In this chapter, I take up the insufficiency of the stockholder-stakeholder debate characteristic of business ethics in its earlier years. I argue that this debate rarely goes deeply enough: to a more comprehensive picture of the human person, a more robust account of the good. This is not optional—if such a more robust account of the good is not made explicit in a normative view of ethics, it inevitably enters beneath the surface, without being made explicit. The sources for more comprehensive accounts of the human person lie in moral traditions that we have inherited, faith traditions, or more secular rational frameworks. This realization, that a satisfactory account of applied normative ethics calls for an anthropology—a substantive view of the good for the human person and the common good of the human community—I call the anthropological insight. Without this insight, appeals to the interests of shareholders or stakeholders have very little content. Before concluding, this chapter explores two important topics: (a) the nature of the common good, and (b) the relevance of “mediating institutions.” Under (a), I discuss the aspiration of “integral human development” emphasized in several faith-based traditions. It maintains that if we focus on the good of the whole person, body and soul, including the reaching out for relationships that whole persons need for their flourishing, the good of all (the common good) can be achieved. Under (b), I argue that the common good requires mediating institutions between the individual and society at large: the family, churches, schools, voluntary organizations, businesses, and local governments. These institutions foster and reinforce the social motivations that are essential to the pursuit of the common good. This chapter is an organic part of a larger work about the overall contribution of Kenneth Goodpaster to the field of applied ethics and is best read in the context of that larger work.
4.1 From the Corporation to the Common Good
I described in Chap. 2, under the theme of conscience, Royce’s moral insight as one of the key sources of influence on my teaching and research. In Chap. 3, under the theme of corporations, I offered the institutional insight as another key source of influence on my teaching and research. Now in Chap. 4, under the theme of the common good,Footnote 1 I will offer another insight, which I will call the anthropological insight as a third source of influence (Fig. 4.1).
4.2 The Anthropological Insight
4.2.1 Stockholders, Stakeholders, and What Lies Beneath
For many years, the normative core of business ethics seemed to revolve around the “stockholder-stakeholder” dichotomy. That is, did the fiduciary obligations of management to shareholders (in the case of publicly traded companies) shape and limit management’s moral agenda—or were there other obligations to so-called “stakeholders” (groups whose dignity and well-being was affected by management decisions) that needed to be factored in as equally binding?
As I reflected on this polarization, I was struck by the following passage written by Pope John Paul II in his 1991 encyclical letter Centesimus Annus:
A given culture reveals its overall understanding of life through the choices it makes in production and consumption. It is here that the phenomenon of consumerism arises. In singling out new needs and new means to meet them, one must be guided by a comprehensive picture of man which respects all the dimensions of his being and which subordinates his material and instinctive dimensions to his interior and spiritual ones.Footnote 2
The passage continues:
Of itself, an economic system does not possess criteria for correctly distinguishing new and higher forms of satisfying human needs from artificial new needs which hinder the formation of a mature personality. Thus a great deal of educational and cultural work is urgently needed, including the education of consumers in the responsible use of their power of choice, the formation of a strong sense of responsibility among producers and among people in the mass media in particular, as well as the necessary intervention by public authorities.Footnote 3
This was something of a “Eureka!” moment for me in the sense that these passages conveyed an insight that went deeper, beyond the framework of the conventional debate—what I will call the anthropological insight. It is the insight that an economic system/sector is of itself morally neutral when it comes to the consumer and producer choices that drive it, i.e., supply and demand. Thus, if we are to elicit normative guidance from an economic system/sector, we must bring to it an anthropology, “a comprehensive picture of man,” rooted in a faith-based or reason-based “moral tradition,” and not simply settle for satisfying preferences while embracing moral relativism.
The anthropological insight is the realization that a satisfactory normative account of business (or organizational) ethics requires a comprehensive view of the good for the human person and ultimately of the common good for the human community, an anthropology, without which appeals to the interests of shareholders or stakeholders have no content.
What was problematic about the stockholder/stakeholder debate was that it seemed blind to the ethical neutrality of its appeal to the “interests” of the parties affected (see Goodpaster 2010). It was a debate that was bypassing the hard work of identifying and affirming a “comprehensive picture of man which respects all the dimensions of his being.” This fact, in my view, ultimately prevented normative business ethics—whether of the stockholder or the stakeholder variety—from delivering on a substantive account of personal and institutional responsibility.
Ah, but could such an account be offered in a pluralistic society in which consensus on a “comprehensive picture of man” might seem impossible (see Goodpaster 2018; Goodpaster and Naughton 2021)? Let us consider this question.
