Adam Smith and Catholic Social Teaching

Journal of Business Ethics - The connections between Adam Smith and Catholic Social Teaching (CST) raise several questions. The principle of subsidiarity adopted in CST, according to which higher...     

From Adam Smith to the American Catholic bishops: Debating visions of economic life

Considerable controversy was stirred by the contrast between the specific approaches to public policy contained in the first draft of the Catholic bishops' letter on the U.S. economy and the policies favored by the Reagan administration. However, a much more basic contrast actually existed between the bishops' underlying vision of economic life and contemporary capitalism. The pastoral challenges a separation between moral criteria and economic activity that is deeply embedded in modernity itself. Indeed, the splitting off of economic life from its moral-religious matrix is seen by the bishops' critics as a positive, defining feature of democratic capitalism. The critics see the separate economic and moral-religious spheres related by due balance; the bishops, while acknowledging an autonomy to economic life, emphasize that its fundamental choices remain moral. The bishops (and, for different reasons, their critics) have preferred to minimize the contrast between the letter's vision and the contemporary economy. They avoid any clearcut judgment on the economic system by stressing pragmatism and reforms; but implicitly they are granting a strictly conditioned acceptance of reformist capitalism, the condition being the system's openness to questioning and change. Peter Steinfels is Editor of Commonweal Magazine and he is the author of The Neoconservatives (Simon and Schuster, 1979).     

The Adam Smith Award Address, 2004

Much of what Adam Smith said in 1776 remains fresh today—particularly on the trade-off between guns and butter. It is safe to say, however, that he did not antic- ipate macroeconometric modeling for forecasting and policy analysis. From its beginnings in the 1940s, the standards and the needs of users of forecasts are becoming ever more demanding as the information flow becomes more bountiful. We have evolved from reliance on annual data to the availability of high-frequency data and the challenges of integrating the two into reliable, timely forecasting models. In extending modeling efforts to transition and newly developing countries, I have been pleasantly surprised at the availability of important data, making possible not only models for individual countries but for linking them to understand the impacts of global phenomena such as oil shocks and financial crises. In many of these countries, however, time series are short—making efficient use of high-frequency data even more important. Another promising area of investigation is integration of input-output and flow-of-funds analysis with income and product accounts for more realistic treatment of such issues as technological change and interest rates.JEL Classification C5     

亚当·斯密的市场道德秩序论

市场道德秩序论是亚当·斯密经济伦理思想的灵魂,它适合于市场经济,是道德观念、市场法则和一般准则的自发融合,并以国民素养培育为保证。德福一致、诚信守法、容忍失败是市场道德秩序论的基本原则。市场的道德秩序不仅是市场经济健康高效运行的基础,还是原发创新性的动力源泉。     

关于"亚当·斯密问题"的认识与思考

"亚当·斯密问题"持续百年之久,其中折射出的人性在道德判断和利益追求的分离与偏颇让古今中外的学者为之困惑.本文在对"亚当·斯密问题"的产生与分歧中对该问题做出了整体的把握与认识,提出经济人与道德人统一的重要性,并指出探讨、深思"亚当·斯密问题"具有深刻的理论与现实意义.     

What Corporate Governance Can Learn from Catholic Social Teaching

This reflection focuses on what insights Catholic Social Teaching (CST) can provide for corporate governance. I argue that the ‘standard’ agency theory is overly reductionist and insufficiently incorporates important economic limitations (such as asymmetric information, incomplete contracts, and the need for coordination) as well as human frailty. As a result, such agency theory insufficiently distinguishes firms from markets, which can easily relativize how we treat others and facilitate rationalization of unethical behavior. I then explore how three pillars of CST—human dignity, solidarity, and subsidiarity—can help overcome these limitations. CST proposes a vision of the business corporation as a community of persons, working together in cooperative business relationships toward the shared purpose of contributing to human flourishing.     

Adam Smith and the ethics of contemporary capitalism

This paper presents a theoretical elaboration of the ethical framework of classical capitalism as formulated by Adam Smith in reaction to the dominant mercantilism of his day. It is seen that Smith's project was profoundly ethical and designed to emancipate the consumer from a producer and state dominated economy. Over time, however, the various dysfunctions of a capitalist economy — e.g., concentration of wealth, market power — became manifest and the utilitarian ethical basis of the system eroded. Contemporary capitalism, dominated as it is by large corporations, entrenched political interests and persistent social pathologies, bears little resemblance to the system which Smith envisioned would serve the common man. Most critiques of capitalism are launched from a Marxian-based perspective. We find, however, that by illustrating the wide gap between the reality of contemporary capitalism and the model of amoral political economy developed by Smith, the father of capitalism proves to be the most trenchant critic of the current order.G. R. Bassiry is currently professor of Management and international business at California State University, San Bernardino, California. Formerly he served as Vice President and Acting President of Farabi University. His most recent articles on business ethics include Ethics, Education, and Corporate Leadership,Journal of Business Ethics and Business Ethics and the United Nations: A Code of Conduct,Sam Advanced Management Journal. He has also published numerous journal articles on international business, corporate strategy and corporate leadership, and is the author ofPower vs. Profit by Arno Press of New York Times.Marc Jones is a management lecturer at the University of Otago, New Zealand. His research interests include multinational corporations and economic development. He has worked as a financial analyst for Electronic Data Systems Corporation and as a management consultant for Peat Marwick Main & Company.     

