethics in the disciplines of economics and the social sciences. Such a discussion of the relation of economics and ethics in the perspective of critical hermeneutics aims at a justification of the rationality of ethical leadership in business institutions (Paine, 1994a, b, 1997, 2003). We can perceive the emergence of a close link between ethics and economics as new strategy for CSR and moral management. However, there remains a tension between ethics and economics (Sen, 1987). Therefore, we need external political and legal constraints on economic markets. Ethics is the foundation of economic action. At the same time, we should admit that there is an ethical dimension within economic notions of utility and efficiency, which should be taken into account when dealing with the ethics of economic markets. Therefore, there may be an economic dimension

Sustainability and Business Ethics    21 to ethics and ethics and economics are in a “dialectical relation” where they mutually shape one another. In the light of economic anthropology this implies a critical examination of the concept of “homo economicus” of egoistic utility maximizing individuals in traditional economic theory (Lütz & Lux, 1979; Sen, 1987). Economic anthropology should rather be considered in the perspective of ethical liberalism where individuals interact in complex networks of reciprocity in social community. Accordingly, economic action is based on the vision of the “good life in community for and with the other person in just institutions” (Ricœur, 1990). This vision is evaluated in the Kantian perspective of universal rules of the categorical imperative (Bowie, 1999; Rendtorff, 2018a). Utilitarian welfare analysis is only possible in the perspective of this framework of “communitarian Kantianism.” It is the task of Kantian determinate and reflective judgment as the bridge between micro- and macro-economic rationality to make the convenient application of ethical theories and principles to concrete situations of choice and decisionmaking in business organizations. This is the basis for our concept of the rationality of what we can call “moral management” or “ethical leadership” in the perspective of “Cosmopolitan business ethics” (Rendtorff, 2018a). Therefore, business ethics is not only about internal market behavior but also about finding external principles of political governance to regulate economic markets. Accordingly, I would propose to adopt John Rawls’ concept of political justice as the ultimate horizon of business ethics (Rawls, 1971).

2. The Values of Business Corporations Based on these principles of critical hermeneutics, integrative business ethics, and communitarian Kantianism, we can begin an analysis of the need for business ethics and CSR with regard to globalization in post-industrial society. Moral management can be considered as important in order to formulate universal norms for different cultures and to cope with economic and social changes and developments in international markets because of increased globalization (Donaldson & Dunfee, 1999). In the age of global capitalism, companies have increased power and responsibility to contribute to social values and sustainable development. Emergence of global publics and media awareness represent a challenge to companies to deal responsibly with issues of human rights and the environment. From the institutional perspective, the result of these social expectations to corporations has been the emergence of norms of a global civil society with its own laws and norms (Dienhart, 2000). Development of codes of conduct and policies of moral management represents the contribution of corporations to establishment of these norms of civil society to reinforce the social foundations of economic interactions (Driscoll & Hoffman, 2000). In order to conceive the function of moral management or ethical leadership we can propose to look more closely the concept of value and its role in business ethics. An ethical vision of values and moral management is necessary. This discussion of values, organizations, and management can be related to the problem

22    Philosophy of Management and Sustainability of how to define the meaning, function, and goal of values in organizations. There are many different values in organizational life and it is the role of business ethics to clarify the relation between these different values in the institutional perspective (Dienhart, 2000). As the basis for individual action institutions reflect values in their culture and decision-making structure. The values of economizing, power-aggrandizing, and ecologizing have been proposed as the original values of the corporation (Frederick, 1995). This debate about values in organizations implies discussions of the relation between economic, legal, social, and ethical values. The question is how these values should be realized in moral management and business ethics. We need a reflective view of morality trying to overcome the danger of management ideology and conceive ethics as the integrating force of business life (Lipovetsky, 1991). Moral management is about the good life in organizations based on universal norms of responsibility seeking to find the right balance between individuals and organizations and indeed between corporations, society, and political democracy. Based on this preliminary definition of values in corporations it is possible to formulate the theoretical basis for business ethics and moral management. Here, it is possible to defend an integrative approach to these theories, combining elements of stakeholder theory, communitarian moral management, and Kantian business ethics in a republican theory of business ethics based on the democratic ideal of the “good citizen corporation” (Crane & Matten, 2015). Arguing for an integration of different theories of business ethics as major steps toward the concept of the good citizen corporations we are able to present a progressive structuring of the major concepts of the corporation within business ethics. The movement from rational choice theory over stakeholder theory, communitarianism, Kantian universalism, and integrated contract theory to the republican (or cosmopolitan) theory of business ethics may be viewed as steps toward a comprehensive concept of business ethics as the basis for good corporate citizenship in modern complex societies (Rendtorff, 2018a). This social responsibility and responsiveness is in the forefront of the license to operate of the firm (Frederick, 1994). Responding to expectations of different stakeholders, the good citizen corporations is involved in public reasoning and deliberative public communication (Ulrich, 2008). Republican business ethics or ethical liberalism between communitarianism and Kantian universalism aims at making democratic values the core of moral management of responsible corporations.

3. Application in the Different Fields of Sustainability and Business Ethics After these foundational reflections, we can propose an application of this theory of corporate citizenship in the different fields of business ethics (Rendtorff, 2009, 2018). In the framework of the concept of sustainable business ethics, we can rethink the concepts of CSR and sustainable development as based on the triple bottom line can be promoted as a framework for justice and basic ethical principles (Elkington, 1999; Rendtorff, 2009, 2018). CSR, business ethics, moral

Sustainability and Business Ethics    23 management, and social and ethical accounting are based on policies of leadership that include different stakeholders (Caroll, 1979) . Accordingly, CSR cannot be reduced to strategic profit-making and something external to the core of the ideal of the corporation, as suggested by Friedman (Friedman, 1970). Rather it is central to good business to be focused on ethics and sustainability. This framework can be applied in relation to internal and external constituencies of the firm. Internal constituencies include owners, investors, management, and employees. Among external constituencies we have to look at relations to other businesses, consumers, marketing, public relations, and to local community. Moreover, in the perspective of sustainable development and concern for a triple bottom line of economic, social, and environmental responsibility I think the relations of the firm to the environment viewed as a stakeholder should be included into the ethics of the firm. Concepts of CSR, stakeholder justice, and sustainable development can be seen as a practical application of the concept of the good citizen corporation in business ethics. The idea of “justice as fairness” is an appropriate framework for inclusion of stakeholders in corporate decision-making (Philips, 2003). Basic ethical principles of autonomy, dignity, integrity, and vulnerability are important expressions of the concept of justice as fairness (Rendtorff, 2009). These basic ethical principles can be directed toward protection of human persons in organizational structures. Therefore it is considered important to move from CSR to corporate social responsiveness (Frederick, 1994; Rendtorff, 2018a). Corporate social responsiveness lays emphasis on the company’s practical contribution to social management rather on its capacity to talk about it (Carroll, 1979). This is not only about government initiative to make incentives for social responsibility, but also proposals for corporations to make concrete contributions to social betterment. Business ethics is not only about ideal theory but must be realized in concrete practice and make a difference for good management strategy. Analyzing relations to internal constituencies of the corporation we can perceive how ethical values are mixed with the original values of economizing, poweraggrandizing, and ecologizing (Frederick, 1994; Rendtorff, 2018a). In addition to the perspective of the ethical principles, relations to internal constituencies were investigated in the light of the tension between economic rationality and ethical rationality. The relation to internal stakeholders can also be viewed in relation to the theory of the firm in business economics. Moreover, issues of corporate governance between shareholders and stakeholders, ownership, and the ethics of finance, socially responsible investments and the ethics of the workplace can be analyzed in the perspective of CSR, sustainability, justice as fairness, and ethical principles for protection of the human person. In particular, the need for respect of the dignity and integrity of the human person in the workplace, for example by promoting workplace democracy and participatory rights has to be promoted. Concerning the business ethics of external constituencies, we can emphasize the importance of social responsiveness and application of ethical principles to the ethics of not only consumer and customers but indeed more generally to the ethics of public relations to governments, local community, and to the building

24    Philosophy of Management and Sustainability of norms and trust relations to civil society. Indeed, the efforts of developing new proposals for accounting ethics and triple bottom-line reporting are important for establishing such relations. Accounting ethics is an instrument to improve transparency and trust, but it is also an instrument to create knowledge and reflective self-perception of the firm. Such multilevel measurement of the performance of the firm can also be developed in the strategies of moral management of the firm implying repeated dialogue with different stakeholders of the firm. There are many important international initiatives in order to improve accounting ethics, but there is also still much to be done in order to develop general international standards. Environmental issues related to the question of sustainable development are indeed very important applications of a sustainability theory of values, stakeholder management, and ethical principles. Here, it is possible to argue that CSR and moral management also include the environment as stakeholder (Rendtorff, 2009, 2018; Rendtorff & Kemp, 2000). In the framework of responsibility and sustainability, the ethical principles of protection of dignity, integrity, and vulnerability emerge as central values for environmental business ethics. From the point of view of environmental ethics, CSR is about how organizations relate ethically to animals and nature. Environmental ethics has an institutional dimension in so far it deals with the relation between organizations and nature searching for means to integrate bioethics, environmental ethics, and business ethics. In this context, we can propose basic ethical principles for interpreting the concept of sustainable development in the perspective of triple bottom-line management. Environmental ethics of organizations should not be conceived uniquely in the light of utility and enlightened self-interest, but rather include ethical sustainability accounts of the intrinsic value of nature and animals. In order to cope efficiently with the quest for environmental ethics development of compliance programs for environmental protection is an important way to increase corporate responsibility for protection of the environment. The symbolic nature of criminal law can help to increase the efficiency of such a requirement of compliance with high environmental standards.

4. International Legal Developments of Business Ethics and CSR We can perceive different legal developments in the United States, Europe, and in the international community that document this normative framework for the role of corporations in society. They express the difference between the different approaches to moral management and CSR in different countries. In the United States, the legal system has been used extensively to create a strong legal framework for promotion of ethics and compliance programs. In 1991 the United States Federal Sentencing Guidelines for Organizations (FSGO) were enacted by Congress. FSGO represent a strong combination of “stick and carrot” measures to motivate and enforce corporations in establishing compliance and ethics programs (Rafalko, 1994). The FSGO were decisive in creating more focus on corporate ethics and organizational integrity. This development was continued with recent Sarbanes-Oxley legislation on corporate governance, transparency, and

Sustainability and Business Ethics    25 accountability after the scandals of Enron and World Com. This legislation has increased corporate awareness and focus on ethical behavior of employees. Such compliance and ethics programs represent a new development of corporate law considering regulation as dialogue and self-regulation rather than strict enforcement of state power. Moreover, FSGO may be considered as a reinforcement of the legal subjectivity of corporations (Rafalko, 1994). Legal regulation is more aware of the corporation as a collective unit and a from individual actors independent entity with its own moral and legal responsibility. European initiatives with regard to moral management and CSR have been promoted from the document Promoting a European Framework for CSR Green Paper from 2002 (European Commission, 2001a,b). This document was followed be a communication about CSR from the European commission and the establishment of the European Stakeholder Forum. The ideas of “voluntary self-­regulation” and stakeholder dialogue lie in the center of legislative approach of the European commission. The legislative framework of the European approach is much weaker than the guidelines that have been implemented in the United States. The emergent European paradigm of CSR focuses on developing a new morality of ethical virtue rather than direct legal enforcement. As such the approach of the European Union tries to reflect the traditions of CSR and engagement in local community, which is central to the business tradition of European societies (Lipovetsky, 1991). There is an effort to develop a culture of virtue where ethics is an integrated part of business economics and management. In order to avoid criticism as an instrumental tool we can say that basic ethical principles are integrated in CSR as in element of post-conventional virtue morality in European social economies. We can consider this process of creating norms and legal rules of CSR in United States and Europe as a part of an effort of establishing global and international norms and guidelines of business ethics (Enderle, 1999). In order to succeed it is important that these norms are extended to be valid all over the global market. Liberalization of international economics and business requires greater ethical responsibility among corporate actors in international relations. We can perceive the institutionalization of international regimes of business ethics based on universal rules and human rights as a moral minimum while leaving some space for differences in substantial norms of local cultures as long these norms do not conflict with universal standards. As normative basis for international business conduct, communitarian Kantianism contributes to establishment of such international regimes of good norms for moral management and multinational business practice. We are moving toward the creation of a cosmopolitan view of business ethics considering the firm as a world citizen in cosmopolitan society. Many international organizations and corporations have contributed to the establishment of such an international regime of business ethics. We can mention OECD, World Economic Forum, and the UN Global Compact principles, the work of the UN human rights commission on CSR and human rights (Rendtorff, 2009, 2018). In particular we can consider the Caux Round-table principles (founded on a universal concept of human dignity) as an important effort to promote

26    Philosophy of Management and Sustainability self-imposed norms of high integrity of powerful multinational corporations in international guidelines for business ethics that are mediating and bridging between east and west (Rendtorff, 2009, 2018).

5. Integrity, Trust, Accountability, and Legitimacy What is the foundation of the morality of the corporation? This issue concerns the ethical and legal foundations of the idea of CSR considered in the framework of an institutional concept of corporate identity and personhood (French, 1984; Laufer, 1996). In this context, we can argue that a collectivist and constructivist concept of corporate identity is a useful foundation of the organizational integrity of the good citizen corporation (or the corporation as a world citizen). At the institutional level organizational integrity can be considered as a result of efforts to establish successful strategies of moral management (Paine, 1994a, b). This is also the basis for trust and accountability of corporations and it makes it possible to formulate an institutional and communicative concept of social legitimacy of corporations. Accordingly, we can argue for an evolvement of the idea of CSR on the basis of recent developments in the ethics and law of moral management (Rendtorff, 2018a). We can analyze the conception of CSR in the current economy on the basis of an institutional theory of organizations in society (Mitchel, Agle, & Wood, 1997). The problem is what conception of the firm and corporate intentionality that is implied in recent developments of CSR. I would like to propose a dialectical concept of corporate intentionality finding a way to overcome the oppositions between the collectivist and the nominalist view on CSR. This position can be considered as an institutional concept of CSR, which constitutes the theoretical foundation of the concept of corporate citizenship (Rendtorff, 2009, 2018). This view on CSR represents a criticism of a concept of responsibility where it is not possible to ascribe any institutional ethical responsibility to corporations. Such a concept of institutional responsibility can be considered as an expression of the legal concept of “due diligence” being present through compliance and ethics programs of the organization where the organization expresses its good intention and standards of integrity. Accordingly, we can put forward the notion of organizational integrity on the basis of the ideas of moral management and CSR. This can be conceptualized as the foundation of good corporate citizenship. The notion of integrity implies the idea of a virtuous and responsible organization (Paine, 2002). There is a close connection between individual and organizational integrity. Integrity strategies should be distinguished from compliance strategies because they deal with values and ethics rather than rules and regulations (Paine, 1994a, b). In organizations, there should be formulated strategies for implementation of organizational values program according to specific values, histories, and contexts of specific firms. Moreover, integrity expresses organizational commitment to justice and fairness with regard to different stakeholders. Indeed, there is also close link between leadership, ethical judgment, triple bottom-line management, and the evolvement of organizational integrity (Paine, 1994a, b). Establishment of organizational integrity

Sustainability and Business Ethics    27 and managerial judgment contributes to formulate a framework for coping with organizational dilemmas in daily practice of leadership. Organizational integrity in judgment is aiming at the ideals of openness, honesty, wholeness, and thoughtfulness (Rendtorff, 2018a). We may say that programs of moral management are useful tools in order to promote a culture of integrity, accountability, and trust in organizations (Bidault, Gomez, & Marion, 1997). I think that genuine trust relations should be considered as important results of moral management and ethics in organizational culture. Due to globalization and greater public awareness, there has been established a stronger link between accountability, trust, and social expectations of corporations. The need to build trustworthy business practices includes management of problems of corporate governance, accountability, and transparency as a deep crisis of public trust and social acceptance of corporations. Therefore, it is necessary to discuss the significance of trust in order to restore corporate image, develop good corporate governance, and to get social acceptance of business in democratic society. I think that trust should not only be considered as an instrument of economic action, but also seen as an important social glue and informal lubricant of business organizations. To consider business practices as based on ethical values moves trust in the center of CSR as the background for accountability and integrity of corporations. This is due to the fact that generalized mistrust and opportunistic behavior constitutes the limits of fair business practice and cannot be considered as the basis for internal unity and external legitimacy of business corporations (Boatright, 2003). Therefore, I would like to defend an ethical definition of trust considering that what is trustworthy is based on the accountability and responsibility of the firm. I think that to trust someone implies means to hold that person or organization accountable over time believing that they will perform actions of integrity and honesty. Moreover, trust is developed out of mutual expectations and promises for reciprocity and collaboration in the future. Thus, there is a close connection between integrity and the accountability of transparent business institutions. The ideas of responsibility, integrity, accountability, and trust can be promoted as constituting elements in a theory of the legitimacy of corporations in modern society. Legitimacy in global society is an important element of the requirements for the good citizen corporation (Rendtorff, 2018a; Suchman, 1995 ). The quest for legitimacy is about not only the economic efficiency of transaction costs, but also the proposed theory of communitarian Kantianism or ethical liberalism based on the four ethical principles of autonomy, dignity, integrity, and vulnerability constitutes an effort to formulate the basis for social and political legitimacy of corporations in democratic societies (Rendtorff, 2009, 2018). The good citizen corporation uses these political ideas as the basis for a theory of rationality of corporations at economic markets in complex societies. We can analyze the impact of different views of the firm and economic life in different theories of management and economics in the twentieth century. The views of legitimacy in some of the most influential theories of economics and management can be used in order to promote an institutionalist and stakeholder-oriented view on corporate legitimacy (Freeman, 1984), which is based on

28    Philosophy of Management and Sustainability the idea of the good citizen corporation. In the perspective of communitarian Kantianism the idea of communicative rationality and stakeholder dialogue is viewed as the normative basis of the concept of good corporate citizenship. These ideas makes us escape the “Weberian iron cage” of instrumental rationality opening for market regimes based on “integrative business ethics” with a broader social basis. Legitimacy is founded on the social community and the human lifeworld based on views on justice as fairness, protection of rights, and the promotion of the common good for society. Thus, according to this alternative view of the legitimacy of business in society, responsibility, integrity, and accountability emerges out of the idea of republican (or cosmopolitan) business ethics where the license of operate and good business of the firm is to be a good servant of society. How do we move from CSR and business ethics towards sustainability and UN sustainable development goals (SDGs) in business? With the SDGs we see an important turn and development of CSR and business ethics. The SDGs constitute a common language for business combining sustainability and CSR. After having developed a strong framework for CSR and business ethics many business corporations include the SDGs in the strategic implementation of CSR and ethical values in business. Here, the SDGs can be seen as a new language of business ethics and CSR, where sustainability and responsible management concepts are formulated in a general language of understanding, communication and implementation of sustainability in business culture, management and leadership as well as measurement of the performance of ethics and responsibility of the business organization. In order to integrate sustainability with business ethics and CSR management, it is important to integrate sustainability concerns in leadership and management at all levels of the company. This concern for sustainability should be more than a nice vocabulary or an illusionary language of branding or sustainability washing. SDG management combined with CSR and business ethics gives a new purpose of the firm where CSR and business ethics integrate into a new reality of the organizational culture, leadership and management of the SDGs. In this context of SDGs management concepts of strategic CSR and business ethics can be included to define the creation of shared value of the SDGs. With focus on sustainability companies are entitled to create value for sustainability, business and society as an integrated part of their strategy. In order to understand this value creation, it is important to consider the SDGs as a new language of global responsibility to which businesses are committed. The SDGs extend the considerations of the importance of the triple bottom-line for business to general framework of strategic concern for people, planet and profit with focus on important contemporary concerns like mitigating climate change and protecting human rights. In this context, we can see the SDGs as a contribution to a new formulation of aim and purposes of corporate governance and corporate citizenship in global society. With the SDGs the United Nations provides businesses with a value framework to be forerunners for creating shared value for business and society. As good corporate citizens following the framework provided by the SDGs in the formulation of their values and visions of CSR and business ethics businesses are contributing to the important global transition towards a sustainable future.

Chapter 3

Ethics of Administration: Towards Sustainability and Cosmopolitanism We have presented the outline of business ethics and sustainability in global society.1 However, this presentation mainly focused on private business corporations. So, what about public administration? We need an ethics of sustainability for public administration professionals in the public state and in the state (Cox, 2015; Larsen, 2000; Rendtorff, 2011a, e, 2018). So now, the problem is how to formulate an ethics of sustainable administration. Indeed, facing the present global crisis and the need for global principles of sustainability and cosmopolitanism, it could be argued that public administration ethics should be redefined according to these ethical ideals. As such, I would argue that an ethics of sustainable administration should deal with ethical theories and principles and dilemmas of public administration in public organizations and institutions, that is, state, regional, and municipal administrations and bureaucracies, including ethical dimensions of the work of courts, police, and military. A presentation of ethics of administration should also look at problems and dilemmas in different types of more or less public organizations and institutions. A starting point of such an investigation should be the risk of moral blindness and no ethics in relation to the present global crisis in public organizations and institutions (Larsen, 2000; Rendtorff, 2014d). Public administration ethics deals with the formulation of the ethical theories and principles that defines administration ethics in public bureaucracies and political institutions (Jordan & Gray, 2011). We can say that public administration ethics concerns the need for practical reason and wisdom in relation to complex decision-making. In this context administration ethics and political judgment is important for the legislative, executive, and jurisdictional power. We can say that the proposal of an ethics administration as political judgment aims at increasing ethical formulation competency as well in the political system, administration, and legal system (Ricœur, 1995, 2001).

1

Previous versions and preparatory works for this chapter include Rendtorff (2013b).

Philosophy of Management and Sustainability: Rethinking Business Ethics and Social Responsibility in Sustainable Development, 29–42 Copyright © 2019 by Emerald Publishing Limited All rights of reproduction in any form reserved doi:10.1108/978-1-78973-453-920191003

30    Philosophy of Management and Sustainability

1. Changed Conditions for Administration Ethics: The Competition State Nevertheless, what is the ethics of administration? In Europe and not least in Denmark there is a long tradition of professional bureaucracies, independent from the political decision-maker, that is, first the King and later from the democratic government. These bureaucracies are supposed to function as agents, technological machineries to the disposal of the principal, the political decisionmaker. Today, this machinery is supposed to be loyal to the political decisionmaker as long as this decision-maker does not violate basic principles of the constitution and of democratic politics. In a democratic society, the administration should function as protector and promoter of the democratic values of the constitution and the democratic political culture. In this sense, we can argue that the traditional values of administration ethics in Europe was Max Weber’s ideal of political vocation combined with an ethics of profession responsibility (Satkunanandan, 2014). In contrast to the European system, many Americans have praised the fact that they did not have the same technological bureaucracies as in Europe. With the doctrine of the balances of power and dynamic interaction between political, legal, and executive systems, it has been argued that the US system is based on checks and balances rather than independent powers with the administration as a system of social technology to implement political decisions. Here, it has been said that the US system of administration was more open to democracy and political evaluations of the bureaucracy. It is in this context that Ronald Dworkin has developed his legal philosophy of a matter of principles and rights in contrast to objective rules and regulations (Dworkin, 1977, 1986). We can refer to Ronald Dworkin’s concepts of integrity of a legal and political system and of the political morality and integrity of the judge and political administrator (Dworkin, 1996). The ideal of the political administrator in the US legal system is the figure of the judge Hercules, who in addition to his perfect knowledge about political and legal theory and practice also is committed to ethical ideals of political morality, integrity, and defense of the basic principles and regulations of the constitution (Dworkin, 1996). However, it may be proposed that these classical ideals of the ethics of administration face a great challenge with the recent changes and transitions of policy-making in the national and international political community (Cox, 2015; Larsen, 2000; Rendtorff, 2011e, 2018). Since the 1990s, there has been a transformation and transition of the classical bureaucratic welfare state in both Europe and the United States toward a more flexible, efficient, service-oriented, and interventionist state, which include concepts of management from private business corporations in public administration. The concept of new public management focusing on service and economic use of resources has been promoted in order to ensure the efficiency of administrations and state bureaucracies. It is the economic paradigm of governance technologies for production and competition rather than a democratic paradigm of political morality that is essential for the public administration.

Ethics of Administration    31 With these new forms of management, we can say that the neoliberal state has replaced the classical bureaucratic state. As Michel Foucault suggests the neoliberal state emerged after the Second World War as an alternative to the totalitarian regime where one party was in power (Gane, 2014 ; Foucault, 2004). What is characteristic of the neoliberal state is that it is an active interventionist state, present in all spheres of society rather than a passive Night watchman state as it was the case in classical liberalism. In fact, at the national and international level this kind of state has taken over from the classical liberal state and the neoliberal state functions more than a business corporation than a traditional civic and political community (Gane, 2014). In particular, we see this in the way the state tries to run its different organizations and institutions, that is, universities, hospitals, schools, military, etc. Here principles of new public management are applied to public institutions and organizations and when this does not ensure efficiency the tasks are handed over to private businesses in broader networks between public and private in order to ensure more competition and efficiency in carrying out the tasks by the involved partners (Gane, 2014). Accordingly, with the Danish political scientist Ove Kaj Pedersen we can say that the state with these developments of new public management and new political priorities has taken a new historical form. Inspired by works of business economists like Michael Porter with his theory of competition between nations Pedersen calls this state form “the competition state,” that is, a political form where it is the basic ideology and aim of the state to be in economic and social competition with other states in order to increase welfare and prosperity (Pedersen, 2010, 2011). This competitive aim is implemented everywhere in the state, and it also becomes a major task of every citizen to take part in this competitive game. With this, we can say that it has become the task of the administrator and bureaucrat to contribute to this development of the competition state. Nevertheless, this also raises the question about what kind of ethics and what values that should be values of the administrator in the competition state. It is indeed interesting and very important that Pedersen emphasizes that ethics and codes of ethics have become even more important in the competition state than they were in the classical welfare state because the administrator is no longer considered as a traditional Weberian bureaucrat, but as an active manager of the organizations and institutions in the competition state as a business corporation (Pedersen, 2010).

2. Challenges to Administration Ethics: Crisis and Corruption Now it seems like the western world exports the concept of the competition state and of new public management to all other countries in the world. Accordingly, ethics of administration has become a global challenge (Cox, 2015; Jordan & Gray, 2011). In addition, in this context the world faces some serious challenges with regard to public administration in order to find appropriate economic and political solutions. In particular, we can mention the (1) global economic and environmental crisis, (2) global crisis of bribery and corruption, and (3) global

32    Philosophy of Management and Sustainability crisis of the public institutions and organizations in civil society as issues facing the ethics of public administration. (a) The global economic and financial crisis is closely linked with the environmental crisis. In combination, the financial crisis and the environmental crisis constitute a world crisis and we need a transformation toward sustainability (Nielsen, 2013). This can be formulated as a crisis for the present world economic system, including a mainstream concept of the competition state focusing on economic growth. The problem is that present model of economic expansion, based on profits and credits, does not help to solve our present environmental crisis where a non-sustainable fossil economy increases the CO2 problem and the global climate crisis. As the Danish science journalist Jørgen Steen Nielsen has stated it, we need a transition to another kind of economy moving beyond competition and growth (Nielsen, 2013). Nielsen does not think that green growth is enough. It is like “having your cake and eat it too.” In his view we must move beyond growth toward de-growth and economy of scarcity, where we have to face that we must move from an era of plenty toward an era of scarcity. Nielsen thinks we need a new ecological economics, as proposed by Jeremy Rifkin and Herman Daly, an economics that can propose a sustainable development in order to deal with the financial crisis, the food crisis, and the climate crisis. Nielsen does not think it enough to propose strategies for sustainable development, combining growth, and sustainability. If we look at companies like Walmart, IKEA, Virgin, and Coca-Cola who have tried to combine growth and sustainability, we see that they have not been able to promote real green growth but despite good intentions efforts for combination of green growth and efficient consumption have led to more consumption, so that efforts of CO2 reduction paradoxically also implies CO2 consumption so that a green growth economy has difficulties in being sustainable (Nielsen, 2013). The reason for this is that the paradigm of green growth relies on mainstream economics, and it does not change the presuppositions of mainstream economics which is based on rational paradigm of growth based on the laws of individual maximizing actors according to the laws of supply and demand in competition on a market with possibility of endless expansion. In order really to promote a green economy we will have to go beyond the principles of mainstream economy and realize that resources are limited, no economic actor is isolated, that we do not have transparent or full knowledge about our actions, that causality is non-linear and indeed that there are limits to growth and that the earth is not an infinite system of resources (Nielsen, 2013). So the problem of the economic and environmental crisis also becomes a problem of the competition state in so far as the idea of the competition state is product of mainstream economics. We may ask whether there is a crisis for mainstream economics or whether there is a deeper system crisis of the world system including its development of the competition state as present paradigm of public governance? According to Nielsen, there is

Ethics of Administration    33 really no question because he sees it as a deeper system crisis where we must move beyond the concepts of major economists like and Adam Smith, John Stuart Mill, and Keynes toward a new transition of our economic systems where we learn that social and individual happiness should not be based on economic growth. Accordingly, the defender of an ecological economics argues for a transition toward another economics where we relate critically toward the dogmas of mainstream economics including (1) what cannot be measured economically, does not count; (2) the environment is an externality; (3) what cannot be measured cannot be discussed; (4) short return should not be scarified for long term investment; (5) risk and probability can be calculated in a price; (6) everything has a price; (7) profit maximization is integrated in business and new public management; (8) markets are efficient and regulation not efficient; and (9) you can predict the future by using the past as a model (Nielsen, 2013). Against these concepts of mainstream economics, Nielsen argues that neoliberal economics should be overcome as a new international ecological economics. This implies zero growth, non-economic growth, and economic sustainability instead of obsession with growth and competition. We can here mention the concept of “steady-state economics” as it has been developed by Herman Daly. Such a new economics could contain the following elements: (1) sustainable limits of consumption; (2) ecological tax reforms; (3) limit inequality in income; (4) new measure for progress; (5) reform of the financial sector; (6) new relation between work/free time; (7) informal economy improvement; (8) regulation of international trade; and (9) formation of new kinds of corporations/firms focusing on non-profit or sustainable profits (Nielsen, 2013). Moreover, such a concept of prosperity without growth would include effort to make the international market for CO2 quota well-functioning. It would also avoid to use growth as a substitute for equality, but define “fair” equality within a sustainable economics. Accordingly, such a transition would really move the economy beyond growth toward sustainability. This vision of a transition toward another ecological economy is really a challenge to the competition state. Is it really possible to make the transition toward another economics and keep the new public management of the competition state or do we have to develop another model of the state to have a new economic system? Moreover, we may ask whether it is necessary to have a new ethics of administration if we want to change the economic system toward ecological economics? But we should also discuss whether it is really true that we cannot have green growth because while we have a welldeveloped mainstream economics there is really very little theoretical and philosophical work done on ecological economics, necessary for a transition toward a new economic system (Rendtorff, 2018a). (b) While countries like the Scandinavian welfare states have nearly zero corruption and bribery and therefore can deal with issues of administration ethics that may seem very academic from the point of view of many countries in the world, most states have serious problems of public officials who are

34    Philosophy of Management and Sustainability corrupt and use their position to personal gain and opportunistic behavior. In a global perspective, corruption, or bribery is the most pressing issue of public administration ethics. Corruption can be defined as the use of money or gifts to get certain kinds of benefits and advantages. In case of the public administrator it is the acceptance or requirement of bribery in the profession that indicates the level of corruption (Rendtorff, 2010c). A society with corruption is a society without trust and integrity and in this sense a society with no justice or fairness. In this sense with the Alain Etchegoyen we may define corruption as a “theater of operations where the state and democracy are the only certain and sure victims” (Etchegoyen, 1995, p. 17). Corruption is therefore an attack on the political economy of society and it is related to the structures of gift-giving, of recognition and of economic exchange of a specific society. In this sense corruption is also the negation of established structures of social exchange in a specific society and this is why corruption is so dangerous for democracy and political economy of societies. Being the negation of positive structures of exchange, merit, and social development, corruption is a model of destruction and dissolution of society (Rendtorff, 2010a, b, c). We can say that corruption represents nothingness, an opposition within the positive social and economic structure of the relations of justice and gift-giving. If bribery is used to get a specific social advantage or product, the relation of the free and fair competition at the economic market is suspended by an act of buying privileges which otherwise should be acquired by free choice. Accordingly, the social and political implications of corruption are important. Corruption attacks the fundamental political and social structures of a just society. Political corruption and bribery of politicians and public officials represent a challenge to the democratic unity of society because individuals are not getting privileges on the basis of merit, transparency, or universally valid criteria, but rather in terms of their own power and ability to bribe the political system. This personal unfair search for power is in danger of bribing the public system (Etchegoyen, 1995). Without proper checks and balances as well as conceptions of fairness and justice corruption will be a danger to the institutions of a democratic society. In this sense we can point to the importance of democratic institutions in a society as the most efficient way to avoid corruption. This may also be the reason why democratic societies are the most active in formulating legislation forbidding any kind of bribery and corrupt practices. We can for example mention the US Foreign Corrupt Practices Act from the end of 1970s that was very severe in ruling out any kind of bribery by US private and public institutions at home and abroad (Etchegoyen, 1995). This was done in order to avoid the strong corrupt of the state system. However, we still face the challenges of corruption in private and public systems of democratic states. We can mention different attempts to bribe judges, police or public officials in order to gain personal advantage by individuals. Or we can mention bribery activities of corporations contributing

Ethics of Administration    35 to lobbying of government ministers or government officials in order to promote their interests or give private enterprises better contracts as the basis for collaboration with states. We can also mention international movement of capitals where corporations in contrast to established rules still act with corruption like practices for example when dealing with new contracts on foreign markets. Here we face the danger of international manipulation with powers of governments in different countries. (c) Accordingly, there is an important transition between the combat of corruption and the ethical integrity of public officials in relation to civil society. We can emphasize the importance of freedom in civil society for the legitimacy of the social order. In democratic society the promotion of freedom and equality through recognition are central for institutional legitimacy. Important virtues of administration ethics in civil society are active commitment to this society and protection of citizens with recognition and respect for their citizenship and active participation in society. The public administrator should be actively committed to promotion of activities in civil society as an indicator of the level of social coherence and trust in a society.

3. Values of Administration Ethics: Cosmopolitanism and Sustainability So with the global challenges to public administration what should be the values of public administration ethics? We may ask why there has been so little corruption in the Scandinavian welfare states? Here, we can find some practical values of the history of public administration in the public sector in Scandinavia (Jørgensen, 2003). Traditionally, there has for example in Denmark been a strong public ethos, based on the values of professional ethics of the employees in the public sector. These values have contributed to the definition of a common identity in national and local government? Historically values are important for the development of the Danish state from a Rechtsstaat, built on the rule of law to a welfare or social state and later to a market or competition state. Values of professional ethics define the organizational identity in the public organizations (Jørgensen, 2003). Important for understanding public administration is the power of a common ethos or coherence that was based on the integrity implicit in the classical idea of the civil servant with the values of responsibility, integrity, professionalism, and fairness that defined the public administration of the state built on the rule of law. However, with the changes in public administration toward new public management and market innovation we also see a challenge to the classical values that can no longer be taken for given. Recent developments of the welfare state toward competition state has challenged the classical values and focus on efficiency and economic calculation has implied a challenge to the legitimacy of the traditional values of the public sector (Antonsen & Jørgensen, 1998). We can also say that the emergence of new public management and challenges of globalization seem to emphasize the need for a new responsibility of the public administrator. Here, we could say that we need a cosmopolitan world vision or

36    Philosophy of Management and Sustainability value ethos of the public administrator. In fact Peter Kemp’s ideas in his books about The world citizen could be proposed as an ideal value for public administration ethics (Kemp, 2011; Rendtorff, 2018a). We can say that a commitment to a vision of solving world problems including concerns for sustainability, the environment and human rights should be proposed as an important part of the consciousness of the values for the public sector. This cosmopolitan approach to the concept of world citizenship would applied to the ethics of administration mean that administrators should be educated to be citizens of the world who see themselves as responsible for dealing with the problems of civilization, including the problems of the economic and economic crisis, of human rights, and of the sustainable development of humanity. Following this theme of cosmopolitanism, a central problem of ethics of administration would be the education of public officials in the social and political ideal of cosmopolitanism. This is indeed important as we are aware of the need of cosmopolitan governance in order to confront the global economic and environmental problems of today (Kemp, 2011; Rendtorff, 2018a). It would be important new values of public administration to internalize the concern for sustainable development in a global perspective with the ability to combine the global and local in the practical approach to the professional work as an administrator. Here, it is also important to give the administrator a sufficiently large social and political horizon so that the administrator can see problems not only from the perspective of local administration of the nation state, but also more globally from the perspective of a cosmopolitan concern for humanity. In this context, it is important that the values of the public administrator are related to the work of the United Nation on sustainability where sustainability according to the Brundtland Report of the World Commission on the environment includes ethical, social, scientific, economic, and legal dimensions of sustainable development (Kemp, 2011). Important for the ethics of administration is that sustainability contains an element of justice and responsibility related to fair distribution of resources and capabilities and in relation to the environment and present and future generations. Accordingly, cultivation to be a world citizen is not only an ideal for education, but indeed also a practical virtue for the ethics of administration. Applied to public administration, the idea of cultivation that is central to Peter Kemp’s vision of education for the world citizen would include a broader political and social concern in the professional ethics of administration. In addition, we may mention Paul Ricœur’s ethical vision of the “good life with and for the other in just institutions,” as yardstick of the ethics of administration (Ricœur, 1990, 1995). As the education for cosmopolitanism is considered as a part of citizenship education such an education would also be considered as important for enlarging the ethical horizon and values of public administration.

4. Theoretical Framework for Administration Ethics Nevertheless, what is the theoretical framework for this kind of administration ethics today? In fact, we can see a confrontation between constructive concepts

Ethics of Administration    37 of the democratic state as the basis for administration ethics on the one hand and critical views de-masking the power and instrumental rationality of the competition state on the other hand. Defenders of a democratic administration ethics would argue that – hidden behind the competition state – we find the classical ideals of the Rechtsstaat, built on the rule of law are still alive. As stated by modern political philosophy of Rousseau and Kant the social contract implies that free and equal human beings submit themselves to a political power in order to provide mutual protection of their rights. The state and its institutions protect the fundamental rights of the citizens. In a modern democracy, the legitimacy of the state is provided by the general will and by the protection of fundamental rights. As a deliberative democracy, social, and political rights and duties are results of communicative, political deliberations based on mutual respect and recognition. Moreover, as suggested by Montesquieu the principle of the strict separation of powers (jurisdictional, executive, and legislator power) and later the balances of power are essential aspects of a democratic political community. As suggested by Axel Honneth in his recent book Das Recht der Freiheit (2011), deliberative decision-making is the essential legitimacy principle of democratic society (Honneth, 2011). We can say that we have experienced the social institutionalization of principles of democracy through the emergence of the free public sphere in Western democracies. Here equality of citizens and liberal rights of freedom based on the constitution are essential for creating a democratic public sphere. The morality of citizens is created through the institutionalization of social and democratic public spheres and debates. The normative idea of social freedom is a result of a democratic public sphere (Honneth, 2011). Public exchange of opinion is essential for this democratic public sphere in modern society. The democratic legal state is built on the rule of law implies the realization of social liberty. The rule of law is a reflexive dimension of the state. The concept by Habermas about Verfassungspatriotismus is a good expression of this role of the commitment of citizen and the civil servant to the values of the democratic state. Defenders of a more critical approach to the possibility of administration ethics follow the work of authors like Michel Foucault and Gilles Deleuze. In the perspective of these authors, there is the danger than administration ethics becomes its own opposite and turns into an instrumental management technology. Following Foucault we can say that administration ethics would be included in the biopolitics of modern governmentality where public administration becomes government of life and of individual human beings dominated through the rationalities of governmentality that are determined by biopolitics (Gane, 2014). According to the point of view of the biopolitics of the neoliberal state, the ethics of administration would not be something different from, but rather a new integrated technology in the rationality of governmentality of the modern state. Foucault gives us the instrument to understand the neoliberal approach to state rationality. The increased power in the modern state implies new public governance as expression of a new technology of governance, at the individual and collective level with personal and social technologies of governance.

38    Philosophy of Management and Sustainability In this perspective of the biopolitics of governmentality ethics of administration based on respect for human rights and recognition of human beings is nothing but a new form of governance technology corresponding to changed conditions of governance in the global society (Foucault, 2004). Recognition of poor people in international politics is a considered as a kind of subjectivity of them as a part of the modality of the global power of the states. The constitution of human beings through the ethical struggle for recognition contributes for example in the discourse of international migration to constitute workers as human capital and subjects of biopolitics rather than contributing to free recognition of citizens as autonomous citizens. Accordingly, in this perspective the neoliberal state uses the subjectivation of responsible citizens through the ethics of administration as a tool to increase its biopolitical power over life (Cheah, 2013). Accordingly, not ethics of administration, but only the liberation of life itself in an escape route from the biopolitical power of the neoliberal state according to this analysis of the dark side of ethics as bureaucratic administration discipline. Similarly, in his late work Critique et Clinique Deleuze proposes a Post-scriptum on the society of control that is a follow-up on what Foucault called disciplinary society, where the individual is disciplined in the family, at work in the factory, in the hospital and in the prison as the ultimate model of discipline (Deleuze, 1993). However, according to Deleuze, the disciplinary society has faced a crisis in modern society after the Second World War and it has been replaced by control society. Kafka explains very well the forms of control society in contrast to the disciplinary society. While the disciplinary society sees the individual as a part of the mass in mass society, the control society focuses on the individual, where it is the self-control or the self-management of the individual that is essential for the social control. It is indeed a kind of machine activity that characterizes the individual in the society of control. The control society is realized with the information technologies as a modern system of social-technological control. The society of control uses the systems of control and testing to keep discipline of individual and the individual is controlled by quantitative instruments. In order to maintain control, society proposes the continuation of testing and education of the employees and members of society (Deleuze, 1993). Recent events of generalized state surveillance, for example, the domestic spying programs in the United States unveiled by Edward Snowden make us wonder whether this idea of control society isn’t more relevant than Honneth’s idea of institutionalization of democracy. And it also raises the question whether whistleblowing regardless of consequences is a duty of a public official in the context of his or her activities in the public system (Honneth, 2011). With their critical views on the governmentality of biopolitics and the intensification of control society Foucault and Deleuze formulates important challenges to the development of administration ethics in the contemporary political order. The issue is how an ethics of administration can avoid being captured by the technology and rationality of domination and control of life.

Ethics of Administration    39 To this, we can reply that it is important to be aware of the dangers of the use of ethics of administration as a technology of control. No administration ethics is possible without analysis of the negative consequences of biopower and technological rationality. However, not to formulate an ethics of administration may indeed be even more vulnerable to the domination by the technologies of governmentality, control, and discipline.

5. Urgent Issues for Administration Ethics Overall ethics of administration is about what kind of values that we need in the public sector (Frederickson 1993; Jordan & Gray, 2011). General themes in this context are transparency and freedom of expression in the public sector. Moreover, we can mention the tension between ethics and law in relation to responsibility of public officials and norms for good governance in public administration as well as the relation between public and private responsibilities. When we formulate a theory of ethics of administration, it is necessary to go beyond a dominant approach in social sciences that only looks at the institutional and organizational dimensions of administration from a descriptive analytical point of view. As suggested the focus of concrete public administration ethics is rather the democratic responsibility of the administrator (including rights and potentialities of whistleblowing) and the role of values in public administration both locally and globally. Accordingly, in contrast to new public management we can argue that the administrator functions as the guardian of democracy in the tension between the administration and its environment. Based on this theoretical framework of the tension between ideals of democracy and political freedom facing biopower and control society as well as with the values of sustainability and cosmopolitanism as broader values guiding decision-making in administrative ethics, we have formulated a basis for dealing with concrete issues of administration ethics. Accordingly, in this final section, I will now mention some issues or topics that are important to address in a concrete ethics of administration. (a) Moral blindness and administrative evil in public bureaucracies. Here, we follow the cold expression of “objective, instrumental rationality” of disciplinary society and instrumental power relations of governmentality and biopower. This kind of analysis looks at the negative phenomena of administration, as suggested by the analysis of the banality of evil (Hannah Arendt), obedience under authority (Milgram), technological rationality in administrative systems (Bauman), and The Lucifer effect of role playing in social systems (Zimbardo) (Adams & Balfour, 2009). (b) From bureaucracy to ethical stakeholder governance. Here, the issue is the problem of how to develop the public organization or institution into an organization with social responsibility for its economic and social environment. We deal with the problem of moving from being a remote bureaucratic system to being a flexible service organization with focus on the citizens. The problem is how responsibility is realized in practice based on responsibility

40    Philosophy of Management and Sustainability

(c)

(d)

(e)

(f)

(g)

for realizing the vision for contribution to the common good of a particular public organization. Stakeholder governance as general strategy for the public sector. Instead of new public management that is overwhelmingly based on economic efficiency and instrumental goal-rationality stakeholder management is supposed to be more informal and democratic. Important issue for a vision of stakeholderoriented ethics for the public sector is to ask questions like What do we do to serve the citizens? Where are we? Where are we going? What should be done? How to organize it? How are vision and values integrated into public management? And finally: What is our money situation? The tension between normative ethics and institutional analysis. Here, it is important to relate ethical analysis and philosophy to the insights of the social sciences. Institutional theory gives potentialities of analysis of public administration from the systemic and organizational perspective. Moreover, institutional theory provides the basis for looking at public administration as an open system in search of legitimacy and legitimation of the administrative system through its creation of trust and confidence with proper ethical behavior. Tension between new public management and ethical responsibility. Here, we face the confrontation between the ideals of economic efficiency of new public management confronted with the classical virtues of professional integrity in public administration. Sometimes, it seems like these virtues have been forgotten in favor of the economic efficiency of the administrative procedures. In this context, we can provocatively ask whether the problem is that public administration has been so occupied with new public management that it has lost so much ethics and responsibility that it would have to be inspired by the practices of corporate social responsibility in the private sector. Professional ethics in public administration. Here, it is important to look at the guidelines and codes of ethics that have been formulated for the administrative profession and contribute with input for these guidelines. We can mention issues concerning ethical principles for the profession (e.g., autonomy, dignity, integrity, vulnerability); the discourse of recognition and the responsibility for the citizen (recognition as a citizen); the ethical integrity of the administrator – individuality and organizationally; requirements for professional ethics in administration – authenticity, autonomy; particular dilemma of public administration ethics for example discrimination, gender, and affirmative action. Ethics at different levels of the organization and institutions. Here we can analyze the differences of the problem of the ethics of administration as they emerge not only in the state, the central administration, but also in the regions, municipalities, and local government. Moreover, we can mention the international developments of guidelines and codex for public administration, for example, OECD guidelines for good governance of public administrations and UN guidelines for sustainability, human rights, and against bribery and anti-corruption guidelines.

Ethics of Administration    41 (h) Personal responsibility, self-management, and ethics. In this context, we can mention dilemmas of personal responsibility and self-management in public administration, for example, real personal existential dilemmas, including problems work-life balance and integrity with regard to bribery and whistle-blowing. (i) Dimensions of practical wisdom and reflective judgment. At this level we need to develop an ethical decision-making model for public administrators – including (1) problem and dilemma analysis in relation to a specific case problematic; (2) application of ethical theory; (3) application of ethical principles; (4) analysis from the point of view of ethical guidelines of professional ethics; and (5) decision-making, evaluation, and follow-up. In this context it is important to be aware of recognition of polycentricity of decision-making. Accordingly, it should be possible to give the public administrator the ability act as a responsible world citizen caring for sustainability and human rights with reflective judgment. An example of the politics of this combination of cosmopolitanism, ethics and sustainability is the new 2019 center left government in Denmark with its new politics of prioritization of the value and visions of sustainability. In the ambitious majority agreement of the group in parliament supporting the government it is proposed to make Denmark a world leader and superpower in green sustainability politics with high reduction of CO2 –emissions, development of green energy and protection of environmental biodiversity. Accordingly, the government follows up on the UN SDGs with visions of global sustainability of reduction of CO2 – emissions with 70% in 2030 realized in a binding climate law with a global outlook of sustainability. This is combined with visions of stronger egalitarian protections of citizens in the welfare state and cosmopolitan responsibility of the state for global problems of sustainability, human rights and migration. The new vision of ethical and values-driven governance of cosmopolitan global responsibility following the SDGs can be said to address the challenges of an ethics of administration in the competition state. In the memorandum of understanding behind the government, the majority moves beyond new public management and emphasizes the importance of trust and responsibility in the public sector and concern for the citizen as an improvement of the dominance performance measures that have been dominant in the public sector with focus on economic efficiency. This ethics of administration also requires a responsible economic policy that combines ethics with a flexible and open labor market in order to raise the earnings of the state to finance the transition of the welfare state towards sustainability and efforts to combat climate change. The challenge of the ethics of sustainability in politics and administration is how governments can improve the green and environmental policy by reducing CO2 emissions and pollution in important sectors of society like industry, agriculture and transportation. An ethical policy of administration would have to make the ideals of sustainability and cosmopolitanism central to the vision

42    Philosophy of Management and Sustainability of government combined with responsible economic policies of environmental transition, green growth and ecological transformation of society in the direction of the SDGs. Here, ethics and politics of administration integrates ethical principles of respect for the autonomy, dignity, integrity and vulnerability of the human person in the framework of responsibility and solidarity in the competition and welfare state in transition towards sustainability. Thus, across research and practice, we see a strong interest in finding solutions for public administration ethics, based on the SDGs. In public administration, this calls for new types of SDG-leadership and partnerships, governance and new understandings of responsibility and ethical leadership in business, NGOs and public institutions. With the global challenge of protecting people, planet and profits the SDGs function as a catalyst for visions of new sustainable administration and business models. In this sense, the SDGs become a central part of CSR in public administration. The SDGs are essential for ethical leadership in public administration, because they integrate social, economic and environmental in the visions and aim of leadership in public institutions and organizations. Here, it is important that administrators are capable of formulating real and authentic strategies for sustainability rather than using the SDGs as superficial jargon for covering up malpractice or leading to a narrow instrumental approach to the SDG-indicators at the expense of reflective ethical reasoning. It is in this context that reflections on philosophy of management, business ethics and CSR can help to improve the processes of ethical leadership, governance and responsibility in the public sector. Indeed, the public sector needs to integrate alternative visions of ethical and heterodox economics in the strategies for sustainability, i.e. ecological economics and solidarity economy are important for insuring the transition towards sustainability in the public sector. It is important with a broader political economic contextualization of responsible administrative leadership in order to improve the transition to sustainability of administrative institutions. Thus, integrating visions and strategies related to the potentials, paradoxes and challenges of the SDGs constitutes a new vision of public administration ethics, responding to contemporary challenges of sustainability and cosmopolitanism.

Chapter 4

Corporate Social Responsibility, Sustainability, and Stakeholder Management In this chapter, I set out to define the principles of responsibility and sustainability within the framework of normative stakeholder theory and business ethics with a possible application to public administration ethics.1 A corporate strategy concerning sustainability and corporate social responsibility can be considered as a practical application of the concept of corporate citizenship and of the “good citizen corporation” in business ethics and public administration (Rendtorff, 2009, 2018a). The argument presented here begins with an analysis of the concepts of “sustainability” and “corporate social responsibility” which are taken as being the foundation for the application of business ethics within strategic management and concrete fields of business ethics. A normative view of the stakeholder model is important for this development of my argument. The discussion of stakeholder theory begins with a presentation of the principles of corporate social responsibility and sustainability. Thereafter, the ideas will be linked to the stakeholder model as the basis for assuring the social legitimacy of the corporation.

1. Sustainability and Corporate Citizenship The concept of sustainable development can be defined as the broad goal of ethical business and emerges out of our definition of “good corporate citizenship” (Crane & Matten, 2004, p. 21). Sustainable development has been proposed as the common goal for the international community by the World Commission on the Environment, the 1987 Brundtland-commission (World Commission, 1987) and this has been developed in the following declarations and conventions by the United Nations. It is defined as the respectful use of natural resources in order to leave possibilities for future generations to live on earth with the same or better

1

Previous versions and preparatory works for this chapter include Rendtorff (2006, 2009, 2018a). Philosophy of Management and Sustainability: Rethinking Business Ethics and Social Responsibility in Sustainable Development, 43–52 Copyright © 2019 by Emerald Publishing Limited All rights of reproduction in any form reserved doi:10.1108/978-1-78973-453-920191004

44    Philosophy of Management and Sustainability conditions as present generations. In this sense, environmental sustainability has been a fashionable term for the international community since 1987. However, the term sustainability does not only apply to the environment. For a long time, sustainability has been a well-known term in business economics, in which it designates the long-term maintenance and development of the firm (Crane & Matten, 2004, p. 24). Within the framework of corporate citizenship, and with the emergence of the United Nation’s concept of sustainability with the SDGs, this concept has become broader to encompass social and environmental concerns in the definition of corporate sustainability. The concept of sustainability has been developed further in the idea of “the triple bottom line,” according to which the firm accounts not only for its economic returns in its evaluation of the economic success and prosperity of the firm, but also for its impact on the environment and social relations with employees, the local community or governments (Elkington, 1999; Rendtorff, 2009, 2018a). The intention being to integrate the concept of the sustainability of the firm into the global initiatives concerning public policies relating to sustainable development, and we can conceive of an application of the notion of corporate citizenship in business ethics. It is important to integrate this concern for triple bottom line management in the development of applied business ethics. We can say that the triple bottom line based on sustainability responds to the traditional values of the economizing, ecologizing, and power aggrandizing of the firm (Frederick, 1995). Such concern for the firm’s interaction with environment requires a temporal dimension integrating relations to future generations. Moreover, the perspective of republican business ethics includes nature in the idea of what the French philosopher Paul Ricœur calls “the good life for and with others in just institutions” (Ricœur, 1990), so that we can add “the good life within nature.” The concept of sustainability should be considered from within the perspective of corporate social responsibility, which is the other important concept for applied business ethics in relation to the internal and external constituencies of the firm. The concept of responsibility is implied in our concept of the firm as being a political and moral actor, which is the result of the idea of corporate citizenship. Lynn Sharp Paine argues in Valueshift. Why Companies Must Merge Social and Financial Imperative to Achieve Superior Performance (2002) that there has been a value-shift in the economy in which we no longer conceive of the firm as an economic instrument for profit maximization or as a fictive legal person, but as a morally responsible actor with values and ethical principles (Paine, 2002). This is the basis for a republican conception of the corporation as a good citizen that in addition to earning money is concerned about the political, social, and ecological environments. This concept of responsibility implies that the firm should not only obey the law, but also engage constructively in the social betterment of society.

2. The Concept of Corporate Social Responsibility The German philosopher Hans Jonas defined the concept of responsibility in Prinzip Verantwortung. Versuch einer Ethik der technischen Zivilisation (1979). He

Corporate Social Responsibility    45 argues that technological and scientific developments have led to a much greater responsibility for humanity than was the case earlier. This is because technological and scientific civilization has so much power to destroy the earth (Jonas, 1979). According to Hans Jonas, the ethics of responsibility is not only about the respect for actually existing human beings, but also a link between responsibility and sustainability in the sense that responsibility implies the duty to guarantee that humans will continue to exist. The principle of responsibility is an absolute, categorical principle for individuals to ensure the earth’s sustainability. This ontological and categorical concept of responsibility can be said to be the foundation for the concept of corporate social responsibility. It includes not only individual responsibility but can also refer to the institutional responsibility of the firm as a moral actor (French, 1984). Corporate social responsibility relies on the capacity of the firm to be ethically accountable for its actions, strategies, and policies. We can define strategies of values-driven management as the basis for a corporate decision-making structure that installs a culture of responsibility in the organization. In this sense, corporate social responsibility is not only conceived as “enlightened self-interest” (Crane & Matten, 2004, p. 41), based on economic concerns for higher returns, but also conceived as based on the view of the corporation as a good citizen with rights and duties toward society. In this moral sense, responsibility is linked to the power and capacity of the corporation to respond to its own actions. The argument for taking responsibility into account relates to the need for the realization of the strong capacity for corporate action. We can distinguish between the institutional responsibility of the firm, the responsibility of executive directors and managers, and the responsibility of the organization’s employees. This fundamental concept of moral responsibility of the firm goes beyond mere legal responsibility and includes a broader number of ethically defined responsibilities to the corporation’s different stakeholders. In this connotation, corporate social responsibility is based on a “moral view of the economy” (Etzioni, 1988) implying good corporate citizenship where the firm has a duty to contribute to the protection of the vulnerable and weak. This concept of corporate social responsibility has emerged as a consequence of a more fundamental concept of moral responsibility (French, 1984). This idea is promoted against those who argue against corporate social responsibility saying that it has not been proved that corporations can be held accountable, that only shareholders have legitimate interests in corporations, and that corporate social responsibility takes away the freedom of the corporation to act in the market according to its own wishes. Against these criticisms arguments for corporate social responsibility have been that corporations have a great deal of power to make a substantial contribution to solving problems and have a social impact on many different stakeholders. This is in addition to economic arguments about the firm’s better economic performance, and that employees will see the firm in a more positive light. One of these arguments asserts corporate social responsibility is in business’ own interest because, by contributing to social change, it can create a better environment for its own business transactions and thereby develop business while being socially responsibly (Buchholz & Rosenthal, 2002, p. 304). Moreover, it is

46    Philosophy of Management and Sustainability argued that corporate social responsibility will improve business’ public image and that government regulation can be avoided if business is proactive with regard to the promotion of engagement in society. Being a socially responsible business can meet the expectations of society, and businesses can help to solve problems, because firms have such great power in society, indeed they may even be able to turn social problems into business opportunities. In addition to these rather prudential arguments (in Kantian terms, hypothetical imperatives) we can say that corporate social responsibility combines enlightened self-interest with concern for good citizenship (Frederick, 1994, p. 153), the common good of society with respect for basic ethical principles of respect for human autonomy, dignity, integrity, and vulnerability (Rendtorff, 2009, 2018; Rendtorff & Kemp, 2000). Corporate social responsibility reflects, in this moral sense, the responsibility to respect basic human rights and take into account the corporation’s different stakeholders. This is the basis for defining the different elements of corporate social responsibility (Carroll, 1979; Carrol & Buchholz, 2000). Seen from the perspective of our proposal of the good citizen corporation, we may, according to an important article by Archie B. Caroll, a member of the business and society movement (Capron & Quairel-Lanoizeelée, 2004, p. 105; Caroll, 1979), distinguish between (1) economic responsibility, (2) legal responsibility, (3) ethical responsibility, and (4) philanthropic responsibility (Crane & Matten, 2004, p. 44). Economic responsibility can be defined as the mandate of profit maximization as has been proposed by Milton Friedman: “The social responsibility of business is to increase its profits” (Friedman, 1971). But this responsibility also implies good corporate governance and the fair treatment of shareholders. Compliance with and formulations of codes of corporate governance can be considered as a contribution to such economic responsibility. Moreover, it includes the conscious and prudent use of management and employees’ resources, together with the technical and professional duties of management and production to see and exploit market opportunities. In this sense, we may say that economic responsibility is different from moral responsibility, because it is about following self-interest and the exchange of goods in the market according to capitalist principles (Comte-Sponville, 2004). Legal responsibilities are about the obligation to follow the law and to play “within the rules of the game” (Friedman, 1970). This also means not doing everything to operate at the limits of the law, and to make an effort to comply with the intentions of the legislator with regard to specific laws. Indeed, efforts to formulate internal compliance programs and programs for values-driven management can be considered as a contribution to such compliance with the laws of society. Moreover, legal compliance should not only be at the national level, but indeed also the local and international levels (Paine, 2002). In debates about corporate social responsibility, the ethical responsibilities are defined as an effort not only to do what is right in economic and legal terms, but to go beyond economic and legal terms and make a voluntary effort to be virtuous and excellent (Paine, 2002). Ethics is about finding the right balance in the gray zone where things may be economically and legally prospective, but not legally justified. The ethical duty may override economic and legal concerns in

Corporate Social Responsibility    47 cases of conflict, and ethical responsibility is about formulating values and norms for the corporation that contributes to the performance of the firm as a good corporate citizen. Ethical responsibilities imply wider concerns for justice and the sustainability of the corporation and society. In this way, the level of ethical responsibilities goes beyond the two other levels. It is defined by the respect for justice and fair treatment of all stakeholders. Ethical responsibility contributes to the democratic legitimacy of the firm in the community. The corporation’s philanthropic responsibilities are not only about the virtues of being philanthropic, but also about the responsibility to be philanthropic in a way that really benefits society. There is a long tradition of corporate philanthropy in which corporations give grand donations to society as a demonstration of power and wealth, and because they want to do some good for the local community. In many cases, corporate philanthropy is directly linked with efforts to obtain at better public image in society. With Michael Porter we may point to the importance of linking philanthropic activities with other of the firm’s strategic and economic initiatives (Porter & Kramer, 2002, 2006, 2011). There should be increased strategic reflection over the philanthropic spending of money by foundations or for other purposes in order to ensure the greatest benefit for society.