The usual explanation for a “thin” theory of the good in discussions of ethical obligations, i.e., a preference-based approach to stockholder and stakeholder concerns, has been that any attempt to go beyond such an approach would land us in an impossibly anarchic competition for a winning “thick” theory of the good. In other words, preference-based relativism avoids having to dogmatically assert a unified objectivism about the good for the human person or “human flourishing” with which not everyone would agree. But this explanation (excuse?) seems to assume that one can come to normative conclusions using stockholder or stakeholder reasoning without affirming a view of “human flourishing”—either overtly or covertly.
Arriving at practical conclusions in ethics calls for at least a provisional objectivism about human flourishing or else normative judgments become vacuous. I am reminded here of a comment by Oxford philosopher Mary Midgley:
The power of moral judgement is, in fact, not a luxury, not a perverse indulgence of the self-righteous. It is a necessity. When we judge something to be bad or good, better or worse than something else, we are taking it as an example to aim at or avoid. Without opinions of this sort, we would have no framework of comparison for our own policy, no chance of profiting by other people’s insights or mistakes. In this vacuum, we could form no judgments on our own actions.Footnote 4 (Midgley 1981)
Midgley was saying that we inevitably put ourselves on the line about what is objectively worth aiming at or avoiding when we make moral judgments. We may be persuaded to change our minds, but we provisionally are taking a stand on human rightness or wrongness, goodness or badness.
4.2.2 A Conundrum and the Anthropological Insight
Another way of looking at this set of circumstances is that we face a philosophical conundrum. Either:
Stockholder and stakeholder accounts of business ethics would need to remain “thin” and relativistic (because they are preference-based) and potentially committed to highly implausible decisions based on stockholder and stakeholder preferences that could be extreme (Goodpaster 2010), or
Stockholder and stakeholder accounts of business ethics—if they were to arrive at substantive conclusions—would have to supply and acknowledge a “picture of man” or “human flourishing” according to some moral tradition (theological or philosophical).Footnote 5
The thought here is that, one way or another, decision makers must bring to their decision making an implicit “picture of man” or “moral tradition” whether they acknowledge it or not; otherwise, they could not reach practical conclusions about right and wrong (and ultimately, the common good). If we want a comprehensive ethics for business (or other) organizations, taking a stand on “human flourishing” or a “picture of man” is not optional: it comes with the territory.
The nature of the debate in normative business ethics, then, changes when we understand that relativism lands us in a difficult place—and that most thoughtful decision makers know this instinctively.Footnote 6 So, they avoid that difficult place most often by adopting and bringing to their arguments about right and wrong an implicit “picture of man” that they wager others will find acceptable, at least in the context of the decision at hand.Footnote 7
4.2.3 Sources of Moral Traditions: Faith and Reason
When I introduced the idea of the anthropological insight above, I alluded to John Paul II’s phrase “a comprehensive picture of man” and suggested that such a picture was rooted in a faith-based or reason-based “moral tradition.” Moral traditions are perhaps not often referred to in everyday life by decision makers in the economic sector, even though, as I have argued, they are implicitly invoked even when they are not explicitly invoked in ethical discourse.
To be sure, the encyclical letter Centesimus Annus is addressed not just to Catholics, but “to all men and women of good will.” Nevertheless, it represents a Christian faith-based reflection on capitalism—its strengths and weaknesses—throughout the twentieth century. And it is rooted in centuries of Catholic social teaching about human dignity and the common good. John Stuart Mill’s account of utilitarianism offers a more philosophical account of ethical decision making, typically popularized by the imperative “Seek the greatest good of the greatest number.” Mill’s view of the good was more sophisticated than his mentor Bentham’s hedonistic view, for he appears to have held that there are qualitative differences among goods, not just quantitative differences and that these qualitative differences could be arranged in a hierarchy that is not relativistic.
More recently, as indicated in Chap. 2, the work of social psychologist Jonathan Haidt (2013) has received much attention as a kind of meta-reflection on the moral traditions that anthropology brings to our attention. Haidt espouses a “moral foundations theory” in social psychology, identifying five or six innate human patterns of processing moral decisions over many millennia.Footnote 8 Haidt attributes a kind of normative force to this pluralistic set of moral traditions (see footnote 6 above), suggesting that consciences that exclude one or more of the considerations represented in his framework will be unbalanced and will need eventually to “right the ship.”
The general point in this discussion is that there are multiple “moral traditions” that spring from two main sources, faith and reason, and that despite the contemporary popularity of more relativistic “postmodern” views, the majority of leaders and corporate employees in the economic sector identify with moral traditions of the more traditional kind, based either in faith or reason.
