JOURNAL OF

ELSEVIER Journal of Economic Psychology 17 (1996) 149 - 153

Book review

Alan Lewis and Karl-Erik W~irneryd (eds.), Ethics and Economic Affairs. Routledge, London/New York, 1994. 387 pp. including refs. Hardback, ISBN 0-415-09396-1.

The typographical style of the book is decidedly academic. It is parsimonious with margins and white space to break up the text and includes only a modest allowance of tables and figures, all in fairly small font. The density of references at the end of each chapter varies considerably though there is a combined subject and author index at the end of the book.

Ethics and Economic Affairs is a collection of eighteen chapters whose progenitors were papers at a joint conference in Sweden in 1991. They are organised into four main sections. Part 1, 'Business Ethics and Management' is approximately twice the length of the other three. These are entitled 'Case, Questionnaire and Experimental Studies', 'A New Economics?' and 'Interdisci- plinary Perspectives'. Like most sets of conference papers and their derivatives, there are multiple authorial interests and foci. Fitting these into the four sections of the book has been a somewhat Procrustean affair. Chapter 2, for instance, contains two case studies (so why not in Part II?) and Chapter 6, on Social Responsibility, contains critiques of opposing classical theoretical positions, so could have been included in Part III.

The range of authorship reflects the origins of the chapters; amongst the international array from USA, Finland, Italy, Netherlands, Switzerland Belgium and Germany, Swedish contributors dominate.

The trigger for the focus of the conference appears to have been Etzioni (1988), whose main theme was lack of a moral dimension in classical eco- nomics, although this theme is not that followed by all contributors.

The book does not state an overall aim but suggests audiences that might find

0167-4870/96/$15~00 © 1996 Elsevier Science B.V. All rights reserved SSDI 0 1 6 7 - 4 8 7 0 ( 9 5 ) 0 0 0 4 0 - 2

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the four parts of interest. Since authorial interests are varied and the subjects of chapters largely discrete, this review proposes to treat each as an individual piece of text within its subsection, albeit briskly in most cases.

A preface to the book is presented as Chapter 1. This raises expectations of more than an extended 'what you can find where' description of contents. It sets the scene for debate about ethics in business in two main ways. The first is to trace a history of thought about ethical conduct in business from ancient Greece to the present. The second is to set the scene for later arguments about the non-neutrality of classical economics and consequent effects of this on business decision making, i.e. a similar line to arguments about the non-neutrality of experimental science. Alleged counter-arguments that a moral dimension is not excluded are promised.

Some issues are raised but not addressed, for example, whether a profit motive and /o r a market economy are inherently irreconcilable with ethical behaviour. Certain debatable assertions are made. For instance, that there are stated to be two kinds of ethics now, descriptive and normative. This is misleading. Since ethics is 'the science of morality', norms and description should both be suitable subjects for empirical research but these are means not ends to appropriate philosophical debate, which is what the book claims that ethicists wish to stimulate. In the sub-section on 'Economic Theory and Ethics' (which, one suspects, was what the conference organisers hoped most contribu- tors would wish to discuss), Etzioni's objection about lack of a moral dimension is cited. As with, many recent works that attempt to 'take over' existing, powerfully argued (but not unproblematic) classic work, some confusion ap- pears. One thinks of all the difficulties caused by Boyatzis' muddled collapsing of two clear models into one. In similar vein, Etzioni's proposal of two relevant forms of utility, both of which are included in Benthamite/Millian 'thriving' is mentioned but not critiqued by the authors, nor is there a forward reference to where such a critique may be found. If the intended audience is 'students, researchers and teachers' straight descriptiveness of this kind is not helpful. Perhaps a stronger editorial decision should have been taken about preface versus chapter.

Part I begins with Chapter 2, which uses two South African case studies to illustrate moral agency and means within and between companies and society. This is a well presented and useful piece that paves the way well for later contributions that accept that an organisation can be a moral agent and chal- lenges the version of the difference between ethics and morality that asserts that the later pertains solely to individuals. A short Chapter 3 fills up space to no apparent purpose. A very long Chapter 4 pursues a proposal for a new paradigm

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of Management by Ethics (MBE). Lacking a body of directly relevant theoreti- cal work, the argument loses itself in a labyrinth of partial mappings of various theories onto ethical business. Social-psychological theories of moral develop- ment studied in non-business contexts (chiefly Kohlberg) are used perhaps too naively but the author makes some valid points in support of the 'organisation- as-moral-agent' concept. Other fields tapped in a very eclectic search for relevant sources range from internal organisational democracy to morality versus performance dilemmas. Chapter 5 is a brief set of ruminations about moralising and is, essentially, an overview of some of the philosophical problems 'mainstream' ethics has encountered over the last several thousand years. Given that this is the subject matter, the facts that Hare, Rawls and others with rather a lot to say on the matter are not cited and that all the references are from economic, not ethics and morality, sources is very curious. Chapter 6 claims an external focus, on Social Responsibility. A section on 'Managerial Creed' opposes Friedman et al. with Jones et al. A 'model' of socio-economic responsibility of the firm is proposed. Cynics might say that getting one's name on a 'model' that others may cite is rather too frequent a purpose of conference papers but perhaps this view is too jaundiced. The argument claims that self-interest in the form of legitimacy can be compatible with social responsibil- ity but the author wants such self-interest to be long-term, i.e. non-opportunistic. Kantians would be quite clear that this may be so but it has nothing to do with ethics or morality and everything to do with prudence. The argument here is interesting to the extent that it moves business dilemmas up a system level to a trade off between legitimacy and efficiency, consistent with the organisation-as- moral-agent position.

