Ethics and Economics

Revised edition of the chapter under the same title in "Ethics in the Economy: Handbook of Business Ethics", ed. by L. Zsolnai, 2002.

Business ethics is more than just ‘applied ethics.' There is no domain which is ‘free' from normative presuppositions, and mainstream economics is nothing more than a strongly normative ‘ideal theory' of rational action. The primary task of ‘integrative business ethics' is therefore to reflect on the form of economic reasoning, the critique of economic reason.

This chapter provides a specific perspective on the ‘emancipation' of economic
rationality from moral philosophy; a process mirroring the disembedding of the economy from society in what Karl Polanyi called the ‘great transformation.' Today, there is a growing real-life ex erience of the problematic consequences of this disembedded, ‘ethics-free' economic rationality. In this situation, integrative economic ethics asks for a new ethical foundation for economic reason itself.
The fundamental tasks of integrative economic ethics are to critique ‘economism,'
including economic determinism and economic reductionism, as well as to rethink basic ethical aspects of economic reason. Pertinent issues include the meaning of economic ‘rationalization' with regard to the good human life and the legitimacy of the politicoeconomic order with regard to a just and well-ordered society of free and equal citizens.

The fundamental difference between ‘market freedom' and ‘citizens' freedom' has to be pointed out, which amounts to the difference between economic and republican liberalism.

In integrative economic ethics three loci of socioeconomic responsibility are
distinguished: the citizens in their different roles (citizens' ethics), the companies
(corporate ethics), and the state in its function of defining the juridical and institutional framework of economic activities (regulatory ethics).