3. Corporate Social Responsibility in Stakeholder Management In Mythes et réalités de l’entreprise responsable. Acteurs, Enjeux, Stratégies (2004), Michel Capron and Françoise Quairel-Lanoizeelée argue for a strategic application of corporate social responsibility. They connect corporate social responsibility with the concept of sustainable development in claiming that the United Nations has asserted that corporations have a role to play in sustainable development in the sense that they should manage their operations and stimulate economic growth at the same time protecting the environment and promoting social responsibility (Capron & Quairel-Lanoizeelée, 2004, p. 5). The idea is that the firm should be considered as a part of society, and that environmental and social issues should be integrated into the strategic management of the firm (Freeman, 1984). At the international level, the firm has, as a good corporate citizen of the world, a duty to contribute to the solution to all the important problems relating to world politics with respect to the environment. We can mention the problems of the destruction of the Eco-sphere, the uses of resources and environmental degradation, and the need to fight social poverty, the prevention of war and conflict as well as to promote human rights, good working conditions, and social stability. Corporate social responsibility implies the conscious contribution of the firm to engage with the problems of the world community as revealed by the different declarations and statements of intent by international bodies of the United Nations (Capron & Quairel-Lanoizeelée, 2004, p. 6). The Commission of the European communities follows the UN initiatives when it argues that corporate social responsibility does not only suggests compliance with legal obligations but also a voluntary effort to do something more for human rights, the environment or for the relations with other stakeholders. We

48    Philosophy of Management and Sustainability find that the Commission in its Communication, Promoting a European Framework for Corporate Social Responsibility, formulates an explicit link between corporate social responsibility and sustainable development (European Commission, 2001a, b). In this definition, the concept of the triple bottom line is central in the reporting and evaluation of the success of the firm, which is to account not only for economic growth but also for social development and environmental protection in the assessment of corporate activities. This view of corporate social responsibility implies a general strategy for strategic values-driven management in the age of globalization. Corporate social responsibility is based on an institutional view of the firm (Scott, 1995, 1998), but also of other public private and third sector organizations as a part of society with duties and obligations. Corporate social responsibility is the basic principle of values-driven management in the age of globalization where social expectations of firm’s are increasing. As good corporate citizens, firms cannot ignore problems of human rights, environmental degradation, and world conflicts. In relation to sustainable development, this view of corporate strategy requires rethinking corporate strategy according to the role of the firm as a good corporate citizen. Certainly, new expectations of the firm also emphasize corporate social responsibility as a matter of enlightened self-interest. International opinion is becoming more focused on values of human rights and of the protection of the environment, and corporations run great risks when not complying with norms of sustainable development. Therefore corporate social responsibility is closely linked with prudent risk management in order to protect the image and reputation of the firm. Accordingly, the pressure on organizations for corporate social responsibility has increased because of the emergence of many active international non-­governmental organizations such as the World Council of Sustainable Development, Transparency International or Attack (Capron & Quairel-Lanoizeelée, 2004, p. 31). Indeed, we can also mention international guidelines for multinational corporations like the Caux Roundtable Principles for Business Conduct (1994) (Enderle, 1999) which, as a result of talks between Eastern and Western business leaders, constitute principles of better business behavior in order to improve the economic and social conditions of the world. Here the Japanese concept of "kyosei" ("living and working together for the common good") is combined with the Western European concept of "human dignity" as the basis for a code of conduct of responsible business behavior (Enderle, 1999, p. 43). Furthermore, the United Nations have agreed to the Global Compact principles which promote values of corporate social responsibility based on the UN’s Declaration of Human Rights and principles concerning the protection of the environment (United Nations, 2003). Further, there are the International Labor Organization’s (ILO, 2002) and the OECD Guidelines for multinational enterprises (OECD, 2002) guidelines for corporate social responsibility. These guidelines and codes of conduct relating to values-driven management are considered contributions to healthy and fair competition in order to promote growth and social change as well as the fair treatment of all the major stakeholders of the firm; this includes, among others, customers, employees, owners, investors, suppliers, competitors, and local communities.

Corporate Social Responsibility    49 Thus, from the strategic perspective, it is argued that corporate social responsibility is not only an important argument for the economic growth of the firm, but also a confirmation of the status of the firm as a moral agent (French, 1984). Corporate citizenship is not only the real “license to operate of the firm,” but also the basis for economic sustainability. The argument for this relation between responsibility and economic performance is basically an argument drawn from the theory of corporate legitimacy. When the firm is an actor that is integrated in the norms and values of society and when economic markets cannot be separated from the social context, it is necessary for good corporate management strategy to conform or comply with society’s values (Capron & Quairel-Lanoizeelée, 2004, p. 93). Otherwise, the firm would be excluded from spheres of social legitimacy, and it is likely that stakeholders would be indifferent or reluctant to deal with the firm or even turn away from the firm and boycott its products and services. Economic arguments are combined with normative arguments concerning business ethics and sociological arguments about corporate social responsibility as measures to increase the legitimacy of corporations in society. In the light of institutional theory, strategies of corporate social responsibility in combination with stakeholder analysis contribute to the understanding of how direct and indirect stakeholders influence the firm (Powell & DiMaggio, 1983, 1991). Corporate social responsibility includes not only stakeholders with power or explicit contracts with the firm, but also other stakeholders who have an interest in the firm from the point of view of social legitimacy. Moreover, corporate social responsibility implies a concern for the common good as being important in legitimate relations with stakeholders (Argandona, 1998). We may interpret this concern in the Kantian perspective of the firm as a world citizen. What is important in corporate social responsibility for stakeholders is the promotion of the common good of humanity in order to increase sustainability and protection of world citizenship of corporations, which includes the commitment to engagement in problems of globalization. Accordingly, we can argue for a close relation between stakeholder management and corporate social responsibility. The stakeholder theory of business ethics helps us to define the strategic basis for triple bottom line sustainability management (Elkington, 1999). In this theory, ethical principles and values emerge as important values in the dialogue between organizations and their stakeholders. Stakeholder business ethics considers communication with stakeholders; this is analogous to the dialogue that goes on in a political democracy. Such an ideal conception of communication with interested parties in the firm is based on the kind of reason implied in political deliberation in a critical public sphere. This contributes to a communicative foundation of business ethics receiving universal validity from the rationality of critical examination of arguments in a space of open dialogue.

4. Institutional Theory and Stakeholder Management From the perspective of institutional theory in sociology, the stakeholder corporation might be considered as a kind of organizational ecology, where the

50    Philosophy of Management and Sustainability organization instead of being a bureaucratic military entity is considered as an inclusive company in constant interaction with the environment. This interaction contributes to the self-perception of the company in order to secure its growth and survival. Dialogue with stakeholders is conceived of as a process of communication and learning in order to improve the reflectivity of the organization. In this way, the integration of the stakeholders in a learning process is a basic condition for the organization in order to “learn how to learn” (Wheeler & Sillanpää, 1997, p. 133). By developing formalized dialogue with stakeholders as a part of the activity of the firm, it is possible to engage in a closer and more productive dialogue with the firm’s environment. Stakeholder management is first of all a way to improve the scope of corporate social responsibility, because it opens up the way for larger groups of interested parties. However, this does not a priori define the implied stakes for governance. After having identified relevant stakes, it will be the job of management to make the correct decision among these implied interests. Nevertheless, a theory of stakeholder interest is insufficient without some view of the common good. Therefore, we need to find the basis of stakeholder theory in the view of the corporation as a practice searching for the common good. An important guide in this process might be to be aware of the communitarian elements of stakeholder management. In addition, we can define the principle of justice as a manor to choose among different stakeholders and in this sense combine instrumental and normative dimensions of stakeholder theory. On this basis, stakeholder management can be conceived as a response to the societal expectation of corporate citizenship and contribution to the common good of society. However, stakeholder management is also legitimate from the point of view of strategic management, because stakeholders have legitimate claims of being treated justly by the organizations. Different groups of stakeholders are legitimate stakeholders if they have justified claims of being treated with fairness by the organization. In the perspective of corporate citizenship, the principles of responsibility and sustainability must be included in this account of the fair treatment of the stakeholders. Therefore, stakeholders who do not directly cooperate with the corporations do not have a direct normative claim and a corresponding obligation to be accounted for as its core constituencies may have a derivative claim of being taken into account (Philips, 2003, pp. 124–127). Accordingly, we can say that civil society organizations or social activists can have legitimate claims in so far as they are representatives of core constituencies of the corporations for example employees or local communities (Philips, 2003, p. 152). In this sense, the strategic management of corporate social responsibility combines concern for economic performance with the concern for the social legitimacy of the corporation. From the institutional point of view, the corporation is an integrated part of society and the values of the organization are shaped by the perceptions of internal and external actors and stakeholders (Capron & Quairel-Lanoizeelée, 2004, p. 105). Social responsibility is necessary for strategic management, because it ensures the social legitimacy of the corporation as a good corporate citizen. In the light of institutional theory, we can argue that legitimacy is determined by the institutional environment of the organization. This environment represents

Corporate Social Responsibility    51 social and cultural expectations of the behavior of the corporation to have a specific appearance. In order to cope with these social expectations, the organization is required to construct its image and social appearance in accordance with values and norms of the institutional environment. This institutional legitimacy is not always directly visible, but may also be a tacit and presupposed structure of norms and habits as the basis for legitimate rational action (Oliver, 1991; Powell & DiMaggio, 1991; Scott, 1995). From the perspective of institutional theory, we can identify a number of different and maybe even contradictory expectations of corporations held by different stakeholders, which include economic, social, and environmental expectations (Scott, 1998). These expectations are ideal but are often reflected in factual claims on corporations. Shareholders want returns on their money, good risk management, economic transparency, and ethical, social and environmental management. States and international bodies want corporations to contribute to the wealth of society, respect the laws and the environment, and be good citizens. Banks and creditors not only want risk management, and economic security, but also respect for social and environmental issues. Employees and trade unions want corporations to ensure equality and provide good social conditions; furthermore they want the firm to have ethical values and ensure motivation, learning, and development at work. Customers and clients want a just price, quality of products, respect for the environment, and respect for ethics and the law. Suppliers want stable relations, acceptable payments, and respect for ethics concerning contracts and the control of production so that they themselves will not have to violate law and ethics. Competitors expect corporations to be fair and respect the rules of the game, for example, by abstaining from environmental and social dumping. Local communities want engagement and contributions of companies to community and they expect companies to help with community development. International organizations and NGOs want transparency, respect for human rights, and sustainability, and they want corporations to abstain from bribery and follow legal rules of countries where they operate. According to institutional theory, the firm can more or less consciously choose different strategies to cope with such social expectations of corporate performance (Powell & DiMaggio, 1991). An organization can ignore or try to avoid such legitimacy claims. This reactive strategy can be combined with the symbolic manipulation of expectations or dramaturgy in order to be a free rider in regard to legitimacy claims. Another strategy would be a proactive conformation to social expectations. We can argue that the strategic management of values and corporate social responsibility corresponds to such a proactive search for legitimacy. Corporate social responsibility contributes to the maintenance of legitimacy (Capron & Quairel-Lanoizeelée, 2004, p. 107). The strategies of values-driven management and business ethics can be considered as conscious and rational initiatives to correspond to the expectations of society of best practice and virtuous behavior. From the strategic perspective, corporate social responsibility can be considered as a symbolic reaction to social expectations in order to protect and develop the brand, image, and reputation of the firm. Despite the importance of legitimacy for corporate performance, we will maintain that there is a business case for corporate social responsibility.

52    Philosophy of Management and Sustainability Following the triple bottom line of corporate performance in the intersection between economic, social, and environmental concerns, the firms have the possibility of increased long-term economic performance (Elkington, 1999). Even though there is a tension between ethics and economics, the ideal situation is one of convergence between corporate social responsibility and economic performance. The ideal of good corporate citizenship is a firm that produces values for shareholders, employees and customers and also contributes considerably to the common good of society. This firm not only considers corporate social responsibility and stakeholder management as a matter of risk or reputation management, but also views legitimacy as a license to operate. Moreover, it regards stakeholders as resources who contribute to improving innovation, learning, and the competitiveness of the firm. In this sense, corporate social responsibility aims not only at risk management but also at developing proactive operational procedures for values-driven management and stakeholder inclusion in order to improve social acceptance of the firm. Thus, management of good corporate citizenship is fundamentally important in the transition towards global sustainability. We can emphasize that sustainable development is based on the ideal of the good life, where the triple bottom-line combines a moral and instrumental concept of the good life in the transition towards sustainability. The idea of sustainable capitalism relies on the vision that it is possible to combine technological and industrial development with protection of the good life and nature. This concept of sustainability combines ethics with economics in the vision of sustainability. Corporate social responsibility in the relation between stakeholders, institutions and sustainability is therefore essential for the transition towards the SDGs in management and business. Businesses needs to take into account limits of instrumental and utilitarian uses of resources, which is included in ecological and environmental criticism of the capitalism of growth. Accordingly, it is important to develop new virtues of business management of stakeholders, based on the vision of “the good life with and for others in just institutions”. In this context, arguably, the SDGs emerge as the new framework for institutional legitimacy of corporate social responsibility and stakeholder management. With the SDGs as general framework for sustainability management, corporations fight to achieve legitimacy in business ethics and CSR by integrating SDG management in stakeholder management. Therefore, normative compliance with SDGs become an essential virtue of management to deal with the challenges of transformation of society towards a more protective and sustainable attitude towards nature and the environment. Indeed, the concepts of responsible innovation and education in virtues of sustainability become essential for dealing with these complexities of developing authentic sustainability of corporate citizenship.

Chapter 5

Business Sustainability and the UN Sustainable Development Goals (SDGs) The sustainable development goals (SDGs) of the United Nations (UN) with the 2030 Transforming the World Agenda from 2015 can be interpreted as a contribution to business ethics and ethical economy. The SDGs combine political aims with visions of economic development and social justice (Sachs, 2012, 2015). Thus, the SDGs are a framework for a new development of business ethics, corporate social responsibility (CSR), and corporate citizenship (van Zanden & van Tulder, 2018). We move from the triple bottom line of people, planet, and profit to the 17 bottom lines of the SDGs and the business organization needs to have visions and values related to all the these goals and their corresponding targets. Accordingly, we can see the SDGs as a framework for developing new progressive business models both with regard to large-, small-, and middle-sized enterprises companies in the local and global community (Rendtorff, 2018a; Székely & Knirsch, 2005). In this chapter, I will discuss the possibility of such a transformation of business strategy for SDGs and what kind of progressive business models for a transformation of the relation between global and local economy that this implies ethical and sustainable business models (Hildebrandt, 2016; O’Higgins & Zsolnai, 2017; Rendtorff, 2015a, 2018). Here, it is important to present the SDGs in relation to concepts and visions of global and local business ethics, CSR, and corporate citizenship (Dyllick & Hockerts, 2002; Marrewijk, 2003; Montiel, 2008). However, we will in the chapter also discuss some critical challenges with regard to the development of new progressive business models on the basis of the SDGs. This chapter is structured with the following sections: (1) From Millennium Goals to the SDGs; (2) The Challenge of the SDGs; (3) Criticism of Sustainable Development and SDGs; (4) From Sustainable Development to the Transformation Toward Another Economy; and (5) Civil Society and Partnerships for the SDGs.

Philosophy of Management and Sustainability: Rethinking Business Ethics and Social Responsibility in Sustainable Development, 53–64 Copyright © 2019 by Emerald Publishing Limited All rights of reproduction in any form reserved doi:10.1108/978-1-78973-453-920191005

54    Philosophy of Management and Sustainability

1. From the Millennium Goals to the SDGs The SDGs of the Transforming the World 2030 Agenda for sustainable development by the UN follows up on the Millennium Development Goals of the UN from 2000, which were considered as important goals for the world community to be carried out by the states (United Nations, 2018a). The SDGs are much more detailed and they were adopted by the 193 member states of the UN, which continues the consensus of the Millennium goals, but engages more broadly society as such including governments, businesses, NGOs, and civil society. The SDGs consists of the 17 SDGs and they are specified with 169 sub-targets which together focus on people, planet, and prosperity (United Nations, 2018a). The private sector, businesses, and companies are essential for realizing the Agenda of transforming the world for 2030 for the SDGs. The UN integrates the SDGs with its other activities directed toward businesses, including business for human rights, UN Global Compact, World Business Council for Sustainable Development, and world business initiative for sustainable reporting in its efforts to motivate businesses to contribute to sustainable development (United Nations, 2018a, b). With this, we can say that the SDGs have become the major focus of developing a locally embedded and sustainable economy to deal with global and universal movements of capitalism and growth. An important challenge for businesses is now to translate and realize the SDGs in their vision and mission, business strategy, value-chain, stakeholder management, and relations to their environment in order to create a strong transformation toward sustainability (Alias, Demaria, & Kallis, 2014; Becker, 2006; Daly, 1994, 1999; Ingebrigtsen & Jakobsen, 2006; Nielsen, 2013, 2015; Rendtorff, 2009, 2018; Sagoff, 1988). A further question is what companies can do to overcome the gabs and what barriers they face in order to comply and align with the SDGs gaps (Kremer & Biesheuvel, 2017, pp. 3–4). A new progressive business model for the SDGs involves this question of what a company can do to align and comply with the SDGs (O’Higgins & Zsolnai, 2017). In many cases, the problem is not least the conceptual discussion of the theoretical dimensions of progressive business models (O’Higgins & Zsolnai, 2017). Rather the challenge is to embed and realize progressive business models in sustainability practice of the corporation. This also contributes to the understanding of how businesses and private contributions can contribute to the realization of the SDGs (Verboven & Vanherck, 2016). The new agenda of the SDGs is directed toward partnerships between public and private sector and businesses play a pivotal role in these partnerships to realize the SDGs.

2. The Challenge of the SDGs This is clear when we look at the agenda of the 2030 Agenda of the UN for transforming our world. The agenda is so ambitious as an agenda for people, planet, and prosperity focusing on universal peace that it becomes a very good question how this can make sense for business corporations and how they can contribute to sustainable development. We see this by the fact that the aim of

Business Sustainability and the UN SDGs     55 sustainable development combines the social issue of eradicating poverty with the environmental issue of sustainable development. The UN SDGs focus on the need to transform the world and this is considered to be a collective effort for all stakeholders. With the 17 SDGs and the 169 targets the UN has tried to define a clear path of sustainable development that combines the economic, social, and the environmental with the aim of protecting human rights and saving the planet. This vision is defined with the keywords of people, planet, prosperity, and peace. The SDGs emphasize the need to eradicate poverty and hunger with respect for basic human rights, dignity, and human equality. The SDGs combine this with a vision of sustainable consumption and production, including taking care of natural resources, dealing with climate change, and preserve the planet for present and future generations. Accordingly, the program of SDGs is a discourse of combine, peace, inclusive societies, happiness and harmony with growth, technology, and progress. The framework for this vision is the idea of involvement of all stakeholders, people, and countries in global partnerships for sustainable development built on respect for human rights and dignity. The vision of peace and prosperity involves an ethical idea of taking care of the most poor and vulnerable with the aim of transforming the world to be a better place to live for all human beings. With this discourse of a vision of a glorious future, peace, and equality the UN focuses on a triple definition of sustainability including economic, social, and environmental sustainability, which are proposed as balanced and integrated goals for a world agenda. The world with peace and without violence is combined with the vision of healthy, good climate, and clean environment with sustainable energy and natural resources (United Nations, 2015). This is the environmental vision of the SDG agenda (Agenda I). In addition to this, there is the social vision of the social vision of the SDGs (Agenda II). This vision includes the respect for human rights and human dignity, justice, and non-discrimination allowing all human beings to realize their potentials. Here, the agenda emphasizes the need to respect equality between men and women. The third dimension of the agenda (Agenda III) is the idea of sustainable growth with a world where economic growth and work for all is combined with rule of law and democracy and the sustainable use of the environment with the aim of eradicating poverty and dealing with environmental challenges and climate change in a sustainable way (United Nations, 2015). As mentioned, the UN considers these agendas as in line with earlier work on sustainable development and human rights since the Millennium goals and the Rio declaration. Nevertheless, the SDGs also emphasize a new development since they include combating poverty in combination with the creation of sustainable economies and democracies. Accordingly, the SDGs imply a strong transformation of the present situation of the world with inequality, discrimination, violence, environmental degradation, pollution, and destruction of the environment. Given this global disaster and crisis, it is a part of the discourse of the SDGs not to give up. The SDGs present our present global situation as time of technological, political, and economic opportunity. The key word is here global interconnectedness, which opens up an opportunity to solve problems together

56    Philosophy of Management and Sustainability through commitment to poverty eradication, health, education, and food security and nutrition. In order to deal with these challenges the SDG goals are closely linked with the targets and together they should be implemented in the economic, social, and environmental strategies and activities of all countries on the globe, not only developing countries, but indeed also developed countries. Here, the agenda of the SDGs emphasize the commitment of all states to implement the agenda of the SDGs and work to measure and evaluate the progress toward realizing the aims and visions of the SDGs. Accordingly, the 17 goals and the 169 targets are considered as global responsibility of all countries and of all stakeholders (United Nations, 2015). With the targets, the UN tries to demonstrate concrete tasks of the work to realize the SDGs. Here in goal 1 to end extreme poverty, the target to reduce at least half the number of people living in extreme poverty on less than 1.25 dollars a day, expresses such a target. Moreover, the focus on equal access to resources and policy frameworks to take care of the poor expresses this specific social agenda as the core of the SDGs. Goal 2 with the aim of ending human hunger and improve food security and nutrition as sustainable agriculture is closely linked to goal 1. Here contribution to develop sustainable agriculture and food production, respecting biodiversity manifest a core dimension of the concern for a sustainable planet. Sustainable agriculture is closely linked with the core goals of the SDGs to combat poverty and hunger in all their dimensions. In that context, goal 3 makes clear the relation between sustainability, health, and the concern for healthy people all over the world. The importance of access to good medicines and general improvement of life standards is important to help the poor to become healthier. The SDGs combine the vision of sustainable development with disaster management and concern for management of global risks. Goal 4 concerning inclusive and equitable quality education and lifelong learning for both girls and boys, women and men also demonstrates the importance of social development, human rights, and dignity as essential in the SDGs. In particular, the goals of global primacy education to overcome illiteracy, but also the focus on university education and entrepreneurship as important for global development illustrates this global focus on illumination and knowledge as essential for combining social and environmental sustainability. In a sense goal 5 of achieving gender equality and empowerment of all women and girls is an important dimension for achieving goal 4. The need to end discrimination, violence, and exploitation of women and girls as well as women’s participation in political, economic, and public life is essential for creating equality. Moreover, sexual and reproductive rights are also essential to the non-discrimination and equality of women and men. While the first five goals relate mostly to social issues of human rights, equality, and human well-being, the following goals are focused on environmental and economic issues. Goal 6 focuses on sustainable water management and sanitation for all as essential for a good environment. Good water management and sanitation is very important to ensure healthy and sustainable communities in more or less developed countries worldwide. Goal 7 focuses on access to sustainable energy for all. This goal combines the idea of universal equality and help to

Business Sustainability and the UN SDGs     57 the poor with elements of sustainable energy. The goal is oriented toward renewable energy with focus on sustainable infrastructure. This goal is very representative of all the goals in the way it is structured since it combines environmental and social dimensions in the formulation of the SDGs. This is also the case with goal 8 that combines sustainability and economic growth with the focus on full and productive employment and decent work for all human beings. This goal combines growth with decent work for all and includes inclusive labor markets, work for people with disabilities, equal pay, eradication of forced labor, elimination of child labor, and protection of women and migrant workers. In general, this goal follows the vision of the International Labour Organization and can be said to argue for a fair and regulated global labor market. Goal 9 concerning resilient infrastructures, including sustainable innovation and innovation can be said to imply the same idea of combining sustainability, equality, and economic development. In particular, this goal includes targets of entrepreneurship, new sustainable technologies, and combination of research and innovation. Indeed, an important element of resilient infrastructures is also technological development and internet access in all countries (United Nations, 2015). Goal 10 concerning reduction of inequality within and among countries continues the welfare policy focus on the SDGs. Here, this goal will sustain income growth of the bottom 40 percent of the population. It aims at empowering inclusion of all, regard less of political, religious, and social differences. At all levels, this goal aims at not only promoting global equality in financial and economic markets, but also by dealing efficiently with global problems and issues of migration and protection of migrants. Goal 11 regarding making cities and human settlements inclusive, safe, resilient, and sustainable also combines the vision of eliminating inequality and eradicating poverty with concern for sustainability and resilience. This implies safe and affordable housing, sustainable urbanization. The goal focuses on issues like building better and stronger cities so that cities with develop in a sustainable and more just way, following the concern for social, environmental, and economic dimensions of sustainable development. Goal 12 about the need to ensure sustainable consumption and production continues the effort to combine economic growth with sustainable use of natural resources. This includes the effort to reduce the use of waste with reuse and recycling and ensure more harmony with nature through the development new economies of sustainability, also in the context of tourism. In this context, there is a specific focus on the need to move beyond fossil-fuel energy with more sustainable energy solutions in particular in developing countries (United Nations, 2015). Goal 13 is the goal of taking urgent action to combat climate change and its impact. This goal includes resilience and adaptive measures to deal with climate change in policies and planning strategies. This goal also implies early warning and institutional strategies to deal with climate change. Indeed, climate change commitment implies migration in developing countries and in particular taking action in countries that are particularly affected. The document about the SDGs mentions in particular the UN Convention on Climate Change as a primary basis for action in this context.

58    Philosophy of Management and Sustainability Goal 14 is about the effort to conserve and sustainably use the oceans and seas for human aims. This implies combat of pollution in the seas and protection of coastal ecosystems, in particular with regard to fisheries and marine use of seas and oceans. In particular, there should be focus on fighting illegal fisheries, but there should also be focus on tourism and knowledge and scientific use of the oceans. While goal 14 deals with the oceans goal 15 concerns the land and the sustainable use of terrestrial ecosystems with regard to use of forest, land degradation, and biodiversity. Here, terrestrial and inland freshwater ecosystems, as well as protection of forests and struggle for desertification are of utmost importance. In this context respect for biodiversity, protection of endangered species, protection of ecosystems, fight against killing of protected species, and enabling poor countries to live in harmony with nature are very important. Goal 16 refers to the promotion of peaceful and inclusive societies for sustainable development in order to create inclusive and accountable institutions. This goal about peaceful institutions implies the reduction of all forms of violence, abuse, exploitation, and trafficking. It deals with promotion of the rule of law and securing access to justice (United Nations, 2015). This goal implies the effort to reduce corruption and bribery and it includes efforts to take care of the poor by giving all individuals birth certificates. This goal is indeed about securing the rule of law in just institutions. Goal 17 is indeed about the partnership efforts to implement the goals through global partnerships. Here, there is a focus on mobilization of all sectors of society at all levels. This goal implies the mobilization of financial resources and technologies for implementation. Important is international cooperation with access to science and technology. Global partnerships require capacity building with trade, exports, and transparent markets. The goal is also oriented toward macroeconomic stability and multi-partnership based on multi-stakeholder partners. It is in this context, that goal 17 explicitly mentions the importance of businesses with the target “17.17 Encourage and promote effective public, publicprivate and civil society partnerships, building on the experience and resourcing strategies of partnerships.” This target focuses on the role of businesses for this development of global partnerships. The UN sees these global partnerships with common work for realizing the targets in an effort between governments, civil society, the private sector, and the UN as important for realizing and implementing the SDGs. There is a focus on the necessity to develop common strategies for sustainable development between business, governments, and civil society. The UN emphasizes that the activity of private business, as a driver of productivity, economic growth, and job creation is essential for this development. An important instrument for this is the development of multi-stakeholder forums (United Nations, 2015). Accordingly, the efforts about SDGs of the UN are highly relevant for business ethics. We see how the SDGs develop the agenda of people, planet, and profit referring to economic growth, decent jobs, sustainable consumption and production, and peace and justice. The UN recommends that everybody globally adopts and take ownership to these developments goals. Governments should integrate

Business Sustainability and the UN SDGs     59 the development goals in their national strategies, and the UN recommends all civil society stakeholders to contribute to the realization of the 17 goals. This includes of course not only business corporations, but also other types of organizations, such as social enterprises. Together with governments and civil society, businesses must get involved in meeting the UN development goals. New organizational forms and governance structures illustrate the efforts and difficulties of transnational corporations and small and medium enterprises with regard to the transformation toward progressive business models following the UN sustainability goals. A future challenge of business ethics is to find the right ethical principles to govern co-creation and co-existence among organizations in partnership management. Important is how partnerships between business and civil society can contribute to good implementation of the SDGs.

3. Criticism of Sustainable Development and SDGs There has been many criticisms of the concept of sustainable development of the SDGs. Critical voices see the concept of SDGs as “sustainability washing” (Buhmann, 2018), where the Western world wants to defend their conception of the world without taking into account the point of view of developing countries (Kremer & Biesheuvel, 2017, p. 8). A basic criticism is that the defense of sustainability is an argument for a “green capitalism,” a concept of green growth that implies a neo-liberal conception of the economy that has nothing to do with sustainability. Further critical perspectives on the SDGs see them as a kind of European ethnocentrism, based on a philosophy of the superiority of Western growth, progress and development. Sustainability is from this perspective not fit for a capitalist system since it is about preservation and stability. Critiques argue that our present use of land and resources remains an effective stealing from future generation since we are destroying their possibilities for life. Such critiques argue that the effort to create growth and overcome poverty is not radical enough to create real social sustainability. Looking deeper into the SDGs, critiques argue that they do not go the root of the evil, but continues to reproduce present exploitation of the poor and of future generations. From the point of view of the marginalized and excluded, the 2030 agenda is not sufficient to solve world problems. Moreover, critics argue that developing countries cannot really make use of sustainability in local economies, but that they rather are submitted to a capitalist concept of development, that they cannot be held responsible for. From this point of view the SDGs of the UN implies an untenable western concept of technocratic manipulation of the world, which integrates developing countries in neoliberal capitalist Agenda of the rich countries. At the same time, the UN has continued to promote the Agenda 2030 as an agenda of sustainable development. While the Millennium Goals were considered not to be specific to lead to a practical agenda, the SDGs are proposed as an effort to realize sustainable development in specific goals and targets. While the millennium goals focused mostly on developing countries, the SDGs are much more holistic and general and they involve all stakeholders, including businesses, NGOs, and private actors (United Nations, 2018a).

60    Philosophy of Management and Sustainability Indeed, the SDGs raise a lot of questions as continuation of the millennium goals. How do the SDGs relate to the millennium goals and how can they be conceived as a further development of the millennium goals? Many questions emerge in relation to the shape and framework of the SDGs. How can we prioritize between the goals? Are the goals too ambitious and unrealistic? How is it really possible to eradicate poverty or combat climate change? Can the SDGs create human action or awareness, even when they appear very abstract unrealistic? And can the SDGs really be universalized to be valid for all societies? These are important questions if we want to embed the SDGs as progressive business models for local business practices in different societies everywhere in the world.

4. From Sustainable Development to Transformation Toward Another Economy The contemporary framework of corporate sustainability began with the Brundtland Commission Report from 1987 of which the SDGs are a later development (World Commission, 1987). Already with the Brundtland Commission, the UN saw sustainable development as essential for survival of the planet. This was the new foundation of a progressive business model where the ultimate goal of the business corporation is to serve society. The aim of sustainable development and concern for future generations was the survival of humanity on the planet earth. In 1997, the British consultancy theorist and practical sustainability manager John Elkington wrote the book Cannibals with Forks where he defined the triple bottom line focusing on people, planet, and profit as an essential development of the UN sustainability framework (Elkington, 1999). In addition to Elkington’s theory of corporate sustainability based on the UN framework, Edward Freeman’s theory of stakeholder management represents a conceptual revolution of a progressive business model that contributes to conceptualize the business model of corporate sustainability (Bonnafous-Boucher & Rendtorff, 2016; Freeman, 1984). With this, Freeman emphasizes that for stakeholder management, valuecreation is relational (Bonnafous-Boucher & Rendtorff, 2016; Freeman, 1984). Relationships are based on human values, caring, and love, and this is the new dimension of socially embedded business and economics. As a relational activity, value-creation for sustainability is based on stable relations through time. With the global challenge of protecting people, planet, and profits, the SDGs are in the framework of stakeholder management meant to function as a catalyst for visions of new progressive and sustainable business models (Hildebrandt, 2016; O’Higgins & Zsolnai 2017; Rendtorff, 2015a, 2018). In this sense, the SDGs become a central part of theory development of CSR and corporate sustainability (Dyllick & Hockerts, 2002; Marrewijk, 2003; Montiel, 2008). A sustainability performance management system is a system to quantify and evaluate a sustainability performance of company. This is a system to measure the performance of a company and evaluate the efficiency of this performance. With regard to a company, this system is a totality of indicators and measures that

Business Sustainability and the UN SDGs     61 evaluates the performance of the company toward a goal of sustainability. With the SDGs, it a part of the Agenda of sustainable development to set up specific target and it measures to evaluate the performance toward the SDGs. Therefore, it is necessary to develop a system of measurement for the SDGs (Kremer & Biesheuvel, 2017, p. 23). The SDG compass can also be considered as a management tool to embed and localize the SDGs for specific business purposes (United Nations, 2019). The SDG compass was developed by the Global Reporting initiative, as a tool for SDG reporting is an instrument to encourage organizations to work with the SDGs. This is an instrument for companies to integrate the SDGs in their activities. An important dimension of the SDG compass is the measurement of sustainability performance, which companies use to develop a strategy for SDGs. This tool should contribute to create a new concept of the business strategy of the corporation, which is opening up for integrating and embedding the organization in the local economy. Here, it is important to take into account the critique of the dominant economy from the different paradigms of ecological economy (Costanza, 1991; Costanza, Cleveland, & Perrings, 1997, Costanza, Low, Ostrom, & Wilson, 2001; Daly, 1999) and in connection with this the emerging solidarity economy (Dacheux & Goujon, 2011; Laville, 2010, 2015). The economies of transition argue for the importance of a new approach to the realization of the transition toward sustainability of economic interactions in society (Alias et al., 2014; Becker, 2006; Daly, 1994, 1999; Ingebrigtsen & Jakobsen, 2006; Nielsen, 2013, 2015; Rendtorff, 2014b, 2017; Sagoff, 1988). The new ecological economy and the solidarity economy are essential for formulation the new paradigm of transition. With regard to theories of ethical leadership in philosophy of management, we can also emphasize that the sustainability goals imply new traditions of leadership models of business ethics, including the ethical manager, organizational ethics, values-driven management, and governance ethics in organizations (Brown & Treviño, 2006; Rendtorff, 2009, 2018; Treviño, 1986; Treviño & Brown, 2005; Treviño, Brown, & Hartman, 2003; Treviño, Hartman, & Brown, 2000). Here, it is important to emphasize that we need to confront the challenge of formulating new concepts of sustainable ethical leadership. Here, it is important to formulate a concept of transformational SDG leadership in the transition toward sustainable development. Research in CSR and sustainability has been focused on the triple bottom line (Elkington, 1997; Kashmanian, Wells, & Keenan, 2011; Norman & MacDonald, 2004) and on clarifying concepts of responsible business, for example, political CSR (Rendtorff, 2018b; Scherer & Palazzo, 2011), creating shared value (Porter & Kramer, 2003, 2006, 2011). Now this research must focus on the “gab frame” of translating SDGs into embedded, institutional, and collective responsibility in value-creating business cases (Hammoudeh, 2018; Hess, 2017; Hildebrandt, 2016; Muff, Kapalka, & Dyllick, 2017; Nielsen, 2015; Rendtorff, 2018a). Investigations of ecological economics, as well as sharing and circular economics have been the focusing on the transition toward sustainability (Nielsen, 2013). This is applied at the micro-, meso-, and macro-level of society. But deeper

62    Philosophy of Management and Sustainability understanding of embedding sustainability into business management and economics is still in development (Baumgartner & Rauter, 2017). Moreover, the use of these economic theories to understand and analyze SDGs is still not accomplished. So focused research is needed to understand SDGs and sustainable economics (Howard-Grenville, 2017). The aim of these economic theories of transition to sustainability is to develop theories and concepts of ethical leadership and CSR that specifically encompass concerns for sustainability (Rendtorff, 2009, 2013, 2014; Scherer & Palazzo, 2008, 2011). Thus, from this perspective we can see how progressive business models in business organizations are necessary to deal with the potential challenges that arise in relation to contributing to sustainable development (Muff et al., 2017).

5. Civil Society and Partnerships for the SDGs Such a formulation of SDGs in the framework of ecological economics, philosophy of management, stakeholder management, CSR, and paradigms of ethical business can also be considered as the framework for theorizing about SDG partnerships. We have already seen how the SDGs open for new progressive business models of relational stakeholder management. This is indeed the foundation of partnerships for the SDGs (Bonnafous-Boucher & Rendtorff, 2016; Freeman, 1984). The member countries of the UN commit themselves to realize the SDGs with focus on the responsibility of governments (United Nations, 2018a). However, it is important to emphasize that the concept of partnerships implies that governments go into global partnerships for the SDGs an also that they enter into partnership with businesses, NGOs, and civil society. The concept of partnership is accordingly essential for the SDGs and different kinds of partnerships are important for the achievement of the SDGs. Here, the goal number 17, partnerships for the goals is very important as a goal that is different from the other goals since it refers to the multi-stakeholder process of finding the goals and to the involved institutions, organizations, and people that need to work together in order to realize the SDGs. In contrast to the millennium goals that focused mostly on the states as responsible actors, it is important to emphasize that the SDGs relates more broadly to the involvement of businesses in the work for the goals and targets (United Nations, 2018a). The idea of the SDGs is that businesses are as responsible for sustainability as governments and other actors. The business model should be based on sustainability, and this involves that businesses should not only follow the principles of sustainable development of the Brundtland Commission and the triple bottom line of John Elkington, but also integrate the visions of ecological economics, philosophy of management, and ethical business in new visions of embedding SDGs in business practice (Elkington, 1997; World Commission, 1987). With the SDGs, the international community proposes a multi-stakeholder approach to solve global and local problems. Therefore, the SDGs are on the

Business Sustainability and the UN SDGs     63 agenda for governments, businesses, and the civil society. In this context, it is important to emphasize that the SDGs as such also are a result of multiple partnerships and interactions. NGOs, governments, business, and civil society worked together to formulate the SDGs as ambitious as they and the diplomatic and political project of SDGs of the UN have been based on a collective process to form the SDGs as ambitious world goals. Because of this interaction the SDGs continue the process from the Rio Summit on sustainability in 1992 over the millennium goals to the formulation of the present world goals as the SDGs. It is important to be aware that this process has led to the fusion of environmental and climate goals in the present concept of the SDGs (United Nations, 2018a, b). This can indeed be considered as a result of the global and local partnership process that is behind the SDGs. The vision of the environmental and climate world goals is not treated as separate from the economic challenges that the world is facing. The partnership process behind the goals has been an integrated and open consultation process that resulted in such combined social and environmental goals for the world community. Accordingly, the concept of partnerships is in itself behind the new vision of the SDGs. The process of formulating the goals has been complex and it is important to keep in mind the complexity of the SDGs with the 17 goals and 169 targets that include a great variety in scope, aim, and context. At the same time, it is important to remember that all countries of the UN adopted the 2030 agenda of the SDGs. Indeed, this answers the question of whether the goals are universal. They must be since all countries have committed themselves to the goals, which means that the SDGs cannot be reduced to a perspective for the developing world not including the rich countries. All countries and all sectors of society must be responsible. We cannot just export problems and issues from one sector to the other. Thus, it can be argued that the ultimate aim of CSR and corporate citizenship in sustainable development is realized with the SDGs through partnerships of relational stakeholder management. In Europe, the EU commission has conceptualized CSR as a voluntary effort closely linked to sustainability, but there has not been much specific advice about how to develop progressive business models for sustainability. With the SDGs, together with other initiatives as business for human rights, the Global Compact, Global reporting initiative, and World Business Council for Sustainable Development; however, such a framework for a sustainable corporation emerges. Indeed, the literature for CSR and stakeholder management makes a close link between sustainability and a good corporate performance. Sustainability is considered as a good business case and business model that can be profitable for the company. Applying stakeholder theory with its vision of relational partnerships, it is possible to argue for a business model for sustainability (Bonnafous-Boucher & Rendtorff, 2016; Freeman, 1984). The customers are increasing focusing on ecological and more sustainable products. Employees want to have a meaningful work and be proud of their corporation in order to worker harder. Shareholders and investors consider sustainability as important for the future of the company,

64    Philosophy of Management and Sustainability which can be considered as prudent risk management. Governments and local community as well as NGO stakeholders also expect of the corporation to be responsible for sustainability and sustainable development and by complying and aligning with this a corporation can increase its social and political legitimacy in a specific society. This contributes to the increase of the brand value and trustworthiness of the company in society, which is an argument for the business case of corporate sustainability. Accordingly, with the focus on partnerships and business involvements of the SDGs, we face a new development of the policy-making and value-setting activities of the United Nations. Historically, the SDGs in business and management propose a new vision of the conceptualization of the relation between sustainability and growth. This implies a vision of the sustainable potentials of technology. With the SDGs there is a continuation of the project of sustainability following the Our Common Future Brundtland report of the World Commission in 1987. This concept of sustainability proposes SDGs as a contribution to an economy of green growth where sustainability and economic transition are closely integrated. This vision of sustainability is formulated in contrast to more critical views of the relation between sustainability and growth. Early concepts of sustainability following the Rome report from 1972 about Limits to Growth proposed a limitation to the economy due to the limits of the carrying capacity of the Earth. This has later been combined with concepts of zero growth and even de-growth. These critical and even radical green concepts of sustainability politics have with their focus on the limits to growth and skeptical attitude to the SDGs vision of growth contribute to critical questioning of the implementation and realization of SDGs in business management and partnerships. This criticism may imply critical challenge to the project of the SDGs in public institutions and private business. In SDG management and strategy we need to be aware of the relation between social, environmental and economic sustainability with focus on the virtues of the good in order make sure that the SDGs lead to real green and environmental growth. Indeed, it is a part of the vision of the SDGs to realize the good life for humanity that they combine public policy with private business in order promote a sustainable use of resources in balanced interaction between the environmental, social and economic dimensions of sustainability.

Part II Philosophy of Management and Ethical Economy of Sustainability

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Chapter 6

Philosophy of Management and Ethical Interdependence in the Anthropocene Age In order to understand the philosophical foundation of the movement from business ethics and corporate social responsibility (CSR) to the sustainable development goals (SDGs), we need to analyze the philosophical dimensions of the ethical interdependence in the Anthropocene age.1 This is the basis for the contemporary transition of our present economic systems toward circular and ecological and more environmentally friendly economic systems. We experience a transformation of economic systems facing the era of the Anthropocene with a new relation between human beings and nature. Accordingly, we need to understand the Anthropocene age as the basis for present developments of business ethics and CSR. At the beginning of his recent book Facing Gaia. Eight conferences on the New Climate Regime Bruno Latour evokes the image of the Cosmocolosse. This metaphor is central to his contribution to the Gifford’s lectures on the theme of natural religion as a question of the New Climate Regime. Latour has helped to stage a climatic and global tragi-comedy, a Gaia Global Circus where the story presents itself as a new character: Gaia. This play is inspired by the notion developed by the scientific ecologist James Lovelock. This is a story of a Cosmocolosse who has become subject. The theatrical staging is a fiction that resembles the nature of Gaia, the effort to save men and argue against climate skeptics. Latour’s book is both a contribution to the philosophy of climate change and a reflection following his scientific work on anthropology of the moderns. For Latour, climate change is a big challenge for the technoscientific, physical, and chemical understanding of modern nature. Moreover, the foundation of the modern nature philosophy has become unstable (Latour, 2015, p. 12). With his lectures on Gaia, Latour contributes with situating the reflection on the Anthropocene and on the planetary limits throughout his epistemology and his sociology of sciences. One could say that climatic developments confirm that the old separation between management and social sciences and the natural sciences no longer 1

Previous versions and preparatory works for this chapter include Rendtorff (2018b).

Philosophy of Management and Sustainability: Rethinking Business Ethics and Social Responsibility in Sustainable Development, 67–78 Copyright © 2019 by Emerald Publishing Limited All rights of reproduction in any form reserved doi:10.1108/978-1-78973-453-920191006

68    Philosophy of Management and Sustainability works. The New Climate Regime makes nature and climate a matter of governance, management, ethics, and political practice. By analyzing the relationship between Gaia and the Anthropocene, Latour shows how nature and the earth have become central elements of the geopolitics of the moderns. Climate change represents a challenge to the epistemology of subject–object relations, and science objects have become hybrids shared between nature and culture. The Latour Conferences are a good starting point for analyzing the theme of Inclusiveness. The theme of Inclusiveness relates to Ethics and Interdependence with the focus on opening up managerial concerns for other things outside the organization. For me the age of the Anthropocene with its climatic changes has accentuated the need for inclusiveness in a time of a global ethical interdependence. This time requires resilient management and organizational practices to overcome human and natural vulnerability to the new natural and social instability of the world. Thus, in this chapter I would like to analyze the anthropological and epistemological foundations of the new philosophy of the Anthropocene nature that lie behind the new managerial and governance practice of resilience of global society with a great planetary, socio-cultural, and interpersonal interdependence of the world in the age of the Anthropocene. This chapter is divided into four sections with a conclusion: (1) Epistemological Foundations of the Anthropocene Ethics; (2) The Anthropology of the Interdependence of Man and Nature; (3) The Natural and Socio-Cultural Interdependence of the New Climate Regime; (4) Resilience Management and Governance in the Anthropocene Age (5) Toward a New Geopolitics of Sustainability.

1. Epistemological Foundations of Anthropocene Ethics Today we need more responsibility and ethics of the environment in management and organizational governance. We need to move toward a technological, political, and economic responsibility for a sustainable development of nature and society. Indeed, the need for responsibility for sustainable development becomes even more important when we consider that we live in the era of the Anthropocene. The concept of the age of the Anthropocene is a geological concept that means that the impact of humanity’s activities on the environment on the planet has become more serious. Due to climate change and other changes in the natural environment of humankind, geology has begun to characterize the geological period present since the eighteenth century as the age of the Anthropocene where human beings as species and collective group contribute to the geological modification of nature. Indeed, the concept of Anthropocene allows Latour to update his epistemology and philosophical anthropology. He continues the reflections of his master Michel Serres on science and society. Serres said that Hiroshima was, in a way, the real subject of his philosophy (Serres, 1992, p. 29). After Hiroshima, we could no longer believe in scientific optimism. This has changed the relationship between science and society, knowledge and morality, and it has contributed to break the framework of previous thinking in the epistemological tradition. Serres criticizes an unconditional belief in the neutrality of science and stresses that we should be aware of the growing ethical problems of science. With his

Philosophy of Management and Ethical Interdependence    69 epistemology of sciences, Latour places himself in this tradition. He develops in The Pasteurization of France (1984) and We Have Never Been Modern (1991) a social constructivist analysis of biology and medicine that exposes ideological powers in science while representing a narrative and discursive approach to the subject of analysis. Latour begins his analysis of the development of modern medicine in The Pasteurization of France, by comparing Pasteur’s discovery of the importance of microorganisms for diseases with Tolstoy’s description of the Napoleonic wars in his novel War and Peace. The point of comparison is that a clear distinction between science and politics cannot be established. The emergence of the new microbiology represented by Louis Pasteur must be understood in conjunction with other historical events where a combination of strategy, economy, and politics influences the events of the time. Latour argues that the emergence of the new microbiological paradigm must be understood as a historic battle of bacteria, where different actors, as in War and Peace, were part of a strategic struggle to institutionalize a certain perception of knowledge. Latour claims that Pasteur was not alone in the implementation of the new paradigm, but involved more or less conscious alliances with a number of different actors who were jointly interested in making medicine an objective science. Like Tolstoy’s Napoleon in War and Peace, is described as a man, who is partly a product of his social situation, Pasteur’s success results from the interaction between a number of social circumstances and Pasteur’s ability to construct himself and his science strategically. Basing his analysis as Tolstoy on discourse and on narrative reconstruction and the adaptation of the event as an interaction between the different actors of a narrative ensemble, Latour explains how the knowledge of the sociological explanation of the history of microbiology is forming this science as an objective medical science. The microbiological view that has revealed the bacteria almost as new social agents can be seen as a new unconscious force that has been established in the struggle to give medical discourse a central place. Medical scientists from the microbiology laboratory have found an instrument to carry out their hygiene project. Latour says that at this historical time, there was already some knowledge about microorganisms, but they were not associated with a risk of infection. Pasteur’s benefit was to see bacteria as agents of the disease using the purity and precision requirements of the laboratory to validate hygiene as a scientific method. Although scientific research has not directly proven the effects of the bacteria, they have revealed the existence of the bacteria. And that was enough. According to Latour, this has led to a dramatic renewal and institutionalization of modern medicine without focusing directly on the visible disease, but only by detecting the evil bacteria as a threat to the body’s immunity and integrity (Latour, 1985, p. 107). In the longer term, the adoption of the “pasteurization program” in medicine meant the domestication of bacteria in the health service, a radical change in the doctor’s task, which translated into preventive medicine, a science of public health and institutionalization of hygienist medicine in society. Using microbiology, medicine has successfully established itself as a professional representative of the state. It was possible for doctors to translate Pasteur’s

70    Philosophy of Management and Sustainability techniques to legitimize their project in order to ensure the hygienic discipline of the citizens in order to stay clean to prevent the spread of diseases and bacteria. Latour states that medical ethics has been reversed so that the physician becomes primarily a representative of social and global health. The illness was no longer just a personal tragedy, but an attack on public order. The powerful status of microbiology as the strong weapon of hygienic medicine is manifested later in French tropical medicine, which sought to create medical measures to protect vulnerable people in settlements. This medicine struggled to restore the natural superiority of the French race compared to the original population of the colonies, which strangely were much more immune and immune to certain tropical diseases (Latour, 1985, p. 125). Latour’s description of the institutionalization of microbiology as an integral part of medical science makes explicit the concept of sociology of knowledge of science as a social construction. It is a battle between different regimes of knowledge that want to be institutionalized. The reconstruction of this process is formed as a story of the emergence of various discursive formations. Latour emphasizes that the medical order is a historical contingent and must be seen as the result of a series of translations of different forms of knowledge and lenses that create a given reality. Latour thus radicalizes the social constructivist project at the same time as he is affirming that the ideas of textual interpretation of hermeneutics, exegesis, or semiotics should be generalized. Not only the relationship between different texts, but also the relation between texts and objects, and especially the relation between texts and objects as such, is a question of interpretation (Latour, 1985, p. 166). Latour emphasizes the close link between nature and culture by saying that knowledge is a relationship between different forces that interfere with each other. The world and reality become a construction that takes place between regimes of knowledge more or less weak and strong that are placed in a discursive context, without reducing the signs to things in themselves. During a period of epistemological and ontological peace, classifications can be broadened, but a consensus on fundamental assumptions can be completely decomposed at the time of war between different fundamental conceptions and between paradigmatic actors such as doctors or natural scientists (Latour, 1985, p. 193). In such an exceptional state, everything is possible, despite the fact that natural science tries to construct this strange story that man “discovers nature,” although we are well aware that many different forces are influencing our world and our scientific knowledge.

2. The Anthropology of the Interdependence of Man and Nature Latour uses this intuition to assert that the self-understanding of modernity does not correspond to one’s own reality. Instead of emphasizing the superiority of civilization over primitive culture, Latour claims that the social constructions of modernity, as well as the magic of the mythical universe, are expressions of rationalization and order of creation in the world. The modern and scientific

Philosophy of Management and Ethical Interdependence    71 worldview seeks not to give priority to other understandings of the world. Nevertheless, despite its effort, science cannot reduce the world to objectivity. In his book, We Have Never Been Modern Latour saw man and humanism as a fundamental truth by pointing out a gap between the social world and the natural world. We have divided the world between humans and non-humans, between people and non-people as in a legal constitution that defines legal persons and the legal order. However, we have forgotten that nature is perceived by humans through certain “glasses” and interpreted by science. According to the scientific philosopher Gaston Bachelard, it is emphasized that scientific laboratory activity must be understood as a “fabrication of facts” (Latour, 1993, p. 18). Instead of taking the distinction between subject and object for granted, it is the development of an anthropology for the modern world that reveals the interactions between people and nature, just as Latour did in the analysis of Pasteur. At the same time, this anthropology rejects the reduction of the world of deconstruction and semiotics to a system of signs. Latour stresses that the idea of the modernity of an absolute gap between nature and society cannot be maintained. Every day, the scientific, political, and technological institutions of society are mixed with different objects created by the community and by the natural objects created by society. At the same time that society is a social construct, we have tried to create nature as a transcendent object. Nevertheless, the link between nature and society is more complex. Society appears as a solid structure that dominates people, even if they have created it through interactions, while remaining in contact with natural objects. As a result, modernity’s attempts to maintain the difference between human and nature cannot be maintained (Latour, 1993, p. 37). Here Latour is not so far from a hermeneutic position, which one would assume that he should be as a constructivist. In his theory, there have also been hermeneutical and phenomenological efforts to see man in a closer relationship with nature. Inspired by the communication philosophy of Michel Serres. Latour likes to join a relationship of communication with nature, rather than wanting to purge society of its natural elements. The modern constitution of society would explain everything with ontologies distinct from nature and society. However, one cannot avoid referring to ontologies of the intermediary, to the communication between nature and society, where forms of mediation are of fundamental importance. Latour refers to science historian Donna Haraway, who pointed out that modern society builds a large number of hybrids, biological robots, cyborgs, domestic animals, or machine-men that form bridges between nature and the society. Instead of letting social constructivism be limited exclusively to human and social phenomena, Latour develops his ontology to apply it also to the natural world. Phenomena such as the ozone layer, frozen embryos, genetically modified organisms are almost things, hybrids between social and natural, which can only be described by a generalized social constructivism that supports social constructs even of the relation to natural conditions. This implies – in addition to rejecting the Modernity project a clear distinction between sensitive people and still life – a criticism of postmodernity (Lyotard,

72    Philosophy of Management and Sustainability Baudrillard, Eco) which asserts that reality consists only of signs that are made in reference to immanence and closed structures. Latour, instead, maintains that meaning appears in a correlation between natural reality and social reality. Latour therefore develops an actor-network theory to understand the interaction between nature and society. With a critical reference to Heidegger, he emphasizes that we must abandon the attitude of Heidegger that we live in the “forgetfulness” of being (Latour, 1993, p. 65). Instead of focusing on technology as a destruction of the lifeworld, we must regain creativity in the technological mediation of things between the world and human beings. However, despite Heidegger’s criticism, Latour can say that he wants to take up Heidegger’s ontological-hermeneutic project to develop a modern science based on a radicalized object–subject distinction. His social constructivism asserts that we will return to a pre-metaphysical anthropological point of view in which we describe the human relationship with being through its construction and interaction with nature. This theory of mediation and diffusion wants, like hermeneutics, to break with Descartes’ theory of knowledge to find a relation to nature, based on the original cohesion of man with being. In this hermeneutical perspective, Latour thus understands social constructivism as a new anthropology that explores the time and self-understanding of Modernity not as an eternal objective truth, but as a definitive perception of the historicity of humanity, founded on a clear distinction between the self-constructed society and the objective death nature. The point now is that this self-understanding is ideologically lost, because science has strong social constructivist elements and the distinction between nature and society cannot be maintained because natural phenomena seem to be hybrids of social phenomena. At the same time, it is disastrous that modernity is no longer open to communication between nature and society. The fragmented perception of postmodernism is a symptom of the problems of modernity in understanding the relationship between societies, nature, and technology. To obtain a good understanding of this relationship, Latour emphasizes a generalization of the anthropological method. Here, the distinction between Modernity and society is not seen as a solid starting point, but because of a certain institutionalization of the community that produces things, people, nature, and society at the same time (Latour, 1993, p. 79). It can be said that this anthropology focuses on the interpretation of the interactions between society and nature in order to understand how natural phenomena have a history that is reflected in social phenomena and which affects the formation of society that acts again on nature (Latour, 1993, p. 82). In line with Michel Serres, as already pointed out, Latour defends the ontology of variation and diffusion, which no longer describes nature and society as distinct opposites, but as two closely related expressions of a particular understanding of beings in a given historical and cultural epoch. Thus, we have explained the epistemological and anthropological foundation of the ethics of the interdependence of man, nature, and the socio-cultural human reality. Thus, this must be the basis for management of the inclusive organization.

