The Economy of Happiness

Happiness in philosophical ethics and utility or satisfaction in economics have much in common. The paper investigates the ethical economy of happiness as a joint topic of ethical and economic theory. It shows that limits of the calculus of utility maximization also apply to concepts of the greatest happiness in philosophy: it is impossible to distinguish the utility or happiness maximizing life strategy. The paper discusses the problem of inter-personal comparisons of happiness and satisfaction and the relevance of the theory of material value qualities developed by Max Scheler’s non-formal, material value ethics for the theory of goods, private and public. Ethics and economics are concerned with rules and duties. It is, however, also necessary to develop a theory of goods and values. Reflections are also made on the relationship between fact and value. Since there are side-effects of facts or experiences on our values, the naturalist fallacy of deriving value statements from experience seems to be less a fallacy than is usually assumed since Hume.

Business Ethics in Globalized Financial Markets

Globalization extends the space of the things that are simultaneous for the human. This applies particularly to the decision-making in financial markets. The global market for capital is one of the main causes for globalization. How is this process of globalization to be judged from the point of view of business ethics? The paper investigates the ethical foundations of capital markets and of financial consulting. It analyzes the foundational theories of corporate governance in the Anglo-American and in the German context. Their difference can be described as external control by competition versus internal control by consensus. The paper gives merit to the different models of governance and to their origin in different conceptions of government. It argues for a twofold strategy: to strengthen the external control of firms by competing teams of management that are able to make an effective take-over threat and to implement elements of workers’ participation in corporate governance as long as increases the efficiency of management - provided that these elements maintain the control rights of the firm’s owners.

Virtual Reality as a Problem of the Electronic Economy.

Two concepts of virtual reality are competing in the cyber world, virtual reality as total adaptability and virtual reality as the simulation of possible worlds. Virtuality as adaptability in industrial production leads to a closer consideration of individual con-sumer demand and to de-massified production. It implies a stronger reference of pro-duction to the reality of consumer needs. The aesthetic concept of virtual reality as pos-sible words and fictional realities can imply a loss of reality. Both concepts of virtuality interact, however. Adaptive production needs the experimentation of imagined and simulated possible worlds. Virtual reality leads to a disembodiment of experience and to the danger of the loss of the validation of perception by experience. The concept of the virtual is originally a concept of theological origin, signifying invisible but real potenti-ality or a reality that is real only as potentiality. One of the most important innovations of the virtual reality of the internet has taken place in financial markets in online trading and online brokerage. The virtual reality of the internet financial markets enables large strata of the population to participate in stock market speculation, leading to a kind of people’s capitalism. Problems caused by the virtual character of the transactions in online trading are the churning of traders and the over-trading of shares by investors.

Schuldverhältnisse.

Debt relationships are relationships of obligations. The paper analyses debt relationships in civil law and economic ethics as well as in theology. It starts from the German word for debt and guilt relationships Schuldverhältnisse. The German term Schuld does not distinguish between debt and guilt and comprises all relationships of being indebted and being guilty. Guilt and indebtedness constitute obligations which are derived from the law of reciprocity. The gift relationship is usually not excluded from the expectation of reciprocity. Relationships of indebtedness form the core of economic and civil law relationships. Christian theology has used the law of indebtedness and the obligation to return the debt as the model for its theory of redemption in the theory of the satisfaction the redeemer pays for humanity’s Schuld, its debt and guilt, towards its creator. The paper examines the similarity of the theory of satisfaction usually ascribed to Anselm of Canterbury or Anselmo d’Aosta to the economic and civil law postulate that debts must be returned. It concludes that the element of giving satisfaction for the guilt or debt of humanity must be part of the theory of redemption since otherwise the passion of Christ loses its sense and redemptory effect. The relationship between the theological and the economic categories is neither accidental nor misleading as it is often claimed but is at the heart of understanding relationships of debt, guilt, and obligation in economics and in theology.

Die Europäische Union und das Ende der Einheit von Staatsvolk und Staat Die Nation als Club, in den man geboren wird.

The European Union challenges the European national state and its idea of the unity of nation and state. It is a transnational union of nation states in which, like in any un-ion, the member states must give up parts of their sovereignty. Regardless of the fact whether the EU is already a federal state or still a confederation of states, it is the return to an older European model of the transnational commonwealth or empire: the EU is supranational and has only limited central power. Since the EU challenges the nation state it seems appropriate to ask what constitutes a nation. The paper discusses two his-torical answers, by Schelling and by Herder. For Schelling, the nations are forms of thought of the absolute spirit, for Herder nations are constituted by their language and the unity of nation and language. The unity of nation and state is derived from the idea that a nation or a people becomes conscious of itself in the state. State and nation are the identity of subject and object. The state is the subject of the nation which is in turn the object on which and on behalf of which the state acts. This identitarian constitution of the nation state is questioned by the EU and by the argument that the identity of the political will of the nation and of the state is usually a fiction. In contrast, the nation must be seen as a club into which one is born, and political representation as temporal delegation without claims to the identity of the citizens and of the political power. The EU is a club of nations, a club of clubs into which its citizens are born. That the EU does not realize popular sovereignty is no flaw. The model of the nations as clubs and of the EU as a club of clubs replaces the national model of the unity of nation and state.