4.2.4 The Common Good as Integral Human Development
Returning now to the Catholic tradition, since that is my tradition, there is an account of the common good emphasized in the twentieth century that deserves to be highlighted and offered to other moral traditions as a model. The assumption in the utilitarian tradition is that the good of all cannot typically be achieved, so the idea of maximization must be introduced as a kind of consolation prize: the “greatest good of the greatest number.”
The faith-based response to this has been that if we truly focus on the good of the whole person, including the reaching out for relationships that whole persons need for their flourishing, the achievement of the good of all can be achieved. This conception of the common good is called Integral Human Development: the Good of the Whole Person and of All Persons (see Fig. 4.2). In the words of Pope Benedict XVI (2009): “The truth of development consists in its completeness: if it does not involve the whole man and every man, it is not true development.”
The intuitive key to this mindset is that the human community is not simply an unconnected group of human beings, each with a separate utility function unrelated to the utility functions of his/her neighbors. Rather, the human community is a family with a shared father:
As society becomes ever more globalized, it makes us neighbors but does not make us brothers. Reason, by itself, is capable of grasping the equality between men and of giving stability to their civic coexistence, but it cannot establish fraternity. This originates in a transcendent vocation from God the Father, who loved us first, teaching us through the Son what fraternal charity is. (Benedict XVI 2009, §19)
This conception of the common good insists on “the dignity of each person and the dignity of the human community without compromise or trade-off” (Goodpaster and Naughton 2021). This may seem impossible in a fallen world—which is why utilitarian maximization becomes attractive—but it should be the fundamental hope of every leader.
In the final analysis, the pursuit of “goods that are truly good and services that truly serve” can, in a faith-based framework, contribute both to the good of each whole person and to the good of all persons without impossible trade-offs. As philosopher Kevin Kinghorn puts it:
To avoid irresolvable dilemmas where I promote one person’s welfare only at the expense of another person’s welfare, we will . . . need to suppose that our world is arranged in such a way that all people’s interests coincide . . . [but] the Christian idea of heaven supposes that there can be—and indeed is—the kind of coordination of people’s interests such that everyone experiences ultimate flourishing. (Kinghorn 2016, p. 199)
Kinghorn sees in his moral tradition a solution to the challenge of the common good—the good of the whole person and of all persons:
If the world really is coordinated so that all people’s ultimate welfare can coincide, then our earlier examples need not lead to irresolvable difficulties. Let us suppose that our third party knows that all people’s ultimate welfare can coincide in our world—most straightforwardly, knows this in virtue of having created our world. Indeed, let us go ahead and specify that this third party is God. (Kinghorn 2016, p. 200)
4.2.5 Mediating Institutions
Up to this point, I have approached the common good as if it were a dynamic relationship between individuals and the wider society (see Fig. 4.2 above). But this perspective overlooks what many have called the “mediating institutions” between the individual and the wider society: the family, the school, the church, voluntary organizations (hospitals, community centers, etc.), law enforcement organizations, local, state, and national governments (see Fig. 4.3 below). Not only does each of these mediating institutions have its own “common good,” each mediating institution offers a laboratory for its participants to learn the skills and virtues needed to temper self-interest for the sake of the wider (but limited) groups.
Mediating institutions foster and reinforce the social motivations that are essential to the pursuit of the common good. From one point of view, mediating institutions disperse a society’s institutional power across multiple centers, limiting the power of government as the overarching institution in people’s lives (Fort 1999). From another point of view, however, mediating institutions, because of their typically smaller scale, can serve as “learning laboratories” for the character traits needed in the pursuit of human dignity and the common good.Footnote 9
4.3 Summary and Transition to Chap. 5
In this chapter, I have argued that stockholder and stakeholder thinking may be necessary to normative business ethics but they are insufficient. The insufficiency calls for something deeper and wider if we are to identify “goods that are truly good and services that truly serve” (Goodpaster 2012). The moral agenda of management calls for a more comprehensive kind of thinking—an anthropological insight—based on human dignity as part of the common good. Normative ethics, in order to be truly normative (and non-relativistic), must explore more robust “theories of the right and the good” than have been offered in the late twentieth century (Goodpaster 2010; Brenkert and Beauchamp 2009; Goodpaster 2012; Goodpaster 2017 [reprinted as Appendix 2c of this book]). The span of management concern dominated the original debate, but the content of the interests of affected parties was seldom addressed.Footnote 10
All of this takes us to a new level of ethical inquiry in applied ethics, a level at which the debate about stockholders and stakeholders is merely a gateway to the hard work of normative business ethics. If the common good is not to be an empty phrase designating whatever people want it to designate (as long as it stays vague), then we must think more deeply about human dignity and well-being. The common good is the good for the whole person and for all persons, simultaneously.