Philosophy of Management and Ethical Interdependence    73

3. The Natural and Socio-cultural Interdependence of the New Climate Regime Thus enlightened on the relation between man, nature, and society in the social theory of Latour we can return to the explanation of the New Climate Regime in Face à Gaia. Eight Conferences on the New Climate Regime. We see a continuity between the position of anthropology and the sociology of science with analyses of the emergence of a new climate regime following climate change. Bruno Latour emphasizes that climatic instability and our life as those that could have acted against global warming has been accentuated in such a way that we are in a deeper ecological crisis that implies “a profound change in our relationship with the world” (Latour, 2015, pp. 16–17). “An alteration of the relationship of the world,” which according to Latour is due to the definition of scholarly madness (Latour, 2015, p. 18), characterizes the “climate skepticists,” “climatenegationists,” or “climato-Quietists” who want to live in another way. However, they, too, believe in the absolute power of humanity, in “geo-­ engineering,” which seems to be due to an alteration of world relations. We are alienated from nature. However, the ecological responsibility we seek does not mean returning to nature. Nature without culture does not exist, according to Latour’s constructivist social point of view (Latour, 2015, p. 23). As he has already been pointed out, the nature–culture distinction, like the object–subject distinction, goes back to the anthropology of the moderns according to him as when “Descartes imagines the world as projected on the canvas of a still life of which God is the arranger” (Latour, 2015, p. 29). Thus nature and culture are two halves of a concept, defined by a relation that functions as a normative form of unification of the two concepts as in the concept of natural law. It is because of this that the New Climate Regime evokes the nature–culture relationship as a strongly political relationship where climatedenialists and industrial lobbies look at the scientific evidence of climate change made by humans as a matter of power. Experts who do not produce totally objective scientific evidence are not really recognized. According to Latour, what we can learn from the pseudo-debate between climate-negationists and scientific experts is the growing evidence of the impact of human activity on the climate. What the New Climate Regime is installing is a new political ecology. According to this political ecology, the notion of instability of nature and of life with nature indicates a very instability of the concept of nature. It is an instability between the political concept of natural law and the scientific concept of natural laws (Latour, 2015, p. 49). Indeed, one could say it is the duty of the ethics and climate policy to find the true passage in this place of global and socio-cultural interdependence. The New Climate Regime has changed our era. The Homo sapiens who became homo oeconomicus of the industrial age changed the situation on the earth. Thus, Latour emphasizes that the current situation implies the emergence of the age of the Anthropocene. This indicates that the insignificance of humanity is over and man has become “an unprecedented geological power” (Latour, 2015, p. 61). Historical acceleration has made human history a geological story

74    Philosophy of Management and Sustainability with climatic impacts and upheavals. In short, this means that there is an intimate relationship between nature and politics and that it is not possible to isolate the nature of politics. This means that there is a “continuous sequence” between the facts of nature and the decisions of men (Latour, 2015, p. 67). Thus, it could be said that science addresses both human actors and non-human actors, involving an anthropomorphization of natural beings. Referring again to Tolstoy’s War and Peace, Latour says that in the description of the Battle of Tarutino 1812 the human subject is made to act by objective forces (Latour, 2015, p. 69). General Kutozov’s forces are anthropomorphized even though they are not really human actors. In the same way, one can find in novels and narrative narratives natural actors who act as human beings even if they are forces of nature. Latour says that the acting forces of nature follow an unstable mode of performance while human actors do stable actions with skills because of the presupposition of human intentionality. With this he wants to emphasize that, the dichotomy between humans and nonhumans “has no more sense than that of Nature/Culture” (Latour, 2015, p. 79). With the New Climate Regime the Earth of the Anthropocene we expect a Copernican counterrevolution of the universe to cosmos, from movement to behavior, subversion of subject and object, from the infinite world to the closed world, what we have seen that Latour calls Cosmocolosse (Latour, 2015, p. 83). Following Michel Serres with his notion of natural contract, Latour emphasizes that the earth is no longer objective but everywhere it is a sign of human action and thus animated by human agents. Thus, according to Latour animation is that the system of the earth is alive and not the deamination that characterizes the relationship between man and nature. Thus, Latour sees, according to the Gaia hypothesis of James Lovelock on geohistory, a great acceleration of the exploitation of nature which is like a state of generalized war, where human history and natural history mix in the regime of “tipping” points, “the moments of great change, crisis, and revolution” (Latour, 2015, p. 99). In Greek mythology, Gaia is a mother goddess, primordial. The poet Hesiod evokes Gaia in his Theogony where Gaia and Eros follow Chaos in the beginning. With the ecologist James Lovelock, who was also physiologist and engineer Latour reverses Koyré’s position by “returning from the infinite universe to the limited and closed cosmos” (Latour, 2015, p. 108). For Lovelock the image of the goddess mother Gaia, personifies “the Earth as a living being.” The Earth is a unique and closed system with its own regulation, an animated system, living with its own teleology and natural laws of development. New Age currents have also developed Gaia-like theories of the living world. Latour remarks that the name of Gaia (Ge), earth comes from the ancient idea of Earth, which means “power of great beginnings.” Gaia is the living planetary system of a super living organism that self-regulates itself as a living system. For Latour, this means that the organism does not adopt the environment but rather the interdependence of living beings where they follow their intentions in interaction with other organisms in a “single and indivisible” process that form waves, as well as unstable and unpredictable actions. For Latour, Lovelock and

Philosophy of Management and Ethical Interdependence    75 Darwin are compatible with their ideas of natural adaptation but the idea of selfish purpose loses its rationality at the level of the system as a whole where it changes in chance and feedback (Latour, 2015, p. 138). Contrary to the idea of an invisible hand, this means the danger of a natural selection process at the level of the system as a whole. For Lovelock, the system should be explained from the totality of the earth and not from the capitalist economy and human biology. According to geologists, Anthropocene means that we have finished with the Holocene and that we have entered a new era of control of the earth by man as an agent of geohistory. To examine a critique of this, Latour refers to Sloterdijk’s generalization of Umwelt in von Uexküll in a science of the Spheres “as a first anthropocenic discipline” (Laotur, 2015, p. 168). For Sloterdijk, it is impossible to have a global and cosmic understanding. He speaks rather of the sphere than of the philosophy of the Globe. For Sloterdijk, the notion of the Globe and cosmos is a Platonic and metaphysical conception of the world of ideas that wants to have perfect knowledge. Thus, the idea of the Globe is cosmopolitanism and strongly metaphysical. The Globe is a theological and idealistic image as a totalitarian scientific model. Indeed, it represents a critique of the thought of the age of the Anthropocene and Gaia that may become global models. Yet, by examining the concept of Gaia more closely, we observe, according to Latour, that it is a concept that can escape from metaphysics. This is not a totalitarian concept, because the lesson of the Anthropocene is that human beings (Latour, 2015, p. 179) cannot grasp the earth globally. It is to make the traditional metaphysics of looking at the earth like a Globe, rather one would have to be interested in spheres and in the spherical shape of the Anthropocene. Gaia is not a totalitarian cybernetic system, but rather an extraordinary sensitivity to human action. With Sloterdijk, Latour wants to develop a new geopolitical theology that recognizes our limits and our dependence on our land and particular sphere of life (Latour, 2015, p. 191). Thus, the cosmopolitan perspective of the Anthropocene proposes at the same time a new anthropology that takes cultural differences of viewpoint seriously instead of planetary wars because there is no natural religion. I would like to emphasize that for Latour the distinction between culture and nature is exceeded by the human arrangement with Gaia. For Latour, according to Serres, the Anthropocene epoch resembles Hobbes’ Leviathan, where he unites the mechanics of the state with the progress of the sciences to the extent that we are confronted with war in the state of nature, where we no longer have a natural contract. The earth has become a place of struggle between populations and techno-scientific rationality with its ideology of capitalist economic growth reminiscent of the Apocalypse and the end of humanity. Latour evokes the book by Stephen Toulmin, Cosmopolis (Toulmin, 1990). The argument in this book is that the advent of modern science since 1610 is a reaction against the times of insecurity of religious wars. The emergence of the modern state is the figure of Leviathan, the strong state that should stop conflicts and set up a global regime. However, the totalitarian state was rather a war monster.

76    Philosophy of Management and Sustainability Nevertheless, science contributes to the destruction of nature. True modernity is according to Toulmin and Latour rather founded on the ecology and the civil society where one controls the states in a cosmopolitan spirit. Instead of the loss of hope in an Apocalypse of modernity, Latour proposes the fusion of “eschatology and ecology,” not as an irrationalism or as a religious mystique but as the moment to end the climate war and accelerated growth. For Latour, Gaia represents a historical power to regain belonging to the world of man against scientific and Gnostic escapism (Latour, 2015, pp. 282–283). Latour evokes the painting of Kasper David Friedrich Das Grosse Gehege to illustrate his point of view. The painting shows that one must not lock oneself in the Earth Globe and that it is impossible to have a virtual and objective point of view on the terrestrial globe. With this, Latour wants to break with what he calls the Old Climate Regime. The New Climate Regime implies – with Deleuze’s term – a reterritorialization and a depoliticization of ecology. To think climate policy Latour borrows from Carl Schmitt’s concept of politics. Indeed, with his notion of Nomos and geopolitics, Schmitt can help to think of the new concept of politics present in the New Climate Regime. According to Latour, Schmitt is hostile to the idea of a global, scientific, and military economy. He is critical of globalist hegemony, and speaks of earth rather than of a globe. For Schmitt the question of politics concerns the Nomos of the earth (defined as the configuration of a political and spatial order) and so it is, according to Latour possible to unite Gaia and a Nomos of the earth as philosophy of the anti-Globe. At the same time, Latour keeps Carl Schmitt’s notion of politics as a conflict with an enemy. He says, “Humans who still live in the Holocene age are in conflict with the Anthropocene Terrestrials” (Latour, 2015, p. 320).

4. Resilience Management and Governance at the Anthropocene Age With this we see how Bruno Latour’s philosophy relates to the notion of resilience management. Indeed, the word resilience has become famous in relation to the debate on the problems of global warming. Resilience comes from the Latin word “resilio” which has the meaning: “jump back, rebound but also retreat quickly, give up.” Resilience also means the ability to regain energy in a situation of abundance. It is about the ability to restore oneself, to develop nevertheless, in difficult environments. Resilience policy has become a new policy regarding survivability, coping, and restitution in a situation of chaos, anarchy, and instability (Slagmark, 2016). The idea of management of resilience is a critique of the positivist and modernist social sciences and their belief in a unique and precise science. Philosophy and science are looking for a new paradigm after modernism and after postmodernism and post-liberal climate politics that is able to take into account the complexity of management in society facing global warming crisis.

Philosophy of Management and Ethical Interdependence    77 Indeed, I think Bruno Latour’s work on The New Climate Regime can provide us with this foundation of resilience management and governance of organizations as inclusive organizations in times of climate change. As we have seen, Latour’s position seeks a combination of philosophy, sociology, science and technology studies, inspired by the epistemological tradition of Bachelard and Ganguilhem (Latour, 1989). Latour insists and believes that it is impossible to have a science that is external to its object in the sense of the modern (Hauchecorne, 2012, p. 942). Latour’s resilience policy is also inspired by the sociology of Edgar Morin’s complexity and Michel Serres’ philosophy of communication and governance. This leads to the development of an international management theory and a philosophy of governance based on natural and social science (Latour, 2005). Latour’s social ontology leads to the scientific humanities as the foundation of ethics and the politics of resilience. In his last lecture of the book, Face à Gaia. Eight Conferences on the New Climate Regime, Latour raises the question “How to govern territories in struggle?” (Latour, 2015, p. 330). Starting from the concept of Nomos and the concept of natural contract, he proposes to us the idea of constitutional law of the earth, following the Global Circus’s comedy of actors conceived as a parody of the theater of negotiations. It proposes its philosophy as an answer to the global problem to keep the temperature to less than two degrees and reduce CO2 emissions. It reminds us that shortly after decolonization and two world wars it is possible to look like states of the world for climate negotiations, even if there is not a Globe as a great unification and absolute knowledge. Indeed, climate negotiations are characterized by the fact that no one can understand Gaia as a unified system. In the same way, there is always an interdependence between nature and culture, human geography and physical geography, and management and governance must consider this. Latour emphasizes that the transversality of problems contributes to the emergence of a new form of politics. Indeed, the negotiators will have to understand that they face Gaia’s challenge that they find themselves in a sort of war that makes them define their interests differently because the climate challenge represents the need for a Realpolitik to even to overcome the egoism of self-interest. To avoid the tragedy of the Commons (Hardin, 1968), developed by G. Hardin, where everyone pursues his personal interest, we must work to overcome the common tragedy.

5. Toward a New Geopolitics of Sustainability With Latour we can talk about the emergence of a new form of geopolitics as the basis for global management and governance where people are interested in Gaia as the place of politics (Latour, 2015, pp. 359–360). We have seen that the epistemological foundations of his Anthropocene ethics are found in constructivist sociology and in the anthropology of the interdependence of man and nature. Management and governance becomes an inclusive organizational activity that responds to the climate problem without becoming a technological cybernetic system. It is no longer a new policy of Leviathan. Latour indicates that

78    Philosophy of Management and Sustainability the Anthropocene implies a limitation to the benefit of Gaia, which exceeds the hegemony of the nation-state on earth and thus marks the end of political modernity and the advent of the New Climate Regime. The natural and socio-cultural interdependence of the New Regime imposes a new ethical reality of the world. This is the reality that inclusive management and inclusive organizations have to face. With the New Climate Regime, we see the emergence of a new managerial and political rationality regarding the search for a new form of international governance. The policy and management of resilience in the age of the Anthropocene opens a new climatic responsibility that goes beyond the anthropocentric technological rationality of Modernity to resituate the man at the center of the Earth as a meeting place between nature and culture. What are consequences for organizational practices of the condition of the Anthropocene Age? The condition of ethical interdependence indicate the necessity of management based on the SDGs. The challenge of the Anthropocene constitutes the background for the SDGs in a time of increased pressure on natural environment. Latour’s theory can help to understand new forms of organizational management and governance in times of global geopolitics of climate change. Accordingly, we can argue that the Anthropocene implies new management and governance based on a close relation between nature and culture. With this new ontological basis for climate responsibility and resilience management in a social constructivist perspective, we can point to the vision of responsible research and innovation as essential for SDG management in the area of the Anthropocene. Thus, a vision of responsible research and innovation emphasizes the commitment of top management and leadership as essential for such kind of resilience management, which include integration of analysis of ethical, legal and social impact in product development. This further includes stakeholder engagement of the company and responsiveness to public and social values of the business organization. With this it is important to have holistic conception of responsible research and innovation, where scientific and technological, ethical and social as well as strategic, organizational and economic concerns are integrated at all levels of innovation of the business organization. This road-mapping process includes awareness of moral value and ethics and efforts of the company to embed this in its activities. Moreover, the company should actively anticipate the social and environmental effects of its activities. This should be combined with stakeholder engagement, transparency and accountability as well active efforts to work for social and environmental goals and monitor this in the organizational development of the company. And this is essential for SDG-management in social and environmental conditions of the Anthropocene.

Chapter 7

Environmental Catastrophe and Challenges to Ethical Decision-making The catastrophe of the nuclear plant in Fukushima in Japan in winter 2011 raises a number of questions about limits and possibilities of institutional decisionmaking in complex organizational systems (Rendtorff, 2014a, 2014b).1 In some sense, this disaster is a symbol of all the fragility and paradoxes of technology and ethics in societies of techno-scientific capitalism. This is a challenge to the philosophy of sustainability in the era of the Anthropocene. The disaster is the typical case of the situation that humanity faces, confronted with the Anthropocene. This environmental disaster reminds us in very literal way about how humanity has built a modern civilization that despite all its power and glory it very close to self-destruction. In this chapter, we will look at the possible explanations of the cause of the disaster and present some possible suggestions for a better framework of an eco-ethics of decision-making in complex organizational systems. The chapter has the following sections: (1) The Challenge of Fukushima for the Environment; (2) Fukushima as a Symbol of the Logic of Technology in Modernity; (3) Political Economy and Responsibility after Fukushima; and (4) Ethical Complexity Thinking in Organizational Decision-Making.

1. The Challenge of Fukushima for the Environment In L’Équivalence des catastrophes (Après Fukushima) from 2012 Jean-Luc Nancy addresses the question of the ethics and philosophy after Fukushima. The idea is that the tsunami against the nuclear plant in Japan is an example of the condition of technology and human action in modernity. The atomic catastrophe shows the connection and interdependence between technical, economic, social, and political problems in complex societies. As it was already the case with the account of Voltaire of the earthquake in Lisbon in 1756, there was a complex interdependence between natural disaster 1

Previous versions and preparatory works for this chapter include Rendtorff (2014a, 2014b). Philosophy of Management and Sustainability: Rethinking Business Ethics and Social Responsibility in Sustainable Development, 79–90 Copyright © 2019 by Emerald Publishing Limited All rights of reproduction in any form reserved doi:10.1108/978-1-78973-453-920191007

80    Philosophy of Management and Sustainability and human society and action. Fukushima is an example of the complexity of interdependent systems and how capitalist society is submitted to constraints of its own production of richness and economic growth. This was the connection between technology and economic accumulation of capital that Marx nominated “general equivalent” in the sense that everything is absorbed by the economic and financial values of society (Nancy, 2012, p. 16). The economic logic means that there is not anymore specific catastrophe in the tragic Greek sense of catastrophe, which makes us search for catharsis or the Confucius, Taoist or Buddhist reconciliation, but instead there is only generalized catastrophe with now possibility of reconciliation afterwards. Nancy asks the question whether the name Fukushima may indicate something particular about the fragility of technology and modern globalized society. Reflecting upon Adorno’s problem whether philosophy is possible after Auschwitz Nancy combines the events of Auschwitz and Hiroshima. Being aware of the madness of Hitler and the efforts to end the Second World War in the name of democracy by the Americans, there is still a striking similarity between the two events. This is the fact that the political masters used advanced technology not only to destroy specific human beings but to destroy a whole life-form of a particular human people in history. The similarity between Auschwitz and Hiroshima is therefore the transcendence of limits, not only of human dignity, morality, and politics, but also of the destruction of a whole world for human beings (Nancy, 2012, pp. 26–27). What then links Fukushima and Hiroshima – apart from the many differences between intentional military destruction and involuntary civil disaster is not only the name similarity, but also the issue of nuclear technology and nuclear power. Fukushima is like Hiroshima an expression of the danger of humanity to itself as it is described in the work of Freud about Das Unbehagen der Kultur saying that human beings are in danger of destroying themselves due to the natural aggression present in their civilization. In the Second World War the use of nuclear atomic bombs was an expression of this. In modern complex society, it is the risky use of technology that is the threat of human beings to themselves where apocalypse becomes a result of the complicated interdependence between human society, nature, and the use of technology. The military use of the technology to self-destruction goes beyond rationality with the figure of Dr Strangelove who against all rationality throws the bomb at humanity. With the civil use of the technology it is the fragility of the accident of advanced technology due to the equivalent of everything, the incalculable, the incommensurable, and the complex interdependence in society that is the basis for the potential self-destruction. It is because capitalist society has become so dependent on technology that it has lost ability to govern its own technology (Nancy, 2012, p. 43). The incalculable in technology is manifested by the fact that we cannot control technology and that technological solutions leads to new problems that make us need even better technological solutions, for example, as it the case with security problems in cars and the need for airbags (Nancy, 2012, p. 44). It is also the case with regard to complexities of medical technology, for example, with the need

Environmental Catastrophe and Challenges    81 for treatment after heart transplants, or indeed with problems of climate change, pollution, or the case of handling the waste problem of nuclear technology. The increased incommensurability cannot be understood in terms of incalculability, but it means that at the same as we experience more equivalence of market logic, communication, and independence we can also see that there is growing incommensurability between worlds, technological rationalities, and modes of existence on earth. However, in order to deal with this incommensurability we make recourse to economic calculation in order to dominate what is incommensurable and incalculable (Nancy, 2012, p. 53). The case of Fukushima is the symbol of this failure to master our technological existence and destiny. This catastrophe is not a natural disaster but a technological, economic, social, and political disaster that witnesses our unconscious dependence on technology. There is fatal link between technological progress and the liberation of forces that are more destructive for humanity. But at the same time Fukushima raises the question of a possible end of our present relation to technology and the work with another future that deals with the problems in a more meaningful manner (Nancy, 2012, p. 63). Nancy speaks about respect for ecology, human dignity, and rights in a way, which does not reduce the incommensurable to the equivalent. To affirm equality today means to fight against the reduction of catastrophe to the equivalent and work for a democracy of free incommensurable human beings (Nancy, 2012, p. 69).

2. Fukushima as a Symbol of the Logic of Technology in Modernity It is explicit in the argument of Jean-Luc Nancy that Fukushima is symbol of the logic of technology in techno-scientific modernity. But how should we more concretely describe this logic in relation to organizational and institutional decisionmaking in society? More concretely we can point to the following elements of this logic that are more or less present in the argument of Jean-Luc Nancy. (a) Fukushima as an expression of a profound contradiction of technological Society. We need advanced technology to maintain our standards of living, but this makes society extremely vulnerable to its own self-destruction. This contradiction has been analyzed in the work about industrial capitalism by Bernard Stiegler. Stiegler defines a catastrophe as something that ends one history and makes room for another history and in this sense Fukushima paradoxically may force society to think about its own technological systems (Stiegler, 2004). In this way Stiegler has proposed an analysis of political economy that can explain the conditions of the cultural capitalism of hyper industrial society. A human society is constituted by a technological system that evolves historically and changes and adjusts itself according to this change with new social ethnical programs which becomes the basis for individual and collective individuation which is the basis for the future of society. Consumer capitalism is indeed characterized by different technologies of domination, of power and of the self (Stiegler, 2004, p. 109). Here we can

82    Philosophy of Management and Sustainability also refer to not only the technologies of bio-political disciplinary power, as analyzed by Foucault, but also the technology of control society, analyzed by Deleuze. Stiegler emphasizes the technologies of control continue and develop the bio-political technologies. However, control societies are not about make human beings to production machines. Rather they create a market for consumption and here we can see a de-subjectivation, a destruction of singular understandings of savoir-vivre (Stiegler, 2004, p. 116). The control society re-inscribes the libido in the individual as a consumer through practices of individuation. Today desire and libido have become systematically an object of capitalist exploitation (Stiegler, 2004, p. 123). It is this generalized intensification of the libidinal economy that put pressure on technological capitalism to move faster with the need for more technology and energy, as produced by nuclear plants. Paradoxically, at the same time the rationality of the system is based on mutual expectations and trust. This has increased with the system of internet and communication technologies. But the hypervulnerability is also present in different technologies, nuclear military power and civil energy technology, communication technology, or medical biotechnology. These systems are built on automatic technology and human beings are forced to live with blind trust in the technology that they cannot understand beyond their daily use of the technology. (b) Fukushima as a symbol of the toxic logic of pharmakon in technological capitalism. This means that technological society is characterized by dangerous deep metaphysical paradoxes of a tension where technology combines life and death, good and evil in the same concept. We can use the pharmacology of Bernard Stiegler, as a continuation of Jacques Derrida’s philosophy to explain this troubling dimension of the metaphysics of technological society. Stiegler develops this argument in Ce qui fait que la vie vaut la peine d’être vécue. De la pharmacologie from 2010, where he presents his concept of pharmacology. According to Stiegler the pharmakon is the transitional object that gives us the feeling that life is worth living (Stiegler, 2010). The concept of pharmakon was developed by Derrida in his reading of Platon in “La pharmacie de Platon” where the pharmakon is writing, absence of speech, that is artificial memory (hypomnésis, hypomnématon) (Stiegler, 2010, p. 13). But pharmakon as writing is also what makes it possible for us to make philosophy, and therefore it is at the same time a healing and a destructive power. And this double role of healing and destruction is indeed the function of all technology for humanity. Stiegler says that the question of pharmakon is at the heart of our present planetary economic crisis and the academic world. We can say that we with our different powerful technologies, in particular nuclear technology face the possibility of an apocalypse without God where humanity can destroy itself. We are in the war of globalization where the industrial technologies destroy the ecosystems of the earth and its social and psychological structures. This was revealed by the global financial crisis in 2008. With reference to Valery’s description in “La liberté de l’esprit” in 1919 of the crisis after the First World War Stiegler emphasizes that he described

Environmental Catastrophe and Challenges    83 the war as characterized by the fundamental ambiguity that all this destruction would not have been possible without human science, knowledge, and reason, as Plato describe writing, which is the technology of rational spirit (Stiegler, 2010, p. 25). Western civilization can be read on the basis of pharmakon. Fire with its creative and destructive powers is a fundamental expression of the double logic of pharmakon. This is also expressed in the human libido with the struggle between Eros and Thanatos. In particular, the logic of pharmakon is expressed in our relation to technology in the Nuclear Age where generalized automatization means a danger of losing control of technological systems. In fact Derrida called the Atomic Era for the “the absolute pharmakon,” as an age that was structurally oriented toward its own apocalyptic destruction (Stiegler, 2010, p. 68). Today, this has become even more the case with computer technology in the sense that the military establishment of atomic technology is totally automatic. Referring to Virilio Stiegler argues that Cuba crisis was about leaving a possibility for human decision in the middle of the automatic systems of military technology. Moreover, at the financial markets today, the automatic speed is characterized by a similar movement. In fact, capitalism solves the problem of the time of work by technology, but this is by making time an abstraction in relation to the concrete work of the individual. In particular the fictive capital is a pharmakon, as it is presented at the financial markets and the capital invested by Madoff with his gigantic fraud in fake investment firm is toxic. If we look at the welfare it is determined by the technology of control by bio-power and accomplished with psycho-power that is used for technological domination of individuals. (c) Fukushima as symbol of the a logic of stupidity or bêtise, moral blindness, and incapacity of human beings to account for consequences of actions. This logic can be described in many ways. We can mention the logic of risk society as described by Ulrich Beck in Risikogesellschaft where the masters take increased risk to maintain society at a high level to please the populations (Beck, 1986). There is also the logic of automatism in Les temps modernes as showed in the Chaplin move where human beings are left to be dominated by the forces of technology. Indeed, we can mention the logic of personal greed and the incapacity to put one self in the place of the other and see the complexity of society. Moreover, there is the problem of contingency, where the impossible happens, just because it is impossible and contingent and therefore not likely not to happen. Or we can mention that there is always the possibility of human error in advanced technological systems, whatever we do to eliminate the risk and danger by advanced risk management and technological back-up systems. These problems can be considered to be the topic of Stiegler’s book État de choc. Bêtise et savoir au XXI siècle (Stiegler, 2012). This book shows how the financial crisis is accompanied by a crisis of the university and of government with loss of autonomy and sovereignty. Stiegler argues that the economic crisis implies the generalization of stupidity where the minority has the power

84    Philosophy of Management and Sustainability and privileges and the majority are like a poor proletariat losing their liberty, dignity, and wisdom as responsible citizens of society (Stiegler, 2012, p. 13). The technological age implies, for example, a destruction of the university and the humanities concept of knowledge. There is a crisis of the university where education becomes creation of technologies of the mind instead of general education (Stiegler, 2012, p. 16). This should be seen in the perspective of the general technological chock of creative destruction (Schumpeter) that is the basis of capitalism. However, it is now technology that has taken over the power and there is a danger of destruction of the human element in society. Stiegler relates the concept of stupidity or bêtise to the dangers of technological systems by looking at Derrida’s analysis of stupidity, animalism, and sovereignty in Séminaire La bête et le souverain (Derrida, 2008, p. 57). Derrida asks the question whether there is a possibility to combat stupidity? If stupidity like writing is a pharmakon that is linked to traces of materiality, then it is something that is close to change human beings into a proletariat (meaning taking away the aristocratic dignity of human beings) (Stiegler, 2012, p. 59). Stiegler thinks that it is possible to fight stupidity (La bêtise), but at the same time stupidity is not just the lack of knowledge. There is a link between knowledge and stupidity, as suggested by the law of pharmakon. We need to make a positive pharmacology (deconstruction) of stupidity in order to fight it and this is the exceptional responsibility of the university and university professor in a time where the world is dominated by stupidity (Bêtise) (Stiegler, 2012, p. 61). With reference to the dialectics of the enlightenment by Adorno and Horkheimer as an expression of the pharmacological situation of technological and industrial society Stiegler talks about generalized vulgarity and stupidity (Bêtise, basesse). Heidegger referred to “Grosse Dummheit” as an expression of the relation between modernity and technology. In fact, we can generalize this concept to the financial crisis of 2007–2008. This nuclear catastrophe of Fukushima implied unforeseeable consequences for the earth and its biosphere. In the financial system, deregulation has led to large profits for few financial firms and people while at the same time shaking the social dimensions of the economy. Moreover, the economic model of consumer society contributes to the technological self-destruction of society. Indeed, it is a paradox that over 1 billion people on earth suffer from famine while the Western World is characterized by overconsumption (Stiegler, 2012, p. 237). The economic crisis is marked by the same elements as the crisis of Fukushima where we see the logic of pharmakon in economic and nuclear technology where the fragile systems that should give life to humanity are in danger of leading to the unintended self-destruction of humanity.

3. Political Economy and Responsibility after Fukushima So now the problem is whether there is a possible answer to the crisis of the technological and financial system. In fact Stiegler mentions that Derrida discussed the possibility of a concept of “nuclear criticism” (Paris, 2010, p. 70). Stiegler refers to Derrida’s conference: “No apocalypse, not now” (Derrida, 1989).

Environmental Catastrophe and Challenges    85 According to Stiegler nuclear criticism means that we have to go “beyond.” When Derrida talks about nuclear criticism he argues that this is a philosophy of limits of experience and finitude. Nuclear criticism is the philosophy of the limits of criticism. This is a self-destruction that leads to the destruction of the concept of criticism. But this criticism is impossible and therefore we need to learn to live with the pharmakon. Life can only be lived with pharmakon and in this sense there is no other possibility. Accordingly, Stiegler proposes another solution to the crisis than to end in total deconstruction which is impossible. This is the idea of pharmacology in political economy using the pharmacy not only to toxic manipulation but also to cure and take care of the human individual. We need to develop new technologies of cure and care in order to master bio-power and escape from control society. One way to deal with the globalized technological capitalism is to work for sustainable development. Instead of consumption that is destruction, Stiegler argues that we need to give the economy a new form of libidinal orientation that does not destroy but takes care of the object (Stiegler, 2010, p. 144). We need to create new motivation and capacity for sustainable investment in society. This economy is a new libidinal economy that takes care of life and the politics of care also relies on human capabilities, as defined by Amartya Sen (Nussbaum, 2011; Sen, 1999; Stiegler, 2010, p. 151). This political economy of care should not reduce care to an ethical question, but instead put it in the center of the political economy. This should imply a new way of life where economize means “taking care” (Stiegler, 2010, p. 153). Stiegler asks the question what responsibility in general and in particular with regard to the university would be after Fukushima (Stiegler, 2012, p. 23). He defends, following Derrida, the universal responsibility of the university (Derrida, 2001; Stiegler, 2012, p. 38). The university has a special responsibility to deal with the problems of techno-science and the planetary crisis of hyperindustrial society. In particular, it is important that the university is responsible to avoid stupidity. Indeed, to say so something stupid is also to do something stupid and this increases the practical responsibility of university professors. According to Stiegler the link between knowledge and stupidity is explained by the figure of Epiméthée who only thinks on the basis of his or her stupidity (Stiegler, 2012, p. 82). In this sense there is a pharmacological condition of knowledge and the university is supposed to struggle continuously against stupidity. Derrida does not link stupidity to the animal, but to individuation. Stupidity is a transcendental psychological feature. But at the same time stupidity is a condition of individuation so that is the reason why we can speak about a systemic planetary stupidity (Stiegler, 2012, p. 108). This has emerged because it is the system of consumer capitalism that is basis for individuation in market society. The problem is that stupidity (bêtise) is what is really human. The stupidity like dissemination and difference is in the center of the imagination of consciousness as ideology and technology. Therefore the university that exercises transmission of knowledge and technology is responsible for the global stupidity and must work critically with it (Stiegler, 2012, p. 143).

86    Philosophy of Management and Sustainability So it is the task to study critically the organizational complexities that leads to stupidity, that is, the psycho-power of capitalism and the bio-power of the state. This should deal with the problem of taking the capability away from people in society as what is in the center of the focus of responsibility, autonomy, and reason in relation to technology, being aware of the danger of the responsibility being itself toxic. In this context the work of Minka Woermann On the (Im) Possibility of Business Ethics. Critical Complexity, Deconstruction and Implications for Understanding the Ethics of Business (2012) represents an attempt improve ethics and decision-making in organizations and institutions (Woermann, 2012, 2016). From this perspective, we can argue that complexity thinking may contribute to deal with the technological and financial crisis. Complexity thinking is about seeing complexity and “opening a window for ethics” in decision-making in organizations. I think that this approach may help us to understand action in complicated organizational systems so that we can better to avoid eventual catastrophes of technology. This approach is an approach to organizations that want to deal with the complexity that was not accepted by the concept of technical rationality of modernity. It is an approach that emphasizes the importance of reflexivity, judgment, and the limits of rationality. Minka Woermann analyzes the implication of the thought of complexity of Edgar Morin in relation to business ethics and organizations (Woermann, 2012, 2016). Complexity theory is inspired by cybernetics and information theory. Complexity thinking is an ethical engagement in order to understand complexity in general and the laws of complexity in particular. According to Morin complexity is a problem not a solution (Morin, 2005, p. 10). Complexity thinking is a method and epistemology for dealing with natural, social, human, and technological systems in modernity. Instead of belief in the necessity of rationality complexity thinking takes contingency seriously. Complex systems are characterized richly interconnected components where the whole is more than the parts and the parts are more than the whole (Morin, 2005). Like Adorno, Morin suggests that the totality is non-truth. Systems are characterized by uncertainty, contingency, complication and confusion, and unaccomplishment. Holism is not enough because it simplifies the complex interdependence in diversity and unity. Complex systems are characterized by mutual interactions in self-organizing processes that can be both open and bounded. The world consists of such complex systems which interact with each other and the environment and their boundaries. In his short introduction to complexity theory Introduction à la pensée complexe Morin emphasizes the finitude of human knowledge and action. This implies that (1) The cause of error is not false perception or logical incoherence, but organization of our knowledge in systems of ideas. (2) There is a new ignorance linked to the development of science in itself. (3) The most dangerous threats to humanity are the blind and incontrollable progress of knowledge nuclear weapons, manipulations, ecological disaster. (4) Organization of knowledge in order to understand complexity is necessary (Morin, 2005, p. 15). In particular it is a problem that we organize our knowledge in very specialized paradigms, that is, biology, physics, human sciences that implies a

Environmental Catastrophe and Challenges    87 hyperspecialization, which includes a blind intelligence, which makes it impossible to see the complexity in a larger framework. We need to find a paradigm of complexity thinking that can see systems in relation to their environments, in particular the ecosystem. With the concepts of information, system and selforganization there has been room for understanding the complexity, contingency, hazard, and uncertainty of natural, social, and technological systems (Morin, 2005, p. 49). Morin describes insight in complexity as insight in the “black box” of a system, that is, in what happens in the system beyond causal laws. Human beings are hypercomplex systems, as there are self-organizing subjects within the system of the world in interaction with the ecological system. In complexity thinking it is important to be aware of the mutual dependency between subject and object. This was expressed in the concept of complementarity as developed by Niels Bohr (Bohr, 1998). In this context, complexity thinking emphasizes the role of the Hasard (Hazard) as contingency relating to tension between order and disorder in self-­ organization of systems. Here, action as planned strategy may also profit from and be determined by hazard. This was for example the case when Gorbatchev as the contingent element in the system initiated the reforms in Russia that ended the cold war (Morin, 2005, p. 109). Accordingly, complexity thinking is preparation for the unexpected and it should help you to deal with the unexpected (Morin, 2005, p. 111). With regard to economic and technological organizations that are self-organizing in interaction with their environment and the ecosystem this means that we need to understand action not only as linear rationality but also including circular and recursive rationality in inseparable and interdependent processes in complementary and opposite relations. Minka Woermann argues that we need to be aware of the ethical implications of this situation of complexity. An ethics of complexity implies a double-­ consciousness of technical models and ethical awareness of the limits of the models (Woermann, 2012). She mentions the former group executive of BP, Tony Hayward’s decision to go on sailing during the oil spill in the Gulf of Mexico (which resulted in his dismissal) as an example of the incapacity to deal with the complexity of the unforeseen oil spill. To deal with complexity means to continue to put in question one’s knowledge mechanisms and face contingency. Inspired by deconstructive ethics Minka Woermann mentions aporia, irony, “bricolage,” and imagination as elements of the ethical awareness of complexity. Indeed, the concept of “bricolage,” that Lévi-Strauss used to distinguish between the rational scientific mind of the engineer in a closed space and the open mind of the savage was deconstructed by Derrida as not being reserve to the savage mind but instead the real condition of all science and technology where there is not perfect technological solution and no strict pre-given rationality for organizational decision-making (Woermann, 2012, 2016). Moral imagination as suggested by the business ethicist Patricia Werhane is also important for ethical decision-making in complex organizational processes (Werhane, 1999; Woermann, 2012). Decision-making and leadership need to be able to see the limits and dangers of specific rules and regulations and moral

88    Philosophy of Management and Sustainability imagination ensures an ethical openness to otherness and difference in decisionmaking. In this context, the awareness of universal ethical responsibility from the point of view of critical moral imagination expresses the articulation of ethical complexity in the organizational context. Indeed, deconstructive ethics implies the awareness of the unforeseen and the contingency being at work in the organizational and technological system. This is expressed in Derrida’s analysis of the double movements of deconstruction in metaphysics where complicated plays of hierarchies, oppositions, difference, trace, and supplements are at work in the theoretical system where the logic of pharmakon means that there is no stable meaning or essence behind the play of differences in ideology of the organizational or technological system. So deconstruction can be conceived as a philosophy of the ethical testimony of complexity and contingency in a given ontological, institutional, organizational, or technological system. But it is also a testimony of the infinite responsibility for the other in that system based on Derrida’s idea that “justice can never be deconstructed” and that “deconstruction is mad about the desire for justice” (Derrida, 1994; Woermann, 2012). This means that justice is always transcendent to a given positive law or formulation of ethics within a specific organizational system. True responsibility always goes beyond what is expected in the direction of the other. In this sense the post-modern complexity thinking opens for an awareness of ethical complexity of decision-making in complex economic systems and as such it is important for understanding complex actions in organizations. However, even though, deconstruction is important for critical business ethics, I would like to insist on the necessity of a comprehensive ethics of business (Rendtorff, 2009, 2018a). This deconstructive approach to organizational decision-making therefore implies a concept of corporate social responsibility (CSR) of private and public organizations (including the nuclear industry). This complex concept of responsibility combines the environmental, social, and economic and stakeholderoriented aspects of CSR. Deconstruction is open for broad responsibility to all stakeholders and it implies continuous reflection over the limits and scope of organizational responsibility.

4. Ethical Complexity Thinking in Organizational Decision-making With this we can ask whether and how Fukushima can make us think about responsibility for decision-making in the organizational context? The obvious question is whether the disaster could have been avoided if there had been more awareness of the responsibility and complexity of management in the organization? And the immediate answer is that it could not be avoided, because the tsunami as a catastrophe could not have been foreseen. It is argued that this catastrophe was beyond the limits of responsibilities because it was due to a natural disaster. However, as argued with the reflections of Nancy and Stiegler there were indeed a close relation between the character of human civilization and the natural

Environmental Catastrophe and Challenges    89 disaster so that they cannot be separated. Accordingly, we need to reflect on the nature of responsibility and the implications for management and leadership in complex organizational systems. Indeed, to propose the ethics and responsibility of complexity thinking means to be able to deal with uncertainty, contingency, and the unforeseen. This becomes a complex risk management in order to avoid the catastrophe. Here, according to Stiegler, Morin, and Woermann we would have to go beyond the rule compliance-based numerical technology like thinking but in order to overcome moral blindness and stupidity. The question is: How do we avoid the huge crisis and catastrophes of the economic systems? How do we avoid being stupid? We can mention the following elements for an organizational culture dealing with complexity and risk. (a) Attention to the unforeseen. This is suggested by Stiegler as important for recreating good relations between individuals and systems. Stiegler says that the new responsibilities of the university needs an opening for an economy of attention where university contributes to teach people how to think and reestablish thought and spirit in opposition to numeric technology (Stiegler, 2012, p. 247). This implies interdisciplinarity and interaction between critical philosophy as curative pharmacology with the technological sciences in the perspective of the political economy of care. At the organizational level, this means that we have to be able to go beyond pre-given cognitive and moral interpretations of situations, so that it is possible to make decisions in relation to the unforeseen. (b) Establish critical organizational identity. We can say that we need institutions with ethical integrity and stability that oriented toward stability and long-term sustainability in a healthy interaction with the environment of the organizations which implies the ability to deal with increased contradiction and complexity while understanding the particular challenges of the organization without losing the aim of the organization. How this is done in the nuclear industry is a good question that relates to our concept of corporate citizenship, that is, the duties of an organization to society. (c) Toward a decentralized view on CSR. Instead of seeing the corporation or organization as being in the center of the concern as affecting or being affected by stakeholders we should see the organization as one among many stakeholders in a complex system where the organization functions as a servant for society. In this context, we should take about organizational responsibility as “stakeholder engagement” where the organization is actively engaged to secure care relations for its stakeholders. (d) Extending the scope of CSR including environmental responsibility. We need indeed to be aware of the critical function of sustainability for the aim and goal of organizations. Awareness of responsibility of the organization to its natural environment is essential for avoiding damage on the environment. Organizations need to work more effectively and seriously with sustainability issues in organizations and create environmentally sustainable practices in order to deal with complex interdependencies that should be taken into account in the sustainability policy of the organization.

90    Philosophy of Management and Sustainability (e) Risk management becomes the central figure for sustainability. The organization should try to define and account for potential risks in relation to its activities. Risk management becomes the central figure for sustainability. This means to go beyond economic and technological models and take seriously the place of the organization among other stakeholders in complex systems. Here, one could benefit from Derrida’s critique of economics as governed by the limits the limits of need, of the useful, the natural, the reasonable, the calculable, and the stable relation between production and consumption, between the self and other, arguing that we need a new economics that understands the complex dynamic interactions of economics. Following Stiegler this means that economics should be care economics and not only restricted to making money for shareholders. (f) Tackling uncertainties of organizational action. We need to go beyond calculation and look at our responsibilities from a complexity perspective and we need to go beyond pre-established logics of quantitative and qualitative methods for analysis and try other methods for understanding and decisionmaking. In this context, complexity thinking looks at the possible problems and pitfalls of institutional systems and their logics of decision-making. We need “double and triple loop,” second level reflection on institutional complexity and logics, as implied in irony, bricolage, and imagination. (g) Go beyond binary logic to look into deep causality structures of events. We need according to Edgar Morin a new kind of logic that goes beyond the existing logical structures. Morin refers to Hegel’s concept of dialectics as implying a higher synthesis that goes beyond Aristotle’s logic implying that the contradictory is found in all phenomena and emphasizing the importance of contradiction and sublimation as transformation to complexity in a ternary logic in opposition to binary logic. But of course there is also the critical problems of the violent self-conservation and reproduction of the dialectical system that need to be taking into account when dealing with complexity. (h) In complex systems we should be aware of interconnectedness and low-­ probability but high-impact extremes events. Such events are exactly like the Fukushima disaster or the BP oil spill in the Mexican Gulf. Such awareness implies taking care of marginal stakeholders and imaging precautions for events that are unlikely to happen. When we work with information and data it involves not only taking care of historical information, but also looking for new information and thinking about lacking information. (i) Precaution and improved risk-mitigation. Management should be critical to the information of predictions and be aware that risk is unavoidable in complex systems. This implies that management should learn the art of working with uncertainty beyond established systems and codes. Here, we can emphasize the principle of precaution that means that we should not do actions if we do not know fully the consequences.

Chapter 8

From the Financial Crisis to a New Economics of Sustainability The international events since the major financial crisis and the need for a transformation to sustainability all over the world involves the fundamental question about the relation between ethics and economics and the responsibilities of the economic market in relation to broader social and political concerns. Following Fukushima and other environmental crises in the world, we need to develop a new economics of sustainability. In this chapter, I will present some of the dimensions of the debate between ethics and economics that are behind the fundamental issue of the role of ethical responsibilities in the financial crisis.1 I want to argue for a close link between ethics and economics, which can be presented as a challenge to the traditional view that there should be a strict separation between ethical and economic rationality. In this sense, the problem of the relation between ethics and economics in business concerns the concept of economic action and the role of ethical responsibility in economics (Mahieu, 2001). The debate about economic rationality and political philosophy depends on the problem whether there can be something like a common good or social justice for all members of society. From the standpoint of mainstream economics we can say that this problem is a problem about how to deal efficiently with limited resources. Thus, we may argue that neo-classical economic theory is a system of thought that seeks to deal rationally with the problem of sacrifice, that is, the problem of who, how, or what society should sacrifice in order to seek optimal and efficient use of resources (Dupuy, 1992, pp. 39–40). With the separation of economics from political philosophy, economics has become the rational use of resources based on the principles of the rational profit maximizer of homo œconomics. Accordingly, the idea of economic rationality depends on the concept of economic action (Sen, 1987). This concept is marked by interplay between individualism and altruism and personal responsibility for economic actions. The idea of an ethical correction of economic action implies a critical attitude to the concept 1

Previous versions and preparatory works for this chapter include Rendtorff (2010b, 2016b). Philosophy of Management and Sustainability: Rethinking Business Ethics and Social Responsibility in Sustainable Development, 91–110 Copyright © 2019 by Emerald Publishing Limited All rights of reproduction in any form reserved doi:10.1108/978-1-78973-453-920191008

92    Philosophy of Management and Sustainability of self-interest as the basis for economic action. It is argued that economic calculation should exclusively be based on individual utility maximization but include an altruistic concern for the common good and for other human individuals. In the perspective of such an ethical correction of economics, we think of the economic actor as an individual, who makes an economic calculation which is extended to include the responsibility for other human beings and society integrating economic calculation in well-founded moral norms and ethical customs of society. In the following chapter, I want to address this issue in six sections: (1) Ethics in Economic History, (2) The Neo-liberal Concept of Economics, (3) Welfare Economics and the Criticism of Neo-classical Concepts of Rationality, (4) The Ethics Out of Economics, (5) Economic Anthropology and the Foundations of Rationality, and (6) Mixed Rationality of Economic Decision-Making.

1. Ethics in Economic History Looking at the relation between business and ethics in the perspective of economic history, we can see that the idea of the rational profit maximizing individual based on self-interest is a newcomer for understanding economics (Denis, 1966, pp. 7–91). Although we find preliminaries of the concept in the classical materialist philosophy of Epicure, it is only with the modern economic thinkers in the sixteenth and seventeenth centuries in combination with the emergence of an autonomous capitalist economy based on efficiency and utility that this view of economic actors becomes predominant. The concept of the political and social neutrality of the market has emerged in this context of independent economic markets. In classical political economy market action was conceived in the perspective of political community. Aristotle argued for example that wealth and money are not goods that man seeks for their own value but rather as a means to obtain the good life in community (Aristotle, 1: 9). In addition, Thomas Aquinas developed the doctrine of the “just price” in which economic exchange relations were based on respect for the natural law and political justice in society (Aquinas, 1966, pp. 74–75 & 83). Even though he was the founder of the modern economic doctrines of selfinterests and the invisible hand, a similar conception of economy as science of the good for community can be found in the works of Adam Smith (Smith, 2002; Werhane, 1991). In the Theory of Moral Sentiments (1759) Smith seems to argue that the relation between persons and other mutual moral sentiments are the basis for economic action. Self-interest is only one among the human virtues and of the natural inclinations of human nature. Therefore, even Smith argued that utility maximization has to be seen in the perspective of other virtues like generosity and justice (Sen, 1987, pp. 22–23). And therefore rational economic calculation is founded on a broader view of human nature than of the idea of “economic man,” which has become predominant in neo-classical economics. At the same time, with Adam Smith we can perceive the beginning of the emancipation of economics from moral philosophy. With the emergence of the modern individual it has been possible to find a concept of rational action which is totally based on individual self-love and egoism (Dupuy, 1992, p. 77). Smith was inspired by the provocative work of the Bernard Mandeville who with his

From the Financial Crisis to a New Economics of Sustainability    93 book the Fable of the Bees announced the new foundations of the modern concept of economic rationality, based on the idea of “private vices, public benefits” (Mandeville, 1970). Smith integrated this view as the foundation of his concept of economic action in the Wealth of Nations from 1776. With this point of view, we can argue that Smith was very important for the degradation of economic action to personal preferences and self-interests of homo œconomicus. Economics is a private affair and the state has only the very limited function to protect the liberty and rights to exercise their personal choices of the individuals in society. Therefore, it is very enigmatic how Smith could combine the belief in self-interest with the analysis of morality and the possible sympathy of human beings with one-another in the Theory of our Moral Sentiments (Smith, 2002; Werhane, 1991). Werhane formulates the tension between benevolence and egoism in the following way Rather in the Theory of moral sentiments Smith criticizes any moral theory that derives its basis for moral judgments merely from self-interest and equally, questions any moral theory that derives these judgments solely from benevolence. Distinguishing passions from interests, Smith argues that human beings are not motivated merely by selfish passions, but that both prudence and benevolence are virtues of the self-directed and social interests, and the basic virtue is justice. (Werhane, 1991, p. 13) Smith seems to argue that the broader social relation between persons and other mutual moral sentiments also can be the basis for economic action. However, we should remember that sympathy in the perspective of Smith is analyzed as a part of the sensibility of the individual (Dupuy, 1992, p. 84). Sympathy, does, however, not come from egoism or selfishness, but the subject feels an inclination toward the other. Accordingly, self-interest seems to be only one among the human virtues and of the natural inclinations of human nature. Therefore, even Smith argued that utility maximization has to be seen in the perspective of other virtues like generosity and justice (Sen, 1987, pp. 22–23). And therefore rational economic calculation is founded on a broader view of human nature than of the idea of “economic man,” which has become predominant in neo-classical economics. However, it may be argued that Smith did not solve the tensions between egoism and altruism with his view of the economic subject. Because of his emphasis on self-interest Smith cannot really integrate the sympathy for the other in his theory and there remains a tragic tension between homo œconomicus and sympathy for the other within the theory of Adam Smith. Moral judgment is captured between egoistic economic rationality and the passions and emotions for the other (Dupuy, 1992, p. 84). In fact, the idea of the invisible hand shows the heart of the tension because the concern for community is removed from the individual to the mysterious divine force of the invisible hand (Dupuy, 1992, p. 94). It is only through the sympathy of the others that the individual requires sympathy for his or her self as based on self-interest. The concept of sympathy in Smith is therefore closely linked to the concept of self-interest.

94    Philosophy of Management and Sustainability In the perspective of the history of political economy we can argue that this indicates that economics originally was viewed as a moral science, not as a mechanical natural science, but as a part of the art of “good government.” According to Amartya Sen, among others, this view of economics has been forgotten in modern economics, which is more interested in the engineering problems of economic efficiency than in ethical and political problems of rights and social achievement (Dupuy, 1992, p. 6). This tradition includes classical authors like Ricardo and Malthus and is continued by the neo-classical tradition of Leon Walras and Jevons and developed by authors like Alfred Marshall in his Principles of Economics (Marshall, 1920), which focuses exclusively on individual utility and seems to forget the importance of concerns for the common good in economic theory. Due to this concentration on self-interest economic theory, the idea of economic rationality is exposed to a strong tension with deontological constraints on economic markets based on protection of rights, interest, and freedoms of other human beings (Sen, 1987, p. 15). According to this view, the concepts of well-being and rationality in neo-­classical economic thought must be considered in accordance with ethical principles. We should look more closely on the ethical aspect of human motivation and integrate questions of the good life in economics. Therefore, without disregarding all the important insights of descriptive positive economy, we may argue for a normative view of economic theory in saying that business ethics is providing us with the “missing link” between traditional “political economy” and micro-economic rationality. In order to provide such a link between ethics and economic rationality, we have to look closer on the foundations of neo-classical in political economy of the neo-liberal view of economic rationality and its possible ethical implications. The neo-classical concept of rationality implies an unlimited conception of rationality according to which economic agents have unlimited competencies of decision-making in order to maximize personal self-interest within an exogenous space of possibilities (Knudsen, 1995).

2. The Neo-liberal Concept of Economics The conception of political economy with neo-liberal thought can be conceived as a generalization of this economic concept of self-interest and economic rationality to be the basis for organizing society and social justice. According to a liberal like Alexander Hayek free competition among individuals at the market within ethical custom is the best argument for human happiness and luck (Hayek, 1998). It may be argued that economic equality cannot be viewed as important at competitive markets based on economic freedom. Neo-classical economic thought based is on the pursuit of self-interest implies the view of human beings as competitive natures. Property rights liberalism does not imply any principles of equality as the basis for economic markets because economic freedom is essential to property rights. It is argued to be paternalistic to limit human freedom by rules of justice on economic markets. Radical libertarians and some liberals are indeed somewhat critical to the deontological perspective, because it implies moral restrictions on personal liberty.

From the Financial Crisis to a New Economics of Sustainability    95 Hayek links this argument for the unlimited economic rationality of the market with a criticism of the proposal to use the state actively to establish social justice in modern society. Such justice would be somewhat the same as socialism and Hayek thinks that there is no meaning in the idea of planned social justice (Hayke, 1997, pp. 66–69). Human beings do not have the perspective of the invisible hand but they are always situated in a culture and history where they live by the human capacity of learning by trail error and imitation. Hayek criticizes the idea of a planned social justice from an epistemological point of view. We cannot rationally construct social rules we can only use our faculty of imitation. We can only follow specific patterns by tacit recognition of meaning and of imitation of others. Freedom is what the individual does with what society has done with him or her (Dupuy, 1992, p. 247). It is the freedom the situated individual to act in a social condition. Hayek approaches economic and ethics from the point of view of a methodological individualism. Human beings are responsible for their society, but they cannot fully know what the result of their actions is and they have no control over the collective level of society which is much more complex than the level of individual action. The level of society can in this context be conceived as a complex cybernetic system that human beings cannot control. Society that is created by individuals is more complex than the individuals and we cannot conceive the system in its complexity. Human beings act in society but society goes beyond their reason and they cannot conceive society. Society is more complex and even contradictory. The social order is a spontaneous order that no-one really wanted to be like that. The spontaneous order can be conceived as a kind of reinterpretation of the idea of the invisible hand. Social order is established between a natural and artificial order. The abstract order is a result of the increasing complexity of cultural evolution. Social world is a result of a large evolutionary process like the process of the evolution of the natural world described by Darwin. There are no general laws of evolution. We are in an open society, the society of individual freedom as proposed by Adam Smith. There is selection of the most efficient rules in evolution. They depend on information and efficiency. Utility and calculation of lives is the instrument of evolution. The market is the essence of the evolution of this spontaneous order. The market is the foundation of social organization, autodevelopment, division of work, and efficiency in evolution. Hayek develops an information theory of price. They are signals not instruments of distribution of wealth. It is not possible to calculate price from the collective point of view. The market is becoming meta-tradition of all economic traditions. It is competition that makes progress at the economic market. Information is the essence of the economic development at the market. Competition makes people act rationally according to efficiency on the market. We can observe such a utilitarian justification of liberty and justice in Hayek’s economic theory (Hayek, 1998). Externalization and self-transcendence are liberating alienation of the individual. You have to leave yourself to the forces of the market and to forget social justice, because you cannot control society anyway. The individual is requested to act in conformity with the rules of the spontaneous social order in which it is a part. Justice cannot be planned but it is a concept

96    Philosophy of Management and Sustainability that is generated by the spontaneous social order. Property rights are the rights of personal freedom. And imitation is the basis for the personal development of individuals and for their social and economic self-regulation. Selection out of path-dependence plays an enormous role in social evolution. The markets results are without ethics. They are blind. Social politics breaks with the connection between individual and the market (Dupuy, 1992, p. 284; Hayek, 1998). We also find this idea of the ethical consequences of individual self-interested action in Alexander Hayek’s philosophy of the “spontaneous order” of economic and social development. During evolution based on interaction among selfinterested individuals those practices, which are based on individual freedom and rational choice of the most efficient alternative, will in the long run contribute to social betterment. Moreover, indeed better legal and moral systems will be a result of this spontaneous order. Fair competition and healthy economic institutions will, in an economic system based on fair competition, contribute to a better society. In this perspective, the idea of competition includes an ethical dimension of fairness and transparency contributing to the spontaneous order of society. Social orders are spontaneous. No one can control them. Hayek seems to want to establish the good and just society on the contingency of social spontaneity and social affairs (Dupuy, 1992, p. 291; Hayek, 1998). Nevertheless, this is really an argument against any attempt to formulate a rational foundation of the political constraints of actions of individuals and corporations. According to the invisible hand and to the idea of the spontaneous order, the market should have the right to exist as a free human institution, because this is the guarantee of social development of society. Thus, economic action should be based on the supremacy of free individual decision-making and on open economic markets with as little government intervention as possible. It is the result of the liberal concept of economics that economic rationality should be liberated on its own and ethics should only be introduced as an external limitation of economics when it goes beyond the acceptable requirements of economic rationality, by for example, not respecting the rules of fair competition on free and open markets. The ideal of perfect competition in Hayek’s thought and neo-classical economics presupposes the rights of individuals to make their own rational choices at economic markets. This view of economics can be argued to be based on the presuppositions of perfect competition, rational independent decision-making, a perfect market, a homogenous product, many competing sellers, and free possibilities of entry/exit into economic markets. It is presupposed that the firm consists of one rational individual rather than a group or coalition of individuals. The firm is a category of the individual and a production unit in order to provide goods to be exchanged on economic markets (Knudsen, 1995, p. 66; Kreps, 1990). In the view of neo-classical economy, ethics is regarded as external limitations of the market. Ethics is not integrated in economic decision-making but useful to ensure free economic action at markets and economics refuse to integrate external values in economic rationality. Therefore I would argue that the only ethics present in this doctrine is the ethics of competition, which is to maximize self-interest and personal preference maximization. A promise of total opportunistic and selfish action is a handshake, as some has characterized this ethics of competition.