Part II begins with Chapter 7, two cases on fairness in consumer pricing. This piece is interesting both for its content and its dialectical presentation. Of all the chapters reviewed so far, this one appeared most likely to have appeal to the intended audience. The conclusion is reached that 'normal' fair-price economics can be challenged as incomplete or inadequate, on ethical grounds. The argu- ment upon which this rests is chiefly about enabling competence to choose. This reviewer's additional comment would be that the firm that does this increases its competitive advantage if competitors do not. A very short Chapter 8 reports empirical studies on ethical investment. Chapter 9 offers two cases in finance and discusses some validity issues of interest to students and their tutors, principally the difficulty of investigating unethical conduct hence over-reliance on scandals. The studies are claimed to be of the attitudinal stance towards unethical conduct of 'colleagues' and 'potential future colleagues'. Since this actually means a sample of business executives and a sample of students, there

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is a certain delicious irony about the ethics of the claimed validity of the results, which claimed that business studies undergraduates were less prone to view certain behaviours as unethical than those with work experience. Chapter 10 addressed ethical regulation of transactions. Again, lacking a directly relevant body of knowledge, the argument was based in sociological work on solidarity and cognitive psychology work on Frames. For some reason, the two experimen- tal groups, Swedish and American, were combined not compared. The outcome was predictable - there is less reluctance to cheat strangers than friends and relations.

Part III begins with a meaty and well referenced Chapter 11 that takes a consequentialist stance on classical economics, arguing that this is not 'scientifi- cally neutral' but influential. Roots of this way of thinking are suggested by Myrdal's 1978 acknowledgement of political non-neutrality. Systemic effects are not ascribed explicitly but an holistic view is taken as is an anti-positivistic position. There is quite a lot of breast-beating about the way economics has lagged behind other disciplines in its approach and epistemology. Chapter 12 reviews arguments for and against interpersonal relations being added to the traditional array of economic goods, the main focus being the latter, claimed by the author to have been neglected. These arguments mostly are of the 'imper- sonality = impartiality = fairness' kind that would have presented William Blake with no demolition problems, 'one law for the lion and the ox is oppression'. Arguments that are similarly revolutionary in political as well as economic terms are put for and against altruism in the workplace.

Used well by the teachers mooted in the target audience, this chapter ought to provide stimulating triggers for debate amongst their students. Chapter 13, on the other hand, will make them groan since it is written appallingly badly. If they can bear to wade through it, there is a set of empirical claims that could provide bases for research. One is the hypothesis that an upsurge of interest in ethics reflects some crisis in previously accepted thought. Another is that key roles in influence occur at the point of interaction between individuals and 'the system', i.e. firms, trade unions etc. In view of the uncongenial nature of the reading chore, the reviewer is not confident whether or not the argument succeeds and was not inclined to make the necessary analytical effort to form a firm view. Chapter 14 on social ownership was very short indeed and seemed shorter after its predecessor. It attempts an analytical rather than a moral argument for and against social ownership, that is, it tries to discover if a moral argument for this can be sustained logically. It concludes that there can be a general, moral justification for social property, hence that such arguments ought to be included in the deliberations of rational decision-makers in society. The

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author would add, yes, if only there were such; unfortunately all the psychologi- cal research on decision-making suggests not,

Part IV appears to be a place for items that were an even worse fit to the other three categories than those that actually appeared there. They seem to be a motley crew with little to do with each other, the original conference theme or the rest of the book. Perhaps stronger editorial decisions should have been taken about their inclusion, taken case by case. Chapter 15 is written in a second language and the style reads oddly. It consists mostly of a prrcis of Luhmann from a systems perspective and the role of natural language and communications (more irony) in it. The reviewer gave up trying to understand why it was included, although one suspects welcoming of new colleagues into 'the peren- nial but moving conference' that Malcolm Bradbury would recognise. Chapter 16 was a fair enough critique of neo-classical economics and possibilities for improvement, taken from an ideological perspective. However, the bulk of it covered ground covered elsewhere in this same volume. A very short Chapter 17 on public choice drew on economic theory of democracy but was not well argued. Its most useful aspect was in suggesting areas needing research, again from an implicit systems perspective. Chapter 18 attempted to create a niche by mining an allegedly neglected Hirschmann paper to produce rather thin content and a poor argument with the title 'Economics and the Enlightenment: then and n o w ' .

Chapter 19 was the short 'endpiece', attempted in a limp and somewhat perfunctory manner, although its message was a good one, namely that there are lay theories and social trends about in business and management and that, however unfounded these might be, they are ignored by the authorial establish- ment at its peril. This would have had much more force if that is what the conference and this entire book had been about.

Sylvia Brown Open University Business School

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