On the economic overreach page we identified that economic ties reach beyond those of community that can supervise them.
We now look at how we can address this.
Behaviour and structure
Certain events prompt us to look inside ourselves and try to shape the way we behave collectively in the economy. For example:
• global economic crises; or
• specific events such as the collapse of a poorly constructed factory killing garment workers,
However, we also need to look outside ourselves. We need to think about how we can collectively shape the structures through which interactions happen. We can also achieve more ethics in economic behaviour in this way.
In summary, when considering how to change unethical behaviour in markets, one may either look to change:
1) the behaviour of individuals – for example by:
• exploiting synergies between ethical and economic outcomes; and
• promoting ethical consumerism, ethical business practices and ethical investment; or
2) the frameworks/ structures in society within which individuals act – for example, by adapting the relationship between the economy and communities (including the state).
This distinction reflects the central debate in the social sciences about structure and agency. Here the term ‘individuals’ is intended to include people, businesses, nation-states – any entity/body/person (in the widest sense of those terms) that makes decisions.
First we look at the behaviour of individuals.
1) THE BEHAVIOUR OF INDIVIDUALS
Situations where the behaviour of individuals may cause unethical outcomes
The behaviour of individuals that causes negative ethical outcomes may arise in two situations:
• Where actions that have a negative ethical impact are adopted by chance (due to lack of awareness etc) and are perpetuated by habit.
Solutions to these will involve a synergy between capitalistic and ethical aspects: we therefore call these synergy solutions.
An example would be a business that leaves its computers and lights on at night. Turning them off would save both money and the environment.
It is vital that such synergy solutions are fully exploited: clearly it is in the interests of the individuals involved, both financially and ethically.
We believe that behavioural solutions are sufficient to deal with synergistic situations.
• Where individuals choose to sacrifice capitalist concerns for ethical reasons.
Solutions to unethical outcomes in the economy can also be tackled by initiatives such as ethical consumerism, ethical business practices and ethical investment. We refer to these collectively as individual ethical solutions.
These solutions achieve better ethical outcomes through some sacrifice of financial concerns. We therefore call these non-synergy situations. It is implausible that in every situation economic and ethical objectives will coincide. Therefore non-synergy situations are inevitable.
Researching and promoting individual ethical solutions is not something that we seek to do at Ethonomics. We focus on structural solutions. This is because we believe that they are a prerequisite for truly effective individual ethical solutions. We also believe that they not receive the attention that they deserve.
In the area of individual ethical solutions we acknowledge the excellent and extensive work already being done here by a great range organisations in this area (Fairtrade, Forest Stewardship Council, Rainforest Alliance and Oxfam, to name just a few).
The action of civil society – organisations and institutions such as NGOs, the media, trade unions, voluntary associations, universities and religious groups – may shape and augment these individual ethical solutions.
The effectiveness of individual ethical solutions for non-synergy situations
We acknowledge the importance of individual ethical solutions (ethical investment, ethical business practices and ethical consumerism) for synergy situations. However, in non-synergy situations they may be limited by various factors.
The factors limiting individual ethical solutions, as implemented by investors, business people and consumers, are:
• lack of resources and information:
• consumers face this when selecting products or services (say in the supermarket). They can’t possibly know all the information that they need to in order to make sound ethical choices. They are unlikely to have either the time or the resources. The variety and complexity of products and services in the developed world is too great.
Instead division of labour is required and probably some element of:
(i) using those already having the relevant expertise (such as business people already involved in those processes); and
(ii) moderating the result democratically.
• the same phenomenon applies for investors selecting shares (albeit less so);
• it also seems to us that the prospects for campaigning NGOs and the media being able to address all ethonomic problems are not good;
• we do not believe that even the state has the capacity to regulate all details of ethonomics (see Big Society).
• limited choice, which shows itself in two key ways:
• it may be that for any particular item (possibly essential items) there are no good ethical choices currently available. The same argument may apply to shares or to businesses seeking products and services in the supply chain;
• products and services are often complicated, potentially involving many different ingredients and manufacturing processes etc. Limited choices will not be able to differentiate between all the ethical choices bound up into the product or service at:
• the point of purchase;
• within the supply chain;or
• at the purchase point.
• competition:
• we regard this as an area that is worthy forming a significant part of a dedicated page. It is a crucial, yet often neglected, part of the jigsaw of understanding capitalism. Please see the next page – cooperatition.
For these reasons we think that individual ethical solutions have serious limitations. However, structural changes in the marketplace would allow individual ethical solutions then to flourish fully.
2. THE FRAMEWORKS/ STRUCTURES IN SOCIETY WITHIN WHICH INDIVIDUALS ACT
It is implausible to argue that in every situation capitalism and ethics coincide. As mentioned, situations divide into:
• synergy situations where capitalism and ethics match (such as in the computers-and-lights-at-night example above).
• non-synergy situations where capitalism and ethics pull in different directions.
• through structural solutions.
Examples of these non-synergy situations that would need to be addressed through structural solutions include:
• more needing to be paid for sugar that pays a decent price to workers; or
• the possibility of a business cutting costs by using a more polluting material or manufacturing process.
We have argued above that individual ethical solutions are not capable of addressing these non-synergy situations fully. Therefore structural solutions are needed.
Looking to structural solutions has an important strength: areas such as bankers pay and the general conduct and purpose of business can be very divisive if the focus is too much upon personal morality. Everyone can be implicated in unethical behaviour in the economy, at the very least through their participation in the economy as a consumer. Therefore this structural approach is an excellent way for people adopt a positive outlook on consumers, business-people and investors, whatever their perceived misdeeds.
Summary – comparing behavioural and structural solutions to unethical economics
A summary of the way we view the relationship between behavioural and structural solutions is:
• current individual ethical solutions are not capable of providing adequate solutions to the problems faced;
• therefore development of new structural solutions is necessary;
• but once those new structural elements are in place they will rely upon people ‘doing the right thing’ within those frameworks. At that stage individual ethical practices and know-how, including that from existing organisations in that area, will be fundamental to the successful use of the new structures.
Therefore what we envisage relies both upon behaviour and (new) structure, hand in hand.
Our question now is what types of structures in society need to be adjusted to encourage ethical outcomes. We turn to cooperatition.