From the Financial Crisis to a New Economics of Sustainability    97 In this way ethics seems to be an exogenous element of social action at the limits of economic rationality. However, a presupposition is that the conditions of fair competition and perfect markets should be accepted of all participants in economic competition, which is restricted by the rules of the game, for example, property rights and contract law. A generous interpretation of the thought of Smith and Hayek may be that the ideas of invisible hand and spontaneous order are attempts to integrate a concept of the common good in liberalism. From this optimistic perspective, liberalism always goes beyond pure egoism because selfinterest is supposed to somehow serve the general interest. Although such an interpretation may be closer to the original moral intent of liberal philosophy, it is a point of view, which seems to have been more or less forgotten in the economic self-understanding of neo-classical economics that isolate the concern for the good from the concept of economic analysis. Moreover, even though they heavily disagree with neo-classical economic theory some other paradigms of economics – for example, game theory and agency theory seem to share the same view of the separation between ethics and economics and of the idea of egoistic rational utility-maximizing individuals as the ideal of economic action. They prioritize the individualistic approach as the basis for economic action rather than considering economics from the point of view of society as a totality in search for common good. Game theory contributes to solving an important problem in neo-classical economic theory – the problem about harmonious equilibrium leading to monopoly, which is contradictory to the ideal of perfect competition (Knudsen, 1995, p. 88). In order to avoid static harmony, game theory operates with “non-cooperative games” as the ideal of economic interaction. According to the economic mathematician, John Forbes Nash a situation of equilibrium is the case where every participant in the game chooses a strategy, which is the best response to compete with the strategies of the other. Perfect equilibrium in non-cooperative game theory is a combination of strategies, where no player has reasons to choose another strategy to improve pay-off (Knudsen, 1995, p. 66). Indeed, this theory of competition presupposes external limitations on markets and firm behavior. The players have to play within certain rules and they have to share the same concept of rationality considering economic actors as self-interested utility maximizers. A similar view of economic man may be said to be present in agency theory building on rational individual agents acting in firms in order to maximize their own interests. In agency theory, corporations are primarily viewed as instruments and devices to maximize profits (Jensen, 1976). And we may even mention some views of economic man in transaction cost economics, arguing that if we look at men “as they really are” we are likely to meet not only self-interested utility maximizers, but potential opportunistic individuals, who, even though they are not rational in any ideal sense, in their daily actions – with limited knowledge are likely to follow a non-ideal strategy of personal utility maximization (Williamson, 1989). Even though transaction cost theories argue for the importance of governance structures and agrees that cooperation, personal honor, and integrity matters (Williamson, 1989, p. 63) this institutional economics regards self-interest as primary motive for action.

98    Philosophy of Management and Sustainability We can say that we are confronted with an instrumental concept of economic rationality, which is presupposed in the systems of neo-liberal and neo-classical economics rather than explicitly argued for. Nevertheless, why consider self-interest as only motive for economic action when we know that real people also are motivated by a plurality of values and ethical choices? (Sen, 1987, pp. 19–20). Economics is viewed, not as a science applied to a specific realm of being, but rather as a general method that can be applied as a fundamental method in all aspects of human life and ethics is only justified as the ethics that allows economic methodology to work as freely as possible. Foundation of this concept of economics is anthropology of the individual as maximizing self-interest and individual preferences – even under conditions of bounded rationality and finitude of voluntary reflectivity. The concept of the common good does not play any important role in this concept of economic action where the drivers of economic activities are not social institutions with common values but the interests of individual utility maximizers.

3. Welfare Economics and the Criticism of Neo-classical Concepts of Rationality In fact, looking closely on the concept of welfare economics we can criticize the focus on a pure economic concept of rationality as foundation of political economy as it is the case in neo-classical and neo-liberal thought. In contrast to the neo-classical liberal model focusing on individual maximization, welfare economics works with macro-economic choices in relation to society as a whole. Welfare economics works with the concept of personal preferences as foundation of economic theories and economic models. This concept of rationality emerged out of the separation of ethics and economics which developed with the emergence of modern economic sciences. There is a difference between the concept of economic rationality and the concept of ethics although we may argue that economic rationality cannot do without ethical scrutiny. Welfare economics constitutes a normative theory of maximizing of personal preferences (Hausman & MacPherson, 1996). In welfare economics the theory of rationality is a normative theory of maximization of personal preferences. The rational theory of welfare economics in macro- and micro-economics is a normative theory of maximization of preferences in conditions of risk and uncertainty rather than it is a descriptive theory of factual economic conditions. In welfare economics this theory is used as the basis for economic action in order to determine results with the most efficient economic outcome. This economic theory of rationality does not operate with a substantial theory of rationality. We cannot determine the content of each individual preference and there may even be irrational preferences. Therefore economic theory is based on a formal theory of individual actions as basis for determining the outcome of economic action. In welfare economics, rationality is based on the determination of the preferences and needs of individuals. Economic rationality is a normative concept, because it is presupposed that individuals should be rational. Daniel M. Hausman and Michael S. MacPherson argue that there is not necessarily an absolute separation between economics and ethics. In fact, rational

From the Financial Crisis to a New Economics of Sustainability    99 decisions according to preferences are in the end tested according to moral concepts of minimal goodness. When economic actors like the World Bank develops economic plans or proposals like the proposal to dump the garbage from the Western World in developing countries, such a proposal is in the end not only evaluated according to economic rationality, but also all other things being equal considered from the point of view of minimal goodness or ethical value. We may argue that it is a presupposition of economic theory that it should be a good thing to satisfy personal preferences of an individual. This concept of goodness behind the economic rationality of welfare economics can be illustrated by the concept of Pareto-optimality which means that an economic situation has achieved Pareto-optimality when it is impossible to improve a condition of one individual with making others worse off. Dumping garbage in the developing countries may improve the situation in the Western world, but it is does not lead to any improvement of the living conditions in the developing world and it therefore does not fulfill the conditions of minimal goodness of ethical actions. However, welfare economics shares the presuppositions of liberal economics by emphasizing that free competition is an important condition of free economic choices of individual actors. The ideal of free competition as the basis of efficient economic action is shared by most welfare economists. Moreover, the welfare economics also shares with liberal economics the idea that satisfaction of rational preferences is the foundation of economic decision-making. Indeed, this is also based on the idea of minimal goodness or ethical evaluation of the economic choices as the basis for decisions in macro-economics. This concept of preferences in national economics may be said to imply that individuals are supposed to be rational and well-informed and their preferences are also supposed not to be odd and totally unethical (Hausman & MacPherson, 2001, p. 64). In this sense, the idea of minimal goodness or ethical acceptability may be conceived to be a condition and a minimal presupposition in the welfare economic conception of individual preferences. In addition, this is the reason why we cannot just send garbage to the developing countries (Hausman & MacPherson, 2001, p. 66). We may say that welfare economics must presuppose ethical awareness of economists in order to be acceptable as an economic theory. The counter argument from neo-liberal or neo-classical points of view to this is sometimes that economists cannot be ethical because ethical constraints would destroy the requirements of free competition. It is falsely supposed that there is a close relation between free competition and immorality. But this may not be the case and it may even be better for a company or public authorities to be moral than immoral in order to ensure long-term sustainability and cost limitation of the institution (Hausman & MacPherson, 2001, p. 68). From this point of view, the critical skeptics have not really demonstrated that there is a close connection between free competition and morality. Therefore, welfare economists cannot have their theory of rationality without looking at the possible moral limits and consequences of their actions. In this sense, we can argue that ethical evaluation has to be an internal aspect of economic theory in welfare economics.

100    Philosophy of Management and Sustainability However, this does not mean that there is a clear relation between economic rationality and ethics. Rational action may in some cases be moral, but in other cases, it cannot be said to be acceptable from the point of view of ethics. Nevertheless, from another point of view, rational preferences in welfare economics may not always be individual preferences. The concept of rationality in welfare economics can be based on altruistic concerns and it is not necessary to exclude altruism a priori from economic models in welfare economics. Indeed, welfare economists have argued that moral norms and virtues have had positive impacts on economic developments, for example, a code of ethics in business makes economic action more reliable and it contributes to increase economic welfare (Hausman & MacPherson, 2001). However, there may also be moral norms that are inefficient from an economic point of view and in cases where they are not even justified from an ethical point of view, for example, when we perceive discrimination or suppression of employees, it may be justified not to accept these norms within economic theory. Therefore, from the point of view of welfare economics moral norms of economic actors may have an impact on economics even though there may be no direct link between conceptions of moral deontology or moral duty and economic efficiency or rationality. This means that although individuals may have meta-preferences, which outlaw actual supposed preferences, there is no direct link between economic rationality and ethics (Hausman & MacPherson, 2001, p. 87).

4. The Ethics out of Economics Common to the ideas of neo-classical theory and welfare economics is the idea of a close connection between ethical rationality and economic rationality. Some even argue that there is an internal ethical dimension of economics and even that it is possible to define what can be considered as valid ethical behavior out of economic reason (Broome, 1999). John Broome thinks that ethics and politics should learn a lot from economics. However, Broome seems to work within the utilitarian tradition of welfare economics and it is not clear whether he would apt for the neo-classical view of the necessity of a market without legal and political restrictions. Broome’s views seem to impose rather strict limitations on economic markets in comparison with the radical libertarianism of Robert Nozick and also with Milton Friedman who both argue for an ethics implicit in economic markets. The issue is what economics can help to say about the good life and how economics as a moral science contribute to a better society. According to the Austrian economists like Karl Menger, Ludwig Von Miss, and to some degree Alexander Hayek, economics may be considered as a kind of “praxeology,” a normative science of practical reason, based on universal categories of human action and helping to realize the human good (Mahieu, 2001, p. 120). They proposed a rationalistic and interpretative paradigm of economics in which it was argued that economics could be based on synthetic a priori principles. In addition, there is much convergence between utilitarian ethics and traditional views

From the Financial Crisis to a New Economics of Sustainability    101 of normative economics. Economics is viewed as the science of calculation of efficiency, profit, and maximization of personal and common human preferences. As far as institutional organization theory is founded on ideas of self-interests and efficiency in maximization of profits, it seems to presuppose some kind of utilitarian ethics. Nevertheless, this is utilitarianism with strong emphasis on personal and egoistic interests. Indeed this is the case with neo-classical economics and we have seen how the concept of human beings as self-interested and potentially opportunistic actors has been taken over by theories of economic organization like transaction costs economics and agency theory. Transaction cost economics considers firms as contractual relationships among individuals who seek to maximize self-interest and the fight against opportunism on the basis of lawful behavior within contracts can be considered as a defense of an ethics of good governance and high performance in efficient economizing market institutions (Williamson, 1989, p. 129). Agency theory focuses on economic property rights as the basis for economic behavior (Jensen, 1976). When we propose an ethics of welfare economics, we are not only looking at the firm in the light of micro-economics but we also consider the organization as integrated in larger social and political systems (Knudsen, 1995, p. 262). We want to state that individual instrumental economic reason only has significance in the framework of ethics subordinating individual goals to the common interest of community. In opposition to this view, we have to admit that there may be many important aspects of economic principles of self-interest and rational action that can help to shape ethics. Orthodox economists argue that efficient allocation of scarce resources is based on minimal governmental and legal intervention and that free actors are the best to know how to respect the norms of the market and ethical custom of society (Swanson, 2002, p. 210). As mentioned, major economists like Adam Smith and Milton Friedman, and also John Stuart Mill believed that the economic rationality of seeking self-interest and profit maximization at economic markets on its own contain an important form of rationality where everyone by seeking to fulfill their own interest will contribute to the common good. Business ethics cannot ignore this ethics of the market, which can contribute to an economic shape of ethics within the rules of market economy. Within such a view of the ethical rationality of economic thinking we can, in the following, mention the norms of economics that are important for the common good of society. According to what may be called the cost-benefit efficiency view of economic ethics free economic action at economic markets is the best way to deal with scarce resources (Swanson, 2002, p. 211). This view may have two formulations. The one is stressing the role of the state in giving dynamics to economics and the other stresses that the autonomy of the private sector is the most efficient way to allocate scarce resources. Economic actors are characterized by responsible and conscious use of scare resources. Economics is about efficiency and prudent use of resources. Moreover, organizational action should be profitable. According to economic rationality, we cannot ignore the bottom-line of income and expenditures for the success of corporate action. Economics is about creating value and maximization of profits in terms of individual or social wealth and utility.

102    Philosophy of Management and Sustainability Economics is the science of efficiency and utility for society and economic action is about ensuring the most efficient way to deal with scarce resources. Economics can also be regarded from the perspective of social development. Utility theory is based on Pareto-optimality (that is, a situation of economic arrangements where a change of the situation cannot make the situation better for some without making it worse for others) (Swanson, 2002, p. 210). Welfare economists stress the role of the state in such situations while libertarians consider that the free market gives the best optimality (Little, 2002). Thus, economics is considered as the science of how to compare and weigh different goods of society and allocate scarce resources most efficiently. Economic action is about how to contribute to creating wealth on markets and thereby create wealth in society. It is advisable to contribute to economic goods within the basic rules and ethical principles of society. In addition, it would not be just not to respect the laws and principles of economics when acting on economic markets. Economic action based on utility contributes to maximization of efficiency within limits of respect for basic rights. An important aspect of such a concept of economic ethics is the already mentioned idea of the “invisible hand” from Adam Smith stating that if everyone acts according to his own interest respecting the rules of fair competition on economic markets, society will flourish and individual self-interested action will be a contribution to the common good. As we have described, we also find this idea of the ethical consequences of individual self-interested action in Alexander Hayek’s philosophy of the “spontaneous order” of economic and social development. During evolution based on interaction among self-interested individuals those practices which are based on individual freedom and rational choice of the most efficient alternative, will in the long run contribute to social betterment. In fact, there are many arguments for corporate social responsibility and corporate citizenship that rely on economic concepts of self-interests. These arguments are based on the idea of the invisible hand and strategic action of selfinterest as leading to the common good. This approach argues that it is possible to use concepts from game theory in order justify action for corporate citizenship from a strategic perspective. Accordingly, altruistic action for the common good may be justified in terms of satisfaction of egoistic preferences. Moreover, indeed better legal and moral systems will be a result of this spontaneous order. Fair competition and healthy economic institutions will in an economic system based on fair competition contribute to a better society. In this perspective, the idea of competition includes an ethical dimension of fairness and transparency contributing to the spontaneous order of society. If we shall conceive economics as implying a particular ethical rationality, we may therefore consider how economic institutions contribute to ethics. The ethics of economics in institutional arrangements is the promotion of rational self-interest and fair competition as an instrument for economic progress. As John Dienhart acknowledges, according to the institutional view of economics markets are considered as “ethical engines” (Dienhart, 2000, p. 145). The aspect of economizing that we have discussed, may very well be considered as a part of economic institutions as ethical engines. However, the concept of economic

From the Financial Crisis to a New Economics of Sustainability    103 rationality is broader and more pluralistic than the view of fair economic markets as exclusively based on the pursuit of self-interest. Thus, we can distinguish between an internal and an external approach to ethics and economics. According to the external approach, economic rationality is based on self-interest and there is complete separation between ethics and economics (Dienhart, 2000, p. 146). Economic engines can help us to attain ethical values, but economics as such is neutral. However, there seems to be an ethics implied in economic rationality. So we can argue for an internal approach according to which ethics is not only considered as external limitations to economics but also rather as a part of economics. However, the internal approach does not necessarily have to rely on a utilitarian and neo-classical concept of economic ethics. Rather we can have a pluralistic approach to the ethical values that have an impact on economic action. Thus, ethics is to be considered as an internal aspect of economic institutions and there is an ethical dimension to economic concepts like property, risk-reward structures, information, and competition. This implies that we should have an institutional approach to economics emphasizing that institutions determine economic action (Powell & DiMaggio, 1991, p. 293). The constitutive rules and principles of economic markets based on property, risk-reward structures, information, and competition include certain ethical ideas that are the conditions for development of economic systems. Douglass North has for example shown how the act of promising is a condition for good contracts that in turn conditions predictions of future economic action (Dienhart, 2000, p. 143). When we deal with the institutional aspects of property rights, risk-reward structures, information, and competitive relationships, we may say that the internal ethics of the economics of fair markets is about how to organize scarce resources in economic systems in a fair way. To respect property rights is viewed as the foundation of the economic system and a part of fair competition is not to question basic property rights. Adam Smith and after him most libertarian economists have for example always been saying that property rights should be considered as the foundation of the economic order (Dienhart, 2000). We may say that our use and definitions of property rights in the center of corporations are not only based on considerations about self-interest, but rather on a combination between consequentialist and teleological considerations. External intervention is necessary when basic rights are not respected in economic transactions on economic markets. This is the case when we encounter widespread corruption with regard to property rights in economic systems. Concerning contracts we can emphasize some implicit ethical values that are required to be fulfilled in economic interactions. This is evident when some transaction cost theorists have stated that governance structures to avoid opportunism as well as confidence and promise-keeping matter for economic interaction (Williamson, 1989, p. 63). With regard to information, we may also encounter certain ethical principles within economic interactions. Correct and reliable information is a condition for trustful relations of economic action on different economic markets. It is a requirement for good contracts that they are based on reliable information.

104    Philosophy of Management and Sustainability The principles of fair and healthy competition may indeed also be an important aspect of the ethical principles of competitive markets (Friedman, 1962). Norms about monopolistic practices constitute internal limitations of economic interactions. It is a widespread belief that monopolistic action is at the limits of economic systems and possible economic behavior at liberal economic markets. If we analyze the ethics of transaction costs economics, it may be argued that a contract view of the firm is not sufficient to conceptualize the ethical dimensions of organizations. Organizations are not only universes of micro-contracts but are based on values that function as organizational goals for corporate behavior. Transaction costs economics addresses ethical problems in organizations when it discusses problems of opportunistic behavior with regard to information, agency, and liability of individuals, but it cannot explain loyal and altruistic behavior in organizations. It may be true that organizations try to control organizational behavior and ensure efficiency in competition by setting up institutional infrastructures based on contracts (Dienhart, 2000, p. 177). But the question is if this really is sufficient to understand cases of lack of opportunistic behavior in organizations? With Herbert Simon, we can argue that transaction cost economics cannot explain why people identify with organizations and feel much more committed that what is required from the perspective of self-interest (Simon, 1995). Authority–employee relationships and motivation cannot be understood as incomplete contracts, but rather as based on the goals and values of the organization as implicit premises for decisions. Employee motivation is therefore based not only on economic incentives but also on loyalty with the goals of the organization. Moreover, organizations should not only be understood as micro-markets of competitive contracts but rather as instruments for coordination of human action, which facilitate action on economic markets (Dienhart, 2000, p. 180). In such a goal-based view, the rationality of utility based on “economic man” cannot be the only explanation of the function of organizations on economic markets but goal-oriented and community-based behavior is a much more important aspect of organizational action. However, within new institutional theory we can perceive an orientation toward integration of different aspects of rationality when dealing with economic institutions (Powell & DiMaggio, 1991). Therefore it may be possible to find a sort of convergence between a goal-based and a contractbased view of organizations. From this initiative to deduce ethics out of economics, we may conclude that ethics is not always external but also sometimes implicit in economic rationality. We can say that ethical aspects of economics are based on the values of the basic concepts of economic systems. We can point to organization of market structures and the most important concepts of economic markets: “Property, risk-reward relationships, information, and competition” (Dienhart, 2000, p. 182). The system of these concepts is not neutral but implies ethical values. These values are not only based on economic efficiency but include a plurality of ethical rationality reflecting individual goals, organizational values, and community values. Moreover, economic organizations are determined by self-interested individuals acting according to utility values, but the ethical values of economic

From the Financial Crisis to a New Economics of Sustainability    105 organizations are more complex and they also include personal values of individual members of organizations (Dienhart, 2000, p. 182). However, the plurality of values also implies great tension between traditional economic values of utility and self-interest with community values based on an ethical view on the economy.

5. Economic Anthropology and the Foundations of Rationality This debate about the relation of economics to ethics and politics centers on the view of economic anthropology and on the motives for action of human individuals. With welfare economics, we already were able to propose a more complex view on concepts of preferences and economic rationality. As mentioned, common criticisms of the idea self-interest of economic actors argue that human beings are not egoistic utility maximizes but belong to human communities and social cultures where concerns for the common good cannot be excluded from understanding motives for economic action (Mahieu, 2001, p. 199). Moreover, neo-classical presuppositions of ideal situations of economic action are conceived to be very far from the conditions of action in concrete social contexts of economic life. Arguments for a broader ethical foundation of economic action state that economic anthropology is characterized by a tension between egoism and altruism (Mahieu, 2001, p. 152). Some authors argue that wise economic action implies reciprocity and concern for other human beings (Etzioni, 1988). Therefore, selfinterest is never the only motive for economics. In opposition to such a social view on economic action economists like Gary Becker have defended altruism as an advanced form of individual utility maximization (Becker, 1993). Becker advances the so-called “Rotten Kid Theorem” stating that people acting altruistically do so in order to improve their self-interest – like the child who behaves nicely in order to get a great reward from his or her parents (Becker, 1993; Mahieu, 2001, p. 164). In this perspective strategies of cooperation and sympathy are only forms of advanced self-interest recognizing the importance of truth-telling, promise, and contract keeping for future collaboration and exchange. This argument has been fully developed by Axelrod who in his book The Evolution of Cooperation (1984) states that cooperative behavior can be founded on individual maximization of utility because in cooperative strategies in the long run will benefit individuals more than opportunistic strategies (Axelrod, 1984). As we see in the discussion of welfare economics fundamental preferences are not always egoistic and maximization does not always have to be based on individual profit maximization. In fact, an important development of welfare economics in the direction of corporate citizenship business ethics and corporate social responsibility is to show that the economic subject is not exclusively to be conceived as an atomistic preference maximizer, but can be said to have altruistic preferences at the fundamental level of economic anthropology. We may say that “economic man” should be accomplished by “social man” or rather that individuals are characterized by a structure of double preferences where individual preferences also are related to other persons. Christian Arnsperger gives us support

106    Philosophy of Management and Sustainability for this argument by considering the French anthropological tradition coming from Marcel Mauss and the concept of responsibility in the phenomenology of Emmanuel Lévinas as possible criticisms of the liberal and neo-liberal restriction of economic subjects to be “atomist monads” of individualist profit maximization (Arnsperger, 2000, p. 99). With this approach we use the French tradition of anthropology to illuminate the concept of economic subjectivity. With his Essai sur le don. Forme et Raison de l’échange dans les sociétés archaiques from 1924 Mauss analyzes the anthropological foundations of the concept of exchange (Mauss, 1950). The main point is that the reduction of all exchange to economic exchange does not capture the anthropological basis of exchange which really is a condition of social integration. By doing an archeological analysis of the origins of exchange Mauss can help to understand the foundations of modern social institutions. By analyzing the concept of exchange Mauss shows that the original concept of the gift of exchange is in sharp contrast to the neo-classical concept of economic exchange. In fact by looking at the triadic structure of giving–receiving and giving back (donner-recevoir-rendre) we can see how exchange is a condition of social interaction indicating the foundational anthropological significance of exchange as a form of social integration between human beings (Hénaff, 2002). Hénaff presents a very profound development of theme of the gift. The problem is whether it is possible to unite gift and exchange. Since Socrates, a particular philosophical tradition has been reluctant to this arguing that a philosopher could not sell his knowledge without reducing the gift of truth to exchange and thereby making it illegitimate. However, there is also another current accepting a like between gift and exchange, which is for example expressed in the philosophy of Montesquieu who argued that trade implied unification of nations and Max Weber who in a certain sense can be said to reply to the theme of the gift with his idea of the Protestant ethics. However, from our point of view these discussions emphasize that the economic exchange is not something isolated, but a case of general human exchange based on reciprocity and recognition. Economic exchange can therefore not be isolated from general human practices and economics must indeed be treated and conceived as a social practice. Economics cannot be separated from the social exchange processes of gift and return even though money seems to neutralize the exchange relation This is illustrated by the phenomenon of Potlatch that was practiced by Indians in Vancouver and Alaska (Mauss, 1950). Potlatch was a form of aggressive gift leading to a fight of giving (prestations totales de type agonistiques) between adversaries, where the winner was the one who could contribute with the largest gift. In Polynesia, exchanges of gifts were a part of important and symbolic events in society, for example, religious ceremonies, etc. In this context, the gift had a religious content and to receive something from other persons was to receive parts of a symbolic substance, for example, as divine mediation between giver and receiver. Today, in contrast to economic exchange, the gift still has parts of such significance. However, in the metaphysics of the gift exchange is not reduced to an economic calculation of preferences but it is linked to spiritual relations between individuals, and even when we deal with economic transactions

From the Financial Crisis to a New Economics of Sustainability    107 this spiritual dimension is a part of the exchange. A gift includes an obligation both from those who receives and gives the gift and in some situations this also includes the obligation to return with expression of recognition and gratitude. Mauss argues that modern society still contains elements of this original concept of the gift (Mauss, 1950). In economics and trade, the interactions are often characterized by expectations of mutual satisfaction between buyer and seller and it is presupposed that the relation of exchange is based of reciprocity and recognition. Moreover, our concepts of generosity are defined as a transgression of the ordinary concepts of exchange. In the ancient mythology of India, God is defined as divine generosity of giving the world to the human beings and in the archaic Germanic societies the gift was related to intimate social relations a symbolic and sometimes spiritual instrument of integration between different groups of society. According to Mauss, the idea of the economic subject in modernity that has emerged with the neo-classical liberal traditions may be conceived of a sort of alienation of the original concept of the gift. Although we still live by the metaphysics of the gift in modern society, we have developed an economic system where the gift has been forgotten in favor of the concept of methodological individualism of individual profit maximizers (Mauss, 1950). However, there are many phenomena that show the limits of this concept of social interaction, for example, social security in the welfare state, corporate philanthropy, charity movements, and gift giving for different kinds of ceremonies. Mauss is regretting that the economic concept of exchange as personal maximization is replacing the spiritual and generosity-based aspects of the gift. In neo-classical economics the maxim of mutual exchange that is based on the idea that all give as much as they received, has been replaced by individual preference maximization. Mauss’ anthropological concept of exchange helps us to question the liberal concept of economic maximization. This economic concept of exchange must be considered in the perspective of our social life and it is limited when we want to understand all the aspects of human motivation. Mauss helps us to formulate a more complex concept of economic exchange linking economics to altruistic motives and concepts of giving and receiving that links economic markets to social life. From an ethical point of view, human subjects are not only “profit maximizers,” but in their giving and receiving in they are also always linked to logics of social integration which is also an important aspect of economic interaction. The central insight of Mauss is that economic anthropology cannot solely be based on the concept of individual preference maximizer, but that economic interaction presupposes a social concern of mutual social interdependence of economic actors. Moreover, this concept of society presupposes a broader conception of the human self than the one which is proposed by neo-classical economics. In fact we can say that the mutual relations of giving-receiving-returning are not external to the market, but rather the real truth of the market, because the market presupposes mutual dependence and mutual relations between economic actors (Arnsperger, 2000). With Christian Arnsperger we may propose a “methodological altruism” to accomplish methodological individualism of profit maximization (Arnsperger, 2000, p. 164). In this context the concepts of altruism of Becker and Axelrod do not take account of what altruism really is (Arnsperger,

108    Philosophy of Management and Sustainability 2000, p. 164). They are begging the question of altruism because they only want to count for altruism in terms of enlightened egoism. Rather, altruism is based on the essentially social character of the market involving basic conditions of the exchange relation as described by Marcel Mauss. Instead of the foundation in the monadic subject of mathematical, axiomatic economics, we have to acknowledge the relation between economic theories to the moral sciences. Economic theory cannot abstract from the morality of exchange, because exchange after all is a social event. With the focus on anthropology, we have learned that it is possible to accomplish the methodological individualism with a methodological altruism, which also account for possible altruistic preferences in the economic subject and furthermore acknowledges the importance of ethical evaluation of economic preferences and of economic motives. Emmanuel Lévinas helps to enlarge the ethical foundation for this altruistic approach to economic anthropology. Lévinas proposes a phenomenology of the intimate encounter of the other human being as the basis for our view of human motivation (Lévinas, 1961; Mahieu, 2001, p. 159). The encounter of the other human being is an infinite demand of responsibility and self-sacrifice. This concern for the other is the basis for social relations and that the reciprocity with the other should not be defined as a relation of “alter ego,” but rather the other is someone fundamentally different from me. In the perspective of Lévinas, the fundamental respect for the other as other is the foundation of ethical relations and this concern for “the other as other” precedes the relation of economic egoistic exchange. The ethical relation is more fundamental than economic relations and this ethical ideal of respect for the other as other is the foundation and condition of possibility for economic exchange (Lévinas, 1961). Therefore, Lévinas says that ethics precedes reciprocity as mutual recognition and altruism as enlarged self-interest. The criticism of the atomistic economic subject that is revealed by the analysis of Mauss is supported by Lévinas’ ethical anthropology, which situates economic action as secondary to the fundamental human responsibility for “the otherness of the other” as revelation of what is the innermost purpose of human action (Arnsperger, 1999). This implies that economic action is embedded in larger social structures and economic rationality cannot be separated from ethical and political rationality. Christian Arnspenger suggests that Lévinas’ phenomenological description of individual subjectivity as implying a fundamental responsibility for the other shows that the logic of the gift is a possibility of individual choice that precedes “every constitution of subjectivity as purely autonomous” (Arnsperger, 2000, p. 113). We may say that this ethics of otherness constitutes the fundamental openness for generosity that precedes the economic account for particular preferences. Lévinas emphasizes that responsibility is the most fundamental constitution of subjectivity and it this sense we may say that ethical subjectivity is more fundamental that the economic subject of neo-classical and neo-liberal economic theory. The critical reader may insist that Lévinas cannot be used in such a way to argue for the primacy of ethics over economics. Such an approach would state that the phenomenology of the other implies a negative reaction to the instrumentalism

From the Financial Crisis to a New Economics of Sustainability    109 of economic exchange and an ethics of situational ethical demand on the individual that goes beyond economic exchange. I agree with that, but this is indeed also a good argument for the primacy of ethics in the reciprocal relation of social exchange between human beings. Accordingly, ethical responsibility is a primary constitutive element of human existence (Arnsperger, 2000, p. 114; Lévinas, 1972, pp. 82–83). This view on the relation between economics and ethics helps us to understand that individual rational maximization can never be fully isolated from the idea of ethical subjectivity as fundamentally responsibly for other human beings. The ontology of economics and the reach of economic method as based on individual maximization cannot be conceived as all-compassing and absolute, but economic rationality is secondary to political and ethical reciprocity. From such point of view economic decision-making should have external restrictions in the laws of political justice and the ethical principles based on fundamental principles of human existence. Economic reason is submitted to responsible subjectivity who, when evaluating economic preferences, cannot avoid asking questions about the ethical ideas of universal moral rules, to the search for justice in political community and to considerations of community welfare. In the perspective of the philosophy of Lévinas, we may say that responsibility for the other human being conditions the legitimacy of economic action (Lévinas, 1972). Moreover, viewed from the ideals of political community, responsibility is not only an intimate relation with the other but also should be extended in time and space to society as a whole. This is the argument of the German philosophy Hans Jonas, who thinks that responsibility does not only concerns present human activities but also should be extended globally in time and space and include the future of humanity (Jonas, 1979). However, such an integration of ethics and politics in economic rationality is not without a price, because basic economic considerations are considered as relative to ethical principles (Mahieu, 2001, p. 168). Concepts of efficiency, utility, production, demand, consumption, accumulations of goods, property are not considered as intrinsic values, but as only valid insofar as they do not violate basic ethical principles or contradict our moral values. Ethical and political limitations of economic action propose an ethics of responsibility as the basis for social regulation of economic action.

6. Mixed Rationality of Economic Decision-making What we can learn from this analysis of economic rationality as linked to social conditions of exchange and to the responsibilities of ethical subjectivity does not state that business decisions are exclusively ethical or economic in any ideal sense, but rather that it is always possible that decision-making will be dependent on a kind of “mixed rationality” including elements from both economic and ethical rationality but certainly also other fields like politics and law. But in a deeper sense, we can also conceive business ethics as the foundation of decision-making in corporations, because business ethics is not only about economic means and rationality but also about social and political goals of economic behavior.

110    Philosophy of Management and Sustainability But now the problem is how to define this political and ethical rationality as basis for economic action? We can emphasize the fact that it follows from subjective ethical responsibility that economic rationality can never be justified without good ethical reasons. In fact this is not only supported by economic anthropology, but also within welfare economics, which as we have argued – although it relies on the concept of individual preference maximization, which is the same of the homo œconomicus of the neo-classical tradition, does not exclude ethical evaluation of proposals for maximization. Indeed, it is a great advantage of welfare economics, somewhat in contrast to neo-classical economics, that it does not separate ethics from economic rationality but rather recognizes that theory of economic rationality always should be justified from the point of view of ethics. It is very important that economists accept this ethical constraint on economic action even when they do not agree what ethical reasons should be used to justify particular economic actions. We may say that such kind of normativity implies that we conceive the concepts of wants, utility (pleasure), competition, freedom to consume in neoclassical economics in tension with social values like needs, self-actualization, cooperation, freedom to growth, and self-realization through work as a potential good. These ideas may be considered as what is necessary in order to promote of justice as the basic structure of society. It is, in the perspective of business ethics, the aim of business institutions to be founded on a close link between ethics and economics in the sense that economic rationality is based on good and wellfounded ethical reasons and arguments. Thus, with this analysis of the theoretical dimensions of the move towards a new economics of sustainability, we have provided the foundations for the economic framework of the SDG management. Essential for such an economics of the SDGs is the acceptance of the conditions of mixed rationality of economic decision-making in the framework of ethical judgment. With this, we also face a criticism of purely instrumental and price-based conceptions of nature and the environment. The economics of sustainability implied in the SDGs become an ethical economy that recognizes the intrinsic and irreplaceable value of nature and the environment. This economics welcomes ecological economics and environmental economics where the intrinsic value of nature and biodiversity is the basis for the economic considerations. Nature and nature preservation is not only a question of economic preferences, but there is a fundamental ethical dimension of sustainability and nature has intrinsic value that cannot be violated. This means that political and economic decision-making of sustainability cannot be only based on utility, focus on market capitalism and economic calculation, but must integrate values and the ethics of the Anthropocene in decisions about sustainability. Moreover, economic preferences cannot stand alone, but the ethical dimensions must be taken into consideration in economic decisionmaking. Thus, the economics of sustainability is based on human responsibility for nature, combined with concern for the intrinsic value and beauty of nature as an independent reality of moral concern. This implies that problems of sustainability cannot only be solved with evaluation of price-mechanisms and economic preferences, but must be considered from the point of view of political values and in particular the ethics and philosophy of management of sustainability.

Chapter 9

Ethical Economy and the Environment The discussion about ethics and economics and the focus on the idea of economic ethics or ethical economy was initiated by Peter Koslowski who in many years worked on the relation between ethics and economics.1 He was particularly interested in the principles of ethical economy, and later he also applied this discussion to the foundations of philosophy of management and corporations. Koslowski wanted to develop a philosophy of ethics and economics or ethical economy. In Peter Koslowski’s book Principles of Ethical Economy (2008), we find the basis for such an approach to philosophy of management. Koslowski argued that ethics and economics must accept one another and unite themselves in a comprehensive theory of rational action (Koslowski, 2008, p. 1). With the idea of ethical economy, Koslowski contributed to define the outline of the discussion of the relation between ethics and economy in German political economy, law, and business ethics (Koslowski, 1987, 1955, 1998). Koslowski was, in the 1980s, a rising star of business ethics in Germany. In particular he focused on a purely ethical approach to the problems of economics and business. His starting point was the hermeneutic positions of the German historical school based on Wilhelm Dilthey and Schleiermacher (Koslowski, 1995). Koslowski was also strongly influenced by Aristotle (Koslowski, 1979). Koslowski also opened up the business ethics approach by considering business ethics in the perspective of religious ethics and ontological social teaching. But this was not really a virtue-based social ethics rather the approach by Koslowski, who was a pupil of the philosopher Spaemann, was an attempt to found business ethics in a hermeneutical religious philosophy. According to Koslowski’s ethical economy that combined hermeneutics with (value-based) social theory in relation to the conceptualization of market and society there is a close interaction between culture, ethics, and economics in the definition of the basis for economic markets. According to the definition of  Koslowski, economic ethics or ethical economy is a theory of the economy 1

Previous versions and preparatory works for this chapter include Rendtorff (2015e, 2016b, 2018a).

Philosophy of Management and Sustainability: Rethinking Business Ethics and Social Responsibility in Sustainable Development, 111–126 Copyright © 2019 by Emerald Publishing Limited All rights of reproduction in any form reserved doi:10.1108/978-1-78973-453-920191009

112    Philosophy of Management and Sustainability and of ethics. As an ethical economy it unites ethical and economic judgments and constitutes the compliment of political economy. Ethical economy and ­political economy are linked to macro-economic and economic theory of rational action. But we can also make a connection between ethical economy and business ­ethics and philosophy of management. In this sense the relation between ethical economy and the philosophy of management and corporation is that the ethical economy proposes the analysis of the institutional and economic frame of the reflections about philosophy of management and corporations. Following Koslowski’s approach to ethics and economics, we can propose a general definition of general approach to philosophy of management and corporations (Koslowski, 1988). This approach would focus on issues like the ontology and epistemology of organizations, including issues of business ethics and practical philosophy of management. But we can also say that it opens for reflections on business ethics in the framework of hermeneutics and reflective judgment. In such a hermeneutic perspective, Koslowski’s approach to ethics and economics is not only hermeneutic and Aristotelian as well as inspired by Thomas Aquinas view on economics, but it also implies a Kantian view on the legitimacy of business ethics. We can say that Immanuel Kant’s distinction between theoretical, practical, and esthetic reason and judgment helps to define the basis for economics and ethics applied to corporations, firms, and organizations. Accordingly, in this chapter we will discuss the possibility of an ethical economy in particular in relation to the environment in the following sections: (1) The Concept of an Ethical Economy; (2) The Need for an Ethical Economy Today; (3) Application of an Ethical Economy: Ecology, Sustainability, and Capitalism, (4) Beyond Anthropocentric Environmental Ethics; (5) From Ethics to Law; (6) The Balanced Company; and (7) Toward a Research Agenda for an Ethical Economy.

1. The Concept of an Ethical Economy From this philosophical viewpoint the ontology of organizations includes questions like: What is organization? How do we define organizational identity and personhood? What are the foundations of different organizational systems? Likewise the problem of the epistemology of organizations includes questions like: What frames our knowledge and what are categories of our understanding and reason and the limits of our conceptions of the world? Accordingly, from the framework of ethical economy we can argue that philosophy of management and economics deals with issues of the role of ethical responsibility in economics, individualism, and altruism in economic ethics, the role of ethics in economic rationality, the interactions and tensions between ethics and economics. This framework for the work on business ethics and philosophy of economics is summarized by Koslowski with the following definition of the ethical economy: Economic ethics or ethical economy is, accordingly, on the one hand, an economic theory of the ethical and of economics and of ethical institutions and rules, and, on the other hand, the ethics of the economy. Like political economy, it has a double meaning. It is

Ethical Economy and the Environment    113 the theory of ethics that uses economic instruments of analysis, a theory of ethics oriented toward economics, just as political economy is a political theory that uses economic instruments of analysis. But ethical economy or economic ethics is also a theory of the ethical presuppositions of the cultural system of the economy, a theory of the ethical rules and attitudes that presuppose market coordination and the price system in order to function. The component of the ethical economy, which is more strongly oriented toward application, is called here “economic ethics” (Wirtschaftsethik), although the terms “ethical economy” and “economic ethics” merge and the present work also attempts to deal with fundamental and applied questions of ethical economy and economic ethics. The term “ethical economy” (Ethische Ökonomie) goes beyond the research objectives of economic ethics, understood as the ethics of the economy, to achieve an integration of ethical theory and economic theory. Ethical economy must be more than simply “economics and ethics.” (Koslowski, 2008, p. 3) But in an opposite way ethical economy can also be understood as the economic theory of the ethical or ethics oriented toward economics. Here, we face the economic theory of ethics. Koslowski argues that economics and economic theory can help to clarify ethical dilemmas and maximization of economic calculations in ethical decisions. It is important to emphasize that the economic theory of ethics helps to understand the role of self-interest and maximization in the solution of ethical dilemmas (Rendtorff, 2018a). So with this definition we can say that Peter Koslowski opens for the analysis of business ethics as a practical philosophy of management. This includes the investigation of themes like corporate social responsibility, values-driven management, and corporate citizenship in the framework of an ethical economy. In the perspective of Koslowski’s approach, we can argue for a cultural and historical approach to the economy that includes an approach to ethical judgment among law, economics, and politics. In Koslowski’s definition ethics is about the good and human virtues while economics concern the design of human institutions based on self-interest and economic rationality. Both disciplines are based on human action and both disciplines work with a concept of rationality (Koslowski, 2008, p. 1). According to Koslowski a comprehensive theory of economics cannot be based only on self-interest, but must include a broader theory of the good. However, ethics must also have a realistic economic dimension, being aware of the rationality of economic self-interested maximization. Accordingly, as a general concept of political economy, ethical economy unites economic and ethical judgments in a unity. It is important to emphasize that this theory benefits from the general instruments of economic theory (micro-economics, macro-economics, and economic analysis) while at the same time also using insights from ethical theory to analyze the goodness of norms and institutional arrangements (Koslowski, 2008, p. 1).

114    Philosophy of Management and Sustainability According to Koslowski, pure economic theory is an important instrument for analysis of rational action in order to assure efficient pursuit of objectives and social efficiency. Political economy generalizes this method to be the economic theory of the political and of the economic dimensions of the political and of the cultural and political dimensions of the economy. With reference to Adam Smith’s wealth of nations Koslowski argues that there has been a close link among responsible management, political liberty, and political coordination of the economy with the combination of political and economic measures (Koslowski, 2008, p. 2). Accordingly ethical economy can basically be defined as the theory of the ethical presuppositions of the economy and of economic ethics. This is acknowledged by the new institutional economics that states that market actors and economic markets are not independent of social, institutional, and cultural arrangements in society (Koslowski, 2008, p. 3). Political economy examines the social, legal, and institutional foundations of the market economy (price mechanism, market interaction, supply-demand, profits, ownership, contracts, rights, justice) while ethical economy investigates the ethical norms and principles of these foundations based on ethical implied understanding (e.g., trust) and ethical norms of justice of the institutions of the economic system (Koslowski, 2008, p. 3). But this dialectical relation between ethics and economics must not forget the point of view of ethical economy as a “material or substantive” concept of ethical economy as a normative theory of the relation of ethics and economics in the concept of goods (Koslowski, 2008, p. 4). There is an interaction between economic and esthetic concepts of values that necessitates a cultural concept of economics, looking at the cultural dimensions of economic institutions, management, and political economy. So Koslowski considers that the ethical economy consists of three fundamental areas of analysis: (1) the theory of the ethical presuppositions of economics; (2) the economic theory of ethics; and (3) the economic and ethical theory of goods and value-qualities of culture. Together this can be said to form an ethical economy of human institutions (Koslowski, 2008, p. 4). Koslowski considers this ethical economy as a return to the older practical philosophy, founded by Aristotle, Kant, and Adam Smith. It is the task of ethical economy to reintegrate this approach in economic thinking. Ethical economy aims of reintegrating ethics in economic theory in order to situate the abstract concept of “homo economicus” within the social and cultural sphere of society. This means that ethics should not only be abstract philosophical meta-ethics, but also concrete ethical reflection about human action in concrete social circumstances. Economic ethics in the ethical economy must be practical ethics dealing with concrete life situations of human action (Koslowski, 2008. p. 5).

2. The Need for an Ethical Economy Today Why do we need ethical economy today? What is the need to focus increasingly on the development of this economic ethics, expressed in political economy, business

Ethical Economy and the Environment    115 ethics, and administrative ethics? Koslowski mentions three important reasons for developing such an ethical economy: (1) Consciousness of the increasing cultural and ecological side effects of our economic actions and need for their ethical accountability; (2) the rediscovery of the human element in technical economic science and the growing expectation of the accountability of leaders of the economy; and (3) the need to counteract a wider separation of the spheres of culture and especially the alienation of the economic world and intellectual and material culture. (Koslowski, 2008, p. 6) The first reason is the problem of unintended side-effects of economic action (externalities). Side-effects are consequences for society, nature, and culture of economic action. They are both problems and reasons for the need for economic ethics. Human power over nature is increasing therefore practical ethical action and responsibility is important. In his analysis of side-effects, Koslowski refers to thermodynamics and to the necessity of economic systems to adapt and cope with their environments. Our power to destroy the world due to unintended consequences of our actions necessitates ethical reflection about economic externalities (Koslowski, 2008, p. 8). The second reason of the rediscovery of the human person in the social sciences means that there is no autonomy of scientific and economic reason in economic sciences. There is always a human element. Economics cannot be a pure physical and natural science because it relies on human action and intelligence. Koslowski therefore talks about a human turn in economics, a “re-anthropomorphization” or “rehumanization” of economic scientific understanding of economic action in organizations and institutions. Koslowski argues that “anthropomorphism” is very important in the post-industrial economy because it is the human engagement in work and production that is essential for value-creation. In the postmaterial service and experience economy, “Bringing the mind back in” has become essential (Koslowski, 2008, p. 8). A re-moralization of the economy is necessary to deal with the cultural influence of the economy which is expressed by the generalization of the human element in the economy and we can add because of our move to “the Anthropocene” era of the relation of humanity to nature and to the earth. The third reason is that it is necessary to have a normative dimension of economic action because the economic element has been generalized to all spheres of society. When the economic system is generalized, it brings with it the need to deal with the social and ethical elements of economic action. Koslowski argues that the differentiation of society has led to the generalization of one subsystem, namely the economic subsystem. At the same time there has been increased separation between the sphere of work and the sphere of leisure. But the economic and instrumental approach has also started to dominate the sphere of leisure. However, this cannot be accomplished without a concern for the cultural dimensions of economic action. Therefore, we need to integrate ethics and economics when we deal with the generalization of the economic approach to all spheres of society. A political and ethical economy is needed because of the extension of economics to all parts of society (Rendtorff, 2018a).

116    Philosophy of Management and Sustainability Indeed, Koslowski defines his ethical economy as a post-modern economy moving beyond the modernist economy from Hobbes, Mandeville, and Adam Smith and also Marx, separating ethics and economic action. The attempt to make economics into a mathematical and mechanistic theory thus separating ethics and economics has failed. The attempts to separate ethics and economics, with personal ethics on the one side and economic rationality on the other side cannot be maintained in Koslowski perspective of a post-modern ethical economy. Accordingly, Koslowski was very open to post-modernism since he wanted to be open to new elements of ethics and economics (Koslowski, 1988). It is therefore right to characterize Koslowski’s position as an open historical-hermeneutic position of Aristotelian origins in ethical economy rather than a closed ontological position, even though there are religious elements in Koslowski’s point of view. One application of the theory of the ethical economy is the idea of a ­hermeneutical social economy. Jörg Althammer from the University of Ingolstadt follows Peter Koslowski in his development of an ethical economy as a general theory of political economy and a theory of the economic dimensions of society which is applied to social issues and family policies (Althammer, 2000). ­Althammer criticizes the instrumental character of the framework conditions as it is proposed in the theory of order ethics. Instead we can say that the ethical economy searches to define the ethical basis for the economy as suggested by Koslowski. Ethics cannot be reduced to economics. Rather it is necessary to define the correct ethical conditions for economic action with regard to definition of the good in relation to ethical decision-making in the economy. The instrumental economic approach is criticized by the ethical approach as not being sufficient for dealing with the ethical conditions of a good society. The order ethics approach as suggested by Karl Homann on the basis of the US professor Buchanan does not take in account these ethical conditions of the economy. The ethical economy approach is according to Althammer also critical to the principles of discourse within the theory of communication ethics. This approach is considered as contradictory since the communication dialogue without power is impossible. Moreover, the neutral moral point of view is not really possible. It is not possible to define the moral basis of this communicative approach to the ethical economy. Instead Althammer proposes to base the ethical economy on natural law and a Catholic societal ethics. This approach looks at the natural law foundations of the economy as based on the individual rights and capabilities (i.e., following Amartya Sen). With this approach the Catholic natural law thinking tries to define the limits of the market economy in relation to the economic action of the market. This approach defines normative systems of economic order that goes beyond the ethics of the market as suggested by the order ethics school of Homann and his colleague Ingo Pies. In contrast to the ethics of the market with its criticism of the social state and of the welfare state the approach of the Althammer and Koslowski school suggests ethical limits to the economic system based on social and political regulation of the market. The capability approach following Sen and Nussbaum represents such a normative approach to the ethical economy within the welfare state. Concepts of corporate social responsibility, corporate citizenship, and social entrepreneurship

Ethical Economy and the Environment    117 find their meaning within in the framework concept of the social welfare state. Ethical economy is not only business ethics or managerial ethics but it is rather the strong effort of the ethical economy approach to develop a general normative political economy to regulate the economic market. This economy focuses on the concept of the social welfare state in relation to the regulation of the economic market. The position of the ethical economy integrates philosophical reflections about the justice and constitutional foundations of the market in the reflections about ethics of economy. The aim of ethical economy is not only to study the ethics of the market, but also to look at the societal institutions of the welfare state and find the right relations between market and state. According to Althammer this has to be based on a humanism of solidarity in contrast to an economic egoism of the market based on “homo economicus.” One way to discuss this is the reflections about the minimum conditions of the social welfare state based on social support to individuals, for example, in form of minimum basic income (Rendtorff, 2018a).

3. Application of an Ethical Economy: Ecology, Sustainability, and Capitalism An important application of the ethical economy is the problem of sustainability in economics and business. Since the industrial revolution businesses have had to deal with environmental problems, but it was not until the late 1960s that these problems came to be commonly understood as severe and requiring thoughtful and efficient solutions on a global scale. There are not only problems of global warming, ozone depletion, acid rain, and depletion of air quality but also problems of water pollution (e.g., toxic oil spills), temperature increases, the destructive use of ocean fishery resources, and further problems of land pollution (e.g., destruction of forests, chemical or toxic substance deposits, radioactive, and nuclear wastes) and deteriorating ecological conditions including the destruction of animal habitats (Velasquez, 2002, pp. 269ff). In the words of the ecological ethicist Aldo Leopold: “Society has been in search of a land ethic of ‘integrity, stability and beauty’ in order to protect the intrinsic value and self-organization of the natural world” (Velasquez, 2002, p. 290). Until quite recently, economic markets functioned according to the idea that unlimited resources were at humankind’s disposal. It was only during the second half of the twentieth century that an increasing awareness of the impossibility of naturally regulated markets began to emerge. Still, it has been extremely difficult, if not impossible, to find the correct balance between economic growth and the environment. In the late twentieth and early twenty-first centuries, the view that corporations should focus on gaining economic profit without concern for the environment has been strenuously challenged. Today there is even more awareness of the fact that environmental concerns in business might contribute to good business and that good environmental policies pay (Hoffman, 1991). The problem of global climate change may, because of its serious impact on global life, be one of the drivers for increased awareness of the need for action relating to environmental degradation (Levy & Newell, 2005, p. 85). Corporations

118    Philosophy of Management and Sustainability and institutions facing this problem start to be aware that they need to take environmental problems seriously in order to obtain social respect and appear as good corporate citizens (Rendtorff, 2015b). Joseph R. Desjardins ([1999] 2002a, pp. 280 & 286) emphasizes that the idea of sustainable development implies a new kind of environmental business responsibility. Environmental issues represent a challenge to the concept of growth that is central to neoclassical mainstream economics. When dealing with corporate social responsibility (CSR) to the environment, business ethics has to rely on the development of a theory of sustainable economics. In this way, the concept of sustainability implies a redefinition of economics that moves away from the concept of endless growth regardless of limited natural resources. Hermann Daly has tried to reformulate economic theory by focusing on environmental concerns not only as a side constraint but as essential to all kinds of economic action. Daly argues that there are ecological limits to economic growth, and that the economic system of the world is dependent on the natural world which functions as the basis for economic resources and energy (Daly, 1996). In order to deal effectively with the environmental problems of the world, we would have to develop a “steady-state” (in other words, sustainable economics) using renewable resources that do not damage the carrying capacity of the natural system or destroy the planet’s life-conditions for future generations (Desjardins, [1999] 2002a, p. 288). Natural resources should be treated as capital for developing sustainable economic relations, rather than as goods for unlimited use. The need for a theoretical reexamination of the notion of sustainability is due to the present crisis of the world economy. We can mention the financial crisis in 2008 that can be considered as an environmental crisis indicating that there are limits to growth and that the present model of expansion, credits, and profits does not help to solve the problems of the environment (Nielsen, 2013). The environmental crisis implies that there are limits to a system based on a non-sustainable fossil economy that has resulted in the climate crisis and the CO2 problem of global warming. Accordingly, the environmental crisis in combination with the financial crisis can be deemed to be a world crisis. The solution of green growth as an alternative concept of growth has been criticized by many as a kind of ­“having your cake and eating it too” economy. From this perspective, it is argued that we need an economy of scarcity where we need to move from the era of plenty to an era of scarcity. It is in this context that we can talk about the need for a new ­ecological economics and the need for a great transition that challenges the myth of eternal growth and helps to solve the financial, food, and climate crises ­(Nielson, 2013). Indeed, we want to develop sustainable business strategies for such a green transition of large businesses. This strategy should go beyond the concept of growth toward a sustainable combination of business and green growth. Such a sustainable economy would be an economy that acknowledges that the Earth is not an infinite growth system. The proponents for a new economics argue for the transition toward an economics where the environment is not just a resource and an externality, but where economic sustainability implies sustainable limits to consumption and a move beyond pure economic growth toward a sustainable and green economy (Rendtorff, 2015b).

Ethical Economy and the Environment    119 Sustainable economics describes the effort to develop a framework for economic theory that not only searches for regulations in terms of pragmatic utility but also recognizes deontological concerns for the rights of animals and nature. Sustainability implies that issues of biodiversity, ecology, and global warming are included in economic considerations. In such a holistic approach to economics, nature is viewed from the perspective of many different historical, esthetic, or spiritual values. These values are integrated into an economic business strategy that respects nature and animals as expressions of intrinsic value and the search for the common good of humanity. It is the task of an alternative ecologically oriented economic model to make these concerns explicit and concrete. Daly’s book Beyond Growth (1996) has contributed to this framework for economics by emphasizing that the economy is just a subsystem of the Earth’s biosphere (Desjardins, 2002b). With its abstract concept of growth, neoclassical economics ignores this dependence on the biosphere and is not able to develop an economic system that is based on recycling its limited resources. It is the task of business strategy to comply with the recognition of such biophysical limits to growth and provide models for sustainable development within the firm. This is particularly so for the world’s industrial, agricultural, and service-oriented corporations who have their fair share of responsibility for global environmental problems. The common understanding of the legitimate responsibility of corporations has definitely been changing. All the stakeholders in environmental issues – not only owners and shareholders but other groups, such as consumers, employees, and the local community – should be consulted when determining the values and strategic goals of the company. It may be worth reiterating the stakeholder philosopher Edward R. Freeman’s definition of a stakeholder as: “any group or individual who can affect or is affected by the corporation” (Elkington, [1997] 1999, p. 298; Freeman, 1984). In a stakeholder economy, the firm is open to these groups and, most importantly, has learned to listen. This search for a moral dimension to the economy is based on the idea that companies, in order to be successful, must have good relations with the community and the social environment (Elkington, [1997] 1999, p. 234). Social capital and goodwill are considered as conditions for economic success (Rendtorff, 2015b). Indeed, the problem of our failing ecological consciousness does not only concern these accidents but can be shown to be a part of our general understanding of the world. Just look at the social and psychological barriers for solving the climate change issue (Kemp & Nielsen, 2009). Socio-economic barriers and ideological barriers in business are constructed by society and we need to overcome them in order to create a balanced relative to climate change. The barriers are not only local but global. Among socio-economic barriers for efficient ecological action we can mention egoism and opportunism; nosism (collective egoism); institutional isomorphism and path-dependency; limited utilitarianism – privilege of present generations; limited resources – prioritization of use of resources; nationalism or patriotism, in other words US argumentation; and lack of global consciousness (cosmopolitanism). Among physical or epistemological barriers we can mention invisibility of climate change; complexity of climate change – it is nearly impossible to foresee the

120    Philosophy of Management and Sustainability results of climate change and the effects of certain actions; the imperceptibility of climate change – it is very difficult to experience climate change; subjective or ideological barriers; the complex of insignificance; fatalism; and shortsightedness. We need to understand the barriers to climate change consciousness in order to make corporations able to contribute in a responsible manner to solve climate change issues. This is necessary in order really to solve global problems of sustainability and climate change. There are also many examples of environmental disasters due to wrong or careless actions by companies, for example, the 1979 Three Mile Island nuclear accident in the United States, the 1986 reactor meltdown in Chernobyl, Ukraine, the catastrophe of the Union Carbide Fertilizer operations in Bhopal, India in 1984 where more than 2,000 people died from gas explosions, the 1989 Exxon Valdez Oil Spill, and more recently in 2010 the Mexican Gulf BP oil spill (Fisher & Lovell, 2006, pp. 469–473; Hoffman, 1990). Together with our limited mindset and conceptual barriers for action, these are just a few cases demonstrating that ecologically responsible action is necessary if corporations want to survive in the long run. This action should involve, among other things, examining new technological possibilities of waste management, recycling, and good use of resources. It may also involve principles of environmental auditing, green marketing, and public relations, as well as policies of values for environmental investments, such as establishing environmental mutual funds that have criteria for screening environmentally sound investment objectives. The strategy of respect for the biophysical limits of economics and corporate activities, biodiversity, and environmental protection must be based on the triple bottom line if companies want to have good relations with stakeholders in the social and economic development of the twenty-first century (Elkington, [1997] 1999, p. 20).