In the last section of this chapter, however, I described an idea elaborated by Professor Timothy Fort and originally observed by Alexis d’Tocqueville: the idea of educating the human heart in the direction of the common good, using mediating institutions. This idea offers us a natural bridge to our fifth chapter: Business Ethics Education and the Socratic Insight.
Hereinafter, when I use the phrase “common good,” I mean to include what I have sometimes referred to in my written work as a compound phrase “human dignity and the common good.” The importance of human dignity in our understanding of the common good cannot be overstated, especially in the Catholic social tradition, since each person is seen as created “imago Dei”—in the image of God. Thus, the common good in this tradition can never trade off the dignity of individual persons in the face of the “good” of the community as a whole. Rights-based thinking enters here to temper the utilitarian maximization impulse.
Emphasis added. John Paul II then continues: “If, on the contrary, a direct appeal is made to his instincts—while ignoring in various ways the reality of the person as intelligent and free—then consumer attitudes and life-styles can be created which are objectively improper and often damaging to his physical and spiritual health.”
Some examples then follow: “A striking example of artificial consumption contrary to the health and dignity of the human person, and certainly not easy to control, is the use of drugs. Widespread drug use is a sign of a serious malfunction in the social system; it also implies a materialistic and, in a certain sense, destructive ‘reading’ of human needs. In this way the innovative capacity of a free economy is brought to a one-sided and inadequate conclusion. Drugs, as well as pornography and other forms of consumerism which exploit the frailty of the weak, tend to fill the resulting spiritual void.”
Let me offer an illustration of how an implicit “picture of man” can figure in a business ethics case. Consider a successful video game company that has designed and marketed simulations of extremely violent (and at times sexually aggressive) protagonists controlled by the game player. When parents or state regulators raise objections to these game simulations, the company defends itself under First Amendment free speech protections, despite some evidence of negative social effects on young people. The “picture of man” in the background on the part of the company appears to be that wants and desires measured by market choices should be overriding, at least if the younger customers have reached a certain age. Other factors about the good for humans, such as avoiding habits that could desensitize a person by simulating violent behavior, appear not to have sufficient weight in the company’s moral mindset. Dialogue between the company, parents, law enforcement, and social psychologists might lead to a change in the company’s weighting of this factor and should be encouraged—in this author’s opinion—as a step toward the common good. There are many other illustrations that are analogous to this one, including social problems with increased obesity, escalating consumer debt, and too few effective business initiatives in developing countries.
It is worth mentioning here that there is an important difference between relativism and pluralism in discussions of the good or human flourishing. Relativism is the view that the good varies with the wants, desires, or preferences of an individual or a group. “That may be good-for-you, but it is not good-for-me,” or “Pro-choice people have one view on abortion and pro-life people have another. No group is righter than the other.” Pluralism, on the other hand, is not a relativistic view, but is simply the view that there is not one single ethical value or principle that acts as the “umpire” for all other ethical values or principles. There may be more than one, thus allowing for potential conflicting values or principles in certain concrete situations requiring our decisions. As philosopher W.D. Ross might put it, each value or principle may give us a prima facie ethical duty, but our actual ethical duty is an objective matter, even if it cannot be discerned except in the situation at hand.
Note that the anthropological insight is not a claim that this or that specific picture of man (or “moral tradition”) is the right one, but that some specific picture of man must be brought to bear if a normative (action-guiding) account of an institution’s ethics is to be comprehensive. Clearly, Pope John Paul II embraces a picture of humankind in which spiritual goods are superordinate to material goods, wants, and instincts. A Marxist secular materialism would offer a very different picture of humankind and, thus, of the common good.
E.g., care/harm, fairness/cheating, loyalty/betrayal, authority/subversion, and sanctity/degradation. Later in his book, Haidt adds a sixth foundation, liberty/oppression, that operates in some tension with the authority/subversion foundation (pp. 200–211).
Timothy Fort writes: “[T]he multiplicity of mediating institutions insures that no particular groups gain oppressive power.” Fort observes further that mediating institutions help us to cultivate and grow moral awareness: “[N]otions of transcendence, expressed in traditional religions or others, must operate through some kind of specific community whereby particular individuals are socialized to understand that there is something to which they are accountable and something with which they are interdependent. The learning laboratories for this lesson are mediating institutions” (Fort 1999). Emphasis added.
Notice that “stakeholders” seems to limit concerns to “affected parties,” while the “common good” may invite a broader tapestry of concerns, e.g., “everything is connected to everything else.”
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Goodpaster, K.E. (2022). The Common Good and the Anthropological Insight. In: Times of Insight: Conscience, Corporations, and the Common Good. Issues in Business Ethics(), vol 54. Springer, Cham. https://doi.org/10.1007/978-3-031-09712-6_4
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