Self-interest vs. the Common Good: On a Central Issue in Economic Ethics

The supposed conflict between individual self-interest and the common good is one of the hottest debated issues in economic ethics, environmental ethics as well as at the intersection between ecology and economics.
Examples concerning planet earth ecology include air and water pollution, overfishing, the clearing of rain forest for agriculture, animal habit destruction, the over-exploitation of natural resources especially in so called ‘Third World’-countries, carbon emissions and the burning of fossil fuels/non-renewable energy resources and consequential global warming and climate change (i.e., ecological footprint).
From an economics perspective we have to debate the role of privilege- and rent seeking special interest groups, the phenomena of lobbyism and corruption, corporate scandals, the role of hedge funds, private equity, derivatives, investment-banking, gambling/speculation on the stock-exchange, insider-dealings, market manipulation, the alleged ‘greed’, avarice, and other forms of unethical behavior as well as the near-sightedness of (some) managers and the short-term oriented incentive systems of shareholder-value capitalism (e.g. bonus payments, thinking in quarterly periods; short-term economy), etc. – all seeming at odds with the broader and long-term interests of other legitimate stakeholder-groups like customers, suppliers, employees and the general public. All these phenomena may be summarized under the heading tragedy of the commons given their lack of economic, social and environmental sustainability.
This research project has been analyzing potential trade-offs and compatibilities between self-interest and common welfare. Both norms play a key role in economic theory as well as for the development and implementation of new concepts for economic policy and regulation.
The project is especially interested in the respective narratives that are used to justify the two norms. Because such narratives typically have their origin beyond economics in the narrow sense, the interdisciplinary framework of the Cluster is an ideal setting for studying the genesis and development of these norms in close collaboration with related disciplines.
The clash of different and differently motivated normative concepts, the emerging conflicts of interest and trade-offs as well as possible solutions were studied from a conceptual point of view as well as in the light of two case studies. One case is the emergence and implementation of the Equator Principles, a voluntary Corporate Social Responsibility initiative in the banking industry; the other case concerns the pros and cons of a paternalistic economic policy.
Standard economic theory postulates that “laissez faire” leads to results that satisfy self-interest and common welfare at the same time. As was elaborated in the project, this view is the result of a particular narrative that only emerges in early modern times and has always been confronted with other views from within and outside economics, in particular ethics, which point out the conflicting nature of both norms. The project showed both at the conceptual level and in the discussion of the two case studies that appropriate mechanisms of regulation, monitoring and sanctions are needed in order to make the results of economic behavior compatible with both norms. In the implementation of those mechanisms and interventions the danger of paternalism needs to be addressed if it is to be avoided.

The most important events of this project:

Workshop: Behavioral Business Ethics: Verhaltensökonomische und ordnungsethische Perspektiven, first “Frankfurt-Workshop on business ethics”, Goethe University, Frankfurt am Main, October 1–2, 2013 (in cooperation with the Center for Business Ethics, Gerhard Minnameier).

Workshop: 10 Years Equator Principles (2003–2013): Fragment of a Normative Sustainability Order or Business as Usual?, Goethe University, Frankfurt am Main, March 14–15, 2013.

 

The most important publications of this project:

Martens, W./Linden, B.v.d./Wörsdörfer, M.: “Deliberative Democracy and the Equator Principles Framework: How to Assess the Democratic Qualities of a Multi-Stakeholder Initiative from a Habermasian Perspective?”, in: Journal of Business Ethics 141, 2017, pp. 1–19.

Klump, Rainer and Manuel Wörsdörfer: “Paternalist Economic Policies. Foundations, Implications and Critical Evaluations”, in: Ordo Yearbook of Economic and Social Order 66, 2015, pp. 27–60.

Wörsdörfer, Manuel: “Equator Principles: Bridging the Gap between Economics and Ethics?”, in: Business and Society Review 120(2), 2015, pp. 205–243.

Wörsdörfer, Manuel: “Inside the ‘Homo Oeconomicus Brain': Towards a Reform of the Economics Curriculum?”, in: Journal of Business Ethics Education 11, 2014, pp. 5–40.

Wörsdörfer, Manuel: “Free, Prior, and Informed Consent’ and Inclusion: Nussbaum, Ostrom, Sen and the Equator Principles Framework”, in: Transnational Legal Theory 5(3), 2014, pp. 464–488.

 

 

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