4. Beyond Anthropocentric Environmental Ethics This interpretation of sustainability is a response to the many people who have criticized the notion of sustainable development for being anthropocentric, but it is also a critique of those who think that the basic ethical principles imply a holistic conception of ethics which cannot be valid in a post-metaphysical worldview. Among the many conceptions that attempt to go beyond anthropocentric ethics, a general theme is the threat of the destruction of living conditions on Earth. Moreover, this kind of thought is marked by strong criticism of technological culture and capitalist economics. Such critical philosophical movements argue for a new understanding of the relationship between humankind and nature. Other positions go further, and argue from the viewpoint of universalism, endowing nature and animals with the same moral status as humans. This is often combined with the deep ecology approach which posits a unique moral status for nature. These arguments propose to overcome the anthropocentric limits of ethics, so that ethics is no longer based on rational individual subjects. Nonanthropocentric positions point to a close relationship between nature and the human life-world. This is also the case in Our Common Future (WCED, 1987)

Ethical Economy and the Environment    121 when it emphasizes the close connection between nature and culture. These propositions for alternatives to anthropocentric ethics are based on a bridge between person, body, and nature. The necessity of a non-anthropocentric point of view becomes even more important when we consider that we live in the age of the Anthropocene (Crutzen, 2002, pp.143–145). The concept of the age of the Anthropocene is a geological concept signifying that the impact of humanity on the environment on the planet has become more serious (Crutzen, 2007). Because of climate change and other modifications of the natural environment by humanity, geologists have started to characterize the present geological period as the Anthropocene age where human beings as a species contribute to the geological situation of nature. The age of the Anthropocene may have started in the eighteenth century when human beings started to act as a collective force of evolution that modifies their natural environment. Since that time, the expansion of the global geography with the increase of human beings on Earth has contributed to this modification of the natural environment of humanity. As a result of its impact on nature and climate through its thermo-industrial revolution, humanity is a new geological force that changes its own natural environment. One of the founders of the concept of the Anthropocene, the Russian geologist Vladimir Vernadsky who visited Sorbonne in 1922– 1923, even cited the French philosopher Henri Bergson’s concept of l’évolution créatrice to determine the concept of the Anthropocene in the thermo-industrial development of humanity (Grinevald, 2012). It may be argued that the concept of human responsibility as an indication of what it really means to be human has become particularly important in the age of the Anthropocene, because we need to go beyond ourselves to non-anthropocentric responsibility. It is implicit in the concept of responsibility as the key notion, in order to understand the ethical duty in a modern technological civilization. We can indeed observe a moralization of the concept of responsibility going beyond a strict legal definition in terms of just being responsible for an action that can be casually imputed. Non-anthropocentric positions often rely on a phenomenological conception of human beings seeking to overcome a contradictory idea of the relationship between subject and object, between internal experience and external material (Kemp, Lebech, & Rendtorff, 1997). What matters is the intrinsic value, richness, and diversity of nature (Velasquez, 2002, p. 289). Moreover, these movements of thought want to avoid oppositions between mechanical and teleological conceptions of nature. Humans are simultaneously considered to be living organisms taking part in an ecosystem, and spiritual beings with the freedom and autonomy to transcend this bond. We experience nature through our bodily incarnation in time and space in our everyday life-world. The perspective can be taken as the basis for an ethical position bridging the gap between humans and ecosystems. Ethics is, in this context, based on human rationality, a vision of the good life, and reflective judgment. Concrete action and the capacity to practically judge ethical principles are the driving forces in this process. The ethical principles may, therefore, be founded on the presupposition that human beings participate in nature, but at the same time that we can transcend this participation and manifest ourselves as different from nature.

122    Philosophy of Management and Sustainability Even though environmental ethics starts from anthropocentrism, it transcends a conception of nature only viewed from the perspective of human relations. Illustrating this from the perspective of deep communication theory, it might be argued that nature speaks to us (von der Pfordten, 1986). But such a communicative relation is rather problematic because we can never communicate totally with nature, even if some animals have simple rules of language. We can open ourselves to nature, but communication is determined by human reality. Although only human beings can talk, it might be possible for animals and nature to be a part of this communicative community as objects that we talk about. In such a communicative perspective human beings and their actions and responsibilities determine ethics, but this does not mean that animals and nature cannot be included in ethical reflections. This privileged participation of human beings in nature might therefore be considered as the theoretical and meta-ethical foundation of a non-anthropocentric normative ethics. Kant’s Critique of Judgment ([1794] 2004) and Foundations of Metaphysics of Morals ([1785] 1999) may be mentioned here as important references for the foundation of ethical principles as the basis for the idea of sustainability. Kant considered human beings as moral agents with an intrinsic inviolable moral status. Through participation in categorical imperative and moral law, we come to recognize other human beings as ends in themselves. Animals and nature are not directly seen as moral entities, but this does not imply that Kant should not recognize the need for the ethical protection of nature and animals. In Kant’s philosophy, the ideas of purpose and of teleological self-organization of living systems are central aspects of the foundational contribution of moral status to animals and non-human nature (Harste, 1994). Moreover, this is based on the human capacity of moral reasoning, and not primarily on the independent moral status of nature. In this weak anthropocentric foundation, the status of human beings as moral depends on how we treat animals and nature. There is a close connection between the beauty of society and of nature. At the same time, the particular position of nature as a system of self-organizing, autopoetic organisms, as well as its position as an object of human esthetic enjoyment, might be emphasized. However, in general, the Kantian argument represents ethical justification on the basis of human reality, even though it clearly attributes important independent moral significance to animals and nature. It is this biohumanism, or the idea of human and civilization’s concern for nature, that is the basis of the proposed relationship between sustainability and ethical principles. Determining the relationship between ethical principles, sustainable development, and the different interests of different stakeholders, including environmental stakeholders, can be proposed as the basis for understanding organizational and institutional behavior in relation to the environment (Starik, 1995, p. 216). It can be considered as an argument for stakeholder management, in other words, including the environment as a stakeholder. Nature and the environment must be included among the stakeholders of the firm, even though it is not easy to identify these interests. It must be admitted that they are an important part of the future actions of organizations (Society for Business Ethics, 2000). Being aware of the environment as a stakeholder encourages corporations to extend

Ethical Economy and the Environment    123 their perspective on deliberation. Such an intensified ethical sensibility can be illustrated by four basic concerns (Starik, 1995, p. 216): panoramization – extending the perspective of analysis; prioritization – including environmental complexity in decision-making; politicization – including the environment in formulating the organization’s political priorities; and particularization – which aims to make the organization increasingly aware of dimensions of environmental ethical concerns.

The ultimate concern of sustainability strategies for environmental management in institutions and corporations is that – echoing Hans Jonas’s ethical language of responsibility – in the future there will still be human beings on Earth (Jonas, 1979). There is a link between stakeholder management and the idea that the corporation should serve the triple bottom line of people, planet, and profits (social, environmental, and economic bottom line). The triple bottom line also implies concerns for distributive justice and equality between generations in order to secure effective and responsible use of resources in the daily practices of the business. It is important to emphasize that these concerns for environmental values are only relieved when a code of values is accomplished with effective structures of decision-making, including dialogue with stakeholders and open environmental audits that integrate ethical principles, sustainability, and transparency. These codes should be forward-looking in order to make environmental issues, protecting nature, and action to deal with climate change and global warming an integrated part of long-term strategic planning.

5. From Ethics to Law The discussion about ethical principles and sustainability now moves from ethics to law (Kemp et al., 1997; Rendtorff & Kemp, 2000). How can we punish or sentence a corporation and who is really responsible when a corporation does not respect the environment? Issues of environmental protection not only focus on utility and efficiency but also on distributive justice and fairness toward future generations (Velasquez, 2002, p. 310). The immediate legal problem is, nevertheless, how to judge or sentence corporations who have been found guilty of committing environmental crime, for example, as is the case with BP and the pollution of the Mexican Gulf in 2010. Today, legislation about environmental issues has become more efficient in many countries. However, there still remain problems regarding just sentencing, how to prevent further environmental crime, or make corporations proactive in their activities in order to prevent environmental crime. But can a corporation really be forced to be environmentally responsible? It could be argued that if corporations could meaningfully be considered as persons, they could then be held morally responsible. Moral responsibility would, thus, be the basis for legal punishment. The liberal tradition, on the contrary, has – since John Locke – argued that one cannot be responsible for one’s own waste since it is no longer one’s property. This tradition also does not recognize

124    Philosophy of Management and Sustainability individual responsibility beyond death. Moreover, corporations are considered as legal fictions: artificial units of individuals which cannot have a particular moral responsibility (French, 1991, p. 4). It is a difficulty for environmental law that it is necessary to consider the corporation as a responsible person in order to attribute moral responsibility to it. The solution may be found in a corporation as a collectively responsible entity that can be considered responsible for its actions, also in relation to future generations. This is not impossible, according to French (French, 1991, p. 7), who argues that a corporation, like a person, is capable of rational agency. We have to admit that ethical principles and values of sustainability also apply at the collective and institutional level. If we look at the predominant legal traditions in the West, there has, however, been a judicial tendency to exclude the environment as an entity for human concern. In the classical natural law tradition, the relationship between human beings, the cosmos, justice, and the nature of things has played an important role in the view that human beings are integrated in a natural teleology of goodness and harmony with the world (Strauss, 1953, 1964). When modern theories of the social contract separated the subject and object, wrenching humankind from nature, they neglected to define nature. It is practically non-existent among the subjects constituting legal and political community. This omission had a powerful effect on the modern conception of the relation between human beings and nature, and had an important impact on our willingness to respect the environment. For Jean-Jacques Rousseau, the social contract is a result of the general will among free human subjects (Rousseau, [1762] 2001). Rawls’s theory of justice also seems to have little room for nature or animals as participants in the community of the original position, who have to decide the structure of future society behind the veil of ignorance (Rawls, 1971). However, a modified sustainability position might also be proposed as the basis for judicial regulation. This is the position of sustainability that I have proposed. It is open to a bio-centric perspective, without the metaphysical implications of the deep ecology position. Michael Hoffman provides an illustrative example: If you were the last human being on Earth after a nuclear disaster and there only was one tree left …. [assuming that] you would not be harmed by the existence of the tree, you would be likely to agree that it would be wrong to destroy the tree, that it had its own right to live, and that its existence would make a difference on Earth independent of you. (Hoffman, 1991) This position implies a bio-humanism which is compatible with the proposed sustainability perspective, and results in corporations having an obligation to work for the improvement of the environment independently of their own interest in economic benefit. This is also the argument for formulating legal regulation of the ethical and moral responsibility of corporations in relation to the environment. Indeed, the symbolic nature of criminal law may respond to public demands for correct and just punishment of organizations perpetrating criminal damage against the environment.

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6. The Balanced Company We can propose the idea of the business ethics of the balanced company as a business reply to the challenges of redefining the ethical economy of the concept of sustainability (Rendtorff, Jensen, & Scheuer, 2013, pp. 33–59). The balanced company is a company that follows the international recommendations of sustainability and respect for nature. According to this approach the corporation follows the Brundtland Report and the Global Compact with increased focus on the ethics of sustainability and respect for the cultural and esthetic resources. From this point of view, the corporation needs to be a good corporate citizen that assumes its fundamental responsibility for society and the environment. This company also takes into account the requirement to deal with the problem of climate change. Moreover, business corporations need to work in relation to the new concept of sustainability. In this context we may see the idea of the balanced company as a third way that combines sustainability and growth in a new manner that overcomes the tensions between growth and non-growth in the debate about business and the environment. Recently, from the research group Management in Transition at Roskilde ­University, we have proposed the concept of the “balanced company” as the basis for dealing with the global problems of sustainability. This approach to sustain­able development is published in our book The Balanced Company: Organizing for the 21st Century (Rendtorff et al., 2013). We emphasize that the concept of balance in the sense of business ethics is concerned with internal and external justification of values, and in relation to the function of the business it is concerned with society, integrity, and stakeholder management. Indeed we can integrate concern for climate change in this business strategy. The struggle against climate change and global warming is an important part of CSR, because the problem of climate change has become so urgent for our efforts to preserve the Earth. Managing the balanced company means relating business practice to the new and redefined concept of sustainability. This allows the business to obtain greater harmony with the environment, taking into account the triple bottom line of balancing the ­corporation. The balanced company searches ethical and ecological integrity in relation to the environment. We can emphasize that the triple bottom line is a practical way to relate to the realization of integrity and stakeholder management as an expression of CSR and green corporate citizenship in relation to the daily practice of the corporation. How do we move from the concept of the triple bottom line to the concept of the balanced company? The answer is that with business ethics we can experience a formulation of the concern for the triple bottom line as a kind of communication and interaction with stakeholders and the environment. In this sense, business ethics and CSR and values in business have significance as central for the organization and management of the corporation as a balanced company. Accordingly, business ethics is relevant for understanding the legitimacy of the corporation in relation to the balanced company with a sense of global responsibility for sustainable development.

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7. Toward a Research Agenda for an Ethical Economy This discussion of the ethical of economy of the environment shows that the concept of ethical economy (Wirtschaftsethik) and the topic of the relation between ethics and economics as a response to contemporary world problems is an important topic for theoretical and practical clarification. The concept of ethical economy includes three levels: micro-, meso-, and macro-levels and it also deals with the philosophical analysis of the ethical foundations of the economy. This will be the topic of this research project where we will (1) clarify the concept of ethical economy, (2) determine the state of the art of the research in the field of ethics and economics, and (3) propose an ethical economy as a response to contemporary world problems. Accordingly, we could define this research project of developing a theory of an ethical economy with the following issues: (1) Identify the major dimensions of the ethical economy, based on literature review and analysis of the existing positions and literature in the field. (2) Identify major empirical areas of research in ethical economy, related to economic institutions, political decisions-making, corporate cultures, and organizations. (3) Propose solutions for actions and d ­ ecision-models for economic ethics and ethical economy in different organizations and institutions. The important research questions for this research project will be: How can we reinitiate the ethical economy, for economic ethics to be operationalized? What would be the major tasks of research in ethical economy today? What is the “research gap” to be initialized for an ethical economy in contemporary research? Is there a room for a research project of ethical economy? Topics for the analysis in terms of ethical economy are: (1) the relation between economic ethics and formal philosophical ethics; (2) definition of the principles of substantive ethics of ethical economy; (3) ethical economy and cultural philosophy of the economy; (4) ethical problems and dilemmas in relation to economic externalities and sideeffects; (5) economy, ontology, decision theory, and philosophy of management, including practical dimensions of decision-making; (6) economic ethics and the market economy, including specific economic dilemmas of business ethics and economics of organizations; (7) the concept of justice and just price in economics and economic institutions; and (8) integration of the philosophy of the ethical economy in the ethics of the environment, as we have suggested in this chapter. With this research agenda on the ethical economy, we have provided a framework for understanding the economic foundations of the SDGs in the perspective of ethics and philosophy of management. The ethical economy is the basis for the concept of progressive business models to be used as the basis for development of sustainable economics at the micro-, meso- and macro-foundations of the framework of the SDGs. It is important to emphasize that progressive business models are based on balanced openness and transparency as well as ethical stakeholder engagement for the SDGs. This is not only the case for business ethics and CSR, but it also concerns the administration of public organizations and institutions. Thus, the framework of the ethical economy, combining ethics and economics constitute a new political economy of the SDGs. This political economy should be used as the basis for analysis of progress towards realization of the SDGs in public organizations and institutions, private businesses and corporations as well as in partnership between business, governments and NGOs and other civil society organizations.

Chapter 10

The Concept of Equality in Ethics and Political Economy In this chapter, I would like to discuss the concept of equality in ethics and political economy.1 We begin in Section 1 by a presentation of a philosophical concept of equality of resources, as it is suggested by Ronald Dworkin in his political philosophy. In Section 2, I look at the concept of equality in relation to the factual distribution in our contemporary political economy. Here, I rely on the work of Thomas Piketty who shows the reality of equality in the world. Piketty argues that it is the concept of capital that reproduces inequality that is still the most essential concept in our economic system. This is demonstrated on the basis of numbers and figures based on data in a perspective of history of economics from the nineteenth century to the present days. In Section 3, I discuss the conceptions and perspectives on this relation between ethics and political economy in our present society. With this the chapter has the following main sections: (1) The Concept of Equality in Ethics and Political Philosophy; (2) Equality and Distribution of Wealth; and (3) Conceptions and Perspectives for Ethics and Political Economy.

1. The Concept of Equality in Ethics and Political Philosophy In his book Sovereign Virtue. The Theory and Practice of Equality (2001), Ronald Dworkin discusses the problem of equality. According to Ronald Dworkin, we can distinguish between equality of welfare and equality of resources. Both are subcase of distributional equality. The problem is how wealth or resources should be distributed equally. It is important to determine in which context equality of resources or equality of welfare is important (Dworkin, 2001, p. 13). “Equality of welfare” seems attractive because it fulfills people’s needs. It seems correct if we deal with handicapped people but less right in cases of artists with needs for doing their art or people who simply have expensive tastes (Dworkin, 2001, p. 14). There are, however, different concepts of equality of welfare so in order to distribute according to equality of welfare it is firstly necessary to define the concept of equality of welfare. In this utilitarian concept of welfare, the problem is how we can measure the value of someone’s life to him or 1

Previous versions and preparatory works for this chapter include Rendtorff (2015c).

Philosophy of Management and Sustainability: Rethinking Business Ethics and Social Responsibility in Sustainable Development, 127–139 Copyright © 2019 by Emerald Publishing Limited All rights of reproduction in any form reserved doi:10.1108/978-1-78973-453-920191010

128    Philosophy of Management and Sustainability herself. Traditionally, this is defined in terms of preferences and subjective judgments. This idea of equality of welfare is different from the concept of equality of resources because it is based on subjective preferences. “Equality of resources” is different from this concept of equality of welfare. It is very difficult to distribute resources according to the subjective enjoyment of different individuals (Dworkin, 2001, p. 42). Dworkin discusses the case of expensive tastes and argues that it seems unfair to distribute resources taking into account expensive tastes of specific individuals (Dworkin, 2001, p. 48). It seems for example counter intuitive to prioritize people with champagne tastes in the distribution of welfare resources (Dworkin, 2001, p. 49). It is an argument against the welfare-utilitarian position that expensive tastes must be taken into consideration in order to secure equality according to this position. However, a general utilitarian position of the greatest happiness to the greatest number would also be critical toward such welfare and preference based position. This position argues for a general increase of welfare and therefore it would be irrational to prioritize people with expensive preferences because of the decrease of marginal utility. The principle of utility limits the principle of equality of welfare, because it looks at the equal distribution of wealth among different people. In contrast to expensive tastes Dworkin argues that the issue of handicaps and physical disabilities calls for concern for compensation and equal distribution (Dworkin, 2001, p. 60). But this cannot be explained in terms of equality of welfare or in terms of general utility because of the implicit tendency of utilitarianism to sacrifice the weakest people in favor of the greatest good to the greatest number. Accordingly, we must move from the position of equality of welfare to the concept of equality of resources. This implies that resources should be distributed equally among individuals. Dworkin proposes to consider the concept of equality of resources on the basis of a kind of distribution like a distribution on an ideal economic market where the share of goods is so equal that no-one would like another distribution of goods (Dworkin, 2001, p. 76). Dworkin proposes an envy test according to which there is perfect equality of resources when no-one over time would like another distribution of resources. Equality of resources means that people get the same number of external resources so that they equally can live the lives they want according to their talents and pursuits (Dworkin, 2001, p. 86). According to the position of equality of resources, there should be some compensation for unequal talent in the same way as there should be compensation for handicaps and disabilities (Dworkin, 2001, p. 92). Equality of resources means that everyone has the rights to equal amount of resources in order to pursue their goals and aims in life. Therefore, this position would allow a hypothetical insurance system and compensation for those who are worse off. One important question is whether one has the right to start all over with new compensations if life has led to economic decline and bad moral luck. I think that the theory of equality of resources should allow for such a new beginning and re-entry for all citizens in order to compensation for disadvantages that emerge through the actual life of citizens. Compared to other theories of justice equality of resources is a distinct political ideal of equality. It is critical to Robert Nozick’s use of Locke’s concept of

The Concept of Equality in Ethics    129 private property to justify inequality. Nozick argues with an example that the wealth of the Basketball player Wilt Chamberlain is justifiable because many people are willing to pay a little bit of money to see him and in sum this generates his enormous wealth (Dworkin, 2001, p. 111). Even in an initial system of wealth equality, according to the argument, very soon, inequality would emerge. However, from the point of view of equality of resources Wilt Chamberlain would be required to pay progressive income tax and thus contribute to the position of equality of resources (Dworkin, 2001, p. 112). Moreover, Dworkin is also critical toward John Rawls famous “difference principle” in A Theory of Justice (1971). He discusses to which extent people in the original position behind the veil of ignorance would chose the principle of equality of resources rather than the principles of justice proposed by Rawls (the principles of political freedom and the difference principle). Dworkin admits that the difference principle in contrast to utilitarian concepts of equality of welfare is an interpretation of the principle of equality of resources (Dworkin, 2001, p. 113). However, the difference principle is not as useful as the principle of equality of resources because there is a certain arbitrariness with regard to the definition of the worst-off built in to the theory of Rawls. It is argued that the difference principle is insensitive to people with disabilities and physical and mental handicaps. By defining a class of the worst-off Rawls cannot account for individuals in the same way as the principle of equality of resources that looks at the problem of equality of resources related to specific individuals and persons. In addition, the difference principle is not as broad in its definition of equality as the principle of equality of resources (Dworkin, 2001, p. 116). So Dworkin (2001) insists that the principle of equality of resources must be a necessary choice in the original position (2001, p. 119). With this concept of equality of resources, Dworkin argues that there is an important link between equality of resources and liberty understood as human freedom of action in society. The principle of equality of resources deals with liberty as an aspect of equality where freedom is limited with the concern for equality (Dworkin, 2001, p. 121). Liberty as political freedom is defined as negative freedom as freedom from legal constraints. In this sense, there is a close connection between freedom and equality. Thus, equality of resources takes into account the fair distribution of resources in society. Dworkin understands equality of resources as a step toward more freedom in society (Dworkin, 2001, p. 123). We can say that equality is an important virtue of a free society where freedom and equality does not necessarily have to be in conflict with one another. According to Dworkin, freedom is such an integrated part of the concept of equality of resources that a conflict between liberty and equality cannot really arise because freedom and equality are mutually interdependent (Dworkin, 2001, p. 134). However, freedom cannot be reduced to a resource but rather liberty is a constitutive element of equality of resources because “freedom of choice” is a core concept of equality where we need to reconcile liberty and equality in the ideal of egalitarian distribution (Dworkin, 2001, p. 153). As essential in equality of resources liberty is essential to political justice (Dworkin, 2001, pp. 180–183).

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2. Equality and Distribution of Wealth While Dworkin suggests the political and philosophical ideal of the ethics of equality as a concept of equal resources Thomas Piketty can with his important book Capital in the 21st Century (English translation 2014) be said to address the problem of equality in the reality of contemporary political economy. This book has become a bestseller in the world. It has sold more than 200,000 copies and the success will continue. Piketty asks the questions: What is capital? How is the wealth in the world distributed? Has wealth increased so that there has become more equality or is the situation of wealth the same in the world? Piketty looks at the relation between income and capital and argues that capital still has paramount significance for income today and that this implies reproduction of inequality so that it is still capital and not work that is the basis for income in society. The important definition of capital in the book can be found on page 52: The first fundamental law of capitalism is α = rxβ where r is the return on capital. This links the capital stock to the flow of income from capital. The capital/income ratio β is related in a simple way to the share of income from national income, denoted α. The formula is α = rxβ. For example if β = 600% and r = 5%, then α = rxβ = 30%. The return on capital is the central law of capitalism. Return on capital is a broader notion than the rate of profit and the rate of interest while incorporating them both. (Piketty, 2014, p. 52) The housing market in Paris shows for example how an old relation between ownership, rent, and capital is still reproduced. It was also like this in the twentieth century. Nineteenth century novels just took the capital income on real estate or other capitals for granted. We can see this in the novels of Balzac or Jane Austen. The author makes many references to the description of money and wealth of characters in novels. He argues that this helps us to understand the perception of wealth and inequality, but it also shows the changes from the nineteenth to the twentieth centuries, because Jane Austen and Balzac can easily use money to describe the wealth of their characters in the sense that Austen’s characters earn approximately 1,000 pounds when they are rich and 30 pounds to live on average a year. Balzac talks about 10,000–20,000 francs to live on average (Piketty, 2014, pp. 105–106). This reference to literature to understand economics is an important contribution of the book for understanding methodology of economics moving beyond only accepting formal references to mathematics. In the book, the big inequality in the world is analyzed in terms of world regions. If we compare the numbers of population with input–output of capital/ production in the different parts of the world we cannot really document a convergence of equality between the parts of the world even if the number of people and total output in Europe and America has decreased. Due to the increase of population in Asia and Africa, inequality between the regions still becomes bigger (Readings of figures Piketty, 2014, pp. 60–61).

The Concept of Equality in Ethics    131 Piketty says: To sum up, global inequality ranges from regions in which the per capita income is on the order of 150–250 Euros per month (Sub-Saharan Africa, India to regions where it is as high as 2,500 Euros to 3,000 Euros per month (Western Europe, North America, Japan) that is ten to twenty times higher. The global average, which is roughly equal to the Chinese average, is round 600–800 Euro per month. (Piketty, 2014, p. 64) Nevertheless, these figures have to be corrected with regard to differences in purchasing power and exchange rates in different regions. Therefore, there may be important regional differences to take into account. We still see a situation where the rich countries have a higher income of their domestic product because they invest more abroad and own more than their domestic product abroad. This is in particular true of Africa where foreign investors like in the old colonial days still own more than 20% of the country’s capital producing units. Therefore, the rich countries earn money on capital ownership in the poor countries. This is documented by international numbers and figures. One possible conclusion from this is the following: That the rich countries still own a large part of the poor countries can be good and bad. It can facilitate access to the international economy of growth but it can also be a danger to development and self-determination, due to marginal utility theory, meaning that the poor countries do not get equally access to their goods like the rich countries who get increased wealth but do not need it so much as the poor countries. The book discusses the law of cumulative growth. There is close link between demographic growth and economic growth. But the capital ownership structure has an influence on this relation. The central thesis of this book is that an apparent small gap between return on capital and rate of growth can in the long run have powerful and destabilizing effects on the structure and dynamics of social inequality. In a sense everything follows from the laws of cumulative growth and cumulative returns. (Piketty, 2014, p. 77). According to the law of cumulative growth in demography we were 600 millions in year 1700, now we are 7 billons, and in year 2300 we may be 70 billion, if this continues with cumulative growth dependent on life expectancy and birth rate. The accumulation of people in the developing world and the stagnation of people in the developed world will lead to greater inequality due to the inequality of capital income in the developed and the developing world. The people in the regions with little demographic growth will become richer because of their increased capital income. On the other hand, there is no doubt that growth has been extremely important for the developing countries. We have now moved from a life expectancy of 40 in the 1700 year to 80 in the twenty-first century and today everybody has access to health care and cultural goods. But we cannot keep this kind of growth.

132    Philosophy of Management and Sustainability But when we look at growth in the twentieth century we see that rapid growth only happened in Europe in the glorious period between 1945 and 1970. But this was due to the fact that Europe was far behind the United States and could reach the United States quickly in the period after that period growth has been more slow, close to average at 1.5% annually. In fact, liberalization policies in the 1980s did not change this. And there is no evidence that state intervention really caused harm to growth. However, it is difficult to foresee growth and we cannot predict how growth will increase in the future. Moreover, growth may decrease in the twenty-first century. Piketty talks about the “double bell curve of global growth”: To recapitulate, global growth over the past three centuries can be pictured as a bell curve with a very high peak. In regard to both population growth and per capita output, the pace gradually accelerated over the course of the eighteenth and nineteenth centuries, and especially the twentieth, and is now most likely returning to much lower levels for the reminder of the twenty-first century. (Piketty, 2014, p. 99) Part two of the book analyzes the dynamics of capital/income ratio over time. Piketty argues that the present state of inequality in the twenty-first century in Europe is just a return to the situation of the nineteenth century which was interrupted by the inequality, created by the public policies following the Second World War. Starting with the references to Balzac and Jane Austin, where the unequal distribution of wealth in nineteenth century society is clear, Piketty analyzes the distribution of wealth in the western societies today. He shows that a small group of people own virtually most of the wealth where millions of people have a very abstract relation to capital. Piketty shows that the richest 10% owns 60% of the wealth while the remaining 90% owns very little and only 40% of the wealth (Piketty, 2014, p. 259). They own so little that capital for them is a very abstract concept. The growth of the middle class in the twentieth century was the invention that contributed to hide these differences in wealth. What was the justification of this inequality? We can call it hyperpatrimonal society that is a society based with inherited wealth. This was the case in Europe. In the United States it was hypermeritocratic society, society of supermanagers, but this distinction does not hold. Piketty does not only make the mathematical measures of inequality by Gini and Pareto, but he also uses real examples from life to illustrate inequality. However, if we look at the numbers the fall in inequality in the twentieth century is due to collapse of rentiers and high income from capital. This is at least the case in France (Piketty, 2014, p. 274). But, we have gone from a society of rentiers to a society of managers (Piketty, 2014, p. 278), where the managers today are the ones with the high income. In France after 1968 a minimum wage was introduced and this increased equality but from the 1980s this trend did not continue so strongly and from the 1990s super salary was introduced to top managers. In the United States, the numbers of rentiers in the beginning of the twentieth century were

The Concept of Equality in Ethics    133 lower than in Europe, but they existed. United States was even more egalitarian than France was between 1950s and 1980s. Since then inequality has exploded and contributed to the instability of the US economy that lead to the financial crisis. The high-paid superstars of managers in the United States have recently contributed to increase of inequality. How should we understand wage difference and inequality? Education plays a key role. In particular, minimal wages are important to avoid inequality in combination with investment in education. But the race between technology and wages cannot explain the increase of top-income in the United States since the 1980s. In the beginning of the twentieth century, inequality in Europe was bigger than in the United States, even in the Scandinavian countries, including Denmark. The top incomes in Germany increased during the Nazi-period 1933–1938 and later in the 1950s. We can also document raising inequality in salary in the developing world, in particular in China after the changes to a capitalist system in the 1980s. Pekitty has also studied inequality of capital ownership. In France, a tax on estate and gifts was established in 1791 and this gives us a historical picture of wealth distribution since that time. In fact, we can document hyperactive concentration of wealth during the Belle Epoque in France and we can document hyper concentration of wealth in Europe in the nineteenth century in particular in societies prior to the First World War. The society of rentiers flourished during “la belle époque.” It seems that the return on capital is greater than the growth rates in such “inheritance societies.” Inequality remains very big: To recap: the inequality r > g (return on capital is bigger than growth) is a contingent historical proposition, which is true in some periods and political contexts and not true in others. From a strictly logical point of view it is perfectly possible to imagine a society in which the growth rate is greater than the return on capital – even in the absence of state intervention. (Piketty, 2014, p. 358) This historical relation changes in different historical periods. The fundamental inequality r > g can explain the failure of the French revolution (Piketty, 2014, p. 365). The concentration of wealth today, through markedly lower than in 1900–1910 remains extremely high (Piketty, 2014, p. 375). Taxation may not change this fact. Piketty says: To sum up: the fact that wealth is noticeably less concentrated in Europe today than it was then in the Belle Époque is largely a consequence of accidental events (the shocks of 1914–1945) and specific institutions such as taxation of capital and its income. If those institutions were ultimately destroyed, there would be a risk of seeing inequalities of wealth close to those observed in the past or, under certain conditions, even higher. Nothing is certain: inequality can move in either direction. Hence, I must now look at the

134    Philosophy of Management and Sustainability global dynamics of wealth. One conclusion is already quite clear, however: it is an illusion to think that something about the nature of modern growth or the laws of the market economy ensures that inequality of wealth will decrease and harmonious stability will be achieved. (Piketty, 2014, p. 376) Piketty studies capital accumulation in the long run. With the reference to Balzac, he asks the question whether study and hard work or marriage with a rich person or inheritance leads to wealth. He looks at the annual flow of inheritances in the long run and he can document that “the inheritance flow accounts for 20–25% of annual income every year in the nineteenth century with a slight upward trend toward the end of the century”(p. 379). From 1910 until 1920, it diminished and from 1920 until 1980 it was rather low (from 10% to 4%) to 7%. From the 1980s, it started to rise again and in 2010 it seems to be 12% (Piketty, 2014, p. 380). The baby boomers had very little inheritance, but the children born in the 1970s and 1980s have already inherited. For them the decision to buy a house may have been dependent on this (Piketty, 2014, p. 381). Capital is also important for production today partly because of technological reasons. You need capital to start a business so the significance of capital has also increased over time (Piketty, 2014, p. 285). Mortality rate which becomes lower does not necessarily influences the transmission of gifts as inheritance. Inheritance is important through the transmission of gifts. Inheritance occurs later in aging societies but is still very important. In the aging society there is a growing importance of inheritance. Gifts are given approximately 10 years before the death of the donor. Gradual increase of gift-giving between generations contributes to enforce this trend (Piketty, 2014, p. 393). In an aging society, people inherit but also a larger amount. If we look at the distribution of inherited wealth since 1790, we can see that 25% of income come from heritage while 75% from work. Nevertheless, this is very unequally distributed. This explains the young man Rastignac’s dilemma. The rich people were a very little group so it is difficult to find a rich girl, so it may be better to work to get a decent salary (to be or not to be!). Inheritance will represent about one quarter of total life time resources of for cohorts born 1970 or later. So we are moving toward the society of petits rentiers (Piketty, 2014, p. 418). The fact of living of money from the past will increase. This is the case with the movie Dirty Sexy Money. In France today we see the reemergence of inherited wealth – not only wealth achieved by hard work, education or merit. This is the case even though the words rents and rentiers took on very pejorative connotations in the twentieth century. In the book the concepts are used in their descriptive sense. Capitalism remains a society of rentiers even though it has become more democratic. The return of inherited wealth seems to be a global phenomenon. This is the case not only in Europe and the US but globally throughout the world. We can see this among others with the increase of global billionaires. The wealthiest 0.1% on the planet, some 4.5 million out of and adult population of 4.5 billion apparently possess fortunes in the order of 10 million Euros

The Concept of Equality in Ethics    135 on average, nearly 200 times of average global wealth. The wealthiest 45 million possess 3 million euros on average (Piketty, 2014, p. 438). Liliane Bettencourt the heir of L’Oreal had a fortune that increased from 2 billion to 25 billion dollars from 1990 to 2010. This was a little less than Bill Gates and more than Steve Jobs (Piketty, 2014, p. 440). However, the entrepreneurial argument cannot justify such differences in wealth. Is the inequality of the fortunes justified? Moreover, Piketty discusses the Sovereign Funds of the Oil states like Norway, Abu Dhabi, Saudi Arabia, and other golf states. What about all the people who worked very hard in the businesses. Maybe we need a progressive fiscal tax on capital! Piketty deals with this question in the fourth part of the book, which is about regulating capital in the twenty-first century. Can we imagine political institutions that contribute to the regulation of these issues? Piketty thinks that a progressive tax on capital is the way to solve the challenges of the twenty-first century. Piketty argues for greater state intervention in the economy. He looks at different solutions to inequality problems in relation to university systems, pension systems, tax systems, etc. Then he argues that we need to rethink the progressive income tax and introduce a global tax on capital in chapter 14 and 15 of the book. It is argued, that estates must be more heavily taxed than income. Piketty argues that it was war not democracy that gave progressive taxation. We need to rethink income tax in a more egalitarian way in the globalized economy. However, a global tax on capital is a utopian idea. It is difficult to impose a tax on global wealth. A simple solution could be automatic transmission of banking information. There is a contributive and intensive justification of capital tax. The three types of tax on income, on capital, and on inheritance accomplish each other. Piketty proposes a European wealth tax enforced by European institutions and the European central bank. A tax on capital is a better and less totalitarian solution than a centrally planned economy. Piketty says: To sum up: the capital tax is a new idea, which needs to be adapted to the globalized patrimonial capitalism of the twenty-first century. The designers of the tax must consider what tax schedule is appropriate, how the value of taxable assets should be assessed, and how information about asset ownership should be supplied automatically by banks and shared internationally so that the tax authorities need not rely taxpayers to declare their own asset holdings. (Piketty, 2014, p. 534) The tax on private capital is the most efficient solution to reduce public debts. This is a way to solve the problems of the crisis in many states. It is presupposed that this would be the solution for the European Union. With this it is possible to create more equality in society and take into account the problem of wealth created by capital in contrast to wealth created by work.

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3. Conceptions and Perspectives for Ethics and Political Economy Therefore, Dworkin’s political and ethical ideal of equality of resources seems to be very far from the present world situation of increasing inequality of political economy. Instead of moving toward a society of equal chances and resources, we face a society with increased inequality. In this sense, Piketty’s book represents an important challenge to mainstream ethics and political philosophy. However, we can still point to a number of important questions that remain after this summary of Piketty’s work. In particular, I think that we could address the following questions to Piketty’s work: (1) Are Marx and Piketty right when they argue that capital will be the basis for income rather work in the long run or do they forget that value-creation through work will still make work very important? (2) How should we evaluate the dangers to democracy of increased individuality? Should we argue that this is not only a challenge to equality, but indeed also to political freedom and social cohesion of democratic societies? (3) Does the law of accumulative growth work? Alternatively, can we doubt it? The belief in the existence of such an economic law seems to be the fundamental presupposition of the work of Piketty. (4) How should we evaluate the use of literary examples in Piketty? They seem to be very important? But can we give them an essential significance for economic theory? (5) Is Piketty right in saying that due to capital ownership the developing world is still owned by the developed world? A fact, which means that inequality in the world, persists! (6) Is it really true that we live in a hyperpatrimonal society where richness and wealth after all is based on inheritance and rentiers? It seems that this is the case and that it is an illusion to believe that we live in a kind of democracy with equal conditions for everyone – given for example, the fact that most students at Harvard have parents who belong to the 2% richest in the United States. (7) What should we say about the idea that it was accidental that there was equality in the twentieth century due to the world wars. How do we ensure equality in the future? (8) What about Piketty’s analysis that we live in a society where people get 25% of their life income from inheritance and that this will also be the case in an aging society because inheritance will only come later but still be a general part of society’s function? Is that not in contradiction with the idea that older people today rather want to spend their money than to give them on to their children? Maybe Piketty underestimates the egoism of the 68 generation that always redefine the life style of their generations! (9) Is the idea of a global tax on capital income a way to proceed? If it is only possible at the EU-level what does it mean for the national tax systems? (10) What will happen if we do not have such a tax in the future – will we as Piketty suggests experience the increase of inequality throughout the world?

The Concept of Equality in Ethics    137 These questions do not exclude the significance of Piketty’s research. The essential achievement of Piketty’s book is that in the classical sense this book represents a revival of political economy scale for global society. Economy is placed as a social science and a humanistic science, and in the end as a moral and political science. In this way Piketty reconstruct from an economic perspective the unity in the practical sciences, at the same time as he recognizes that each of the different human sciences have their special perspective. This way of thinking of economy was founded by Aristotle and followed up by Thomas Aquinas and represents an important tradition in Western political philosophy. We can find the same unity in Adam Smith’s main work The Wealth of Nations from 1776, in which the modern political economy is based. Later on economy became an independent specialized social science that has lost its relation to the other social sciences. This has especially been the case in the period after Second World War when economy increasingly has become an exercise in mathematical economic model calculation, a mathematical model technique that has totally lost its connection to the other social science. In the same period global economy has been developed in a scale that has not been seen before. The consequence has been that it has become difficult to discuss global society in a relevant way. On the one hand we had the dominating economy where it was possible to make some mathematical calculation about specific economic topics without any relation to a broader social scientific, political, and moral understanding of the significance of economy in society and its human consequences. On the other hand we had the social sciences, sociology, political sciences, law, humanities and not at least historical sciences, and finally moral sciences in their broadest sense. These sciences could criticize the economically driven creations of global society at the same time as they were not really able to face social reality in the sense that the humanistic perspective had no impact on the development of global economy and society. Economy had in practice become the triumphant sovereign perspective on human life and society for the understanding of the main transformations of modern global society. On this background it is very important that Piketty introduces the classical political economic perspective on economy and global society. Piketty’s book has created a new platform for the social sciences. In this context, it should be emphasized that the global perspective is the essential perspective in Piketty’s book. He recognizes that economy has transformed the world to a global world. It is from this perspective that he tries to understand the transformation of the regions and nation states. Piketty will give an understanding of how economy could transform global society in the twentyfirst century. In this context, the long historical perspective from the past to the future becomes very essential. Piketty’s description could be called a historical analysis of the transformation of modern society from the origin of capitalism in the eighteenth century until the global perspective in the twenty-first century. And now a final issue of a possible solution: Philippe Van Parijs’ Real Freedom for All: What (If Anything) Can Justify Capitalism? (1995) that the idea of basic income is the only way to ensure freedom of choice of citizens. Maybe we should

138    Philosophy of Management and Sustainability take the work of Philippe Van Parijs seriously if we want to combine freedom and equality. Van Parijs introduces the ideas of “basic income” for all and “negative income taxes” as a possible solution. Perhaps that is an additional way to overcome the present increasing inequality in our economic system and ensure “equality of resources” (Van Parijs, 1995). Van Parijs has started The Basic Income Earth Network (BIEN; until 2004 Basic Income European Network) that is a network of social activists and academics that want to ensure a guaranteed minimum income everywhere on earth based only citizenship and not on work or charity. The network defines basic income as “an income unconditionally granted to all on an individual basis, without means test or work requirement.” Basic income for all can be interpreted as a proposal for concrete realization of distributive equality as the basis for freedom. If one cannot afford things like taking care of children at home or realizing dreams of doing artistic painting then one really does not have freedom of choice. Van Parijs argues that basic income for all can be financed by taxing of work and jobs, but with the insights of Piketty we might add that basic income can be financed with a tax on capital income so we experience an economic redistribution from the rich to the poor in order to ensure distributive equality. However, basic income does not imply a break with capitalism since it is possible to have a capitalist economic system together with the idea of basic income of all based on redistribution of money made on economic markets (Rendtorff, 2018a). In “The Need for Basic Income: An Interview with Philippe Van Parijs” conducted by Christopher Bertram (Imprints vol. 1, in March 1997) the position of basic income is explained (Bertram, 1997). Van Parijs tells us that basic income follows the tradition of guaranteeing basic income in some European social welfare states while being at the same time a distinct new idea: first, basic income is strictly individual, given to all people on an individual basis irrespective of their household situation; second, it is given to all irrespective of income from other sources (labour income or capital income); third, basic income is not subject to whether people are willing to work. It is not restricted to the involuntarily unemployed, but it would be paid to people who choose to not to engage in paid work (for example, housewives, househusbands, students, and tramps). (Interview with Van Parijs) In the long-term basic income might be quite solid but in the short term it corresponds to minimum income in some European countries. The objection to this approach has been a moral objection arguing that basic income gives people “something” for nothing. But this argument can be addressed by reference to the concept of distributional equality what Van Parijs calls “real freedom for all.” This concept is originally a Marxist concept but it refers to the freedom of individual choice that was also important in Dworkin’s concept of distributive equality. The justification for basic income is first of all this issue of distributive equality, but there may also be practical economic justifications for unconditional basic

The Concept of Equality in Ethics    139 income for all citizens. Seen from this pragmatic point of view of the labor market it is not necessary a consequence that the demand for jobs will decrease. Rather it may be different and some jobs may require higher salaries in order to be attractive. Another argument against the proposal is that it would be too expensive and the earnings from tax would decrease. Against this argument it may be argued that there also money to be saved on basic income since the administrative costs of the system would be much lower that contemporary social systems that are dependent on heavy legal and administrative measures. Furthermore, tax should be moved from tax on work to tax on capital and consumptions. With increased consumption tax state earnings would increase so that basic income could be justified. With modern technology, it is argued basic income scheme would be quite cheap for a society. Moreover, people who already have some basic income, that is, in form of pensions would not need further basic income since they can finance themselves. Also people who already have work would not receive basic income money because they already have money. Rather basic income is directed to the poor people in society who don’t have any earnings. Basic income is directed to those people who have no income. Van Parijs proposes a cosmopolitan and international approach to basic income so that should be implemented everywhere on earth. Maybe not in short terms but it should be considered as a regulative ideal of global distributional equality. In political philosophy this approach implies a kind of thinking that mediates between socialism and liberalism keeping the market society but why integration of the idea of basic income as a guarantee of basic liberties and distributional equality. It is a capitalist system with private ownership and freedom at the market. But this is combined with a basic guarantee of distributional equality in the international community. This is the sense of equality in political economy with a cosmopolitan perspective. Thus, this chapter has presented the concept of equality as essential to a democratic society and therefore equality is a central concept in the SDGs. In fact, we can argue that in the framework of the SDGs, the combat of extreme poverty, just societies and welfare states and stability in democratic political institutions are as important as efforts to combat climate change and insure biodiversity. Indeed, the struggle to overcome extreme poverty seems to the essential concern throughout the framework for sustainable development of the SDGs. In this context, sustainability emerges as a project of the enlightenment searching to ensure the survival of humanity, confronted with the contemporary social and environmental challenges. Moreover, it is important to emphasize that a coherent concept of sustainable development aims at not only overcoming marginalization of the poor people of the world in order to protect the political and economic interests of the marginalized. Thus, as suggested with this argument from Dworkin and Piketty, a democratic society and a just political economy must be based on both political and social and economic human rights. This political philosophy of justice lies behind the political and economic values of the SDGs of the United Nations.

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Part III Foundations of Philosophy of Management, Ethics, and Sustainability

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Chapter 11

The Dark Side of Sustainability: Evil in Organizations and Corporations How do we explain the horrors of modernity, Auschwitz and the death camps, the Gulag, or September 11, and in Iraq and Afghanistan, and more recently the War in Syria and the continuation of terrorism all over the world? On the one hand, we ascribe this evil to willed demonic human actions. On the other hand, our concepts of evil become insufficient and we are confronted with the radical incomprehensibility of evil actions (Finkelstein, 2000; Neiman, 2002). In this chapter, I will address Hannah Arendt’s philosophy of responsibility and reflective judgment as way to deal with political and administrative evil as one of the many faces of evil in contemporary society.1 This is the dark side of sustainability and this helps to explain why organizations and businesses are so far from contributing to the good social and environmental development of society (Adams & Balafour, 2009). I will begin with a discussion of the banality of evil. Then I will explore this in relation to Hannah Arendt’s analysis of the administration of evil as an example of political evil in administrative and legal systems, as expressed by the personality of Adolf Eichmann. This is the basis for a general theory of administrative evil in organizations and corporations (Bird, 1996). Finally, we will place this concept of administrative evil in Hannah Arendt’s general political philosophy.

1. Hannah Arendt: The Banality of Evil The German-American philosopher Hannah Arendt, who had to flee from the Nazis to the United States during the Second World War, published in 1951 one of the most important works on the terrors of systems in the twentieth century, The Origins of Totalitarianism (Arendt (1951), 1964) which was later developed in her work in Eichmann in Jerusalem. An Essay on the Banality of Evil from 1964. 1

Previous versions and preparatory works for this chapter include Rendtorff (2014c, 2014d, 2015a).

Philosophy of Management and Sustainability: Rethinking Business Ethics and Social Responsibility in Sustainable Development, 143–160 Copyright © 2019 by Emerald Publishing Limited All rights of reproduction in any form reserved doi:10.1108/978-1-78973-453-920191012

144    Philosophy of Management and Sustainability I think that Arendt’s concept represents a new way to approach the problem of evil that goes beyond classical concepts of. Arendt’s philosophy contains in this connection a critical evaluation of the concept of evil as a result of a demonic and devilish evil spiritual force (Arendt, 1964; Bernstein, 2005). Looking closely on Arendt’s conception of evil in relation to political philosophy we may argue that it represents a revolt against the implicit theodicy in the political ideology that was dominating during the Iraq war and in later wars on terror and in the conflict in Syria. After the terror action against World Trade Center in New York, President Bush has several times emphasized that the War on Terror and the fight against Osama bin Laden was a fight between good and evil (Bernstein, 2005). Although they finally emerged as miserable and somewhat insignificant men Saddam Hussein and Kaddafi were also portrayed as the incarnation of evil and the war against Iraq had similarities with a crusade against evil powers in the world. With terrorism we come as close as possible to “intentionally willed evil.” The actions of the terrorists in Spain as in Russia and the evil of Bin Laden, Hussein, and Kaddafi have been compared to the crimes of Hitler, Stalin, and other totalitarian regimes in the twentieth century as an expression of “absolute evil.” Arendt asks the question, how the Holocaust, that is the killings of six million Jews in concentration camps, was possible. She does not think that such evil was beyond every human understanding (Arendt, 1964). But none the less, evil requires that we try to understand it and thereby creates a defense against it. Arendt stated that evil in Nazism should be understood as a historically conditioned modern political phenomenon, which is essentially different from earlier forms of tyranny and despotism. According to Arendt, totalitarianism is characterized by the fact that technically rationality and calculation of utility is used to realize an irrational ideology that often is based on anti-Semitism or racism. Totalitarianism as a political system reaches the character of nightmares, when it uses technology to make change radically human beings and society by the use of systematic murder or ideologically organized madness. Terror creates constant insecurity and unsafe feelings among individuals in society. In totalitarianism elites are sanctioning their power by the use of secret police. Concentration camps and death camps are essential to establish total power to military leaders. The function of the camps is, with the sharp insights of Arendt, to make human beings superfluous and meaningless (Arendt, 1964). Arendt argues that radical evil in the totalitarian regime consisted in its attempt to become master over human nature and accordingly in its attempt to form human nature according to its own will. Arendt continued in the 1950s and 1960s as one of the most important American political philosophers to be captured by the problem of evil in totalitarianism. It was in this context that she in 1963 accepted by the week newspaper The New Yorker to report from the court case in Jerusalem against the Nazi criminal Adolf Eichmann, who was considered one of the major responsible bureaucrats for the transport of Jews to concentration camps (Arendt, 1964). Arendt argued ironically and satirically against the predominant view, that Eichmann who had been presented as a symbol of intentionally willed evil, rather as the incarnation of the devil, was nothing special. Contrary to world public,

The Dark Side of Sustainability    145 Arendt reduced Eichmann to be a banal and petit bourgeois bureaucrat (Arendt, 1964). He had not deepness or moral imagination and his evil cape from his lack of ability to himself in the place of the other. Contrary to the fascination of Eichmann’s devil personality, Arendt argued that his evil consisted in his incapacity to distinguish between good and evil. In this sense the banality of evil is the frightening consequence of radical evil that made every human being superfluous and meaningless (Adams & Balafour, 2009). The personality of the terrorists, the Nazi soldiers or Stalin’s butchers may be said to be characterized by the same mediocrity and ideological blindness. There is no reason in evil. It is meaningless and incomprehensible. This radical evil as the banality of evil is at the limits of our imagination and it is this radicalism which may make it difficult for us to understand that evil is banal that is the result of actions of people who are not able to have moral reflection. This kind of radical evil emerges in different ways. While Eichmann was a bureaucrat who killed at distance and never himself meet with his victims it was different with the soldiers in Serbia or the rebels in Rwanda. They did not stop with killing at a distance, but they were confronted directly with the sufferings of the victims and in some cases they were raping their victims from civil population. In some cases they may even feel that they are victims and have sadistic enjoyment of their acts and therefore have a feeling of enjoying evil as a good. The “willed evil” of different forms of terrorists is often presented a consequence of a consequence of a rationally justified religious or nationalistic hate to their oppressors (Finkelstein & Birn, 1998). And still one is marked by the meaningless and lack of goal in their actions. The essence of the concept of banality of evil is that regardless of whether it is close or at distance evil is nothing else than stupid people’s violent ideology and lack of capacity of moral reflection. The reflections of Arendt join Kant’s problems of understanding how it could be possible with thoughtful action to challenge the universal language of morality (Bernstein, 1996a). Evil actions are committed by people without deepness or conscience. This is why it does not give any meaning to ascribe to terrorists or “rogue states” like North Korea, Iraq, Iran, or Syria as representatives of the demoniac axe of evil. Such banalization of evil is very provoking, because it makes it difficult to give a traditional psychological explanation of the sufferings of the victims and give them moral rehabilitation by the fact that they were confronted with monstrous evil personalities. Like Eichmann, the Serbian politicians in Yougoslavia, who were convicted of war crimes or the suicide bombers of September 11, appeared to be “ordinary men” and it is difficult to see them as representatives of ­complex psychological personalities. It is a characteristic aspect of Arendt’s doctrine of evil that it refuses the insights of the explicatory power of psychoanalysis to understand the complex motives of evil personalities. Even though concepts of double personality and perverse precision may apply to the totalitarian personality, they are not really present in the work of Arendt (Arendt, 1964). However, this lack of psychoanalytic explanation and dependence on existentialist philosophical anthropology helps us avoid the deadlock of saying that Eichmann or other criminals cannot be ascribed responsibility for their actions,

146    Philosophy of Management and Sustainability because morally they did not know what they were doing. In fact, courts and legal authorities cannot ignore the moral and legal responsibility of such criminals, because they were morally free to do otherwise. In fact, the hate and moral incapacities of the perpetrators gives us the difficult challenge within penal law that it is to make people who do not have capacities of moral reflection to think ethically, regret, understand the monstrosity of their actions and honestly seek forgiveness. It is a misunderstanding to think that Arendt’s doctrine of the banality of evil takes away the direct intentions from the actions of the perpetrators. On the contrary, in order to respect the victims, we have to maintain that terrorists and war criminals are causes of evil, because it is not possible to refer to a higher more powerful evil that they are determined by. The perpetrators have no escape because they are existentially responsibility for their violence and brutality. One of the most worrying aspects of the banality of evil is that the perpetrators have lost the moral awareness of this responsibility and it is this lack of responsibility that makes it possible for them to do their evil actions. If they had had a capacity of moral reflection, they would be able to follow the moral law of respect for the eternal value of human beings as well as for their integrity and dignity. We may conceive Arendt’s approach as a criticism of the tendency of rationalization of evil that was dominating Western reflections about evil, where it has been attempted to justify evil as having a meaning as a necessary opposition to the good from the perspective of the will of God, human freedom, or necessary movement of history (Bauman, 1989). As mentioned, the contemporary version of this is the concept of the demoniac will of destruction, a clearly sinful will that consciously has chosen to confront the good and nihilistically destroy the whole world and itself (Baumeister, 1997). However, we may argue that even if Eichmann or some contemporary terrorists or soldiers are not really evil, other criminals like Göring or Hitler were real demoniac persons. Moreover, don’t we have moral responsibility to maintain that fanatic terrorists are incarnations of evil? In this context, Arendt’s thesis was provocative because it was in full contrast to the concept of the enemy of its time, where it was supposed that there must have been some ice cold, calculating brain behind the killings of Jews in concentration camps. What is so frustrating and unbearable for the victims about the thoughtlessness of Eichmann combined with his dutiful commitment to the extermination of the European Jews is exactly the fact that many of the German soldiers and officers like Eichmann were nothing but ordinary human beings that were following orders in a large military system without thinking on their own (Arendt, 1964, p. 42).

2. Detailed Analysis of Eichmann’s Banality of Evil Nevertheless, how can we characterize the political and administrative evil of Adolf Eichmann if we look at it in detail. It can be argued that Hannah Arendt show us the institutional set-up and organizational dimensions of moral indifference and this is why this kind of evil can be described as an indication of the banality of evil (Milgram, 1974; Zimbardo, 2007). Accordingly, from an

The Dark Side of Sustainability    147 institutional perspective we can argue that the figure of Eichmann is not only a psychological figure, but also the institutional dimension of this figure as the prototype of the morally indifference of administrative and legal bureaucracy is very present. We can say that Arendt describes the essential dimensions of this kind of personality that characterizes agency in legal and administrative systems. In fact, role-playing as described by social psychology of Stanley Milgram and Philip Zimbardo is an important element of understanding how Arendt’s interpretation of Eichmann provides us with the dimensions of an institutional analysis (Arendt, 1964). As social psychology emphasizes role expectations in social system are important for compliance to the logic of the system (Adams & Balafour, 2009). Institutional action is characterized by such expectations and obligations in social action patterns in modern society. As it is implicit in Arendt’s analysis there is certain blindness in the role agency because genuine human action is replaced by role behavior. The role behavior is a kind of system-based discipline behavior where the individual is submitted to the constraints of the system. It is on this foundation that we can go deeper into the definitions of moral blindness and banality of evil as defined by Hannah Arendt in her book on Eichmann in Jerusalem. Essay on the Banality of Evil. A close look on her way to describe Eichmann leads to the following structural features of moral indifference or moral blindness in Eichmann that relates to his existence as a role-player in a social system that carries the banality of evil with him through his agency: (1) A concept of the administrator an obedient bureaucrat. Eichmann argued that he was only following orders and therefore he was not guilty in any legal sense, but maybe in a moral sense, but this would not have any significance in a legal trail. Because on the existing legal system he had done nothing wrong. “Eichmann feels guilty before God, not before the law.” Eichmann plied “Not guilty in the sense of the indictment” (Arendt, 1964). (2) A concept of the bureaucrat with no personal involvement in his work. Eichmann argued that he was not personally committed, but that he only did his work as an objective and neutral bureaucrat following the orders that was given to him. Eichmann said: With the killings of Jews I had nothing to do. I never killed a Jew, or a Non-Jew, for that matter – I never killed any human being. I never gave an order to kill a Jew or a Non-Jew. I just did not do it. (Arendt, 1964) (3) The bureaucrat had no bad conscience and no evil will. Eichmann insisted that there was no inner bastard in him. And there was agreement that he was no psychopath. It was shown that half a dozen psychiatrists had certified him as “Normal” and his attitude toward his family was “not only normal, but most desirable.” It was difficult to say that Eichmann had a “perverted sadistic personality” (Arendt, 1964, p. 22) or that he was characterized by a strong anti-Semitism.