Gerechtigkeit zwischen den Generationen – Globale Perspektiven.

Intergenerational justice arises from the fact that generations stand towards each other in a relationship of obligation. Children owe their existence to their parents, and therefore the continuation of their own existence in children of the next generation. Self interest demands the constant continuation of generations – for old age pensions and for the continuity of families. The welfare state weakens this bond of obligation by transferring old age pensions provision to the state. In this process, a welfare state illusion arises: individuals overrate systematically the value of their claims to pensions provided by the state and underrate the need to give birth to future generations at sufficient numbers. They underestimate the future burdens they will undergo due to a drop of the population numbers. The continental European countries are late in shifting their pensions to capital market funds that invest in countries with a high ratio younger generations. The countries with pay-as-you-go-sytems of old age pensions overrate the degree of freedom they have in withholding from the global capital market as the market for old age pensions and they underrate the degree to which their old age pensions will be devaluated due to the decrease of population.

Das Ausgleichsprinzip der Sozialen Marktwirtschaft zwischen Solidarität und Korporatismus. Korreferat zum Beitrag von Wolfgang Ockenfels.

The Social Market Economy has been seen as a third path between capitalism and socialism shaped by the principle of solidarity. The rhetoric of the third way can be mere mediation as indecisiveness or the consequence of a third conception of the economic order. Solidarism and personalism as the base of the economic system are opposed to individualism and collectivism. Different conceptions of the human person form the basis of different economic systems. Personalism is also a critique of the belief in systems. It claims that the economic order must be based on (multiple) principles, not on the idea of a closed system. A weakness of the Social Market Economy is its belief in personal and corporatist decision-making aiming at consensus between central interest groups. It does not give sufficient consideration to the role of the capital market as the market for corporate control. Paternalism and corporatism of the dominant interest groups are failed developments originating from underrating the control by impersonal competition.

Wirtschftsethik und Unternehmensethik Zwei Kurzdarstellungen

Economic ethics describes the interaction of ethics and economics in explaining human action and in giving normative advice to ethically justifiable and efficient choices of action. As ethical economy, it analyses the ethical conditions of coordination in markets and the economic conditions of ethically legitimate behaviour. Ethical economy is a theory of the ethics and culture of the economy. Formal ethics is the pre-coordination of the economic coordination of the price system, material value ethics is the clarification of the value categories of goods and a general theory of value and good. Economic ethics is applied to the questions of incomplete contracts, professional ethics and the marginal ethics of an industry, and conflicts of interest. Business ethics describes the role of ethics in commercial firms and not-for-profit organisations. It is an organisational ethics and an individual ethics since there is organisational and individual failure to act properly. Individual ethics can neither be substituted for institutional ethics nor institutional ethics by individual ethics. The basic principles of business ethics in business interactions are mutual value creation and serving contracts. The role of the manager is not only to be the agent of the owners or shareholders but to be the fiduciary of the whole firm and to act in the common interest of the firm. The right incentives must be set in firms since there are also perverse incentives. Triple bottom line accounting that encompass ethical and environmental performance indicators introduces richer criteria of business success. Both articles are the longer versions of articles that were prepared for the leading German encyclopaedia, Brockhaus Enzyklopädie in 30 Bänden, 21st edition, Leipzig (F. A. Brockhaus) Fall 2006.

Der freie und der unfreie Wille und der Ursprung des Bösen.

The origin of evil is one of the great puzzles of philosophy and theology. Evil is no objective of the world order since there can be no objective to fail to meet an objective. To assume that evil is part of the world order would, however, imply to assume that there is an objective to fail an objective, namely to aim at evil as an objective to realize the failure of an objective. Nevertheless, one finds a positive will to do evil in the world. What can be the origin of this will to evil? The Augustinian answer is that it is the free will of humans which causes evil in the world. This free will is the cause of itself, it has no effective cause outside of itself. This position meets the objection that, according to it, human free will is the only causa sui, the only cause of itself, outside of God who is also cause of him- or herself. In Augustine, the highest in the human, free will, becomes the only cause of evil in the world. Alternative theories of the origin of evil are the idea that God or parts of God are the origin of evil or that evil is only there for higher objectives and therefore not really evil. The former position has two forms, the Gnostic and the Idealist form. Gnosticism assumes that God fell and caused evil by his or her fall. The Idealist conception in Hegel and Schelling assumes that even God had to undergo suffering and evil to become personal. Evil becomes in these theories a precondition of becoming personal. The theistic position in thinkers like Jacob Böhme and Franz von Baader is that evil is the result of superhuman, but not divine, will and of human free will. Humans are not the only origin of evil. Linked to this position is the idea that humans are not only tempted by their free will but only by their unfree will. There is in humans the tendency of overreaching and over-stretching their freedom and the tendency of not sufficing and underperforming their freedom, the tendency of the unfree will to stay below its possibilities. Both elements of a failing will, the will to overdo and the will to underdo one’s freedom, can be the origin of evil. There is the grandeur and the banality of the evil will as the will which is too free and too unfree at the same time. The tendency to emphasize only the free will in the human leads to elevationism and an elevationist view of the human, the tendency to emphasize only the unfree will in the human leads to reductionism and a reductionist view of the human personality and the social world.