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Without Ethics the Economy Runs into the Wall

Only 27% of Germans think the population profits when business does well. Only 40% believe the economy and the population sit in the same boat. With tendencies to screen itself socially and give priority to its own goals, the economy loses the important capital of trust.
WITHOUT ETHICS THE ECONOMY RUNS INTO THE WALL

By Rainer Clos

[This article published 7/9/2008 on the website of the Evangelical Church in Germany is translated from the German on the World Wide Web,  http://www.ekd.de.]


The results could hardly have been more alarming. According to surveys, only 27 percent of Germans think the population profits when business does well. Only 40 percent believe the economy and the population sit in the same boat.

Extreme manager salaries, corruption, spying on co-workers, electronic eavesdropping on journalists, balance sheet manipulation, tax fraud, "grasshoppers" and the drifting apart of the poor and the rich: all this nourished a general suspicion and a disconcerting acceptance crisis.

This decline in trust was the background for a new memorandum with which the Evangelical Church in Germany (EKD) justifies its economic ethics position and meddles in the debates about market and morality. With the title "Entrepreneurial Conduct in an Evangelical Perspective," the document avoids simple "business bashing" for the problematic behavior of individual managers and businesses.

In the foreword, Bishop Wolfgang Huber, chairperson of the EKD, recalled "that evangelical faith has a positive relation to entrepreneurial conduct." "Readiness for responsibility, world formation, initiative, spirit of enterprise and engagement for the public welfare are firmly anchored as virtues in the evangelical tradition," the document says self-assuredly. As its core message, the memorandum emphasizes: deep ethical rooting is indispensable for economic conduct. Consideration of moral standards and social responsibility pay off positively for businesses and the economy and in no way lead to economic disadvantages.

The business world is not free from social obligation and cultural connection but must give an accounting. With tendencies to screen itself socially and give priority to its own goals, the economy loses the important capital of trust, the evangelical church memorandum warns. The church document argues: Since entrepreneurs have power, they can be expected to follow communally recognized values and be models. "When the business world works without a moral compass, the moral capital of society that is also indispensable for personal conduct disappears."

Alongside the social responsibility based on Christian commands, the values of an "honest merchant" as ethical standards should be emphasized according to the EKD. Promoting sustainable conduct, good managerial leadership, observance of environmental- and social standards, a business culture, cooperation between management and co-workers, compatibility of family and vocation and social engagement are concrete recommendations.

The EKD supports an embedded market economy, not market radicalism. The concept of the social market economy depends on a logical connection of a high economic dynamism through state safeguarding of functioning competition with social justice as the presupposition for broad prosperity." This is a guiding principle of the memorandum which discusses in detail the consequences of the changes on the financial markets. The model of the social market economy and making possible social participation and prosperity for broad sectors in our country are important for the future, Huber says.

The tension between necessary profit orientation and social justice is not new territory for the evangelical church. The first economic memorandum in 1991 asked about the acceptable relation of public welfare and self-interest. The joint declaration "For a Future in Solidarity and Justice" (1999) attracted much attention. In this declaration, the evangelical and catholic churches challenged neoliberal tendencies. In the memorandum "Just Sharing: Empowerment to Personal Responsibility and Solidarity," the EKD in 2006 urged overcoming poverty.

On this background, one interpretation seems short-circuited that the evangelical church made its peace with capital in the entrepreneur memorandum. Rather the church reminds the economy and businesspeople of their social responsibility given the negative spin-offs in the pursuit of investor- and profit interests.

The Braunschweiger evangelical bishop Friedrich Weber recently coined the concise formula: Without morality and values, the economy runs into the wall. How desirable moral action can be brought about beyond appeals to economic theory remains open. According to pure theory, economic action must be moral for the success of individuals and the whole society.

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not ethics is the problem 19.Jul.2008 06:19

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capitalism is