148    Philosophy of Management and Sustainability (4) The bureaucrat is not necessarily intelligent or clever. There is no deep personality behind his actions. He is rather ordinary and mediocre. Eichmann was for example doing rather poorly in school (Arendt, 1964). Eichmann didn’t really know what he wanted to do with his life and it was a kind of coincidence that he entered into the S.S military organization. It was without any real deep decision-making that he acted in his life. And he is therefore an illustration of the existential archetype of inauthentic man. (5) The bureaucrat is often from the middle classes. Arendt said that Eichmann appeared as a typical member of the lower middle classes, even though he came from a middle-class family. In Court Eichmann gave the impression of a typical member of the lower middle classes, and this impression was more than borne out by every sentence he spoke or wrote while in prison. But this was misleading; he was rather the déclassé son of a solid middleclass family. (Arendt, 1964, p. 29)

This is an indication of the bureaucrat as someone who chooses the job out of necessity rather than personal wish. (6) The bureaucrat may show ambition and engagement within the system. Arendt emphasizes that though the career of Eichmann before entering into the SS and Nazi system was rather insignificant, his engagement in the Nazi system made him very soon flourish as an expert in the Jewish question. He became an efficient administrator and he was very good in implementing the policies that came from the top. He was committed to solving the “Jewish question” and he contributed significantly to the Madagascar Plan suggesting that the Jews should be removed to Madagascar. Eichmann advanced very quickly in the Nazi system from Untersturmbannführer over Hauptsturmführer to Obersturmbannführe (Arendt, 1964, p. 35). (7) The bureaucrat has no ethical formulation competency that goes beyond following the rules of the system. Even though he seemed to be efficient Arendt emphasizes that Eichmann had no ability to think from the standpoint of somebody else. In fact, his whole relation to the world was marked by selfinvented clichés and he was unable both to think and speak. The longer one listened to him, the more obvious it became that his inability to speak was closely connected with an inability to think, namely, to think from the standpoint of somebody else. No communication was possible with him, not because he lied but because he was surrounded by the reliable of all safeguards against the worlds and the presence of others, and hence the reality as such. (Arendt, 1964, p. 49) (8) The bureaucrats who do acts of moral blindness cannot be considered as an ordinary criminal. Arendt emphasizes that the case of Eichmann could not really be considered as a case of bad faith and of self-deception because he felt in total harmony with his surroundings and he thought that he was following the

The Dark Side of Sustainability    149 rules of the system. This behavior may be seen as a part of his existence as a cliché and of his role in the system. (9)  Objectivation is an integrated part of the bureaucratic attitude. Eichmann was a part of a system that was characterized by the attitude of objectivation and compartmentalization. Compartmentalization is indicated by the fact that Eichmann only was responsible for organizing the final solution, but he never actually saw the killings. Objectivation implied the objective relation to the killing of the Jews. This “objective attitude” – talking about concentration camps in terms of “administration” and about extermination camps in terms of “economy” – was typical of the SS mentality, and something Eichmann was very proud of. By its objectivity (Sachlichkeit), the SS officers dissociated itself from such “emotional” types as Streicher, that “unrealistic fool,” and also from certain “Teutonic-Germanic Party bigwigs who behaved as though they were clad in horns and pelts” (Arendt, 1964, p. 69). (10)  The bureaucrat does not take responsibility for political decisions but implement decisions. Eichmann said that he had doubts about the final solution and preferred a more peaceful and not so bloody outcome. But when it was said that the final solution had to be implemented he did not protest. Arendt cites Eichmann: “At the moment I sensed a kind of Pontius Pilate feeling, for I felt free of all guilt” (Arendt, 1964, p. 114). She continues “Who was he to judge? Who was he to ‘to have [his] own thoughts in this matter’? Well, he was neither the first nor the last to be ruined by modesty,” Arendt sarcastically comments (Arendt, 1964, p. 114). Instead, Eichmann started the operation by the necessary legislation to make victims stateless and negotiate with Jewish councils on transportation and other matters. (11)  The victims collaborate in their own extermination. Arendt emphasizes in the book how the Nazi used the Jews to collaborate in their own extermination. The Jews in the ghetto used police to have order and this police was as rough as the Nazis. The former chief Rabbi of Berlin, Leo Baeck did not tell people that Auschwitz was dead and therefore people volunteered to go to Auschwitz (Arendt, 1964, p. 119). Moreover, the Jewish authorities die Judenräte wanted to keep law and order and in some cases, they also prevented people from escaping. But could they have done otherwise being forced to it by the Nazis. This shows the complexity of the relation between perpetrators and victims and how the victims were used to fulfill their own execution. (12)  The duty of obedience is the first virtue of the bureaucrat. Eichmann emphasized his admiration for Hitler as der Führer. He saw himself as a law-abiding citizen who followed the orders of society as a requirement of being faithful to society. But for Eichmann this very soon turned into total obedience: Since, in addition to performing what he conceived as the duties of a law-abiding citizen, he had also acted upon orders – always so careful to be “covered” – he became completely muddled, and ended by stressing alternately the virtues and vices of blind obedience, or the “obedience of corpses,” Kadavergehorsam, as he himself called it. (Arendt, 1964, p. 135)

150    Philosophy of Management and Sustainability (13)  The bureaucrat considers the norms of the system as the universal morality. Eichmann shows this commitment to the norms of the system by a reference to the Kantian definition of duty. He argued that he followed the categorical imperative of the Führer. Arendt cites that Eichmann said: “What I meant by my remark about Kant that the principle of my will must always be such that can become the principle of general laws” (Arendt, 1964, p. 135). Eichmann said that he had read Kant’s Critique of Practical Reason and had tried to live according to it, but had stopped when he was going to carry out the final solution. Arendt says that Eichmann may have transformed the categorical principle to the Führer principle of “Act in such a way that the Führer, if he knew your action, would approve it” (Arendt, 1964, p. 136). Eichmann contribute to change “Thou shalt not kill” in to its opposite “Thou shall kill” so that not to kill became a temptation (Arendt, 1964, p. 150). (14)  It is a characteristic of the bureaucratic system that it makes opposition look useless and meaningless. The Nazis did not allow the opponents to be heroes, but they gave them an anonymous death. Moreover, they tried to make opposition look impossible and useless so that all victims would give in. In this sense, it seems stupid to try to oppose the destiny. However, as Arendt emphasizes it was not everywhere that the killings and the final solution was accomplished. So resistance was possible (Arendt, 1964, p. 233). Moreover, the system wants to strip every human dignity of the victims and therefore it tries not to make any victim appear as a hero. (15)  The bureaucrat may be so devoted to his task in the system that he over performs even when opportunistic leaders want to stop. This is the result of the relation between Eichmann and Himmler who toward the end of the war ask Eichmann to slow down because he wants to cover up of the actions. But Eichmann is not happy with this and he wants to continue his mission and accomplish it. He is so devoted to his mission in the system and he cannot stop when it is required of him. With these dimensions of the actions of the bureaucratic administrator as the originator of administrative evil in the totalitarian system, Arendt ends by sarcastically describing Eichmann going to the gallows “with great dignity” and performing all his clichés of the Nazi system. Arendt ends the description by saying: It was as though in those last minutes he was summing up the lesson that his long course in human wickedness had taught us – the lesson of the fearsome, word-and-thought-defying banality of evil. (Arendt, 1964, p. 235) It is an important part of the epilogue of the book that Arendt wants to argue that the trail in Jerusalem in some sense was inappropriate because an international tribunal and trial was needed because Eichmann’s crime was not only a crime against the Jews but indeed also a crime against humanity. Therefore, it

The Dark Side of Sustainability    151 should be an international tribunal that should be responsible for trail against Eichmann. Arendt writes that the crimes that we deal with are a new sort of crime, which can be seen as a crime against the human status as such (Arendt, 1964, p. 257 and 275). In the postscript, Arendt sums up her analysis of Eichmann in order to understand his totalitarian personality as an agent of the banality of evil. She emphasizes that the problem with Eichmann was that he had no other motives than personal ambition. He would not have killed at close hand, for example, His superior, but he was able to kill at distance because of his ambition of being a good administrator and bureaucrat, that is, to fulfill the task and role of being a bureaucrat. Arendt says: And this diligence in itself was in no way criminal; he certainly would never have murdered his superior in order to inherit his post. He merely, to put the matter colloquially, never realized what he was doing. It was precisely this lack of imagination which enabled him to sit for months on end facing a German Jew who was conducting the police interrogation, pouring out his heart to the man and explaining again and again how it was that he reached only the rank of lieutenant colonel in the S.S and that it had not been his fault that he was not promoted. In principle he knew quite well what it was all about, and in this final statement to the court he spoke of the “revaluation of values prescribed by the [Nazi] government”. (Arendt, 1964, p. 287) With this Arendt shows how his principal concern was promotion and to accomplish is role in the system. Arendt continues in her description of Eichmann as the incarnation of the banality of evil: He was not stupid. It was sheer thoughtlessness – something by no means identical with stupidity – that predisposed him to become one of the greatest criminals of that period. And if this is “banal” and even funny, if with the best will in the world one cannot extract any diabolical or demonic profundity from Eichmann, that is still far from calling it commonplace. (Arendt, 1964, p. 288) Here we see an important distinction between commonplace and the banality of Eichmann. Even if he looks like ordinary man and is a kind of ordinary man we may still say that his crime is extraordinary exactly due to its extreme banality. Arendt shows that the banality of Eichmann makes him different from the common place morality of every man. The fact that he is not able to say other things than clichés at the time of his death shows the high degree of banality of existence. And Arendt continues:

152    Philosophy of Management and Sustainability Such remoteness from reality and such thoughtlessness can wreck more havoc than all the evil instincts taken together which, perhaps, are inherent in man – that is in fact the lesson one could learn in Jerusalem. (Arendt, 1964, p. 288) Arendt goes on to discuss that the crime committed was a crime of genocide. Moreover, she insists on the fact that Eichmann still has full responsibility for his actions and should be sentenced accordingly (Kateb, 1983). Thus, Arendt insists that an international court is needed to deal with the kind of crime against humanity that Eichmann is responsible for.

3. Moral Blindness in Institutions and Organizations What kind of consequences for institutional analysis of the understanding of the banality of evil and for the political philosophy of evil can we draw from this analysis of Eichmann? Maybe we can say that the different element of the description of the bureaucratic personality illustrates the institutional dimensions of roles in systems that constitute the bureaucratic personality. We can use these elements as the basis for analysis of bureaucratic mentalities and the creation of evil in different context of human action in organizational systems and social and political institutions (Adams & Balafour, 2009; Goodpaster, 2007). This is necessary as a preliminary introduction to the different elements of institutional analysis in business organizations and public administrations. I have elsewhere (Rendtorff, 2015a) analyzed the concept of the banality of evil and moral blindness beginning with Hannah Arendt and continuing with Bauman, Milgram, and Zimbardo. Bauman theoretically developed Arendt’s concept by focusing on organizational bureaucracy in the modernity of totalitarianism and imperialism (Bauman, 1989). Milgram provided us with an analysis of individual obedience and the loyalty of employees in the organization (Gilbert, 1981; Kelman & Hamilton, 1989; Milgram, 1974; Vetlesen, 2005). Zimbardo gave us a definition of the relation between moral blindness and role-playing in organizations (Zimbardo, 2004, 2007; Zimbardo, Maslach, & Haney, 2000). Although I know that that there are many differences between Eichmann’s context during the Holocaust and the university-based experimental work of Milgram and Zimbardo, I would like to point to some structural and conceptual content of the concept of modern blindness that we can deduce from the previous analysis and apply to modern business organizations. However, here I will jump directly to the institutional conclusions concerning moral blindness that we can draw from Arendt’s analysis of the banality of evil. The dimensions of the concept of moral blindness that are relevant to business ethics include (Rendtorff, 2015a): (1) The implication that the manager, business leader, or public administrator has no capacity for moral thinking. What happens is that the manager does not see an ethical dilemma in his or her actions or that this ethical dilemma is ignored in favor of the duty to obey the organizational imperative.

The Dark Side of Sustainability    153 (2) The manager, business leader, or public administrator only follows orders and justifies his or her actions by reference to the technical goal-rationality of the organizational system. This is a function of the duty to the organizational system and we can say that management by objective has replaced any deeper reflection on outcomes and aims of the action. (3) The manager, business leader, or public administrator is strongly influenced by the ideology, principles, or instrumental values of the organization. The manager cannot see beyond the specific ideology that characterizes the organizational system and this ideology determines the actions of the manager with regard to employees and external and internal stakeholders. (4) This attachment includes an abstraction from concrete human needs and concerns in the business organization. This focus on the ideology and rules of the organization implies the incapacity with regard to stakeholders as other than systemic elements. They do not appear with names and faces but are treated according to the rules of the system. (5) In many cases, moral blindness strangely enough includes collaboration on the part of the victims of the harm. This implies that managers outsource difficult and hard decision-making to the victims so that the victims can help the managers by implementing the harm to victims that must be introduced according to the rules of the system. (6) The victims follow the rationality of the system and they identify with their roles, motivated either by pure obedience or by an attempt to minimize greater harm. Here we see how the interaction between victims and perpetrators, managers and people in the system who are managed by the managers is a mutual social relation and the outcome of the interaction also depend on the role-playing by the victims. (7) Moral blindness contains a dehumanization of the victims and other stakeholders implied in the process, rendering them as elements, things, or functions of the system. Managers conceive the victims not as human beings but as elements or functions in the system. In the process of interaction, there is a tendency that the victims internalize these elements. (8) Moral blindness relies on total obedience by the administrators of the system. The administrators of the system do not go beyond the system but the identify with the system and they identify with their roles because they don’t have capacity of going beyond the system and there is no possibility in the rationality of the system to go beyond the system and consider the system from outside. (9)  Technology and instrumental rationality is an essential element in the administration of the organization. The managers use technology and instrumental rationality as the driving force in their decision-making and this decisionmaking is determined by the techno scientific instrumental rationality. (10) Each participant in the organization accomplishes a specific work function with a specific task but he or she has no general overview of the organizational system. There is an element of compartmentalization where nobody in the system have an external overview of the content of the system. They cannot see the outcome of what happens in the system but they can only see the result of their own particular actions.

154    Philosophy of Management and Sustainability (11) Top managers and leaders may behave opportunistically to follow their own interests with regard to the main goal of the instrumental system. The top of the system are supposed to follow the high ideals that are proposed as the ideological justification of the system. In reality they may act opportunistically and follow their own particular interests. (12) Top managers, administrators, and leaders may act irrationally beyond common human understandings of morality in order to serve the instrumental rationality of the organizational system. They may be so linked to the system that they have no external position from which they can see the system. They may act in ways where they incarnate the system even though it is beyond human sense and common reason. (13) The administrative and managerial obedience to realize the organizational aim becomes the central interest of the managers or administrators of the organization. Here we see that the managers forget any reason to obey the system outside the system and they see the obedience to the system as the central basis for their action. (14) Obedience, role-identification, and task commitment remain the central and ultimate virtues of the commitment of members of the organization to the organizational system. Again we see how the commitment to the system is dependent on the role that the employee or manager has in the system. The rationality of the action is the sense of belonging to the role in the system. (15)  Each member of the organizational system commits themselves to the values of the organizational goal of the system. This is a part of the roleplaying and compartmentalization that there is no critical evaluation of the system as such only a belonging to the system through role-identification and role-playing. These elements can be said to constitute the essential structural and functional elements of the concept of moral blindness, or rather what we can also call moral silence (Rendtorff, 2015a). However, we can also consider moral blindness from the point of view of a rather phenomenological or hermeneutical perspective. This is the approach that we find in Frederick Bruce Bird’s 1996 book, The Muted Conscience: Moral Silence and the Practice of Ethics in Business. This book provides the most comprehensive recent attempt to define the application of the concept of moral blindness in business ethics. In fact, Bird (1996) extends the concept of moral blindness to include moral muteness and moral deafness. Moral muteness is defined as the inability of people to defend their ideas and ideals (p. 2). Moral deafness is the inability to listen to and hear moral concerns, and moral blindness can be said to complement and include moral muteness and moral deafness (Bird, 1996, p. 2). In his book, Bird claims that we may be able to understand the moral vacuum of business by reference to moral blindness, muteness, and deafness and this is what we can understand as an application of the idea of the banality of evil in the business organization today. Bird seems to include, however, an important element of presupposed moral understanding in his concept of moral silence. The thesis of the book is that many people fail to voice their moral convictions due to moral silence, moral blindness,

The Dark Side of Sustainability    155 moral muteness, and deafness. This is defined as the opposite of hypocrisy where people speak about morality without doing anything. Here people have some feeling of morality, but they remain morally blind, mute, and deaf with regard to speaking up and taking action about the morality in the organization. We can say that in this approach the banality of evil follows St. Pauls’ famous self-­indictment: “For what I do is not the good I want to do; no, the evil I do not want to do – this I keep on doing” (St. Pauls: Letter to the Romains 7:19). Moral silence is defined as the situation where people fail to communicate their moral concerns with reference to common moral standards. In this general context of the business organization, there is no communication about morality in the organization and there is no whistle-blowing about the wrong-doing that is occurring in the organization. Bird considers people to be morally mute when they fail to speak (Bird, 1996, p. 35). In particular, by failing to contribute to whistle-blowing or repressing concerns about problems they perceive in the organization. Even though there are many ways to blow the whistle, from internally creating awareness about the problem in the organization to public external statements, the morally mute may not say anything to anybody and remain silent due to fear, obedience, blindness, and so on. According to Bird, moral muteness may include the inability of managers or administrators to speak up about moral concerns. In the case of the banality of evil in organizational systems with immoral functionality, this would include the failure to say anything about the internal inhumanity of the organization; however, Bird also points to another general failure of managers, namely their inability to voice moral convictions in relation to the performance of employees in organizations. Moral silence with regard to the evaluation of activities of employees who may behave immorally in their treatment of customers or other stakeholders shows a lack of moral accountability of managers and leads to system with no communication about morality. Bird says that people who are morally deaf “do not hear or respond to moral issues that have been raised by others” (Bird, 1996, p. 55). Moral deafness implies the inability to listen and to hear particular moral concerns. In general, moral deafness implies inattentiveness to moral messages and unwillingness or inability to listen to genuine moral convictions. Bird refers to the concern for the other as the foundation of moral hearing as proposed in the phenomenology of Emmanuel Levinas (Bird, 1996, p. 57). The ability to be attentive, to hear and to make sense of the moral claims of the other is essential to the person who is able to listen to moral concerns. From this perspective, to be attentive includes the ability to comprehend and to focus with sympathy on the moral issues of concern; thus, to be morally deaf is to be inattentive and unable to listen with sympathy. Moral deafness is one element of not being able to put oneself in the place of the other and have the ability for moral concern and moral thinking. Indeed, we can say that there is an element of apathy in moral deafness (Bird, 1996, p. 59). In particular, Bird emphasizes that morally deaf organizations ignore problems and bad news requiring moral decision-making. Famous examples he cites include the case of the Ford Pinto, the Nestlé infant formula scandal, or the 1987 boat disaster in Zeebrugge where 188 passengers died (Bird, 1996, pp. 63–65). Moral deafness implies the tendency to

156    Philosophy of Management and Sustainability suppress moral concerns and to not see potential moral problems because of concern for the functional efficiency of the system. In Bird’s analysis, moral blindness is a sort of umbrella notion that includes the concepts of moral muteness and moral deafness. Bird defines moral blindness in the following way: “People are morally blind when they fail to see or recognize moral concerns and expectations that bear upon their activities and involvements” (Bird, 1996, p. 85). Moral deafness and muteness can be considered as forms of moral blindness. Bird defines moral blindness as something more than just seeing. It is a special ability to perceive, recognize, understand, and foresee. It is the ability to have moral vision and to put oneself in the place of the other and perceive, understand, and recognize the moral concerns that are relevant for the other person, group of persons, or organizations. Different ethical theories contribute to the development of the capacity to have moral sight and moral vision. The ability to perceive moral issues is closely linked to ethical formulation competency, wherein one’s understanding of ethical issues relies on knowledge of different ethical theories and arguments. Moral blindness implies a lack of moral vision and of ethical formulation competency and an exclusive focus on specific instrumental concerns of organizational efficiency. Bird combines moral blindness with moral shortsightedness, which can be considered as the inability to foresee moral factors in relation to organizational decision-making (Bird, 1996, p. 101). It is a kind of narrow-mindedness that is not capable of seeing morality as an important dimension of organizational activities. Let’s now see how this applies specifically in public administration and in private corporations. The findings of the philosophy and sociology of the banality of evil and the whole social psychology tradition relating to evil and moral blindness are very important for our understanding of business ethics. There is a wide research perspective that opens from this kind of analysis. The idea is to make the same kind of hermeneutic-phenomenological analysis of the phenomenon of moral blindness like the one that Arendt makes of Eichmann. This kind of analysis looks at the actions of a person or persons in relation to their existential self-understanding and values. This analysis can then be accomplished with a social interaction analysis based on the kinds of implicit rationalities in the social psychology experiments, which bring an important perspective to help understand the choices and actions of individuals leading to moral blindness. But we do not have to make the experiments to analyze role-playing and structures of obedience and power. This method can be applied to all kinds of case studies and the combination of existentialist understanding and analysis of social roles in systems and structures will provide valuable insight. A good example is the interaction of IBM with the Nazi regime the 1930s (Black, 2001). This approach could for example be useful in order to understand case like Shell in Nigeria, Enron and Arthur Andersen, World Com, Bernard Madoff or the BP and Deepwater Horizon oil spill because it would look at individuals, and their responsibilities and self-understandings in relation to general social roles and structures, which would indeed clarify the series of events that led to the catastrophe.

The Dark Side of Sustainability    157

4. Responsibility and Reflective Judgment What is fascinating about Arendt’s thesis of the banality of evil is in this ­context that evil as such is nothing, but it was made possible by social and institutional administrative political and legal systems and this helps us to be liberated from radical evil as an absolute power in the universe (Benhabib, 2010; Bernstein, 1996a, 1996b). We do not have to survive existentially and ethically by making the demoniac by inventing pictures of our strong enemies or changing human beings like terrorists or dictators into cynical brains of intelligent and exiting criminals, as it is the case with the production of myths and symbols as it is proposed by many movies and fictive representations of evil. It is important to recognize the fact that by being aware of the banality of Eichmann’s behavior, it became possible for Arendt to understand Holocaust as the result of human failure rather than the expression of an evil force in history or nature beyond our possible control (Benhabib, 2010). Evil is not primarily based on evil motives, because it has no depth and only what is good can fully exist, as Arendt says in her references to the philosophy of Augustin. In fact, looking back on Arendt’s early work about the concept of love in Augustin’s philosophy we may find the key to her critical reflections about the concept of evil (Arendt, 1929). We could argue that Arendt in her concept of evil presupposes a universe where evil cannot exist in itself because it is always a privation with regard to the almighty power of God. With this concept of evil we are close to the metaphysical philosophy of Augustin. As indicated evil does not have an independent existence, but originates in mediocrity and dogmatic blindness in administrative, legal, and political systems, and it is this intellectual inferiority that characterizes terrorists and ideological fanatics. We perceive that Arendt may be influenced by Heidegger’s concept of thought and thinking according to which real thought is the capacity to go beyond the established boundaries of systems and science (Taminaux, 1996). Arendt argues that the people who do evil have not reach the level of thinking as reflective interrogation as mentioned by Heidegger. However, Arendt goes beyond Heidegger by linking the concept of thinking to moral judgment and the capacity of compassion, of putting oneself in the place of the other (Arendt, 1978). It may be easier to understand Hannah Arendt’s concern for the criticism of the absolute concept of evil as many people regard as the logical consequence of the barbarian totalitarianism of modern society. It would be impossible to live in a world where evil is determined by a thoughtful evil force that is absolute. And Arendt’s philosophy is an attempt to escape from the threat of such a world by ­reinterpreting the concept of evil from the point of view of banality of evil as radical evil (­ Bernstein, 1996b). As an expression of a new conception of the problem of evil, we are desperately in need of in this time of anguish and nervous pictures of enemies, the reflections of Arendt are good examples of creative political thought in philosophy of management that in its method is both different from empirical political science and sociology. This philosophy is critical toward builders of ­systems in the tradition from Plato to Hegel and Marx (Arendt, 1965, 1988). Political thought

158    Philosophy of Management and Sustainability starts out with respect for human dignity and freedom and it seeks to fight for a human world building on respect for individuality and difference. It is important to understand that Arendt focuses on the significance of the banality of evil for our social institution (May & Kohn, 1996). The institutional dimensions of Holocaust are emphasized, for example, the incapacity of Eichmann to refuse the moral blindness implied in his institutional socialization. It concerns the capacity to give possibility and space for thinking and judgment, when human beings are parts of collective responsibility in institutions. In this context the problem of Eichmann is not only an issue for individual responsibility but it also includes responsibility for collective actions in different forms of modern institutions and organizations, that is schools, hospitals, ministries, military organizations, companies, etc. Thus, the philosophy of Hannah Arendt may be presented as an extenuation of European humanism that includes aspects of Greek and Roman culture. Arendt also emphasizes the independence of United States in 1776, because it in opposition to the French and Russian revolutions implied the creation of real democratic political community, where the constitution was based on human freedom and moral sense. This democracy was oriented toward equality, because it was opposing a strong separation between those in power and the citizens. The political thought of Arendt represents a challenge to hierarchical totalitarianism and it is supposed to avoid the banality of evil by fighting for a classical republicanism, where free and autonomous citizens in mutual respect and reciprocity are searching to work for the common good. The great conceptual and philosophical gain and also existentially liberating consequence of the thesis of the banality of evil is the statement that evil is not founded in the inherited subconscious desire of humanity. We have the possibility to deal with evil through human sensitivity, moral imagination, and capacity of put one self in the place of the other (Arendt, 2003). Human responsibility is exercised through the capacities of reflective judgment. Arendt was working on the concept of judgment through her whole life, but she died before she could finish the third book of the trilogy The Life of the Mind: Willing, Thinking Judging, which should have addressed the problems of judgment. It was the intention of Arendt to conceptualize judgment from Immanuel Kant’s maxims as they were developed in Kritik der Urteilskraft (1790) (Kant, 2016). However, we can reconstruct Arendt’s concept of judgment from the book Lectures on Kant’s Political Philosophy that was published in 1982 after she had died. In this book political and ethical judgment is conceived as an independent capacity of consciousness, which is different from both will and thinking (Arendt, 1989). Judgment is first and foremost the capacity to judge about human actions and political activity. Judgment is based on the feeling of community (sensus communis) and it opens for the human capacity of ethical reflection. Judgment is based on human capacity to be conscious of plurality and think for him or herself and with this to be able to put oneself in the place of the other. In judgment we incorporate moral sensibility and we follow critically and impartially the course of history.

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5. Evil in Modern Philosophy In this chapter, I have presented an alternative view to the traditional concept of evil as expressed in the theodicy of modern philosophy where evil is rationalized as something reasonable and purposeful understood as an expression of God’s plan with the universe or as an intentional demonic will that aims at destroying the world. I have tried to propose an alternative critical conception of evil that explains harm and destruction as with the concept of banality of evil as proposed by Hannah Arendt. After this I went into a detailed analysis of Arendt’s description of the administrative evil of Adolf Eichmann in order to demonstrate the different dimensions of Arendt’s institutional and organizational concept of evil. As such this concept is terrible because it shows how human beings become agents and role-players in bureaucratic systems, but it also shows how evil is not created by individual monsters but by human institutions that can be improved and changed in order to prevent evil from happening. After the absurd terrorism and violence of the totalitarianism of the twentieth century it does not give any meaning to rationalize harm as meaningful evil that even though it is evil may have some importance for the development of the world toward the good. This is important for understanding the dark side of sustainability, including the question of why nothing happens even though we all know that we need to act to deal with contemporary sustainability challenges on the planet. Here, evil is incomprehensible and as radical and banal evil it challenges human rationality. Organizations and corporations may not do not do the good, that they want to do, but instead they do the evil that they do not want to do and that humanity does not want. Therefore, as proposed by Hannah Arendt, the only way to deal with harm and wrong-doing is to return a concept of responsibility that is closely linked to reflective thinking. Thus, avoidance of evil relates to awareness of responsibility and ethics. Nevertheless, the critical reader may here ask the question: what is the relevance of this metaphysical concept of evil as moral blindness for philosophy of management and sustainability? In particular, critics can argue that the ideal of the SDGs are very far from the bureaucratic systems of organizational and institutional evil that Hannah Arendt analyzes. However, looking deeper into the organizational challenges of the SDGs we may encounter may challenges of organizational implementation and organizational complexities that may lead to more harm than good. The challenge of the SDGs is that humanity may destroy itself with climate change and social and environmental erosion without action. There may also be complex problems with the realization of the SDGs in global management and politics. Critics may argue that the SDGs rely on a western ethnocentric and racist concept of development, which although sometime unintentionally may lead to more destruction than goodness. This is a very harsh criticism and indeed not always true, but Arendt’s philosophy provides us a powerful framework for detecting such kind of problems of moral blindness, deafness and muteness in organizational analysis of SDGs and of sustainability management in organizations.

160    Philosophy of Management and Sustainability Applying the concept of moral blindness to the challenges of management and administration of the SDGs, we can emphasize that realization of the vision of the SDGs imply that administrators and managers have capacities of moral thinking where they can evaluate sustainability strategies and decisions from the moral and ethical perspective. It is important that administrators and business managers are capable to move beyond just following orders and evaluate SDG solutions in the light of their own judgments. This means that SDG management should not only be based on technical and goal-rational solutions immanent to the organizational system. Rather, the SDGs are so complex that administrators and managers cannot only follow ideologies and instrumental values. They need judgment and ethical formulation competences where they can integrate reflection on specific human needs in general strategic and political decisions. Moreover, when administrators and managers face concrete stakeholders in the process of implementation of SDGs they should be strongly aware of the need to protect the victims of the unintended consequences of global ­sustainability ­policies. Here, it is important that the goal just not justify the means and that SDGs strategies are formulated with the basic aim of respecting human dignity and rights and minimizing potential harm related to dehumanization of people and stakeholders that take part of the process of implementing the SDGs. What we need is humanistic management that does reduce human beings to functions in the system, but can see beyond technology and instrumental rationality in order to integrate ethics in sustainability decision-making. What is necessary is the ability to do holistic decision-making where administrators, managers and politicians who work with the SDGs are able to look beyond their specific roles and functions in the system to address the SDGs in a general perspective, moving beyond the specific goal and targets. The challenge is to go beyond pre-given conceptions of decisions, solutions and consider strategies for sustainability in a general multi-disciplinary and multiprofessional perspective in order to give room for reflective judgment and professional decisionmaking. What we need are administrators and managers who are not only self-­ interested individuals who promote their own interest in the organizational system. Rather, managers and administrators need to move beyond the moral blindness of obedience, role identification and task commitment in order to work with the SDGs from the perspective of good and reflective judgment. Administrators and managers should not only be committed to the goals of the organizational system of the United Nations, but they should also use reflective judgment to evaluate the SDGs from complex, professional and multi-disciplinary points of view in order to make sure that decision-makings are well-informed, just and ethically justified.

Chapter 12

The Ethics of Integrity: A New Foundation of Sustainable Wholeness The concept of integrity is very important in ethics.1 It has been defined as a virtue concerning the wholeness of the human person and personality. The sphere of integrity is both physical and moral. Integrity has mostly been understood as coherence or completeness indicating the purity of a totality that has not been destroyed. The notion is associated with true identity, honesty, respect, and trust. As early as in Plato’s ethical theory, integrity meant basic moral virtue and human character. There is a close connection between integrity, personal identity, and character. The sphere of integrity expresses the personal life context (Kemp, 1998, p. 39). In this way, integrity is related to the unity of the personal identity of the individual. It characterizes the totality of the personal identity. It implies respect for the values that the individual considers as fundamental for personal development. Integrity could be understood as a life-context and life-totality (Andersson, 1996, p. 37). On this foundation, in our book on Basic Ethical Principles in European Bioethics and Biolaw Vol. I–II (Jacob Dahl Rendtorff & Peter Kemp, 2000), we defined integrity in relation to autonomy, dignity, and vulnerability in the following sense: Integrity accounts for the inviolability of the human being. Although originally a virtue of uncorrupted character, expressing uprightness, honesty and good intentions, it has, like dignity, been universalized as a quality of the person as such. Thus, it refers to the coherence of life that should not be touched and destroyed. It is coherence of life being remembered from experiences and therefore can be told in a narrative. Therefore, respect for integrity is respect for privacy and in particular for the patient’s understanding of his or her own life and illness. Integrity is the most important principle 1

Previous versions and preparatory works for this chapter include Rendtorff (2000, 2011a, 2011b, 2011c). Philosophy of Management and Sustainability: Rethinking Business Ethics and Social Responsibility in Sustainable Development, 161–170 Copyright © 2019 by Emerald Publishing Limited All rights of reproduction in any form reserved doi:10.1108/978-1-78973-453-920191013

162    Philosophy of Management and Sustainability for the creation of trust between physician and patient, because it demands that the physician listens to the patient telling the story about his or her life and illness. (Rendtorff & Kemp, 2000)

1. Integrity in Business and Politics Some further applications of integrity characterize the development of the concept beyond individuals going further into society and nature. We can mention the concept of national integrity in international law and politics that does not only refer to the right of self-determination of a population and a society to develop and flourish according to their own norms and desires. In development policy we can talk about social development as “integration” as opposed to intervention (Rendtorff, Diderichsen, & Kemp, 1997). Environmental integrity refers to the coherence and wholeness of living beings and ecosystems. It relates to their auto-poetic self-organization and purposeful evolution, a kind of creative evolution with a purpose without purpose, a natural teleology of self-organizations of animals and nature (Kemp, Lebech, & Rendtorff, 1997, p. 18 & 111). These concepts of self-organization and purposeful development may also apply to organizations with their particular evolution of wholeness and unity. Indeed, there are many possible uses and faces of the concept of integrity. It is usually defined as “wholeness, completeness and freedom from moral corruption” (Audi & Murphy, 2006). Here, the concept is understood as a moral virtue that is not only broader than practical rationality or autonomy of decision-making, but also narrower than the concept of moral judgment and practical wisdom. In this sense, integrity becomes an important virtue of citizenship and indicates the commitment of corporations to be involved in social community. Moreover, integrity is linked to concepts of identity and moral character because the concept expresses the capacity to be moral in ones choices, actions, and concerns in a way that benefits others. We can in political philosophy and business ethics adopt Lynn Sharp Paine’s definition of integrity as the “quality of moral self-governance” (Audi & ­Murphy, 2006, p. 6; Paine, 1997, p. 335) emphasizing that integrity is linked to concepts of “moral conscientiousness, moral accountability, moral commitment and moral coherence” (Audi & Murphy, 2006, p. 6). Moreover, it is essential to Paine’s account of integrity in business ethics that it combines ethics and law in the sense that integrity as wholeness means that the manager combines compliance with legal regulations with ethical behavior. With this approach we can situate the concept of integrity with the classical tradition of republican political philosophy. An outcome of this could be to define ethical action and ethical integrity to the commitment to common social and political values in society (Paine, 1994a). Audi and Murphy discuss that integrity is defined rather differently in the literature on business ethics. There is a tension between definitions emphasizing honesty (e.g., John Della Costa in his book The Ethical Imperative) and other definitions that consider moral completeness as the central component. Virtue ethics definitions are also different. Some are very substantial taking loyalty, congeniality,

The Ethics of Integrity    163 cooperation, and trustworthiness as components of integrity while other definitions are less substantial and consider integrity to be an attitude of moral consis­ tency and coherence with regard to one’s commitments to the good life (Audi & Murphy, 2006, p. 6). Audi and Murphy ask the delicate question whether there is a precise definition of integrity left. I would like to argue that integrity should be conceived as a moral and political virtue of doing what is ethically and morally right. Moreover, I use integrity as the concept indicating the commitment to business ethics of organizations in their concrete business activities. Accordingly, integrity must not only be conceived as personal wholeness but also as a virtue, which is necessary to implement justice in society and organizations. I agree with Audi and Murphy when they emphasize that the epistemology of integrity relating to oneness, completeness, purity, and wholeness refers to the realization of moral principles in organizations. An important core of the principle of integrity can therefore be defined with the concept of integration (Audi & Murphy, 2006, p. 10). Stephen Carter helps us to justify the argument that integrity is very important in a republican political theory and commitment to citizenship. Carter discusses integrity as a pre-political virtue that is a virtue of good moral behavior as the foundation of citizenship with a wide range of applications in media ethics, politics, family life, for example, marriage, sport, etc. He considers integrity as a virtue and life style applied to good people with honorable moral characters. This means that there also can be integrity in civil disobedience. This was shown by Martin Luther King who argued that civil disobedience and acceptance of punishment for civil disobedience was an adherence to the highest law, manifesting civil disobedience as a great act of morality and belief in justice (Carter, 1996). Carter makes us aware of the liberating and may be even revolutionary dimension of integrity. Integrity does concern not only citizenship but also an attempt to be true to oneself in opposition to existing destruction of integrity. Integrity is in this context defined as the virtue of self-respect in relation to others. Integrity may help to emphasize the importance of diversity and revolution in order to restore integrity in opposition to fragmentation (Babbitt, 2001, p. xiv). The integrity of oppressed groups is characterized by this need for breaking with the oppressors. National integrity may be preserved through a liberating fight for democracy against existing powers of totalitarian domination.

2. Integrity as Existential Subjectivity In feminism, Susan E. Babbitt considers integrity as a way to promote “objective respect for difference and particularity” (Babbitt, 2001, p. 134). This is, for example, the case when we are creating capabilities of women in developing countries giving them possibility of developing with integrity and self-respect. Mark S. Halfdon also discusses the concept of integrity from this perspective (Halfdon, 1989). He also defines integrity as “wholeness, completeness, unimpaired, or an unmarried state.” With regard to individual human beings integrity expresses the wholeness of human life (Halfdon, 1989, p. 11). In existentialist philosophy there is a close link between personal commitment and the authenticity

164    Philosophy of Management and Sustainability of individual existence. It is maintained that integrity involves a commitment for a certain cause or objective. A person of integrity is a person who is committed to his personal life project. With Jean-Paul Sartre we may emphasize that a person of bad faith is a person without integrity (Halfdon, 1989; Sartre, 1943). We can say that there is a close relation between integrity and authenticity in existentialist philosophy (Halfdon, 1989, p. 18). In this sense integrity involves an engagement or a commitment for an ideal, principle, or cause. But what about loss of integrity? How can one make a real existential choice where it is possible to take responsibility for one’s own identity in order to restore self-respect? In the existential context we might emphasize that integrity can be considered as a “normatively interpretive perception of self and worth” (Babbitt, 2001). As commitment to a certain kind of unity of the self-integrity is a proposal of a normative interpretive sense of the unity of the self. However, one important doubt from the existentialist perspective may be whether integrity is a useless metaphysical concept remaining within a classical tradition of virtue ethics that cannot really be used in post-modern society? It is argued that integrity remains an idea of the philosophy of the subject based on an impossible search for sincerity and identity which cannot be obtained in modern fragmented society. Take the case of an existential crisis. How can the self ever obtain integrity in a situation of in-authenticity and contingency? Can we reduce integrity to authenticity? Or how can we be ourselves in a situation where the self is constituted by non-identity and self-transcendence? Is there integrity of the authenticity of being a being that never coincides with oneself ? But then the problem is if integrity depends solely on commitment or if it is possible to distinguish between good and bad commitment. John Rawls criticizes integrity for being an empty notion that allow for almost any content. In this perspective it may be possible to be a Nazi with integrity. It is argued that this person would be able to live with integrity with unethical principles as long as you are consistent in your actions (Babbitt, 2001, p. 136). According to this view there cannot be anything that is intrinsically valuable integrity. The notion of integrity can only have an instrumental value. Even though integrity sometimes seems to be without substantial content, I do think that this criticism fully grasps the moral content of integrity. As linked to personal identity and self-respect, integrity cannot be isolated from ideas of the good and of human dignity. Robert C. Solomon states this very clearly when he emphasizes that the virtues of the Nazi do not have anything to do with integrity. The concept of integrity is closely linked to morality and values. There can be no integrity without real moral values. As defined as wholeness integrity should be defined as implying the wholeness of virtue, wholeness of person. Integrity is not selfishness because it is about the individual in relation to the larger picture and it integrates the individual in the sense of being an integral part of something larger than the person, for example, community, corporation, society, humanity, and cosmos (Solomon, 1999, p. 38). In this sense integrity involves openness, flexibility, affection, cooperation, and caring, and it stands in sharp contrast to other figures of personal morality who are without integrity: the hypocrite, the opportunist

The Ethics of Integrity    165 and the chameleon (Solomon, 1999, p. 41). In integrity one remains morally autonomous by being true to oneself and to community. With this approach Solomon emphasizes that the most important aspect of integrity may be the ability top follow basic virtues of honesty, fairness, and trustworthiness as means between extremes (Solomon, 1999, p. 69). Accordingly, for Solomon, we have to formulate a catalog of good business virtues as expression of integrity. These virtues should not come from the top like the ten commandment of Moses, but they should rather be based on human deliberation, choices, and decisions aiming at the good life (Solomon, 1999, p. 43). Along with Bernard Williams we might say that utilitarian or consequentialist thinking is incompatible with integrity because consequentialism does not imply any basic commitments but a willingness to give up every moral ideal as long as it leads to the best consequences (Williams, 1973a). Bernard Williams holds that our moral actions come from projects to which we are fundamentally committed in a way that we do them because they contribute to constitute our fundamental identity and integrity. In this perspective integrity defines our basic dispositions and motives for actions (Williams, 1973b, 1985). Thus, the importance of integrity is found in its expressions of our deepest motives and values. Moreover, there seems to be some implicit moral requirements in the concept of integrity excluding that any commitment could be a commitment of integrity. Integrity constitutes the wholeness of personal identity which has a narrative content as the unity of personal character which is defined by the virtues, practices, and dispositions of the individual that are realized as personal identity in a life-long moral commitment (Babbitt, 2001). Accordingly, it seems like there are internal constraints on the possible commitments from the perspective of integrity. Possible commitments of individuals are limited to consistent moral ideals (Halfdon, 1989, p. 37).

3. Integrity as a Virtue On this foundation integrity as a personal commitment to moral ideals may be defined as a virtue that orients individuals toward practical goodness and excellence. Good and virtuous people are people who possess integrity and in the lifelong period of their existence they develop integrity as a part of their character and commitment to life. In the perspective of such a Kantian moral philosophy, integrity is closely linked to autonomy and dignity. Integrity functions as a norm for autonomous actions of individuals. It puts constraints on duties and defines individual’s concerns for wholeness and unity of life. Integrity refers to a commitment for basic goods and to self-control linked to personal commitment (Ramsey, 1997). Moreover, integrity is closely connected to the idea of the individual as a moral agent with self-respect and a good will striving toward a moral ideal. We might say that integrity represents a set of values and principles to which one is fundamentally committed. Free human beings form the moral identity in good judgment according to a reasonable life-plan of good disposition. In the ­Kantian perspective integrity is a fundamental virtue of good moral character that includes moral principles (Ramsey, 1997, p. 54).

166    Philosophy of Management and Sustainability A challenge to this concept of integrity is the relation between commitment and adversary. How do persons of integrity behave in situations of moral conflict? It is indeed a problem how we should understand the ethics of adversary (Appelbaum, 1999). A person of real integrity will not give in when this person is confronted with other challenges and demands to behave in another manner. Instead a person of integrity will stick to the moral ideals that define this person’s identity. There is a close link among integrity, consistency, and commitment to moral ideals. A person of integrity maintains the commitment in situations of conflict and temptation. But these ideas lead us to the problem of the connection between moral integrity and compromise. The problem is whether compromise in action can be accepted as an integral part of the virtue and value of integrity. It could be argued that compromise cannot be accepted as a part of integrity because integrity requires uncompromising behavior with regard to basic moral principles or ideals. Uncompromising behavior would in this perspective be a fundamental part of the character of the good person. So the problem is to which extent compromise can be justified as a part of the value of integrity. Indeed this is difficult to admit if we like Bernard Williams define the value of integrity as closely connected with personal responsibility (Halfdon, 1989, p. 83). There seems to be very little space for compromise according to our definition of integrity as moral purity and consistency. It might be difficult to see how one can keep integrity and still confront other people with other moral values. However, I think it may be possible to engage in compromise and still keep your moral integrity. In this context, we may introduce the notion of reassessment. This concept implies that it is possible to revise the one’s idea of integrity in a way that a moral compromise would not lead to the loss of integrity (Halfdon, 1989, p. 100). However, opposed to this view we may say that integrity remains an ideal that cannot be realized in every situation. In some situations, compromise is necessary in order to keep integrity. This might imply a reassessment of some principles, but it does not lead to giving up every kind of ideal and principles constituting personal visions of integrity. Given this, we can still admit that moral conflict may be desirable for persons of integrity in a way that the value of integrity involves an attitude where individuals are ready to confront moral issues as a part of their effort to keep their personal integrity. We may argue that ethical responsibility relates to different contexts and therefore the self in some cases has to enter into compromise in order to maintain the relation with these different contexts. Of course there is a tension between integrity and compromise, but in some cases to preserve the core of the self may include compromise in certain contexts (Goodstein, 2000, p. 809). We can argue that the idea of reasonableness and of prudence and judgment are the concepts that allow us to combine compromise and maintenance of integrity (Goodstein, 2000, p. 815). Instead of total reassessment, we may say that integrity is the capacity to maintain oneself in confrontation with others. This is the capacity to maintain and develop important values in the life with others in community. It might be the real sense of good integrity that you can engage in dialogue with others and reach morally view that are morally acceptable for everybody.

The Ethics of Integrity    167

4. Integrity as Organizational Integrity With legal scholar Ronald Dworkin, we may move from individual integrity toward organizational integrity. In law, Dworkin defines integrity as simultaneously a legislative and adjudicative principle. The idea is that judges understand all laws and legal principles as created by one judge who searches to apply those laws and principles consistently in moral framework (Dworkin, 1986). Those principles are in law a matter of interpretation and the judge ought to interpret the law as expression of historical and cultural consistency with the rules and principles of the legal order. A law as integrity is a political ideal for the application of the norms of the order in order to create a “true community” (Freeman, 2001, p. 1401). In being concerned with jurisprudential integrity, Dworkin helps to bridge the gap between individual and collective action in defining the concept of integrity. He is right in explaining integrity as systemic wholeness and coherence in the judicial system. But Dworkin does not define integrity only as systemic coherence but includes a moral dimension and striving for moral excellence in his definition of law of integrity. Integrity is the definition of the effort to achieve moral excellence in the judicial system as a whole. This effort implies individual integrity, but it also goes beyond the moral behavior of persons toward the legal system as an independent unity with specific judicial requirements of integrity (Dworkin, 1986). This vision of integrity helps us to understand the concept of integrity as an expression of practical reason, virtues, and dispositions of collectivities. In this context we can refer to the professional integrity of specific organizational groups, for example, integrity of the nursing profession or of the professional integrity of lawyers and indeed of organizations as a unity with a specific identity and narrative history. In organization theory and business ethics, Lynn Sharp Paine has done a pioneering work with her effort to make the move from individual to organizations and define the concept of organizational integrity (Paine, 1997). We might say that the starting point is the requirements of a modern business environment marked by increasing competition, higher demands on employee knowledge and qualifications as well as a value-pluralistic society where employees and management not necessarily have common values prior to their participation in the organization. Lynn Sharp Paine defines organizational integrity in a broad sense as “honesty, self-governance, fair dealing, responsibility, moral soundness, adherence to principle and consistency of purpose” (Paine, 1997, p. vii). This concept of “organizational integrity” comes also from the Latin origin of the word, which is integritas, wholeness or purity. In this sense integrity implies a sense of responsibility, commitment, and self-governance. Integrity is closely linked to the identity of the organization. Defined in such a way the quality of integrity comes in degree in accordance with the status and stability of the organization (Paine, 1997, p. 98). Accordingly, organizational integrity means that policies and strategies in organizations are based on ethical principles and values that are promoted as the foundation of organizational excellence. In this way the company is considered as an agent, which shows its character and identity in its actions and capacity of

168    Philosophy of Management and Sustainability self-governance. In such a perspective of organizational integrity, we may define ethics as an “invisible infrastructure of norms” (Paine, 1997, p. 2). Nevertheless, these norms may also be formulated explicitly in the policies of values-driven management of the company. Ethics and values imply the effort to engage in right relationships with the stakeholders and constituencies of the firm in order to create an environment of trust and responsibility. Indeed, in the modern knowledgebased economy, these requirements for organizational integrity are becoming increasingly important in order to ensure cooperation for good performance in the organization (Paine, 1997, p. 3). We might emphasize that organizational integrity is the result of a long process of developing values in organizations (Kapten & Wempe, 2002, p. 152). Moreover, organizational integrity has an independent status, when we compare it to individual integrity. It may be possible to have an organization where all individuals consider themselves as individuals of high integrity while the organization as a whole is acting unethically. But the contrary can also be possible. Due to organizational policies and strategy, a high-integrity organization may consist of a number of low integrity individuals who due to these structures act with integrity in the organization. With a somewhat free citation of Immanuel Kant we might say: even a “population of devils can live in a community based on the rule of law” (Kant, 1983). But this is only the case in very rare circumstances. However, organizational integrity is also aiming at the ideals of openness, honesty, wholeness, and thoughtfulness of individuals (Carter, 1996). As the basis for judgment integrity expresses the virtues of self-control and self-respect of persons in organizations (Paine, 1997). Integrity is the foundation of the unity of the personality, but individual integrity is a part of the relation between individual and organizations. In this way, a room for personal responsibility and judgment of employees is promoted (Paine, 1994a).

5. Integrity as Practical Judgment In order to be aware of the different dimensions of integrity, purpose, principle, and people, we can use Paine’s approach to develop a model of practical reasoning and judgment (Paine, 1994a). This model of managerial judgment works on the basis of reflective judgment with teleological, deontological, and utilitarian considerations as framework for decision-making dealing with ethical dilemmas of confrontation between different ethical concerns of utility versus duty, virtue versus need, etc. Paine argues that the purpose of the organization refers to the teleological goal of the organization (Paine, 1997, p. 229). At this level primary aims and ideals are analyzed. Principle might refer to the deontological dimension of the organization. Principle interrogation might block teleological considerations if they are in contrast with fundamental rules of universability. This is the Kantian dimension of morality. Finally, we may also mention a utilitarian dimension of moral decision-making, which has to do with people, that is the preferences and commitments of specific individuals. This dimension concerns human well-being and we may add that it aims at the “good life with and for the other in just institutions,” as formulated by Paul Ricœur (p. 202) in his moral philosophy.

The Ethics of Integrity    169 In an important article “Moral thinking in management: An essential capability” Paine makes a link between judgment, management, and moral thinking. ­Ethics is something that companies should care about because it is right not because it is effective (Paine, 1996, p. 477). Business leaders who care about ethics are on the right track. Ethics should be taken seriously. It is not only a question about strategy. Business leaders should use the concept of “moral thinking.” Moral thinking is an essential capability for managers. Paine refers to R. M. Hare who in Moral Thinking. its Levels, Method and Point (1982) has developed the concept of moral thinking. Paine proposes this concept as the framework for her view of moral thinking (Hare, 1982). However, Paine changes the viewpoint of Hare in important respects. Hare talks about the level of intuitive and of reflective moral thinking. Paine proposes to call the level of intuitive moral thinking for the level of principled moral thinking. Principled thinking refers to immediate ruling out of specific moral actions according to given moral principles. At another level we have the level of reflective moral thinking. At that level we refer to prescriptive universalism. Hare defines this as a kind of utilitarian pragmatism. Moreover, Paine thinks that this level can be determined as a level of a reflective attitude which can be said to refer to the kind of utilitarianism which is included in stakeholder analysis and what she calls people oriented moral thinking. This level may be determined as the level of principled consequentialism. At this reflective level of moral thinking moral principles are evaluated at a reflective level according to the possible impact on the good of society. Thus, Paine argues that there is a close relation between moral thinking and trust (Paine, 1996). What we mean when we say that managerial judgments imply development of the capacity of managers to do “moral thinking” (Paine, 1994b). In focusing on ethics, managerial judgment avoids the problems of compliance. Ethics is not separated from rules, but ethical judgment is broader than legal judgment. Ethical judgment linked to moral thinking is an essential capacity of good managers working for corporate integrity. Because of this danger of moral blindness, Lynn Sharp Paine gives the advice that managers should focus directly and explicitly on ethical issues in the decisionmaking process. In this way these problems will not be excluded or overlooked from the decision-making process (Paine, 1997, p. 226). In this context, it is important not to neglect specific stakeholders or other concerns in the process. If a specific stakeholder group is not recognized in the decision-making process, it may have unforeseen consequences. The different claims and ethical needs of stakeholders must be accounted for, when evaluating specific cases of ethical judgment in order to achieve organizational integrity as the basis for corporate citizenship in complex organizations. Integrity is an instrument to create a balanced company that can communicative with society and stakeholders (Kapten & Wempe, 2002). The important dimensions might be defined as the evaluation of the aims and objectives, the rights, and obligations, as well as the stakeholders that are affected by the decision-making of the organization. Indeed, it is very difficult to find the right determination of organizational integrity when evaluating these different dimensions of managerial judgment. But, there is a close connection between ethical judgment and organizational

170    Philosophy of Management and Sustainability strategy in order to find the right balance between compliance to rules and efforts to integrate values in organizational culture. Accordingly, corporate citizenship is an important outcome of actions with integrity in organizations. Marvin T. Brown takes the point of departure from such a concept of corporate integrity and situates it within a large framework of integrity as wholeness and coherence of society. He defines integrity as linked to civic ethics and to social responsibility and he situates organizational integrity within the larger framework of cultural, social, and environmental integrity conceived as consistency, relational awareness, inclusion, and worthwhile purpose. In this sense, we see an extension of corporate integrity to include the cultural, interpersonal, organizational, social, and natural dimensions of the world. In addition, in this sense we see how a philosophy of integrity aims at social and cultural integration (Brown, 2005, p. 9). In conclusion, we took our starting point with the definition of integrity as an individual sphere of privacy. Very soon, we also accounted for integrity as a political virtue for republican democracy and it was possible to extend integrity to be applicable in the domains of organizational ethics and politics. Finally, we realized that there is no real theory of integrity without a concept of moral thinking and reflective judgment. Thus, the concept of integrity is essential for understanding the philosophical foundations for ethics and politics of sustainability and the SDGs. Integrity covers nature, society, and humanity and it builds a bridge between human beings and nature. As earlier suggested, integrity also forms a part of the basic ethical principles of autonomy, dignity, integrity and vulnerability. Indeed, when presenting the idea of integrity as sustainable wholeness we have presented a close connection between integrity and vulnerability. What about autonomy and dignity? In addition, those principles are important to analyze. In particular, when it comes to management of sustainability and the political framework of society, the concept of dignity is important. Here, the scholar of international politics, Donna Hicks, who worked with practical conflict resolution, has done pioneering work of applying the concept of dignity in politics and business (Hicks, 2013). Hicks realized that the key to solve conflict issues among human beings in international conflict was the concept of human dignity. She realized it was essential to pay attention to human dignity of the people involved to solve conflicts. In conflicts around the world in Cambodia, Cuba and Sri Lanka people felt that they could only go on with conflict mediation if their dignity could be restored. Hicks thinks that problems in the work place relates to violation of dignity. Violation of dignity in the corporate world implies lack of respect for human beings in the work environment. Concepts of respect, esteem and identity are essential to this concept of dignity. According to Hicks, people want to be treated as human beings that invaluable, priceless and irreplaceable. Therefore, respect for human dignity is essential in organizations and society. This involves principles of fairness, independence, understanding, benefit of doubt, accountability. Indeed, the essentials of dignity is mutual respect for dignity of all human beings. Given this importance of dignity in society and corporations, we will now analyze the foundations of dignity in a more even more fundamental concept of the philosophy of sustainability, namely the concept of recognition between cultures as foundation of the ethics and politics of sustainability.

Chapter 13

Recognition between Cultures as the Foundation of Ethical and Political Sustainability In this chapter, I examine the concept of recognition as the ultimate foundation of ethical and political sustainability and its role in theory of cultural encounters and the confrontations and understandings between cultures.1 The theory of cultural understanding, exchange and encounter are related to the problem of respect and of recognition of another culture. The problem of recognition of culture is a problem of the recognition of the other and this is necessary as the foundation of sustainability. So when we talk about mutual recognition between cultures we deal with the problem of the search for identity and recognition of the other in society as the basis for a community with many cultures and diversity. On the global level we do not only search for economic equality of resources, but also for the cultural respect of the other. As Nancy Fraser has stated, “Justice requires today both redistribution and recognition” (Fraser, 2004, p. 152). In the history of philosophy since Hegel until Kojève and Honneth this search for respect has been conceived as the fight for recognition. However, the concept of recognition may be based too much on fight and conflict, force and power and therefore we cannot be certain that this fight for recognition will give us the foundation for political and social ethics that we really need, and we can also ask the question to which extent the concept of recognition is valid for explaining the required respect between cultures. So it seems like recognition is not enough, but that this concept of recognition needs to be accomplished by the concept of the gift. The problem in this respect is to which extent we can have recognition without fight, battle, and conflict? Is it really possible, as it is presupposed by critical theorists, also to develop a respect and mutuality that is not based on agostic confrontation of force and power? In this way we can ask the question to which extent is possible to develop a concept of the experience of the gift that can 1

Previous versions and preparatory works for this chapter include Rendtorff (2012b, 2014c). Philosophy of Management and Sustainability: Rethinking Business Ethics and Social Responsibility in Sustainable Development, 171–186 Copyright © 2019 by Emerald Publishing Limited All rights of reproduction in any form reserved doi:10.1108/978-1-78973-453-920191014

172    Philosophy of Management and Sustainability contribute with a mediation in the fight for recognition between cultures and also to whether it is possible to integrate the figures of the gift and loving gratitude in the fight for recognition between cultures? In order to examine this problem of the relation between recognition and gift in the problem of the recognition between cultures as the foundation of sustainability, the chapter will take the work of Paul Ricœur as the methodological frame for examining the limits of critical theory with regard to the conceptualization of the relation between recognition and gift. We will start by tracing the concept of fight and battle for recognition back to the origins of the concept in the work of Hegel and Kojève. With this starting point we will examine the challenge to the philosophy of the battle of recognition as it is proposed by the philosophy of the Hegel and Kojéve by the philosophy of the gift as agonistic recognition in the social anthropology of Marcel Mauss. From there we will shortly discuss the thought of the impossibility of recognition and gift in the French existentialist and Nietzschean thought of Sartre and Bataille as a remembrance of the aspects of recognition that has been partly forgotten by critical theory in the present thought of Honneth. We will also show how the American thought of recognition from Fukuyama to Fraser also suffers from the same problems of uniting gift and recognition in the place between identity and difference of cultures. With the hermeneutic concept of recognition in Gadamer and Habermas and Ricœur, we might find something that can overcome the problems of the battle and violence of the fight for recognition in the confrontation between cultures. And this may provide us with an important adjustment of critical theory of recognition of Honneth and others contemporary proponents of the fight for recognition (Rendtorff, 2012b).

1. Recent Definition of Recognition: Paul Ricœur’s Philosophy In his book Parcours de la reconnaissance: Trois etudes, Paul Ricœur gives a definition of a framework of discussion of the concept of recognition. He emphasizes the complexity of the concept of recognition that is broader than what we include in the meaning of the concept of “fight for recognition.” Ricœur defines the relation of recognition in this way: “I recognize actively something and I require to be recognized.” In this sense recognition is at the same time the art of denomination (in the Kantian sense of recognition), recognition of images (in the Bergsonian sense of recognition of oneself and intersubjective recognition (in the sense of the battle for recognition). Ricœur mentions some different meanings of the concept of recognition in the tension between knowing and recognize, which can help us to understand the concept of recognition as the foundation of ethical and political sustainability: (1) To present for the mind the idea of somebody or something that one knows. (2) Recognize because of a sign, of a marque, an indication or a person or a thing that one has never seen before. (3) Come about to recognize, to perceive, or discover the truth of something. (4) Recognize that the negation sometimes means not to be aware of, no more to listen. One recognizes another law than one’s will. (5) Recognize for. (6) Admit, confess, having recognition for, witness recognition

Recognition between Cultures as the Foundation    173 (Ricœur, 2004, pp. 18–20). In addition to these many significances of the concept of recognition, we can mention the meaning of recognition in the relations of gift and of (economic and social) exchange (Ricœur, Paris, 2004). With this multiplicity of meanings of recognition Ricœur helps us to understand that the dimensions of respect and of understanding in the meeting between the self and the other and between human beings and cultures contain at the same time a cognitive dimension, a dimension of self-consciences and a normative or moral dimension. To recognize implies at the same time to be recognized and recognize in the sense of holding something to be truth, to accept the truth of something or to witness the thankfulness that one has to give to someone (something, an action). With this terminological clarification, we can ask ourselves what the relation is between the Kantian recognition, Bergson’s concept of recognition, and the Hegelian and post-Hegelian recognition where it is nearly impossible to make distinction between knowledge and recognition (Ricœur, 2004, p. 34). With this important distinction, we are now taking up our discussion about the conditions of a philosophy of recognition.

2. Origins of Recognition: Hegel and Kojève The philosophy of recognition in Hegel can be exposed to different interpretations. We can distinguish between the concept of recognition by the young Hegel from Jena where the search for recognition is essentially integrated into the emotion of love and the happy meeting of subjectivity and the self. In this romantic philosophy we can nearly perceive an element of agape that is the free donation of oneself to the love of recognition of the other. However, in the Phenomenology of Spirit we can perceive a change of the concept of recognition that now announces the combat for death in history. In this context Hegel takes up Hobbes’ problem about the place of human beings in the state of nature when they live in primordial hostility to one another and with a fear of death (Ricœur, 2004, p. 250). The problem concerns unification of different people in social and political relations that go beyond the struggle for death in the state of nature. The challenge of Hobbes to political philosophy has a double aspect. It contains a naturalistic critique of ethics saying that human beings in the state of nature are violent, following their own interests. But it also proposes a social contract, which goes beyond an ethics of the good. In the combat for life and death, we find the question of the relation between the self and the other as an important problem in the same sense as the intersubjective recognition goes beyond itself toward the ethical and political recognition in the state according to the doctrine of the law, Die Rechtsstat. Accordingly, recognition becomes a political concept that is central for the realization of the individual in the universal and for the realization of the free spirit in history. We see clearly how, what happens in the Hegelian analysis is an overcoming of the Kantian concept of recognition toward an intersubjective dimension of recognition that is constructed out for the search for oneself in the social and historical relations. Hobbes interpretation of Hegel’s concept of the struggle for recognition can be described as a violent struggle for recognition (Haber, 2004, p. 76).

174    Philosophy of Management and Sustainability The struggle for recognition appears as the medium of the conditions of intersubjective reciprocity of the social relations. There is a promise of a new social foundation in the relation of violence. Hegel proposes to move beyond Hobbes’ concept of recognition by proposing a struggle for honor and dignity as the basis for recognition. Here, the other is not only an enemy, but also somebody who is important since the value of recognition depends on the recognition by the other in the social relation. Accordingly, the struggle for recognition becomes for Hegel a struggle to death in which the mutual human recognition becomes the most noble human activity since this is the foundation of good social relations. Thus, we may add, sustainability depends on human recognition in the social reality of mutual respect. With his reading of the Phenomenology of the Spirit, Kojève has developed this approach to the problem of recognition and in this sense, he has given a foundation for the modern discussion of intersubjectivity, history, and the relation between the same and the other. In the work of Kojève, we find a reading of the phenomenology that takes the point of departure with the concept of thymos (desire of recognition) as the fundamental stake in the historical battle between masters and slaves. The masters and slaves are fighting to death, but the slaves will lose the combat (Kojève, 1947). They are the weakest and they submit themselves because of the fear of death while the masters are confronting death. In this battle, however, it will be the slaves who are the strongest (qui perd gagne) because the slaves will have the opportunity to go away from their oppressors. The future is the future for the slaves. History is the history of the reproduction of the slaves and their world views in the works of culture through their work and their reproduction of themselves in their creations in history. The slave will find recognition but this is not the case for the master because he does not need to be recognized. At the same time, history, as a battle for recognition, is the realization of human freedom in history. Bourgeois society is the realization of the spirit as modern democracy that implies the mutual recognition of freedom among citizens. This is the fusion of the political recognition and the economic recognition (in the sense of the recognition of the work effort of the slaves). The modern state with its universal protection of free citizens implies the recognition of the self as member of a democratic society in the mutual recognition of the citizens. Kojève thought that America after the Second World War and the European Union represented examples of such a homogeneous state: The universal state of recognition. We should not forget the famous conclusion by Kojève who thinks that the uni­ versal realization implies an important paradox, namely the realization that the universal state would be the end of human beings because the desire of recognition is no longer necessary because the object of the recognition has been realized at the end of history (Fukuyama, 1990). The paradox of the end of history is expressed by Fukuyma in his emphasis of the tragedy of the last man. If human beings are defined by their participation in the struggle for recognition and by their work to dominate nature the fulfillment of these goals would mean the end of human beings. This is because there would be nothing left to fight for in the end of history where humanity has obtained both the recognition of humanity and the life without any economic and material needs. Humanity would at the

Recognition between Cultures as the Foundation    175 end of history stop to work and stop with the fight for recognition. The paradox is that the very nature of humanity is the struggle for recognition to overcome injustice and that if human beings cannot participate in this struggle they will lose the most noble part of their humanity. Kojève (and Fukuyma) go further with this nearly existentialist paradox: The end of history it is the end of art and more seriously even the end of philosophy. Accordingly, for post-historical human beings, there is no longer a meaning in life, the battle for recognition has ended. The irony of the end of history is that we need to find new manners of existing for example by being inspired by the way people live in Japan (as described in the invitations to take part in the tea-parties of the tea-culture of the East). In the cultural encounter between East and West we can ask what Kojève means by this idea of seeing life in Asia as a way to live the end of history as the end of the great battle for recognition. Maybe he would argue that Japan and Asia are no longer considering recognition as a battle but rather an inner accomplishment of the harmony of the self with itself.

3. The Gift as a Recognition: Marcel Mauss With the philosophy of recognition coming from Hegel and passing by Kojève we find the foundation of the concept of recognition as struggle, battle, and war. This is a concept that has been taken over a lot in the developments after Hegel and Kojève. However, in the French philosophy of recognition we find another origin of the concept that is very important to retain when we deal with the concept of recognition. This is the implied concept of recognition in the philosophy and sociology of the gift between agonistic gift and free gift that was originally developed in the ethnology and anthropology of Marcel Mauss. According to Marcel Mauss in his Essai sur le don: Formes et raison de l’échange dans la société archaique (1924), we can observe a close relation between the gift and the social exchange (Mauss, 1924). In fact, we can say that the logic of the gift is a logic of rivality and combat for recognition. In his description of the function of the gift in the archaic societies, Marcel Mauss shows how the gift as Potlacht plays a central role in primitive societies and in our culture and history. In fact we can say that we can find a desire for recognition and battle for death in the agonistic presentations as they are performed by the original peoples of North America or Polynesia. The agonistic gift in the Potlatch can in this sense be characterized as a battle for recognition and as a agonistic search for respect and recognition. However, in the concept of the gift we therefore find a search for the gift and for a generosity that can go beyond the agonistic and aggressive gift. We need in this sense to be conscious of the dimension of the search for respect in the concept of the gift. The gift represents a vision of social exchange that is central in modern society. Not only the agonistic gift and the destruction of the self in generosity are important but also the positive side of the gift as gift of death and of life. The agonistic gift in the Potlatch can be characterized as battle for recognition and as an agonistic search for respect for recognition. However, in the concept of the gift we can also find a research for a gift and a generosity that goes beyond

176    Philosophy of Management and Sustainability the aggressive agonistic gift. We need to be conscious about the dimension of research for respect in the gift. The gift represents a vision of social exchange that is central in modern society. Not only the agonistic gift and the generosity in the gift are important but also the generosity of the gift as gift of life and death. In fact, the gift conceived as exchange is represented by the fact that there is the obligation to give and receive also by the one who receives the gift. We can say that they obligation to give back in a dignified way is imperative. In this way the gift is in the same sense gift of life and of death. There is also a profound recognition of the other present in the original gift. A gift contains in this sense both demands from the one who gives and from the one who receives the gift. It is nearly impossible to refuse the gifts and in very particular situations it becomes an obligation to give a gift and also to be thankful and give another gift in return. To give and receive something express a recognition and respect for the one who gives or receives. There is also in this sense a relation of moral recognition in the gift. Further there is a spiritual relation in the gift. To give something in a gift is to respect the other as a spiritual being, that is autonomous and who have a particular dignity as a human being, and this is why the generosity of the gift as expression of recognition is so important in the modern society. In this way, with the reflections of Marcel Mauss about the gift we find a very important description of the relation between gift an recognition.

4. French Thought of the Impossibility of Recognition and the Gift 4.1. Nietzscheanism We can say that French philosophy after Kojève and Mauss continues the reflection over this theme of the gift and about the close connection with the discussion about the relation between the self and the other. However, it is in fact the gifts of an agonistic type and it is the concept of recognition as endless struggle that is the basis of the French approach to the problem of recognition. With this philosophy we are confronted with nearly Nietzschean approaches to the problem of the gift. We can mention Georges Bataille and Jean Paul Sartre as the philosophers who argue for this impossibility of the gift and of a genuine relation of recognition. In the philosophy of Georges Bataille we find a “Hegelianism without reserve” that is combined with a metaphysical reflection about the concept of the gift. The Hegelianism of Bataille represents a reflection about the figures of recognition, in particular about the sovereign masters who demonstrate their sovereign capacity of living in front of the slaves. But the concept of masters can also include those who are totally at the limit of the struggle for recognition Those who have the sovereign power confront death, nothingness, and misery. In La part maudite (1949) Bataille develops the concept of the gift as related to a logic of exchange in front of the free generosity where the individual engages totally in sacrifice and the gift of him or herself (Bataille, 1949). This is linked to the distinction between heterogeneity and homogeneity according to which exchange is homogenity while the donation of oneself is linked to heterogeneity.

Recognition between Cultures as the Foundation    177 In La part maudite Bataille makes research on the general economy and the restricted economy, inspired by the description of the gift by Marcel Mauss. There is a close link between the concept of the gift, expense, and the economic unity of society. In his analysis of expense, Bataille demonstrates that the notion of generosity is the foundation of the sovereign gift. For example in the celebration events and festivities of primitive societies that even though they are not rich, are having great celebrations with a generosity that so great that it is nearly destructive. We can find in the philosophy of Jacques Derrida and his thinking about gift and generosity a development of the thought of Bataille in relation to the concept of homogeneity and in relation to the self-transcendence in expense. In fact, the problem is to which extent we can say that there exists a reflection about the gift that goes beyond exchange? Derrida shows that the phenomenon of the gift that transcends the recognition in the gift-relation and the relation of return are impossible. In the deconstructivist perspective, it is impossible to find a generosity that goes beyond the struggle for recognition.

4.2. Existentialism In the thought of the existentialist philosophers we can also observe a strong criticism of the philosophy of recognition. In particular in the philosophy of Jean Paul Sartre we can observe a complex use of the three meanings of the word “recognition”: as recognition, as picture and as intersubjective struggle. In addition, the tension between the agonistic gift and the generosity of the gift beyond the logic of exchange is very present in the thought of Jean-Paul Sartre. In L’Etre et le Néant (1943) recognition (as image and recognition rather in the sense of estimation) appears as the fundamental figure of being for the other in the sense where is recognized by the other through the feelings of proudness and honor. In addition, the relation between human beings is conceived as a relation of struggle and conflict (Sartre, 1943). It is impossible for human beings to be recognized as the same time as en-soi and as pour-soi and this is why romantic love is conceived as a unique figure of recognition and of harmonious gift that is totally impossible. Sartre presents us with a generalization of the relation of agonistic gift as conception of the fundamental relation between human beings. Having talked about the eventual possibility of a morals in his main work Sartre searches in the postmortem publication Cahiers pour une morale (1946– 1947) to find a positive affirmation of the relation to the other (Sartre, 1983). In this direction of reflection as complicit, Sartre makes an effort to think the negativity of conscience as affirmation and we can say that the concept of recognition as estimation and also the concept of the gift as generosity play a very great role in this context. The recognition of the other as free and creative spirit implies the generosity of the gift and also the estimation of the project of the other although it is different from my own. But, as we all know Sartre could not publish his thoughts about this ontology of affirmation. Perhaps because it was nearly incompatible with the thought in L’Etre et le Néant. Finally, the ambiguities of the concept of recognition are repeated in the second great work of Sartre, Critique de la raison dialectique (1960). In fact, the

178    Philosophy of Management and Sustainability struggle for recognition is in this work replaced by the social struggle for surviving in the revolution for a better society (Sartre, 1960). This dialectics is circular and the group in fusion becomes very soon an organized group and then an institution of “serialized being.” In this dialectics, recognition is momentarily realized in the free project of the individuals in order to fight for a better society. In fact, it is the gift of generosity that is at the origins of the social organization of society but very soon this gift is transformed into exchange because of the economic and social scarcity and in this way, we can say that history of humanity begins – in the fight for overcoming the abundance of life.

5. American Reintroduction of the Problem of Recognition With Bataille, Derrida, and Sartre it is difficult to understand how anyone really seriously would restart with the philosophy of recognition if not only in order to express the impossibility of the gift and any form of accomplished recognition. However, in American philosophy we can observe an effort to make a new commencement and reconsider the philosophy of recognition as a central concept of social philosophy that would be essential to guide us today. In this context we can mention the social theories of the philosophers Francis Fukuyama and Nancy Fraser. We will start by presenting the thought on recognition by Francis Fukuyama.

5.1. Francis Fukuyama and the End of History Francis Fukuyama, the American political economist in the tradition from Kojève is very inspired by the political philosophy of Leo Strauss. Fukuyama has contributed with an interpretation of the philosophy of recognition that gives it a concrete interpretation of the political philosophy after the end of the cold war in 1989 (Fukuyama, 1990). After the end of the political struggle between communists and the adherents of liberal democracy, the struggle for recognition has end and we are only facing the question of the possibility of pragmatic politics in order to organize the political structures of liberal democracy as stable and effective as possible. In fact, this movement toward liberal democracy that has happened in the Western world is repeated in all cultures that transform themselves through a struggle for recognition in the movement from the totalitarian society toward liberal democracy. This movement for research for recognition is manifested as a desire for recognition of the peoples through the establishment of stable political institutions. Modern political recognition is not only a question about economic equality but also a question of constructing a national political community with an open liberal culture. The obstacle for development of a liberal culture is the existence of a national ethnic culture that does not recognize the importance of multicultural democracy. Moreover, we have to recognize the universal rights of every citizen, in particular the right to religious freedom in the Western countries. In addition, the

Recognition between Cultures as the Foundation    179 struggle for recognition is a struggle for overcoming the social inequality of birth and to realize a social equality of citizens as the starting point for the realization of a democratic community. Fukuyama emphasizes all the fractions of sense of national identity, religion, social equality, civil society, and liberal institutions that collectively constitute a people. This approach to a sustainable community can be said to be the conditions of a good market economy and in this way the success of capitalism depends on the social foundations in the premodern cultures. The economic liberalism depends on the political recognition in the political community. According to Fukuyama, the end of history is characterized by a double movement; first of all the homogenization of the liberal society and of the culture of the West. After this, the persistence of the people and the particular cultures in the different countries of the world, for example, the Islamic, the culture of the near Orient and Northern Africa, the other countries of Africa, the traditional culture of the Asian countries that combine economic progress with the traditional cultures of society. In this way, according to Fukuyama, the end of history represents a strong movement toward a universal and homogeneous state. At the same time, we can observe a realization of the own and proper identity by the different peoples who realize themselves as perfect people. Accordingly, in this sense the struggle for recognition persists as a historical movement even though the debate about this struggle for recognition is less present in the Western world. Accordingly, for Fukuyama the great challenge of Western thought is the combination of universal development with cultures that are more and more different, that is, unequal recognition between equal people confronted with equal recognition between unequal people. This kind of permanent struggle for equality has according to Fukuyama replaced the struggle for recognition at the time of the end of history.

5.2. Nancy Fraser and Identity Politics We also find this problem in the political theory of Nancy Fraser. Here the problem is formulated as the problem of recognition in a situation of identity politics where social groups use the struggle of recognition as an instrument to be integrated in the political community. Fraser emphasizes like Fukuyama that recognition does not only signify retribution in the economic order but also that it implies a particular recognition in the cultural order where recognition signifies the right of a culture or people to be recognized in its particularity as a community. However, Nancy Fraser makes us think about the problem of recognition in the situation of political decline. She shows how the struggle for recognition of cultural difference in a society based on identity has become the central concern of identity politics (Fraser, 2004, p. 162). As such, the struggle for recognition transcends traditional politics conceived by the struggle of minorities in order to be recognized. Accordingly, what is at stake in the struggle for recognition is to find an expression of social and political justice in relation to tolerance of minorities.

180    Philosophy of Management and Sustainability According to Fraser, what could be conceived as a criticism of Fukuyama – politics should never turn away from the discursive deliberation toward the struggle of recognition implied in identity politics. We can say that it is important that democracy is founded on deliberative discourse rather than on a struggle for recognition based on identity politics.

6. German Reformulation of the Problem of Recognition In the German tradition we also find an effort to reformulate the Hegelian philosophy of recognition in the modern framework. In this tradition we experience a dialogical and discursive reformation of the problem of recognition within the hermeneutical project of Gadamer and Habermas. After this we find a new interpretation of the concept of recognition as it has been formulated by Axel Honneth in his formulation of the concept of recognition in the framework of the third generation of critical theory. We can say that Honneth in his strong defense of the concept of recognition as based on the struggle of recognition has a tendency to ignore the dialogical concept of recognition as it is proposed in the critical hermeneutical philosophy.

6.1. Hermeneutical Origins of Recognition: Gadamer and Dialogical Understanding In the philosophy of Hans Georg Gadamer in Wahrheit und Methode (1960) we can observe a use of the concept of recognition in the discussion of the development of historical hermeneutics in great tradition of hermeneutics from Schleiermacher à Dilthey (Gadamer, 1960). In this context, the hermeneutical concept of recognition stays as a part of the philosophy of love of the young Hegel and recognition is very far from a philosophy of struggle for recognition. We can say that we can observe recognition in the mutual gift that happens in the fusion of horizons of cultures. In the hermeneutical concept of Gadamer there is not a struggle for recognition but rather a dialogical understanding that is guided by the wisdom of the phronesis of the Aristotelian practical reason.

6.2. Beyond Struggle for Recognition: Habermas and Intersubjective Recognition Even if Habermas criticizes the traditional hermeneutical project of Gadamer, he is not very far from a discoursive conception of recognition. In fact, Habermas’ philosophy contains a criticism of the subjectivist philosophy of the young Hegel. Hegel is imprisoned in a subjectivist philosophy because he does not make the important distinction between work, language, and human interaction. With his philosophy of language and of communicative interaction Habermas is able to formulate a kind of recognition that is not a result of a struggle but rather is emergent of a democratic deliberation. We can say than in Habermas’ Theorie des kommunikativen Handelns (1981) recognition is a result of democratic deliberation (Habermas, 1981). According to Habermas, recognition in communication

Recognition between Cultures as the Foundation    181 leads to an intersubjective recognition that does not need the struggle for recognition because recognition is the result of the communication. We can describe the concept of recognition according to Habermas as use of language in another way than just having a power influence on the other. Without the experience of reciprocity, it is not possible to experience mutual recognition in a sustainable community. Reciprocity is the condition for inscription of mutual recognition in social life. From this Habermas argues that the concepts of work and interaction in a conceptual historical materialism constitute the basis for which the general historical movement can be thought. Nevertheless, this is also the basis for the argument that social and economic institutions in order to be sustainable must be founded on democratic deliberation, as suggested by the concept of communicative action. Habermas argues that Hegel’s philosophy of the spirit and its historical self-development is dependent on this concept of communicative action. Moreover, Marx would also have to see his concepts of work and exchange with nature in this perspective of communicative interaction (Haber, 2004, p. 74). In this way we can say that Habermas helps us to overcome the negative, agonistic, and impossible recognition through the importance of the argumentative language and through the importance of the democratic communication. Habermas does not abolish the agonistic oppositions, but he invites us to keep them while at the same time reinterpreting them as categories of communication.

6.3. Axel Honneth and the Renewal of the Struggle for Recognition In opposition to the great work of Habermas to find a normative foundation for critical theory in communication, Axel Honneth, his successor, does not follow Habermas but reintroduces a theory of recognition as defined as struggle for recognition that precedes and goes beyond the communicative encounter. According to Honneth, we can say that the hermeneutical concept of recognition in the philosophy of Gadamer and Habermas forgets the strong moments of conflict that are present in communication. Honneth takes over the concept of struggle for recognition in order to integrate and reintroduce the lost moment of critique in critical theory after Habermas. With this aim Honneth proposes a normative anthropology of the struggle for recognition as a very important dimension of human nature (Honneth, 1992). According to Honneth, the problem is that the struggle for recognition cannot be isolated from the understanding of human social life. Habermas’ philosophy is characterized by a great nativity when Habermas thinks that it is possible to a have communication without domination and to reconstitute a happy intersubjectivity in this communication. Honneth insists that it is impossible to realize the utopia of communication in a world full of power and force relations. Honneth emphasizes against Habermas that it is impossible to have a creation of a social relation without a struggle for identity in the different social and legal spheres of recognition. We can say that Honneth proposes a criticism of a deontological concept of justice and that he emphasizes that recognition in a post-traditional ethics is found in the struggle for the autonomy of freedom. There is a search for autonomy in

182    Philosophy of Management and Sustainability the struggle for recognition that can be understood as a way to fight pathologies, injustices and alienations in modern society. According to Honneth we should not ignore the confrontation and the opposition in the social field. The struggle for recognition confirms a social difference and in this way we can say that this struggle and search for recognition will present a criticism of the social order. With Honneth we can accordingly say that recognition is very important in social philosophy. The concept of recognition is important in the communicative ethics since recognition represents the minimal condition to have an ethics of discussion. Accordingly, in relation to sustainability the communicative ethics represents the minimal conditions for having a relation to the other that is not manipulative or instrumental and this makes the communicative relation possible as the basis of social, ethical, and political sustainability In his social theory of recognition, it is important for Honneth to emphasize that the struggle for recognition represents a very important dimension of the normative expectations of individuals and also their moral integration in society. According to Honneth we cannot ignore the struggle for recognition in the fight for constitution of identity in the public space if we want to understand the political logic of modern society. Accordingly, the concept of discursive politics in Habermas’ philosophy forgets the struggle for recognition in the different spheres of recognition in society that proceeds the discursive openness of communicative action. Without recognition, there would be disgust, humiliation, and alienation of the identity of the individual. The social integration happens through the institutionalization of the different forms of reciprocal recognition in the struggle for social integration. The struggle for recognition represents a dimension of the identity of the individual and recognition represents a normative expectation behind the idea of communicative action. We can say that recognition is necessary because of the experience of the lack of justice in institutions.

7. Hermeneutical Reintroduction of Recognition: Paul Ricœur On the basis of the hermeneutical conception of recognition and in the confrontation with Honneth’s concept of recognition we can say that Paul Ricœur develops his analysis of recognition by taking into consideration the theme of the gift as an important element of the recognition. In this way Ricœur also contributes to the reflections about recognition within French philosophy. In his book Parcours de la reconnaissance. Trois études (2004), Ricœur begins with a description of recognition as identification. In this theory of recognition we can see that the Cartesian and the Kantian concepts of recognition become different manners of identification of things with ideas and of holding something for true. To identify is to link something with something and this is explained in the production of meaning by the imagination (Ricœur, 2004, p. 72). Recognition is in this sense conceived as an act of reproduction of imagination that is identified with the schematics of the faculty of understanding. Recognition is an identification of something else that according to the phenomenological point of view relates to the identification, which is the recognition of the self by the self.

Recognition between Cultures as the Foundation    183 We can say that Ricœur emphasizes the importance of recognition for identity. He speaks about the self-recognition of the capable human being. In particular, there is a link between recognition and the responsibility of the self and of the sentiments of proudness and shame. Through the identification with the thymos, the self recognizes itself as a morally responsible being that is exposed to the reasoning of prudence, of phrones, and the responsibility for acting according to the virtues. Accordingly, we can say that in this phenomenology of capable human being recognition as identification signifies “I can” (“je peux”). It is the capacity to be oneself, to recognize one’s identity as narrative identity, as the identity of narrative identity, as identity-ipse and not only as identity-idem. Through the recognition of the self we can see the establishment of a fundamental responsibility for action and also an understanding of the imputability of the responsibility for the fundamental vulnerability of the human being. In this way we can observe that the recognition of the self in personal identity is linked with the memory and with the promise of the self to hold to what is promised and those categories become fundamental categories of the moral identification of the self with itself (Ricœur, 2004, p. 213). Ricœur describes this dimension of self-recognition of the self in the social world with a reference to Amartya Sen, which is a good indication of how recognition is essential to sustainability. With Sen, we can refer to the problem of the capacity or capability of action which relates to the concept of agency. In opposition to the utilitarian tradition which focuses on the consequences of actions, Sen emphasizes the positive function of liberty in order to define the politics of social recognition of the self. With the concept of capability there is a close link between individual freedom of choice and the social responsibility for sustainability in community. In this way we can say that in the responsibility and in the imputability of moral action that the recognition of the self becomes an intersubjective recognition that is linked with the research for the social identity of the self. So, very well integrated in the French tradition of the philosophy of recognition, Ricœur makes a great connection between gift and recognition when he reflects about intersubjectivity and recognition. Ricœur describes recognition as mutual recognition as something that is more than symbolic, which includes the real and authentic relation between individuals in community, founded sur the relation of mutual gift-giving and generosity among respectful human beings. With this definition of intersubjectivity we can see that reciprocity is expressed as an important dimension of the identity of the self in relation to the other. According to Ricœur, what we can say that Honneth keeps from Hegel this is a normative theory about the struggle for recognition (Ricœur, 2004, p. 274). In this theory, the social genesis is happening in the identification of the self with community. We can observe different spheres of recognition at the level of the family, the social, the political, and legal sphere. Ricœur acknowledges that the reflections of Honneth about recognition are important but they don’t include every truth about the concept of recognition. According to Ricœur, Honneth is right against Habermas in emphasizing the importance of recognition as an important

184    Philosophy of Management and Sustainability concept for understanding the political participation in the public space of the individual (Ricœur, 2004, p. 293). What is important is the individual responsibility to be able to express oneself with rationality and autonomy with regard to moral questions of sustainability in community. This responsibility is inseparable of the responsibility of the individual in relation to individual civil, political, and social rights linking individuals to sustainable communities. Responsibility covers the expression of individual rights and capability with regard to community. Even though Ricœur accepts the importance of the struggle for recognition for human dignity, social esteem, and narrative identity, Ricœur does not consider the politics of recognition and of identity as sufficient for understanding the concept of recognition. Ricœur makes a return to the hermeneutical concept of recognition as mutual recognition based on love, (“agapé – philia – amour et pardon”). In order to make this move he enters into the discussion about the economy of the gift and about the paradoxes of the gift and return as they are formulated in the philosophy of Marcel Mauss. We can say that the peace of mutual recognition presupposes that the reciprocity transcends a negative circle of the gift leading to an aggressive gift of revenge (méfait vs. contre-méfait) and in this way is transformed into a gift of sacrifice (don vs. contre-don) sacrifice opening for a gift based on de positive reciprocity (Ricœur, 2004, p. 331). Ricœur insist to say that there is something that transcends the struggle for recognition in the exchange of the gifts and in the mutual recognition of love (Ricœur, 2004, p. 336). According to Ricœur, we need to have confidence that it is possible to establish a positive circle with the other in the act of recognition and gift. The positive relation of exchange includes the answers to the question of how to give and how to give back. These different relations of gifts are founded of the ideal of generosity to give without expecting anything in return. At the same time, the relation of love is maintained in the willingness to give back as essential for the stability of sustainability of the community. There is a generosity of agape in the first gift, which explains the paradoxes of the gift without return. This mutual recognition is showed in the enigma of the gift (“l’énigme du don réciproque cérémoniel”), as shown by Michel Hénaff. We can say that in order to really have a mutual recognition it is necessary to have the experience of the gift without return as it is expressed in the mutual and reciprocal recognition of gratitude that is manifested is the generosity of the social relations based on love and generosity. In this way, we can say that the experience of the gift is very important for the encounter of the other as other in the social struggle for recognition. And in this way the generosity of the dialogical encounter of love goes beyond the pure struggle for recognition as proposed by the Hegelian tradition.

8. From Recognition to Acknowledgment: Patchen Markell An author that has understood the necessity of this criticism of the concept of recognition is Patchen Markell from the University of Chicago with the book Bound by Recognition from 2003 (Markell, 2003). In this book, Markell proposes

Recognition between Cultures as the Foundation    185 to replace recognition by “acknowledgment.” Markell makes a critical examination Charles Taylor’s work on recognition The Politics of Recognition from 1992 that follows Hegel, Kojève, and Honneth in defining recognition as a necessary political recognition among equals in society and politics. Inspired by Hannah Arendt, Markell (2003) argues that recognition belongs to a kind metaphysics of subjectivity that leads to the misrecognition of the fundamental unpredictability and finitude of human life (p. 5). Moreover, Markell argues, in accordance with our discussion of Honneth that injustice may not only be a matter of recognition, but may involve other things. In order to develop a concept of politics that deals with these problems Markell proposes a politics of acknowledgment to replace the politics of recognition (Markell, 2003, p. 7). This view of politics, inspired by Hannah Arendt takes into account the fundamental finitude and vulnerability of every human being that seems to be lost in the politics of the struggle for recognition that focuses on the strong and selfcontrolling subjectivity. The problem of recognition is that it refers to a kind of sovereignty and self-mastery that does not understand that politics is a matter of human vulnerability in the intersubjective encounter (Markell, 2003, p. 14). Markell cites Hannah Arendt’s reply when she received Emerson-Thoreau Medel where she commented that “if it is good to be recognized it is better to be welcomed, precisely because this is something we can neither earn nor deserve” (Markell, 2003, p. 180). In this sense acknowledgment and welcoming is something beyond recognition that may be said to imply a generosity of the gift that moves us beyond recognition and the economy of the gift. We can say that the politics of acknowledgment supports the argument that we have to go beyond the struggle for recognition toward kind of reciprocity that is based on mutual generosity and respect for human difference, freedom, and singularity.

9. Toward What Kind of Sustainable Recognition between Cultures? Can we overcome the agonistic battle for recognition as the foundation of cultural encounter where it is the sovereignty of the power of cultures rather than mutual vulnerability and fragility that is at stake? Or do we stay enclosed in a battle for being recognized that never really leads to genuine recognition of personal cultural identity? We have seen the problems of the notion of recognition in this regard and maybe we have to overcome recognition in favor of gift, acknowledgement, and respect for difference instead of going for such a strong concept as recognition. With the distinction of Ricœur with the different aspects of recognition as l’art de dénommer (The Kantian sense of to recognize something), recognition of pictures (the Bergsonian significance of reconnaissance de soi) and intersubjective recognition (struggle for recognition in the Hegelian sense) we find a more complex vision of the cultural recognition that transcends a simple concept of recognition defined as struggle for recognition. In addition with the romantic philosophy of the young Hegel, we can nearly perceive an element of l’agapé, the free donation of the self. But as we have seen

186    Philosophy of Management and Sustainability with the phenomenology of the spirit of Hegel, we can see a change of the concept of recognition that moves toward struggle to death for recognition in human history. This gives us the foundation of the modern confrontation between battle and inequality of cultures like the one that has been described by Kojève and Fukuyama who describe the battle for recognition. Here we see that the battle for recognition is accomplished in the Western would and it is repeated in all the cultures of the world until the realization of a state of recognition in freedom and respect between cultures. This search for the free realization of the human struggle for freedom in culture and history is present in all cultures. However, it may be better to perceive this struggle not only as recognition but also to move beyond the struggle toward respect for vulnerability and acknowledgment of human finitude and mortality rather than having to prove strong sovereignty. With the agonistic gift we are confronted with a vision of the battle for recognition. This aggressive gift represents an expression of the battle for recognition between cultures. To be able to show generosity expresses the power of the sovereign and the superiority of the culture and here we forget the concern for vulnerability and fragility. With the French philosophy of Bataille and Sartre we have seen the decline of the gift and the impossibility of recognition based on generosity, and therefore we may propose another foundation of generosity as rather based on human vulnerability and fundamental ethical responsibility for the other, e.g., as proposed in the philosophy of Emmanuel Levinas. Accordingly with this decline it seems that the only form of possible recognition between cultures is the one that is developed through the hermeneutical approach by Gadamer and Habermas, where we see how the concepts of acknowledgment and respect for the other replace the strong struggle for recognition. The hermeneutics of the fusion of horizons and the philosophy of communicative action are very close to Ricœur’s of the act of denomination and of recognition of images as recognition of the self-identity of the self. In the perspective of the hermeneutical project, one passes toward the other in order to have recognition of oneself. Gadamer and Habermas demonstrate how a discourse thought about recognition represents an important criticism of the agonistic battle for recognition. However, with Honneth we have shown some doubt concerning this concept of recognition. There is no recognition without the struggle for recognition, but this leads to a problem because in this way we cannot proceed. What remains is a battle without recognition. It is only with the thought of Ricœur who makes an effort to integrate a positive view of recognition as “gift without expectation of return” that we have the possibility to escape the problem of struggle without recognition. But at the same time, it seems to me that Ricœur’s project is not possible without the hermeneutical vision of recognition including the important concept of acknowledgment of vulnerability and accordingly with this approach we are very far from the concept of the struggle for recognition in the traditional sense. In this way it seems as though the recognition of cultures is not possible without communication and the generosity of the mutual gift.

Chapter 14

Philosophy of Management in the Hypermodern Experience Economy Modern experience economy is about buying and selling experiences, to make intimate experiences and search for customer satisfaction the driving motor of capitalist economies (Sundbo and Sørensen, 2013).1 If we want to understand the contemporary conditions of the transition toward sustainability, we need to analyze the sociological and philosophical foundations of the experience economy as the condition of sustainability management. The concept of experience and more recently the notion of authentic experience have thereby become central to management and management philosophy (Pine & Gilmore, 1999, 2007). In this chapter, I want to discuss some fundamental and foundational aspects of the concept of authentic experience in the framework of the experience economy as a social reality of a globalized society that moves from post-modernity to hypermodernity-defined exponential turbo-escalation of all aspects of postmodern society (Lipovetsky, 2006a). This analysis should be considered as an attempt to present the social philosophy of business and society, which can be seen as the foundation for my theory of ethics and philosophy of management of sustainability (Rendtorff, 2010b, 2011a, 2011b, 2013a, 2013b, 2013c, 2013d, 2014a, 2014b, 2015, 2016, 2017, 2018a, 2018b). The chapter is divided into the following sections: (1) We will start with a preliminary definition of the concept of experience economy. (2) Then we will discuss the phenomenological perspective on the concept of experience and relate this concept to the idea of authenticity. This will be based on a comparison between different concepts of authenticity. (3) After this, I will analyze this concept of authenticity in the framework of the kind of society that has made experience economy possible. In this context, 1

Previous versions and preparatory works for this chapter include Rendtorff (2018c).

Philosophy of Management and Sustainability: Rethinking Business Ethics and Social Responsibility in Sustainable Development, 187–201 Copyright © 2019 by Emerald Publishing Limited All rights of reproduction in any form reserved doi:10.1108/978-1-78973-453-920191015

188    Philosophy of Management and Sustainability I am strongly inspired by the French philosopher and sociologist Gilles Lipovetsky, who provides us with a general sociological analysis of the concept of consumption in experience society (Lipovetsky, 2006). (4) On this basis, I will discuss some elements of ethics in the experience economy in order to show how the economy of the gift and philanthropic exchange is an integrated part of the experience economy. (5) Finally, I will discuss the search for authenticity in the experience economy (Pine & Gilmore, 2007) in order to discuss whether authenticity is something like a marriage between capitalism, experience, and authenticity arguing that there seems to remain an insurmountable tension between these concepts. The aim is to elaborate the problem whether it is possible to create deliberately authentic experience with the somewhat artificial investments of business organizations that always seem to have the aim of making profits as a part of their efforts to satisfy the search for authenticity.

1. Creativity, Sustainability, and the Experience Economy What is the experience economy and why is creativity important in this kind of economy? We find two major references to creativity in the literature: Richard Florida who gives an analysis of the creative class who are the new producers of the creative society (Florida, 2002); Pine and Gilmore who propose the experience economy as a stage and theater of economy activity. According to Florida, creativity is the key to economic success and according to Pine and Gilmore in the future “customer-centric, customer-driven, and customer-focused experience economy: “…every business is a stage and therefore work is a theatre” (Pine & Gilmore, 1999, p. x). The life of the bars, gambling halls, day clubs, and nightclubs in Las Vegas all together represent the essence of the experience economy. In this economy, focus has moved from the product to the experience of the product. For example, according to Pine and Gilmore, the importance of the creativity and culture behind the product implies that there is a huge qualitative and accordingly price difference between drinking an ordinary cup of coffee and drinking it on a historical square in Venice. We can say that the experience economy makes creativity important as guarantee for authenticity of the products. Pine and Gilmore distinguish experience from other products (Pine & Gilmore, 1999, p. 6). While commodities are materials from the natural world and goods are “tangible products that companies standardize and then inventory,” services are “intangible activities performed for a particular client” and experiences are – while emerging out of this service economy, but also breaking its essential paradigm – conceived as “something memorable and personal” that gives customers emotions that are revealed in the same way as a play on “the stage of a theatre reveals sensations among the spectators” (Pine & Gilmore, 1999, p. 6). With this view of the creative economy as a theater and a stage, Pine and Gilmore conceive the experience economy as the creative future of capitalist society:

Philosophy of Management    189 The growth of both the Industrial Economy and the Service Economy brought with it a profilation of offerings that didn’t exist before imaginative companies invented and developed them. That is also how the Experience Economy will grow, as companies tough out what economist Joseph Schumpeter termed the “gales of creative destruction” that comprise business innovation. Those businesses that relegate themselves to the diminishing world of goods and services will be rendered irrelevant. To avoid this fate, you must come to state a rich, compelling experience. (Pine & Gilmore, 1999, p. 25) The conditions of modern economic activity imply in this sense a pressure on corporations to be creative and give consumers experiences that give meaning to their lives. This search for authentic experience represents a challenge to consumer society because the responsibilities of business are growing from being only related to the importance of product creation toward responsibility for human experiences and emotions. In this sense, we can argue that there is a moral imperative implicit in the experience economy: Therefore, we believe that the moral emphasis should not lie on whether commerce should shift to experiential offerings. If societies are to seek continued economic prosperity, they must be placed instead on what kinds of experiences will be staged. The business executive, like everyone else, must in the end concern himself with the ultimate ends of man. (Pine & Gilmore, 1999, p. xii) We see how the concept of the experience economy is generalized as a fundamental feature of the economic system of late capitalism. Therefore, it must be the task of critical management studies to face the issue of the experience economy in order to understand modern management.

2. Subjectivity and the Concept of Experience Because Pine and Gilmore are some of the most prominent defenders of the concept of experience management and of experience economy, we have presented their concepts as essential for understanding the experience economy. From a critical perspective, we may, however, ask the question about what concept of experience that we face in the experience economy. The notion of experience economy is based on the idea that the post-modern or hypermodern capitalist economic system is not solely about distributing material goods but that immaterial services and experiences are must more important products of hypermodernity. This notion of experience is based on concept of human subjectivity and subjectivation of the costumer as an individual subject who wants to buy and consume experiences. Therefore, it is essential to discuss what kind of subjectivity of experiences that we face is the hypermodernity (Lipovetsky, 2006) of the experience economy.

190    Philosophy of Management and Sustainability In fact, the experience economy relies on a post-modern view of the subject where the subject is a function of self-creation and construction. We can argue that experience is not something essential that is pre-given in the mind of subject, but experience is constructed in interaction between subject and the provider of the experience, that is between buyer and seller. In this context, it is important to ask whether Pine and Gilmore and other authors of the experience economy and experience management really capture the core of the notion of individual and subjective experience. We may ask the authors of the experience economy: But what do you understand by experience and what does it mean for the individual subject? In addition, the answer is important for a critical analysis of the notion of experience economy, because we may argue that the notion of experience by these authors may be too simple. With existential feelings of emptiness and depression after having enjoyed the happiness creating placebos of the food and culture industry, we are hunting for experience, but lose the grip of life and we are left with boredom and nothingness when we are not enjoying the products of the experience industry. Therefore, we need a much more complex concept of experience. Pine and Gilmore are partly aware of that when they refer to authenticity and ask how companies can provide customers with “authentic experiences” (Pine & Gilmore, 2007). This search for authenticity leads us beyond the predominant hedonistic and utilitarian paradigm, because authenticity deals with “real experience” as opposed to passive satisfaction of pleasure needs. However, what is “real experience” and how can this idea of experience be related to the post-modern or hypermodern concept of constructed subjectivity? In this context, critical management studies can refer to the phenomenological or existentialist conception of subjectivity and experience (Husserl, 1936; Merleau-Ponty, 1945; Sartre, 1943). According to the phenomenological view of experience, we should not understand subjectivity as passive reception of preference satisfaction but rather as an active search and construction of meaning. In his phenomenology of the subject the initiator of phenomenology, the German thinker Edmund Husserl conceives experience as based on intentionality. Intentionality is the directedness of the subject toward the world and experience is constituted though the interconnectedness of experience of meaning in the human life world (Husserl, 1936). Experience is the construction of meaning of the subject in a life world that is intersubjectively mediated with time and space as constitutive elements and conditions of possibility for experience of meaning. From the existentialist point of view represented by the French philosopher, Jean Paul Sartre this notion of experience is radicalized. Sartre argues that human subjectivity emerges in the negation of the meaningless world of things (Sartre, 1943). It is the existence of the human self, as active creator of meaning through projects and engagements in the world that creates experience. Experience is not passive encounter or reception of the world but it is active engagement in the world through the projects of existence of the self. With Jean-Paul Sartre, we may say that experience is a creative act linked to the self-construction of subjectivity through existential choices and projects in the world. The contemporary philosopher of Jean-Paul Sartre who criticized Satire of having a too strong concept

Philosophy of Management    191 of human freedom, Maurice Merleau-Ponty, further helps us to understand the limits of the utilitarian concept of experience (Merleau-Ponty, 1945). For him experience is essential to our being in the world as bodily incarnated human subjects. Human beings experience the world though bodily encounter with the world where there is a constant interaction between subject and object and the human freedom only makes sense in the perspective of the fact that it belongs to the world through its bodily experience. Accordingly, introducing the phenomenological perspective we may critically argue that the utilitarian concept of experience is too simple for the experience economy. With the phenomenology of experience, we see that experience is a very complex fundamental element of human subjectivity. When we rely of the critical insights of phenomenology, we can emphasize the following elements of an anatomy of experience. (1) Experience is not passive preference maximization but subjective construction of meaning through the engagement with the world of the subject. (2) Experience is not static reception of impressions from an outside world, but it is an event with an engaged encounter of subject and object, consumer, and product of consumption. (3) Experience is not something superficial and external to the subject but is fundamental to them identity of the individual. We may say that true experience is a passion that transforms the individual and sometimes even changes us into better human beings with a more profound understanding of life. (4) In the sense of intentionality, experiences are not only feelings of pleasure but also more fundamentally based on the search and encounter of meaning. In this context, experience may also be linguistic and expressed though language in narratives with metaphors and symbols that the individual uses to construct meaningful narrative identities. Therefore, we see how the use of phenomenological insights might make our concept of experience much more useful for our understanding of the concept of experience that underlies the paradigm of the experience economy and experience management. Now, however, from the perspective of critical management studies the question is whether this clarification of the concept of experience may be a help to make the experience economy even more dominant and manipulative rather than emancipating individuals from an all-enclosing capitalism. What if it is true that the experience economy changes all experiences into goods of consumption? This would include not only banal pleasure preferences, but also all existential experiences of meaning and engagement with the world. Does this mean that all our existence and intimacy of life is commodified and what does this mean for our lives and identities of the self ? The question is whether the new experience economy remains an empty anesthetization of otherwise authentic human lives. The problem is whether this phase of hypermodern capitalism leads to the destruction of humanity or whether it is possible to conceive a vision of the experience economy of and of experience management that on a post-modern or hypermodern basis would be able to integrate authenticity and real experience into the increased capitalist consumption and production of experience. The issue is whether or how capitalist markets can sell experiences of the authentic and real. Nietzsche speaks about human beings as makers of symbols and metaphors and about the metaphorical character of reality with nothing

192    Philosophy of Management and Sustainability behind the theater and stage. In addition, post-modern critical thinkers have replied to this by emphasizing how the illusions are becoming the reality. Foucault has described how the self is created through the construction of illusions of authenticity (Foucault, 2001) and Deleuze says that subjectivity emerges as a “desiring machine” based on experiences as events of pleasure (Deleuze & Guattari, 1972). So maybe it does net matter so much whether experiences are fake or real as long as the market system manages to sell us experiences that give authentic meaning to our lives beyond pure pleasure maximization.

3. What Kind of Society Made the Experience Economy Possible? Therefore, whether we like it or not, it may be argued that the experience economy is so advanced that it includes the phenomenological and existentialist concepts of meaning in the concept of the experience economy. This is why we may argue that beyond post-modernity hypermodernity has reached the level of the total commodification of the self with the concept of the creative experience economy. Nevertheless, how did we get that far and what kind of society is it that makes possible the experience economy? The post-modern or hypermodern experience economy is built on a kind of creative destruction of experience where the creativity of human beings as makers of metaphors and symbols moves in the forefront of capitalist production (Lipovetsky & Serroy, 2004). We are searching for more than maximization of pleasure preferences in the cultural industry. We want to become new human beings when we eat at restaurants, travel, go to the theater, read magazines or books, or even when we buy ordinary products in the grocery store or in the supermarket. We want to experience happiness and authenticity in all aspects of our lives as consumers. Consumption shall help us to construct our identities. I shop, therefore l am. Consumption of the products of mass luxury brand products, perfumes, clothing, and electronics is not only material, but also indeed metaphorical and symbolic. I construct my personal identity through the experiences of being special by buying mass product brands of luxury that are based on promotion of my distinguished individuality. It is the creativity of the producers and designers of experiences that is needed to fulfill this search for meaning in the experience economy. The conditions of possibility of the experience economy are based on the historic changes of the meaning of creativity in human societies. Today with a hypermodern society of creativity, creativity means something else than it was the case earlier in history. What is essential is that creativity no longer is based on a higher divine reality, but instead refers to the entrepreneurial genius of the human creative spirit. We see that this was not always the case when we look at the concept of creativity in classical Greece and the Middle ages (Kearney, 1998 ). At that time, creativity and therefore maybe experience referred to higher reality as being imitation of the divine. The aim of human creativity was to imitate the divine creativity, but at the same time, the human imagination should stay within the divine order. A mythical figure like the hero from Ancient Greece Prometheus who stole the fire

Philosophy of Management    193 from the Gods and moved near the sun illustrates that human creativity should not move beyond the boundaries of the divine. This idea of creativity as mimetic illustration of the divine was also dominant in the middle Ages where it was the task of the artist to make pictures and illustrations of the divine. In modern times after the Renaissance, however, we encounter a break with this concept of creativity. Creativity is no longer defined as an imitation of the divine, but it refers to the “transcendental imagination” of human beings as it is described in the philosophy of Immanuel Kant who talked about creativity as the free play of the imagination. Although the romantic period after Kant redefined creativity in the terms of subjective representation of the divine, the Kantian approach to creativity marked a strong break with earlier concepts of creativity because it no longer referred to a mimetic conception of creativity. Instead, we see the emergence of a concept of creativity, which refers to the unknown beyond existing reality. Creativity is linked to the free play of human imagination and it is this creativity without reference that we find as being an essential concept in the experience economy where creativity is no longer imitation of the divine but instead a tool to provide creative solutions to satisfy the needs of authenticity and pleasure by the consumers of experiences and meaning. Where no divine meaning is left to imitate, it is still up to the creative class to fill the empty place of the loss of meaning in post-modernity or hypermodernity and because there is no pre-given meaning dependent on a metaphysical reality also the consumer must be creative and create meaning through experiences. The French sociologist and philosopher Gilles Lipovetsky helps to define the social conditions that makes the experience economy possible. He is the one who argues that we have moved beyond post-modernity toward hypermodernity. “Hyper” indicates an exponential acceleration of the features of capitalism in post-modernity. According to Lipovetsky we no longer live in post-modern society but instead we should talk about the hypermodern consumer society. In this society, the features of advanced consumer society have been generalized. Human beings are now primarily defined as hyperconsumers and their appearance as citizens is derived from this condition of consumption. Hypermodernity expresses a metamorphosis of liberal culture (Lipovetsky, 2006). We live in a consumer society that now has become global and international. In the hypermodern society, we can talk about a new system of consumption that has become universalized. What characterizes hypermodern society is the development of a world culture of consumption or we can talk about universalization of the brand market economy to everywhere in the world: The West, Asia and China, South America, and Africa. This global market culture is a culture of global media and of global commercial culture. Hypermodern society is made possible with the neo-liberal ideology of the free market and private happiness through consumption and it was accelerated with the global revolution of information technologies. In his work on hypermodernity Le Bonheur paradoxal, Lipovetsky describes the three phases of the development of hypermodern consumer society: (1) The period from 1880 to the Second World War. (2) The period from 1950 to 1970. (3) The time of the l970s to the 1990s, where we really can see that consumer

194    Philosophy of Management and Sustainability society is developed. From the 1980s we are facing hypermodern society. This is a society where consumption is democratized and made available to everyone (Lipovetsky, 2006). Whereas the first phase of industrial society is the emergence of industrial society, the second phase is a generalization of a consumer society that is characterized by increased individualization of consumption, for example by the generalization of luxury products like perfumes, etc. for women. The consumer society produced comfort projects and it was marked by increased individualization of products. However, it is only with the emergence of hypermodern society that we really face the emergence of individualization of products (Lipovetsky, 2006). In this individualist society, we see how individuals are able to organize their space and time on the basis of their individuality. Accordingly, we can argue that with the individualization of consumption combined with the focus on individual experience we are facing a society of hyperconsumption combining mass consumption with individuality and making immaterial experience and pleasure the focus of product promotion and product content. This new society of hyperconsumption is marked by a break with the conformities of class society. Although there class differences still exist, there is no longer a specific class culture. The consuming individual is liberated from the institutions and all from the bonds of society. We can say that the consumer of the experience economy is a “turbo-consumer,” a capitalist consumer who is no longer regulated by strong law and ethics and who is free to consume as much as he or she wants. A very good example of this “turbo-consumer” in hypermodernity is the consumer of the great international brands. The brands are expressing the global logic of hyperconsumption. Through global marketing brands, appeal to the dreams of having authentic experiences of the global turbo-consumers. Consumers of hypersociety are not particular loyal to one particular brand, but they are loyal to the promise of happiness in the brand economy that activate their dreams and emotions. The global brand economy expresses the logic of experience as emotional rather than bound to the materiality of the products. Hyperconsumption is a continuing renewal of the sensations. It is travel in experience. The turbo-consumer wants the most intense experience and in order to get this experience the turbo-consumer overcomes traditional limits of time and space that is taken over by commercial logic. There is a close link between brand economy and the search for happiness as an ultimate imperative of hyperconsumer society. In another book with Jean Serroy La culture-monde. Réponse à une société désorientée, Lipovetsky discusses globalization of culture in the perspective of hypermodernity (Lipovetsky & Serroy, 2008). We can mention fashion, advertisements, tourism, art, the star-system from Hollywood as aspects of a world culture that has become dominating in hypermodernity that manifests itself as a cultural hypermodernity aiming at satisfying the search for satisfaction of experiences by consumers in hypermodern society. Nevertheless, at the same time this globalization of culture in the framework of an experience economy is marked by the paradoxes of increased complexity and increased collective and individual disorientation. The capitalist market experience economy is supposed to

Philosophy of Management    195 respond to the dark sides of increased individualization and narcissism. Because of individualist mass society with less common references to give a sense of meaning and community the world culture of brand consumption of culture is supposed to be the compensatory device that can give individuals meaning and fullness in their individual lives that are increasingly void of meaning. World culture promoted though experience economy is the tool to give meaning and sense to individual lives (Lipovetsky 1983, 1987, 2002). We can say with Karl Marx that the generalization of consumption on the hypermodern consumer society implies a situation of total commodification of everything in the human world. It is however, a paradox that this situation is closely linked to individualization and a cult of the individual self-realization in remarkable personalities. In experience society as “dream society” (Jensen, 2001) everyone is special and we are all searching for happiness as the ultimate realization of meaning and authenticity in our lives. As desiring machines (Machines désirantes with Deleuze) it is essential that marketing and selling of experience correspond to our need to appear as personal and individual. We have become individualistic egoists of consumption (Le Bonheur sinon rien). The happiness of the experience economy is not only material, but indeed also symbolic through the enjoyment of the feeling of being special by consumption of luxury brands for the masses (Lipovetsky & Roux, 2003). In this sense, the combination of experience economy and hypermodernity shows how society has become a civilization of desire. In this individualistic emotional binding to products through experiences, we see the realization of the move from industrial fordistic economy to the post-fordistic service economy as a brand economy with emotional binding of consumers to products through the search for happiness as the ultimate demand of the experience economy. However, we may still question whether people in hyperconsumer society are happy? Lipovetsky reminds of the happiness is paradoxical: As the poet Aragon says “The one, who speaks about happiness has often sad eyes!” (Lipovetsky, 2006a).

4. What is the Morality and Ethics of the Experience Society? What happens to morality in this period of hypermodernity? When people are individualized and no longer find metaphysical foundations of meaning in divine reality, humanity, the state or other collectivities, the other or all other instances outside of the self we may ask whether it at all can be meaningful to refer to ethics in hypermodernity (Lipovetsky, 2006a, b). In other words, when there is no duty left in the sense that morality has no legitimation in itself how can we have ethics in advanced consumer society? Moreover, is the experience economy the replacement of ethics and morality by the search for personal happiness or can we perceive other implications for business and ethics as results of the global experience society in hypermodernity? Again we can find help in the work of Lipovetsky who in the book Le Crépuscule du devoir analyzes the aim of ethics in post-modern society – insights that we can also apply to the context of the experience economy of hypermodernity

196    Philosophy of Management and Sustainability (Lipovetsky, 1992). Gilles Lipovetsky argues that in post-modern times there has been a change of morality from duty to virtue. It does not mean that morality is gone in post-modern times but rather it has changed character. This is linked to the individualization and narcissism of the experience economy of hyperconsumer society. As we have argued the post-modern consumer uses consumption of experience products to get meaning, pleasure, and happiness in his or her personal lives. In this sense consumption is an important tool of the individual to construct a meaningful identity that can be respected by others as a part of the cult of the personality that is most important element of procuring social status when the pre-given elements of social positions of class society are eliminated. In addition, when the world is void of pre-given morality, ethics has to be chosen or constructed according to the values and choices of the individual. Therefore, we perceive that in the emptiness of hypermodernity morality has become a part of the personal self-realizations of individuals. In experience economy, morality and ethics are realized through the experiences. Morality becomes a part of the product in order to give consumers possibilities to brand themselves as moral persons with particular moral identities. What we see in the experience economy, therefore, is not that ethics is conceived in opposition to society but rather that ethics is integrated in the experiences that are sold through the branding of the different products of hyperconsumption. A very convincing example of this is the branding of ecological products. Products that are proposed by companies like Body Shop do not only signal the ecological responsibility and protection of animals with no use of animal experiments of the corporation and the consumer, but they also illustrate the affirmation of the moral identity of the consumer through the values that are confirmed when the consumer buys a specific product from this corporation. When buying ecological products that gives an experience of being friendly to nature and animals the consumer affirms his or her moral identity as a responsible person that does not destroy the world and its natural resources and this makes the consumer feel happy and authentic. Accordingly, ecological products can contribute not only to the wellbeing of the person but also to the person’s appearance as a person with a strong integrity and moral identity. An even better example of the relation among ethics, morality, and selfconstruction as a moral person in experience society is buying and selling of charity as an experience. When we look at the marketing and promotion of charity and care for the poor of many humanitarian and third sector help organizations, we can see how ethics and morality are not only necessarily excluded from the experience economy but also can be integrated in the experience economy. However, how can charity make a difference as an experience? Here, we can point to the sociology of giving and receiving (Mauss, 1924) in order to understand how, the experience of giving is marketed as an essential element for motivating potential supporters of a given charity purpose. Analysis of the marketing of their products by charity organizations shows how they include experiences of wellbeing and character-building as an essential motivation for the act of charity. In Denmark, the example of the Children’s Foundation can illustrate this point. The Children’s Foundation has developed a

Philosophy of Management    197 charity concept where it promotes the help for children not through anonymous donations but with a personal relation between the donator and the receiver. The donator can “adopt” a child in Africa by paying a certain amount of money each year and thereby help the child to go to school. As a return for the gift, the donator receives personal letters from the child thanking him and her for the gift and there may also be potential for further relations between the two in the sense that the donator eventually will visit the child and get personally acquainted with the child and us family. This personalized charity has been very popular and we may add that this is because the donator is given a personal experience of charity through the process of giving and receiving. According to social anthropology, a gift relation includes both a giver and receiver who both need to be recognized in the gift relation (Mauss, 1924). So the example of charity illustrates how not only the receiver but also the giver is recognized in the gift relationship. We may argue that the gift relation illustrate a moral imperative of the experience economy, namely that morality may be an essential element of the experience that is sold so that the customer can use the experience to build his or her personal identity as a moral and virtuous subject. Pine and Gilmore are aware of this dimension of the experience economy when they discuss the morality of the experience economy (Chapters 9 and 10 in Pine & Gilmore, 2007). They emphasize that the customer is the product (Pine & Gilmore, 2007, p. 163) and that companies are asked not only to affirm and accomplish our experiences but also to transform us according to our wishes to be better human beings. In this sense, there may be a convergence between experience management and management of corporate social responsibility and business ethics. Consumers want to be transformed toward greater responsibility as moral subjects through their choices of products and we can argue that the ethics of the experience economy in hypermodernity opens up for an individualist responsibilization as an integrated part of the experience economy. Of course, the effort to change the customer through experience may not be limited to ethical values and it may include other forms of values. Nevertheless, through the experience economy, companies are supposed to transform their customers so that they become different and better human beings and it is very difficult not to include a moral dimension and moral intention in this view of the experience economy. In the experience, economy corporations have great ethical responsibility because they sell experiences that can change the individual (Pine & Gilmore, 2007, p. 165). This new responsibility is of great attention to critical management studies. Of what kind of responsibility can we talk about? In addition, is it not wrong to reduce morality to a question of identity construction through commercialized experience? It seems like the move from duty to virtue in the experience economy has a heavy price of the commercialization and commodification of all aspects of human life. Can morality really be marketed and commodified? Not only the warnings but also ambiguous potentialities of the experience economy that increase corporate moral responsibility are the fact that through the selling of experience as the major product of the service sector it is not only the experience but also the customer in him or herself that is the product (Pine & Gilmore, 2007, p. 168).

198    Philosophy of Management and Sustainability Therefore, the hypermodern consumers need an ethical experience economy in order to construct themselves and their identities in their search for increased wellbeing and it seems that Pine and Gilmore are aware of this when they argue that a so-called Transformation Economy (Pine & Gilmore, 2007, p. 173) will take over from the experience economy. We can say that individuals in times with no other meaning-giving authorities and reference left than brands are begging the brands to change them and give them meaning in their lives. In this context, the moralization of the needs and understandings of individual consumer experiences are essential to the understanding of the experiences of customers. In the words of Pine and Gilmore: Experiences transform guests into participants in the encounter, whether the long-term effects are deleterious or therapeutic. In addition, transformations tum aspirants to “a new you,” with all the ethical, philosophical, and religious implications that this implies. Ali commerce involves moral choice. (Pine & Gilmore, 2007, p. 183) With this, Pine and Gilmore have great ambitions for the experience economy that they even want to conceive as a wisdom economy. Service with care is an essential element of the experience economy and the metaphor of the theater as the illustration of the market economy of experience must not make us forget the transformational character of the theater that aims at the purification or catharsis of the feelings of pity and fear of the spectators. Indeed, we may generalize the function of morality in experience economy as an illustration of a classical gift economy (Mauss, 1924). As in the example with the Children’s Foundation, the anatomy of the gift in gift-giving is based on the fact that the one who gives, searches for recognition. What is given is spiritual and it is very important that both the one who receives and the one who gives get the required recognition in the gift relationship. What is important for the gift relation in the experience economy is that economic relation is no longer limited to the pure instrumental anonymous exchange, but instead ethical experiences of meaning are mediated into the relation between giver and receiver. We see it in the experience of charity where the customer is getting an experience of being a good person through consumption, but we can also mention entertainment with an ethical and political aim as for example the famous concert “We are the world!” where the participation in the party-like atmosphere of the concert gives the individual the possibility to contribute to a greater purpose and ideas of saving humanity. Another example is “Football against racism!” where a political purpose is added to the football match, but we can also mention the campaign “Red” where certain luxury mass brands under the auspices of the Rock Star Bono were characterized by donation of a percentage of the price of the product to poor people in the third world. Through the commitment to the brand “Red,” the individual could get a sense of taking part in a greater social purpose. In this sense, the most characteristic feature of ethics in the experience economy is the combination of business, morality, and esthetics in the sense that morality

Philosophy of Management    199 becomes an integrated part of strong brands that indicate commitment to higher purposes as an essential element of fostering improved happiness for individual consumers.

5. Can Critical Management Studies and the Experience Economy Be Combined? So what should critical management studies say about this realization of the experience economy in the move from post-modernity? What critical lessons can we draw from the preceding analysis of the experience economy? What if the experience economy of hypermodernity is a social fact how should scholars of critical management relate to this situation? Should we stay with revealing the illusions of the ideologies of experience economy or should we accept some aspect of the experience economy as a progress for humanity? Indeed such questions are important, but also difficult and I am not yet able to answer all of them. Instead, I want to focus on one important element that makes the link back to our discussion of the necessity of integrating the phenomenological concept of experience into the idea of the experience economy. This is the problem of authenticity, which is a most radical way to put the problem of the ideology of the experience economy. We can in this context, ask whether the search for authenticity of Pine and Gilmore is acceptable as an answer to the need for the experience to go beyond passive pleasure satisfaction. When they say that authenticity is the new business imperative they try to deal with human existence. Moreover, this is characteristic of the fact that consumers paradoxically want to buy real stuff at a capitalist market that by definition cannot be real as such but only the market faking the real and authentic situation of existence. So experience economy must go beyond utility and pleasure and with the words of Pine and Gilmore: “Organizations today must learn to understand, manage, and excel authenticity.” Management in the experience economy must according to this view deal with authenticity as the new business imperative. Consumers want real products that can give them meaning and feelings of being authentic. Products must appear as real and what is artificial should be the most real of all as in the tale of Danish author H. C. Andersen about the nightingale where what is natural is not accepted as real but only the artificial is praised as authentic and really real. With critical management, we can say that it is possible to conceive the ironic and ideological elements of this concept of authenticity. What we think is authentic is not authentic and what we think is real is unbearable and not acceptable because it does not seem authentic. Therefore, from the critical perspective we may ask whether it really is possible for the market economy to provide authenticity for consumers. It seems to be an illusion that the market should be able to give us the meaning in our lives that we are not able to establish ourselves because of the increased fragmentation, individualization, and disorientation in hypermodern society. Nevertheless, Pine and Gilmore insists that the aim of the experience is selfrealization of the subject (Pine & Gilmore, 2007). They define authenticity as the ability to purchase in conformation with one’s self-image. The authenticity

200    Philosophy of Management and Sustainability should be generated through the ability of the corporations to overcome the fake/ real distinction in the products that they provide for the consumer. So according to business in search of authenticity, what we need is to give people authenticity in their in a post-modern condition where reality itself seems to be socially constructed. The paradox is that people need authenticity but they cannot find it in the real world because social institutions do not exist to give them this meaning of life. Accordingly, we can ask the question whether business can help individuals to find authenticity in a world where people cannot find meaning. In addition, the answer to this question according to Pine and Gilmore is that in a fundamentally capitalist society the most important force defending uniqueness and authenticity would be the market place itself. With this situation, ethical management studies might reply that this really seems to be the realization of the total reification of human reality because now human beings have left everything in their lives to be solved by the market economy. However, we may also argue that authenticity is a too difficult concept to make into a tool for the market economy. This is indeed present in the discussion of Pine and Gilmore of the concept of authenticity. They propose five axioms of authenticity that shows the dilemmas and tensions of existential and economic authenticity: Axiom I: If you are authentic then you doesn’t have to say that you’re authentic. Axiom 2: If you say you’re authentic, then you’d better be authentic. Axiom 3: It’s easier to be authentic if you don’t say you’re authentic. Axiom 4: It’s easier to render offering authentic, if you acknowledge they’re inauthentic. Axiom 5: You don’t have to say your offerings are inauthentic, if you render them authentic (Pine & Gilmore, 2007). These axioms show how difficult it is to refer to authenticity in experience economy and experience management. In fact, the most difficult thing is to be authentic when you know that you are not authentic and the problem centers around the paradoxes of having a corporate strategy for authenticity because it seems like that at the minute you say that you artificially want to be authentic you are not authentic any longer. In the context, we can use the phenomenological insights of Jean-Paul Sartre to point to more problems of authenticity as a fundamental strategy for the experience economy. In fact, Sartre argues that authenticity is impossible because every human experience is based on a tension between being and non-being (Sartre, 1943). To be authentic in the sense of being totally present for oneself is impossible. Accordingly, it is impossible to be authentic to one self, because “human beings are what are not and they are not what they are.” This critical insight illustrates the impossibility of authentic experience as a preferences based on overcoming the fake/real distinction. Human beings are not what they are but they play roles of existence like it is the case in a theater where the actors play

Philosophy of Management    201 different roles without being identical with the role that they play. Therefore, it seems like the concept of authenticity can be deconstructed with the insights of existentialism and critical reflections show that the experience of the experience economy will never be authentic experience. The only authenticity is the authentic experience of being inauthentic. Nevertheless, does it really matter? Wouldn’t it be worse if the market economy could really provide authenticity? Such are the questions that we could ask from the perspective of critical management studies.

6. Perspectives for Sustainability in Hypermodernity Summing up, we have in this chapter tried to present some critical reflections on the concept of experience economy that seems to be dominant in hypermodernity defined as the turbo-escalation of post-modernity. The problem is whether there is room for an ethics of sustainability in hypermodernity? In particular, we have presented an immanent criticism where we follow the logic of the experience manage­ ment theory from the inside in order to ask critical questions to the conditions of possibility of this theory. We have shown how the concept of experience as preference must be accomplished with a much wider and profound phenomenological concept of experience. We discussed the relation between creativity, experience economy, and hypermodernity and demonstrated that the experience economy will be one of the most predominant elements of hypermodernity, in particular because of the increased individualization of turbo-consumers as an essential element of hypermodernity. Moreover, we have looked at the relation between ethics and experience economy and we can see that there does not have to be an opposition between virtue and self-construction in the framework of hyperconsumption, but rather that the market may be able to integrate economics and ethics in experience management. From a critical point of view, this ambiguous condition needs further reflection. The same may be the case for the concept of authenticity and sustainability in the experience economy that from the point of view of critical management studies represent an ideological concept but also creates a certain perplexity because of the problems of reaching an authentic transition toward another more sustainable and ecological economy. Thus, in order to succeed with the transition to sustainability in the experience economy, it is important to remember the conditions of management in hypermodernity. The sustainable transition face the challenge of the infinite desires of the authenticity-seeking consumer of hypermodernity. Therefore, management of sustainability in the experience economy must combine aesthetics and ethics in the search for authentic experience. Moreover, the challenge is how sustainability management following the SDGs can convince the consumers that it builds on true values and creative social innovation that can convincingly engage for the new values of zero CO2 emissions and respect for nature and biodiversity. The key to economic transition towards a new environmental, ecological and circular economy in hypermodernity is the integration of SDGs and sustainability management in the moral and esthetic values of authenticity in the experience economy.

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Part IV Responsible Management of Sustainability

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Chapter 15

The Principle of Responsibility: Rethinking CSR as SDG Management In this concluding chapter, I would like to present the new principle of responsibility that emerges with rethinking corporate social responsibility (CSR) as sustainable development goal (SDG) management. The movement from the Brundtland report Our Common Future from 1987 to the UN SDGs in 2015 can be seen a continuing effort to make a strong link between sustainability and responsibility at all levels of society (Kemp, 2008).1 The need for sustainable development is due to our global misuse of natural resources. In short, we can mention population problems, climate problems, greenhouse effect, acid rain, oil spills, forest burning, global warming, etc. Sustainable development is simply necessary to ensure the planet’s survival. The implicit philosophy of the SDGs is the ethics of global responsibility. As we have seen, the 17 SDGs propose together a vision of a sustainable future for humanity. The focus on responsibility for humanity and for the environment is clear when we look at 17 SDGs of the UN 2030 Transforming the World Agenda: (1) No poverty. (2) Zero hunger. (3) Good health and wealth being. (4) Quality education. (5) Gender equality. (6) Clean water and sanitation. (7) Affordable and clean energy. (8) Decent work and economic growth. (9) Industry innovation and infrastructure. (10) Reduced inequalities. (11) Sustainable cities and communities. (12) Responsible consumption and production. (13) Climate action. (14) Life below water. (15) Life on land. (16) Peace, justice, and strong institutions. (17) Partnerships for the goals. From the point of view of ethical theory, the SDGs combine elements of capability approach to individual rights and duties, utilitarian welfare policy and focus on social and environmental justice as central to the vision of sustainability. This vision of sustainability combines people, planet, and profit combining ideas of sustainable transition and economic growth. Accordingly, in this concluding chapter we present the philosophical foundations of the concept of sustainability and the SDGs, as they are present in the principle of responsibility. This challenge means that companies, NGOs, states, and the international community are forced to work together in much closer strategic alliances and 1

Previous versions and preparatory works for this chapter include Rendtorff (2011e, 2018a). Philosophy of Management and Sustainability: Rethinking Business Ethics and Social Responsibility in Sustainable Development, 205–220 Copyright © 2019 by Emerald Publishing Limited All rights of reproduction in any form reserved doi:10.1108/978-1-78973-453-920191016

206    Philosophy of Management and Sustainability partnerships to solve the world’s environmental problems. Instead of rejecting any external interference in their activities, companies should engage in dialogue with the outside world to bring their production into line with the ideal of sustainable development (Kemp, 2009; Rendtorff, 2018a). In a situation where the liberal economic system has triumphed in the struggle of ideologies at the end of history, the worldwide system of multinational corporations should be aware of its social responsibility. At the same time, we can say that the international globalized society is determined to broaden the perception of companies that are responsible not only to their shareholders, but also more broadly to a broad group of stakeholders (stakeholders) to be involved in the decision-making processes. This has made a decisive change in the understanding of the company’s area of responsibility (Rendtorff, 2018). Today, it is possible for companies to make decisions that contribute to making money for the owners (shareholders), but companies should rather involve other groups in society (state, local communities, customers, employees, etc.) who have an interest in their activities, in decision-making. This emphasizes the business ethics of the relationship between sustainability and morality as an integral part of a modern global market. This is not a new thought. Already Adam Smith had a look at the moral dimensions of the economy when he argued for “the invisible hand,” where the fact that each selfishly follows one’s own interests and actually serves the common good as long as one also has moral respect and sympathy for the other person. This liberalist thinking about the combination of self-interest and sympathy and the ability to “put one-self in the other‘s place” plays a major role in making sustainability an integral part of modern market economy. Today we cannot ignore the fact that companies are forced to secure social legitimacy by living up to the political ideals of society, which is central to the SDGs and green economic transition, which are political priorities in society. It is central to a sustainable economy that social capital and democratic interaction between stakeholders, based on mutual trust and recognition in a communitarian, social integration, is a fundamental criterion of profitability and success.

1. Business and Management for Sustainability Sustainability should not be understood here as an airy macroeconomic climate policy ideal, but it is an integral part of daily business operations at all levels of the organization. Internal trust between employees and management as stable external business-to-business relationships is a criterion of success (Rendtorff, 2018a). In addition, many companies have become aware of the need to make sustainable technology an integral part of the organization and the need to work with other parts of society to address the serious environmental problems. This requires a very new understanding of the company’s horizon of action, and sustainability ethics should be part of management’s official policy. Businesses that do not create such relationships will have major problems surviving in the transition because they do not yet understand that we are facing a decisive range of social change. They are blind to the development. They believe

The Principle of Responsibility    207 that sustainability is an expression of unrealistic environmental activism. They do not look into the need to integrate environmental and social values into the company’s strategic management programs. Moreover, they do not realize that these must necessarily be equated with the company’s “hard” economic values. They do not understand that the demand for sustainability also includes claims of equality, justice, and poverty alleviation. They believe that they can still not interfere in political matters and that they can do business without considering social and ethical issues. They refuse to be open about the company’s internal affairs and they refuse to inform anyone other than the company’s shareholders about its activities, and therefore they are not open to the public’s opinion until it is too late and they have suffered a decisive image loss (Rendtorff, 2001, 2009, 2018). Companies that are not aware of the increasing focus on sustainable economy risk placing themselves far from the market’s development. So much focus has been placed on sustainable economics and ecology that increased ecological social responsibility is necessary for the company not to fall behind in the bankruptcy and go to ruin in the long term. It has become a requirement that the company makes use of sustainability-based value management and strategy, which takes into account “the triple bottom line,” which means that a minimum bottom line should be respected both in economics, ecology, and social conditions if the companies want to success in the twenty-first century (Rendtorff, 2018a). Companies should respect the triple bottom line and integrate the SDGs in their business models if they want stable relationships with consumers, employees, the public, and the community as a whole. This means that the issue of sustainable development should not be seen independently of the economic and business development of society. In pointing out the integrative function of the sustainability ideal in relation to the connection between the human and the non-human area, it must be emphasized that sustainability must be seen in the light of a threefold bottom line between economy, ecology, and social responsibility. We cannot ignore the fact that many companies in industry and agriculture are directly involved in degrading treatment of animals and predatory behavior on nature. Although not mentioned in direct context, one can also say that the ethical principles of autonomy, dignity, integrity, and vulnerability play a role in the corporate ethics of the ideal of sustainable development (Rendtorff, 2001, 2009). Respect for autonomy can be seen in the light of the requirement to involve all the company’s stakeholders (Stakeholders) in sustainable decisions (animals and nature can also be considered as potential stakeholders). Respect for dignity is present in a continuing reference to human rights as central dimensions of social responsibility. Respect for integrity expresses itself in a concern for the integrity of ecosystems and in the demand for business respect for the whole of nature. Finally, the notion of respect for nature’s vulnerability can be said to be a central starting point for sustainable business, which takes into account nature and the resources of the earth. We can therefore argue that the link between ethics and responsibility in relation to the environment that is present in the SDGs means that we are moving toward green capitalism, where the market economy and the business community

208    Philosophy of Management and Sustainability make the triple bottom line the basis for a sustainable economy. Here, a number of new requirements for management and implementation of sustainability principles are presented in modern companies. Of particular interest is a “sustainable accounting” in which shareholders (Shareholders), managers, consumers, environmentalists, and other stakeholders (Stakeholders) are involved in the assessment of the company’s sustainability (Rendtorff, 2001, 2006, 2009, 2018a). Generally, sustainability is defined in businesses and corporations in accordance with the UN policy-making of sustainability, including the SDGs, which has really become the general norm as an effort to secure the development of the present world in a way that does not destroy the existence of future generations (Kemp, 2009). According to this view of business, economic growth should be in harmony with ecological and social conditions. Due to the seriousness of environmental problems, companies with major environmental problems have, in the longer term, a lesser chance of survival. At the same time, it is implied that in a future, globalized and intensive economy with open markets, it is necessary for companies to be in the front, and we cannot ignore the fact that a lack of respect for the economic, social, and ecological bottom line is dangerous for the survival of the company. It is necessary to consider political, environmental, and social issues in the assessment of the company’s performance and accounting. In highly competitive, open markets, companies cannot bypass the threefold bottom line with economic, social and environmental considerations. The company should consider the economic, social, and environmental considerations in development. Sustainable efficiency in a green transformation firm should, in line with the UN SDGs aim at improving the integrity of life and ecosystems. It is about maintaining the economic, ecological, and social sustainability of nature so that it can also be available to future generations. It is important to emphasize that the ideal of sustainability is realized in close connection with both internal and external cultural and social conditions. It is a matter of productively utilizing all the company’s different types of capital, for example, that physical and mental human capital also plays a role. In this connection, it can be emphasized that social respect for sustainability is dependent on the social virtues and cultural capital of society (Kemp, 2009). Therefore, business models that measure the company’s ability to respect the sustainability ideals must include a wide range of social and cultural indicators. Here one can mention, for example, the company’s involvement in arms trade, use of nuclear energy, employment and respect for ethnic minorities, respect for human rights, dialogue with consumers and local areas, etc. in addition to the ecological considerations of animal welfare, for example, by restricting animal testing and the integrity of ecosystems. The new types of accounts and social reports that already exist in many companies, such as Novo Nordisk, The Body Shop and SHELL or BP and Vestas, express the concrete measure of whether companies are making progress in realizing the sustainability ideals in their daily life and work. It is implicit in recent bioethics and environmental ethics that respect for sustainability is a requirement that is not possible to escape. We can emphasize a

The Principle of Responsibility    209 number of current developments that require companies to adapt to the sustainability strategies that are focusing on the SDGs. The globalization of the economy, trade liberalization, new investment, and restructuring opportunities are all societal factors that intensify corporate power. The emergence of the global politically conscious environmental activist and consumer has also contributed to highlighting the company’s values. The inclusion of soft values such as respect for sustainability and human rights and awareness of CSR has become an integral part of corporate public relations. The company’s ability to listen to the public’s ethical requirements and be open to criticism characterizes the modern stakeholder-based market economy (stakeholder capitalism). We cannot ignore the fact that social values and cultural identity relationships as an invisible hand of morality play a major role in the success of companies (Rendtorff, 2009, 2018a). Nevertheless, this also means that we must not forget the social dimension of sustainability. The population issue is, for example, an integral part of the struggle for a sustainable society. At the same time, it is no longer possible for companies to keep the connection between economy, ecology and social responsibility secret to the public in their accounts. In a globalized information economy, the public has strong opportunities to gain access to knowledge about the company’s accounts. The need to include values in the company’s activities is at the same time based on requirements for transparency and openness. Modern enterprise management cannot avoid being based on open involvement (Disclosure) of all stakeholders. Therefore, the company cannot avoid entering into a dialogue with stakeholders on basic values and action scenarios. This entails, for example, the expanded strategic cooperation with NGOs, which today have become an integral part of many companies’ relations with their stakeholders. In this context, one can argue that, in particular, international companies today face openness as a key public legitimacy requirement. Where they previously kept the information for themselves, many companies today see it as an advantage to enter into communication with many different stakeholders. Large companies such as the biotech giant Monsanto, BP, SHELL, or Novo Nordisk have understood the need to listen to their stakeholders. A progressive business model implies openness and willingness to integrate SDGs in management and this contributes to give the corporation improved knowledge of its surroundings. The new willingness to transparency is reflected in a number of factors that go beyond traditional accounting requirements, for example, in the new social reports. Some of the new openness dimensions have been introduced into the legislation’s requirements for green and social accounts, others are completely voluntary, while others become involuntary, as with companies that have not understood the need to engage in a broad spectrum of stakeholders (Bonnafous-Boucher & Rendtorff, 2016). This also involves future generations, animals, plants, and the biosphere as a whole, as relevant as a new stakeholder. Such consideration for future stakeholders is based on a high level of social capital in society. The concrete realization of the ethics of sustainability based on the principles of autonomy, dignity, integrity, and vulnerability can thus be achieved through an intensified dialogue with the company’s stakeholders (or when it comes to

210    Philosophy of Management and Sustainability animals and nature, dialogue with their representatives) (Rendtorff, 2009, 2018a). There must be continuous involvement of stakeholders in management decisions (through regular meetings, the introduction of sustainability accounts and reports, development of an ecologically effective management plan for the company (eco-effectiveness and lifecycles) in order to achieve harmony between the economic and ecological dimensions of company management. The new types of ecologically oriented cycle perceptions of the organization’s interaction with the outside world can be perceived as an attempt to concretize the ethical principles in the companies’ daily planning. An ecological technology is based on a constant restoration of what is destroyed, as well as a sustained understanding of any unintended consequences of action. It is important to use the technologies in the light of the company’s ecological and social responsibility. We can mention six dimensions of such an eco-compass: Understanding of health and environmental risks, conservation of resources, care of energy consumption, care of materials consumption, recycling of materials, ensuring long-term product use. It is extremely important to make these dimensions an integral part of the company’s creative innovations. Here it is about developing products that do not violate the harmonious integrity of ecosystems (Rendtorff, 2001, 2006, 2009). In this context, companies should develop a future-oriented planning. A transition toward sustainable production focusing on the SDGs involves the involvement of future generations’ interests in production. The ultimate requirement of sustainability is responsibility for future people, as well as justice and equality between generations. Leadership based on the triple bottom line aims to avoid ecological disasters because of non-sustainable production. The sustainability principle, combining CSR and SDGs should be integrated into the company’s day-to-day management to ensure efficient and sound use of resources. Finally, it is important to emphasize that the sustainability strategy is not only implemented when the company makes its ecological and social objectives as a part of sustainability auditing and reporting in relation to the SDGs. The transition to sustainable development is linked to the development of coherent and compelling reporting procedures based on impartial analysis and auditing. It is a great challenge for future accounting, how to measure the development of respect for the ethical principles of autonomy, integrity, dignity, and vulnerability in a company. In addition, a sound measurement of sustainability should include many of the abovementioned dimensions in the reporting: dialogue with stakeholders, openness and transparency, sustainable technology, long-term planning, etc.

2. Sustainability and Corporate Social Responsibility One can say that sustainability is a result of the company’s responsibility, that is, CSR is the fundamental principle of responsibility, which is the prerequisite for being able to speak meaningfully that the company must take environmental, climate, and nature into account (Rendtorff, 2005a, b, 2009, 2018). The concept of CSR, which justifies sustainable development, thus perceived as the purpose of ethical business operations and business, is at the same time justified by an even more fundamental concept, namely the good corporate citizenship (Good Corporate Citizenship),

The Principle of Responsibility    211 which is a concept that expresses a social philosophical basis for the company’s social commitment (Crane & Matten, 2004, 2015; Rendtorff, 2009). With the notion of the national and global citizenship of the company, the notion of CSR is integrated with the Brundtland report and the SDG launch of sustainability as a common political goal for the international community. Although the concept was developed in the field of environmental policy, sustainability as the core concept of business operation, aiming at realizing the SDGs in business management can well be defined as restraint on exhausting the resources of the earth, so that the opportunities for future generations on the earth would not be degraded with poorer conditions than present day generations. Historically, sustainability is not, in fact, an unknown concept in the business economy that uses this concept to denote the company’s long-term economic and social stability and thus has already seen it early as an expression of its good citizenship (Crane & Matten, 2004/2015; Rendtorff, 2018a). Hereby, the concept has been generalized as the basis for the theory of the good citizenship of the company, so that it not only refers to narrow economic profitability, but also includes consideration of the company’s social and environmental sustainability. The fact that sustainability expresses the company’s good citizenship means that the company agrees to comply with society’s general requirement to take into account future generations, nature, and the environment. When the sustainability ideal is realized as the company’s social responsibility, the theory of the triple bottom line is realized in the practical operation of the company. This is the case where the company is not only aware of the economic profit of owners and shareholders, but also includes the impact on the environment and the social relationships with employees, customers, the community, or the state in assessing the business success (Elkington, 1999). This goal therefore aims to realize the company’s social responsibility, as it integrates economization, ecology, and power increase into a unified whole (Frederick, 1995), after which the company is understood as an organism in interaction with the environment. The strategy for good citizenship hereby has a timely dimension when sustainability focuses on the company’s obligations to the environment and future generations. Thus, business ethics and corporate citizenship not only have a social dimension, but also are put into interaction with nature, after which the ethics of what the French philosopher Paul Ricœur calls “the good life for and with others in just institutions” (Ricœur, 1990, p. 202) makes no sense without being seen in relation to the living nature. Sustainability as a consideration of nature and future generations has thus become a part of companies’ good citizenship, embodied in the company’s social responsibility, which is central to dialogue with the company’s internal and external constituents in society and nature. This is based on the notion of the company as a political and morally responsible actor. From the end of the twentieth century, there has been expressed a value shift in the economy where we no longer perceive the company as a neutral instrument of profit maximization or as a fictitious legal person, but first and foremost as a politically committed citizen with a moral responsibility with values and principles (Paine, 2002, p. 81). An understanding of the company’s responsibilities, which means that it must not only

212    Philosophy of Management and Sustainability follow the law but also as a good citizen with commitments to the community engage constructively in the social and environmental improvement of society. Hereby we are promoting the central and basic relationship between responsibility and sustainability. The Japanese philosopher Tomonobu Imamichi can contribute to this foundation with his philosophy of eco-ethica. As suggested by Imamichi we live in the technological conjuncture, where there is a close connection between human beings and technology in terms of dependence of and cohesion with technology (Imamichi, 2009 ; Kemp, 2009). This technological cohesion implies the need to create new virtues. We need to accomplish the classical virtues of justice, courage, loyalty, humility with the new virtues of responsibility to philoxenia (love for strangers), punctuality, cosmopolitanism, and mastery of technology. In connection with this we need to understand groups and organizations not only as legal, but as moral subjects. It is in this context that the virtue of responsibility is essential, both at the ­individual and at the organizational level. Imamichi argues that there has not really been a clear notion of responsibility in the Western tradition before modernity. The adjective “responsible” can only be found in the thirteenth century in French and in the fourteenth century in English. The concept of responsibility is only found in French in 1787 and later in English. In German we can only find ­Verantwortlichkeit in the end of the nineteenth century. In the work of John Stuart Mill responsibility means “Accountability.” In the nineteenth century the concept is closely linked with the social contract. This means that even though there has been a strong reflection on the human person, there has not really been a deep reflection on the concept of responsibility in the Western philosophical tradition. In contrast to Western thought, Imamichi argues, in the Oriental and Eastern though there was not really a reflection about the concept of the person, but the concept of responsibility is central to the philosophy of Confucius. In his philosophy, the responsibility manifests itself as a fundamental virtue. Responsibility is a part of inter-individuality (l’inter-individualität). The five virtues in Confucius’ philosophy are “love, responsibility, ethical habit, intelligence, and devotion.” With this we can nearly say that the concept of responsibility becomes the most important concept in human dignity and in the respect for the human person in the humanistic philosophy (Rendtorff, 1999). However, in the twentieth century, responsibility both as a virtue and as a principle has become an important concept in the Western philosophical tradition. The German philosopher Hans Jonas has in Prinzip Verantwortung. Versuch einer Ethik der technischen Zivilisation (1979) contributed with a basic definition of the concept of responsibility. He argues that technological and scientific development has given humankind a much greater responsibility than before in history. Because we have far greater power to destroy the earth, humankind’s responsibility is intensified (Jonas, 1979). According to Hans Jonas, the liability ethics is not just about respect for contemporary people, but there is a very close connection between sustainability and responsibility in the sense that responsibility implies the obligation that there can also be human life on earth in the future. The concept of responsibility expresses an absolute categorical principle that we have a duty to ensure sustainable development.

The Principle of Responsibility    213 This overall categorical and ontological concept of responsibility can be described as the background for good citizenship and the company’s social responsibility (Rendtorff, 2018a). CSR not only includes individual responsibility, but also involves the company’s institutional responsibility as a moral actor. CSR depends on the company’s ability to be ethically responsible for its actions, strategies and policies. The ethics are the basis for a management structure that creates a culture of responsibility in the organization. This means that CSR, as expressed by the SDGs, must be defined as “enlightened self-interest,” not only based on economic considerations for achieving higher returns but also based on the notion of the company as a good citizen with rights and obligations to society (Crane & Matten, 2004, 2015). The argument for the company’s political and moral responsibility is based on its great power in society. Here, a distinction can be made between the company’s institutional responsibility and the individual responsibility of the employees, the directors, and the middle managers. As an expression of the company’s institutional responsibility as an organization, the notion of the company’s moral responsibility goes beyond the purely legal responsibility and includes a wide range of ethically defined responsibilities in relation to the company’s various stakeholders. Hereby, CSR is based on a moral perception of the economy, which is expressed by the good citizenship, where the company assumes responsibility for the vulnerable and weak in society (Rendtorff, 2009, 2018). This entails a criticism of those who claim that it has not been established that companies such as institutions can be held morally and politically responsible, that only shareholders and economic owners can have legitimate interests and demands on the company and that CSR, as expressed in the SDGs, results in an unacceptable restriction of the company’s ability to trade freely in the economic market. This widespread skepticism has not understood that CSR is in the business of its own because it can create a better environment for its own transactions by actively engaging in improving society (Rendtorff, 2018b). Social responsibility will undoubtedly improve the corporate image in the public, thus avoiding further bureaucratic regulation if the company proactively engages in society. Social responsibility is an important contribution to the company’s efforts to live up to society’s expectations, and the private business community should engage socially because it has so much responsibility that it can even help solve social problems by seeing new business opportunities. In addition to such pragmatic wisdom arguments, we can emphasize that CSR combines the enlightened self-interest with the consideration of moral custom and ethical principles in society (Rendtorff, 2009, 2018a). Here CSR expresses respect for human rights and the need to treat the company’s various stakeholders in a fair and fair manner. So how should we conceptualize the relation between CSR and SDGs. There are many proposals and we often see a confusion of the ­theoretical conceptualizations in the different concepts of CSR and SDGs. Accordingly, we need to discuss the relation between CSR and SDGs in details. In  fact, it can be argued that the relation between CSR and sustainable development already became very close, when the World Commission on the Environment, the Brundtland Commission defined sustainable development as the

214    Philosophy of Management and Sustainability respectful use of natural resources with the aim of respecting the good life conditions for future generations on earth. With this combination of CSR and sustainable development the Brundtland Commission really contributed to the challenge of Milton Friedman’s conception of CSR with his famous dictum: “The social responsibility of business is to increase its profits … within law and custom of society.” Contrary to Friedman, the combination of CSR and sustainability in the SDGs propose a much larger responsibility of business for the sustainable development of society. Based on these ontological and ethical definitions of CSR, we can now differentiate between the various elements of social responsibility as the foundation of philosophy of management of the SDGs. In light of the ideal of corporate good citizenship, Archie B. Caroll distinguishes between (1) financial responsibility, (2) legal responsibility, (3) ethical responsibility, and (4) philanthropic responsibility (Caroll, 1979; Rendtorff, 2005a, b, 2018a). Economic responsibility with focus on the SDGs can be defined by the demand for profit maximization, as determined by Milton Friedman: “The social responsibility of business is to increase its profits” (Friedman, 1970). Nevertheless, this responsibility also involves fair treatment of shareholders (Shareholders). The good management here implies a responsible and financial prioritization and use of resources, not least in relation to employees and customers. The economic responsibility also entails management’s technical and professional responsibility to find and exploit market opportunities. In this sense, the economic responsibility differs from the moral responsibility because it is about following self-interest and exchanging goods and services on the market according to capitalist principles. The legal responsibility in relation to the SDGs concerns the obligation to follow the law and play the rules of the game without breaking the law. This also means that the company should not only settle on the border of the law and always try to escape where the fence is lowest, but also make a real effort to comply with the law’s meaning. The legal responsibility speaks internally, where the company works to ensure that employees keep the law, and it expresses itself externally to ensure that the company’s products and services do not contradict the law of society. This law compliance requirement applies not only nationally, but also when multinational and transnational companies operate globally and locally in foreign countries. The ethical responsibility in relation to the SDGs is defined as an effort not only to do what is responsible and right in the economic and general legal sense, cf. the letter of the law, but also to go beyond the economic and legal requirements and voluntarily endeavor to be morally responsible. Ethics is about finding the right balance in the gray zone, where actions can bring economic profit and comply with the law; yet contain ethical issues that make them unacceptable. The ethical obligation takes precedence over the economic and legal considerations in conflict cases. In this sense, ethical responsibility embraces wider considerations of justice and sustainability in the company and in society. Therefore, ethical responsibility goes beyond the financial and legal responsibility. It can be defined as respect for justice and involves efforts to fair treatment of all stakeholders. This means that ethical responsibility is central to the company’s democratic legitimacy.

The Principle of Responsibility    215 The company’s philanthropic responsibility following the SDGs deals not only with the company’s philanthropic gift to the outside world, but also about the responsibility of being philanthropic in a way that really benefits society. There is a long tradition of corporate philanthropic responsibility, where companies give great gifts to society as a demonstration of power and wealth, and because they want to do something for the community. Business philanthropy is in many cases closely linked to the effort to give the company a better public image in society. Here we can emphasize the importance of integrating philanthropy into the strategic and economic core areas of the company. Business philanthropy involves reflection on how the money can best be used for the common benefit of society and the company. Based on these definitions of the concept of responsibility, it is clear that we must consider corporate governance as an integrated part of CSR if we are to make sense of the idea of the company’s good citizenship. In this perspective, rules for good management practice are a natural realization of the company’s overall social responsibility. The ethical requirement that emerges in the need for healthy markets, shareholder protection, transparency, value-based management, ethical accounts, requirements for auditing and reporting and for public relations in a more or less formalized sense expresses the enforcement of the overall coherence between sustainability and social responsibility. This is the case, whether for the US Federal Guidelines for Organizations (1991) and the Transparency Legislation – Sarbanes-Oxley – for the Enron scandal or the European Good Governance and European Commission Green Initiatives Paper on Corporate Social Responsibility (Rendtorff, 2009, 2018a). The rationale for corporate governance thus combines the pragmatic consideration of economic earnings in sound economic markets with overall ethical and democratic considerations to make businesses more legitimate in society based on fundamental principles of sustainability as well as ethical and social responsibility. In addition, in its work on specifying and developing sustainability, the UN has stated that companies play an important role in sustainable development in vision of the SDGs in the sense that they can stimulate economic growth and social development in their work by being aware of the environment and their social responsibility in relation to their obligation to be good citizens. The company is part of civil society, where it has an important role to play in developing society, and environmental and social issues cannot be excluded from the company’s strategic management. At the international level, the company can help solve important world political issues relating to the environment, such as avoiding the destruction of the ecosphere, overuse of resources and environmental degradation, combating social poverty and engaging in mediation in wars and armed conflicts, but also working for human rights. Here it is important to recall that sustainability integrates social and environmental issues. Thus, CSR in sustainable management does not mean implying the company’s responsible contribution to solving the global community’s problems in the broader sense, as they are described in the UN’s various declarations, conventions, and policy strategies, based on the concept of sustainable development, which was defined by the Brundtland commission and later developed with the SDG Agenda of a transition toward sustainability.

216    Philosophy of Management and Sustainability The European Commission follows the United Nations Sustainable Development Strategy when it emphasizes that CSR is not just about complying with law but must also be understood as a voluntary commitment to doing more than what is legally required to protect human rights, environment, and company relationships with different stakeholders. The EU’s Green Paper on CSR and Sustainable Development and subsequent communications in the latest on CSR emphasize that this is a direct connection between CSR and sustainability, since CSR must be considered as part of the company’s contribution to sustainable development. In this context, the triple bottom line is central to reporting and evaluating the company’s societal benefits, which focus not only on economic growth but also on social development and environmental protection involved in the assessment of the company’s activities. This approach to sustainable CSR implies that companies and other private and public organizations are regarded not only as economic entities but also as open systems that have different social obligations to society as a whole. This close relationship between CSR and sustainable development forms the basis for a strategic reflection on the company’s good citizenship, which can be perceived as being particularly necessary at a time when international opinion puts increased pressure on the companies that run a great risk if they do not. Therefore, it is an essential dimension of responsibility that the company adheres to the international community’s standards for sustainable development. The pressure on companies to contribute with social responsibility is not least increased due to the emergence of the many aggressive and very active NGOs, the World Council of Sustainable Development, Transparency International or other critical NGOs, which oversees business activities. Here, international declarations such as the Rio Declarations of 1992 and 2012 by UN Summits on Environmental Issues or other Declarations on Climate and Environment are important ethical and legal guidelines for corporate contributions to the common good of humanity. These declarations contribute to the support of the business for the SDGs. In continuation of the overall strategy for sustainable development, the UN has specifically agreed with the companies on the Global Compact principles of 2003, which enforce CSR on the basis of UN human rights declarations and principles for environmental protection, and which more than 8,000 international companies in 2019 have joined. These Guidelines for CSR and corporate governance can be seen as an attempt to define a general framework for sound and responsible behavior in order to not only create positive growth and social change but also to ensure fair treatment of all company stakeholders, including customers, employees, owners, investors, suppliers, local communities, and more controversial competitors. The international codes of conduct can be said to address all four dimensions of CSR that we have mentioned, namely that businesses in their activities envisage the economic, legal, ethical, and philanthropic dimensions of CSR. The global process of formulating sustainable development principles is based on the notion of the possibility of a global civil society in which the company is considered a responsible participant and acts as a good citizen, which is essential

The Principle of Responsibility    217 to the SDGs. The requirements for companies from NGOs and trade unions contribute to not only the adoption of international guidelines and codes of conduct for CSR and corporate governance, but also ethical, ecologically, and socially aware consumers in Europe and the United States have fought for Fair Trade and respect for the environment as criteria for corporate governance. Consumer organizations have worked for the idea of ecological or ethical labeling, as a basis for consumers to be sure that the products are produced with social responsibility. Products with the brand Max Havelaar should, for example, be products that are produced with sustainable ecological quality and under socially acceptable working conditions. In this context, efforts can be made to develop rules for fair business conditions, for example, at the Ethical Trading Initiative. The socially responsible investment movement is growing and, among ordinary shareholders and institutional investors, there is greater interest in the triple bottom line and non-material issues in evaluating the company’s sustainability. This is an important driver for embedding SDGs in business management. Furthermore, the need for protection of the company’s brand and its good reputation is also of great importance for the consolidation of CSR and strategic management.

3. Toward a New Responsibility for Sustainable Development Therefore, there are good arguments for a close connection between CSR, SDGs, sustainable development, and companies’ good citizenship. Nevertheless, there is also a continuous discussion of how the concept of CSR, SDGs, and sustainable development really needs to be defined and how it should be understood in practice for the companies’ work. In this context, it can be emphasized that there has been a development in company ethics from a narrow to a broad definition of the concept of corporate responsibility or CSR as the concept for the integration of CSR and sustainable development now mostly referred to as. The definition of the concept of corporate responsibility is in itself a difficult discussion (Rendtorff, 2009, 2018). If you speak in general about the company’s responsibility (sustainability responsibility), this is the company’s basic existence that is at stake as a responsible organization with a view to the company’s good citizenship. This responsibility is justified by the company’s power and ability to act and targets all the company’s stakeholders and in relation to the company’s obligations to society. However, one can criticize the term “corporate responsibility” for being too vague and too comprehensive in comparison with the intention of identifying specific responsibilities of the company, especially for the purpose of action that goes beyond already given responsibilities. This has been one of the arguments for using the concept of CSR, which has gained a lot of ground, not least because of the European Union’s work on the concept of Green Paper on Corporate Social Responsibility from 2002 and much later as a part of the EU’s official policy in this area. Most recently, however, many have begun to claim that the concept of CSR is too narrow, as there is a tendency to understand responsibility as directed solely against social conditions and forget about the close relationship between CSR and sustainable development.

218    Philosophy of Management and Sustainability Therefore, most people today prefer to use the concept of “social responsibility” to emphasize that social responsibility should be understood more generally, so that it not only includes social issues, but more broadly toward sustainable development and all types of social responsibility. Conversely, this definition has been criticized for being idealist and unfocused and therefore it can be argued that the concept of CSR is actually better. One possible solution, however, is to use the concept of CSR, but at the same time emphasize that it must be understood broadly and always in close connection with companies’ basic social responsibility for sustainability (Rendtorff, 2009, 2018a). The reason why it is necessary to distinguish between the company’s fundamental responsibility and its social responsibility (CSR) is that there has been a tendency to reserve the concept of CSR for a “voluntary effort” that goes beyond the company’s other legal and economic commitments and thus also make the commitment to sustainability voluntary. This has, in particular, been the trend in EU work on the concept, and one has distinguished it so as to emphasize that work on social responsibility is ethically justified and thus differs from the company’s other responsibilities. The argument for volunteering is also based on the focus on internal motivation, which characterizes the value-based approach to organization and management. Therefore, we can consider the movement of CSR as closely linked to ethics and value-based management, as it is about getting the company to do something more in relation to its general responsibilities, in particular what it is financially and legally obliged to do. However, there has also been criticism of this focus on voluntary social responsibility. One can argue that if the responsibility is voluntary then there is no guarantee that the company will live up to its responsibilities. Without coercion, it is claimed, the responsibility runs into the sand, and the company will refuse to be aware of its responsibility. This reasoning seems reasonable, and it is important to see social responsibility in the light of the company’s fundamental ethical responsibility, so that social responsibility always expresses a fundamental ethical responsibility and in this sense cannot be reduced to a “voluntary” meaning “arbitrary” responsibility that one cannot assume without a bad conscience. In general, there is a movement away from volunteering and toward regulation when it comes to CSR, for example, the Danish legislation from 2009 that the 1,100 largest Danish companies must report on their CSR efforts in their annual reports. With this, we can say that the new CSR–SDG management approach to the transition toward sustainability goes definitely beyond the neoclassical view of CSR, which for a long time has been dominated by critics of corporate values and ethics. We are moving far beyond this economic view on CSR with the new connection between CSR and SDGs. Principal arguments for CSR for sustainable development that play a role in the discussion include the following: (1) Social responsibility creates a better and more sustainable business, which is a good starting point for long-term innovation and development. Social responsibility gives the company a good profile in the public. (2) The company becomes a good citizen, contributes self-regulation to sustainable social development, and creates coherence in society by being socially responsible. (3) Social responsibility

The Principle of Responsibility    219 is advanced “reputation” and “risk management,” which forms the basis of crisis management and gives the company a good reputation in the outside world. (4) The company gains greater social legitimacy and recognition through social responsibility for sustainable development. (5) By being socially responsible, the company can retain old and get new and motivated employees and create a more trusting relationship with customers because they see that it takes into account sustainable development. (6) The company is a part of society, and therefore it can be held collectively responsible as a whole toward the sustainability and survival of society. (7) Business managers must not only be accountable to the company’s shareholders or investors, but also take into account all the company’s various stakeholders in the decisions. These stakeholders have strong interests in sustainable development. (8) There is a close correlation between CSR, stable investment and financial gain, and there is a lot of money to be gained from being at the forefront of green economy and sustainable development. CSR is a sophisticated form of “long-term shareholder value,” especially if the focus is on sustainable development. (9) Companies cannot avoid being political. Relating to social responsibility is to take the political side of the business economy seriously and reflectively to define values and ethical considerations in relation to nature and future. (10) Social responsibility expresses a necessary burden that companies should contribute to sustaining a democratic society that will ensure the existence and sustainable development of society and nature and combat social exclusion and provide the poorest in society with proper living conditions. The main arguments against the company’s CSR and commitment to sustainable development are as follows: (1) Only human and individual and not businesses and things can be responsible. Therefore, a company cannot be responsible. Talking about social responsibility for sustainable development can never be more than marketing the company. (2) Social responsibility for sustainable development means that the company manager uses the money for his own purpose and not in the company’s interest. That is why it is illegal. (3) Social responsibility leads to socialism, where one no longer seeks to gain profit for the shareholders, and the company becomes a political actor for the promotion of general purposes such as sustainable development, but it lies beyond what the company actually stands for. (4) Social responsibility is nothing more than a form of economic thinking that involves what every good leader does when the company maximizes profit. (5) Social responsibility dissolves the capitalist economic system and leads to the creation of a new and not very effective economy, which no longer follows market forces and thus may ultimately imply a threat to sustainable development. (6) Social responsibility is undemocratic because it is the managers and not the employees who have to decide what is responsible and sustainable development in society. Social responsibility is therefore referred to as a subversive resolution of the democratic decision-making process. (7) Social responsibility is ideology and religion. Talking about a strategy for sustainable development is far too loose. In the end, it has nothing to do with concrete business in the company. (8) It cannot be demonstrated that social responsibility for sustainable development is profitable. It is pure philanthropy where money is not invested rationally but simply in relation to dreams. There are also large costs associated with developing social

220    Philosophy of Management and Sustainability responsibility, for example, in connection with administration, staff training, as well as accounts, reporting and development of codes of conducts for sustainable development. (9) Social responsibility is not tied to real ethical intentions, but it is a strategic concept that exists only to give the company a good public reputation. (10) Social responsibility is not to the benefit of the weak, because it creates an artificial philanthropic economy where the truly competitive cannot get through. This is ultimately a problem for sustainable development (Rendtorff, 2018a). The critical arguments show that it can still be controversial to make sustainable development the central strategic argument in the company. Nevertheless, the positive arguments for CSR and sustainable development far outweigh the negative, not least if will take the company seriously as a moral and political player in society. When we talk about a change in the company’s role in society toward a good citizen who is also committed to the common good, we make a moralization of the company, where the company is to be understood as a moral person with a real ethical responsibility (French, 1984; Rendtorff, 2009). In this perspective, the company is no longer a pure economic actor, but an ethically responsible agent, attributable to motives, actions, and intentions. When this is the case, a close relationship arises between sustainable development, environmental ethics, and company ethics. Here we can see that the company’s good citizenship is formulated as CSR as the basis for a sustainable market economy. The ideal of sustainable development of the SDGs is an ethical concept that must be interpreted in the light of social and economic equality and justice. The triple bottom line here is an important precision of sustainability. The ethics of sustainability are based on a symbiosis between people and nature. At the organizational level, an ecologically oriented life cycle is developed. Here, the company’s strategy for sustainable development and its environmental and social accounting and reporting becomes extremely important. The sustainability ideal is thus integrated into the business ethics, with the withdrawal of the threefold bottom line as the basis for the firm’s good citizenship, which contributes to improving the social, environmental, and economic considerations of society. Thus, in conclusion, rethinking CSR and business ethics in sustainable development means integrating SDGs in sustainability management of private corporations and public organizations. This vision of sustainability follows the ethical concept of responsibility as a virtuous moral imperative for the transition to a new environmental, ecological and circular economy. In this context, responsible management and good corporate citizenship interprets the concern for the triple bottom line in the perspective of the multiple bottom-lines of the SDGs including people, planet, and profits with peace and partnerships with regard to the 17 goals and targets of the SDGs. This is the core of this new vision of CSR and business ethics in sustainable development towards cosmopolitan concern for the future of humanity on the planet in the era of the Anthropocene.

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Index Accountability, 26–28, 212 Accounting ethics, 24 Administration ethics (see also Business ethics), 29 challenges to, 31–35 changed conditions for, 30–31 issues for, 39–41 theoretical framework for, 36–39 values, 35–36 Agency theory, 97, 101 Aggressive gift, 106, 175, 184, 186 Anthropocene age, 67–68, 121 resilience management and governance at, 76–77 Anthropocene ethics, epistemological foundations of, 68–70 Anthropocentric environmental ethics, 120–123 Authentic experience, 187, 190 Authenticity, 199–200 axioms, 200 Autonomy, 27 ethical principles of, 207, 209–210 Banality of Evil (Eichmann), 143–152, 152, 158 Brundtland Commission, 60, 62, 213–214 Bureaucrat, 147–150 Business integrity in, 162–163 leaders, 169 models, 62–63, 208 philanthropy, 215 Business ethics (see also Administration ethics), 19–28, 51, 59, 67, 101

Capital, 134 tax, 135 Capitalism, 21, 117–120, 130, 134 of hyperconsumption, 12 Climate change, 57, 67–68, 125 invisibility of, 73, 119–120 Code of ethics in business, 100 Codes of conduct, 21 Communitarian kantianism, 19–20, 25, 27 Consumer capitalism, 81–82 organizations, 217 society, 6, 10, 194 Corporate citizenship, 22, 26, 43–44, 49, 53, 63, 116–117, 170 governance, 27 identity, 26 integrity, 170 responsibility, 217 Corporate social responsibility (CSR), 19–20, 22–23, 25–27, 43–47, 53, 61, 67, 88, 116–118, 205, 210–217 Cosmopolitan(ism), 5–6, 29, 35–36, 75 Creative/creativity, 188–189, 192–193 destruction, 94 political thought, 157 Decision-making, 87, 169 Deconstructive ethics, 88 Democratic/democracy, 6, 15 Dignity, 27 ethical principles of, 207, 209–210 Economic(s), 6, 20, 32, 94 action/actors, 101, 102 anthropology, 21, 105–109 authenticity, 200

238   Index crisis, 83–84 decision-making, mixed rationality of, 109–110 ethics, 111–112 globalization, 6 growth, 57 liberalism, 179 logic, 80 man, 92–93, 105 model of consumer society, 84 organizations, 104–105 rationality, 91, 98, 103 responsibility, 46 subjectivity, 106 system of late capitalism, 189 Ethical/ethics, 19, 40–41, 46 action, 162 of administration (see Administration ethics) balance, 13 of competition, 96 of complexity, 87 complexity thinking in organizational decisionmaking, 88–90 conceptions and perspectives for, 136–139 cosmopolitanism, 15 in economic history, 92–94 out of economics, 100–105 economy, 111–126 engines, 102–103 equality in, 127–129 of experience society, 195–199 integrity, 162 judgment, 169 to law, 123–124 leadership, 21, 24, 61–62 liberalism, 19, 22, 27 management studies, 200 principles, 19–20, 22–25, 27 rationality of economic thinking, 101 of responsibility, 45–47, 214 sensibility, 123 subjectivity, 108

of sustainability, 29 theories, 29 European Commission, 216 Financial crisis, 12–14, 83–84, 118 economic anthropology and foundations of rationality, 105–109 ethics in economic history, 92–94 ethics out of economics, 100–105 mixed rationality of economic decision-making, 109–110 neo-liberal concept of economics, 94–98 to new economics of sustainability, 91 welfare economics and criticism of neo-classical concepts of rationality, 98–100 Financial responsibility, 214 Firm, 47–48, 96 Fraser, Nancy (political theory), 179–180 Freedom, 35, 37, 39, 95, 102, 110, 129 Fukuyama, Francis (American political economist), 178–179 Globalization, 3 critical philosophy of, 4–6 criticism of globalization and hope for exit from crisis, 12–14 as expression of hypermodernity and world culture, 10–12 hope of cosmopolitanism in age of hypermodernity, 15–17 misery of world, and struggle for recognition, 6–10 Good citizen corporation, 20, 22–23, 26–28, 43, 46 Good corporate citizenship, 43, 52, 210–211 Hannah Arendt’s philosophy, 143–146 Hayek’s economic theory, 95

Index    239 Hegel and Kojève philosophy, 173–175 Hermeneutical origins of recognition, 180 reintroduction of recognition, 182–184 Honneth, Axel, 181 and renewal of struggle for recognition, 181–182 Humanity, 73, 121, 174–175 Hyperconsumption, 11, 194, 201 society, 10–11, 194 Institutional(ization) action, 147 of democracy, 38 legitimacy, 51 of microbiology, 70 responsibility, 26 theory, 40, 49–52 Integrative business ethics, 20, 28 Integrity, 26–28, 161 in business and politics, 162–163 ethical principles of, 207, 209–210 ethics of, 161 as existential subjectivity, 163–165 of legal and political system, 30 of oppressed groups, 163 as organizational integrity, 167–168 as practical judgment, 168–170 as virtue, 165–166 International Labor Organization (ILO), 48, 57 Justice, 171 as fairness, 23 principle of, 50

Legitimacy, 26–28, 50 for corporate performance, 51–52 Liberal culture, 10, 178–179, 193 Locke’s concept of private property, 128–129 Markell, Patchen, 184–185 Meso-level ethical economy, 126 Mixed rationality of economic decision-making, 109–110 Moral accountability, 162 blindness, 39, 152–156 coherence, 162 commitment, 162 conscientiousness, 162 deafness, 154–156 imagination, 87–88 imperative, 189 management, 21–22, 24, 27 muteness, 154–155 norms, 100 responsibility, 45, 123 sensibility, 158 shortsightedness, 156 sight, 156 silence, 155 thinking, 169 vision, 156 Neoliberal(ism), 13 agenda, 6 concept of economics, 94–98 state, 31 Nietzscheanism, 176–177 Non-anthropocentric positions, 121–122

Kantian business ethics, 22 Kantian moral philosophy, 165

Obedience, 149, 154 Organizational integrity, 26 integrity as, 167–168

Law of cumulative growth, 131 as integrity, 167 Leadership, 87, 154

Paine’s approach, 168 Pareto-optimality, 99, 102 Partnerships for SDGs, 62–64 Pasteur’s techniques, 69–70

240   Index Paul Ricoeur’s philosophy, 172–173 Philosophy of ecoethica, 212 Hannah Arendt’s, 143–146 Hegel and Kojève, 173–175 Marcel Mauss, 175–176 Paul Ricoeur’s, 172–173 Plato’s ethical theory, 161 Political/politics, 185 corruption, 34 CSR, 61 decision-maker, 30 ecology, 73 equality in political philosophy, 127–129 integrity in, 162–163 justice concept, 21 morality, 30 Principle of responsibility, 205 business and management for sustainability, 206–210 new responsibility for sustainable development, 217–220 sustainability and corporate social responsibility, 210–217 Public management, 30–31, 39 Rational(ity), 21, 94 action, 92, 100 choice theory, 22 theory of welfare economics in macro-and microeconomics, 98 Recognition of culture, 9, 171, 182 American reintroduction of problem of recognition, 178–180 French thought and impossibility of recognition and gift, 176–178 German reformulation of problem of recognition, 180–182 Hegel and Kojève philosophy, 173–175 hermeneutical reintroduction of recognition, 182–184

Paul Ricoeur’s philosophy, 172–173 Rentiers, 132–133 Resilience, 76 management, 76–77 resilient infrastructures, 57 Responsibility, 26, 43–45, 68, 88, 106, 108, 157–158, 184, 197, 212–213 Risk management, 90 risk-mitigation, 90 Role behavior, 147 expectations in social system, 147 role-identification, 154 role-player, 147 role-playing, 147 Social capital, 119 contract, 124, 173 entrepreneurship, 116–117 integration, 8, 206 ontology, 77 order, 95–96 psychology, 147, 156 responsibility, 46, 50, 213, 218–220 roles and structures, 156 Stakeholder, 119, 169 business ethics, 49 corporation, 49–50 governance, 40 theory, 43, 63 Stakeholder management, 49–52, 63 corporate social responsibility in, 47–49 Sustainable development, 23, 32, 43, 55, 118, 213–215 criticism of, 59–60 new responsibility for, 217–220 Sustainable development goals (SDGs), 53, 67, 205 challenge, 54–59 criticism of, 59–60

Index    241 Sustainable/sustainability (see also Dark side of sustainability), 19, 29, 35–36, 43–44, 55, 57, 59, 61, 117–120, 124, 188–189, 210–217 application in, 22–24 business and management, 206–210 economics, 119 innovation, 57 methodology, 19–21 Technological/technology, 153 age, 94 rationality, 35 society, 82 system, 81 Totalitarianism, 144 Triple bottom line, 125, 207, 220

Utilitarian(ism), 169 thinking, 165 Utility maximization, 93 theory, 102 Value of integrity, 166 of professional ethics, 35 values-driven management, 51 Vulnerability, 27 ethical principles of, 207, 209–210 Welfare economics, 98–100, 110 economists, 102 equality of, 127–128 policy, 57