亚当·斯密农业发展思想研究

经济学之父亚当·斯密的传世名著《国富论》包含了非常丰富的经济发展思想,在《国富论》中,亚当·斯密重点对制造业、商业等城市经济进行阐述的同时,对农村、农业的发展也提出了自己的见解。虽然这些见解零散地分布在《国富论》的各篇章中,且距今已有二百余年,但是这些看似零碎的见解却包含着博大精深的农业发展思想,对现今我国的农村、农业发展仍然有着很强的指导和借鉴意义。     

Conciliating Work and Family: A Catholic Social Teaching Perspective

Although work–family conflict is highly relevant for both families and businesses, scarce attention has received from business ethics perspective. This article focuses on the latter, presenting a set of relevant insights from Catholic Social Teaching (CST). After reviewing the foundations and principles presented by CST regarding work–family relationships, a set of normative propositions are presented to develop work–family policies and for a correct personal work–family balance. It is argued that business responsibility with employees’ family should be considered as a part of Corporate Social Responsibility. In addition, the applications of these principles and propositions can lead to a mutual enrichment of both business and family.     

Catholic Social Teaching: A communitarian democratic capitalism for the new world order

Catholic Social Teaching has taken a remarkable turn with the May 1991 document on economic ethics,Centesimus Annus. During their one hundred year history, church documents were notable for their courageous championing of the rights of the least advantaged; they were much less distinguished for their understanding of how markets and incentives function in capitalism. Most business leaders admired church teaching for its compassion but had little respect for its competence. With this most recent document, however, there is a growing conviction that the church may have come of age in economic ethics. Even theWall Street Journal has celebratedCentesimus Annus. The article outlines the highlights of the document and its points of continuity with the tradition. Responses from business and the academy are also briefly considered.Oliver F. Williams is a member of the faculty and serves as Associate Provost of the University of Notre Dame. A Catholic priest, Father Williams has a doctorate and other degrees in theology and chemical engineering. He has published and lectured extensively in the field of business ethics.This article includes an updated version of some material previously published. For more elaboration on the history of Catholic social teaching, see articles by Williams, O. F. in Houck, J. W. and Williams, O. F. (eds.): 1984,Catholic Social Teaching and the U.S. Economy: Working Papers for a Bishops' Pastoral (University Press of America, Washington, DC) and in Williams, O. F. and Houck, J. (eds.): 1982,The Judeo-Christian Vision and the Modern Corporation (University of Notre Dame Press, Notre Dame, IN).     

“Just” Markets from the Perspective of Catholic Social Teaching

The “justice of markets” is intricately connected to the treatment of the poor and the disadvantaged in market economies. The increased interest of multinational corporations in low-income market segments affords, on one hand, the opportunity for a more inclusive capitalism, and on the other, the threat of greater exploitation of poor and disadvantaged consumers. This article traces the contributions of Catholic Social Teaching and its basic principles toward providing insight into what constitutes “justice” in such “marketing to the impoverished” situations.     

The Business Responsibility for Wealth Distribution in a Globalized Political-Economy: Merging Moral Economics and Catholic Social Teaching

If it is accepted that the real marketplace does not necessarily distribute wealth in the manner that the ideal market would have done, and that societal institutions have an obligation to bring the real and ideal market distributions into accord, then it can be argued that economic actors have a responsibility to consider the effects of their activities on the distribution of wealth in society. This paper asserts that businesses have a responsibility to consider the wealth distribution effects of their wealth-creating decisions. We use arguments from moral economics and Catholic social teaching to support this assertion, deriving decision principles that we apply to the Starbucks fair trade coffee case.     

The Ethics of Branding in the Age of Ubiquitous Media: Insights from Catholic Social Teaching

Extreme narcissistic organizations are unable to behave ethically because they lack a moral identity. While such organizations are not necessarily unethical intentionally, they become self-obsessed and use a sense of entitlement, self-aggrandizement, denial, and rationalizations to justify anything they do. Extreme narcissistic organizations might develop formal ethics programs, but such programs will have little effect on behavior.     

Marcus Aurelius, the Stoic Ethic, and Adam Smith

In The Theory of Moral Sentiments (TMS) Adam Smith draws on the Stoic idea of a Providence that uses everything for the good of the whole. The process is often painful, so the Stoic ethic insisted on conscious cooperation. Stoic ideas contributed to the rise of science and enjoyed wide popularity in Smith’s England. Smith was more influenced by the Stoicism of his professors than by the Epicureanism of Hume. In TMS, Marcus Aurelius’s “helmsman” becomes the “impartial spectator,” who judges actions in terms of the way they are seen by others. This is the key to justice, without which society collapses. Business school students should be taught that Smith’s “invisible hand” is best understood as a universal rationality that uses just actions for the benefit of the whole.     

Adam Smith and the Political Economy of a Modern Financial Crisis

Financial crises have occurred periodically for hundreds of years, and Adam Smith had important insights into their causes. Although by no means all that we know about such crises has been derived from Smith, it is interesting and important to reflect on what he did know and how ignoring his warnings about the creation of excess liquidity has contributed to the current crisis. In addition to the complexity of contemporary finance and the role of central banks and other regulatory institutions, a major difference between Smith's day and ours is the emergence of “moral hazard” as an important policy issue and its corollary, “immoral results.” It is important to realize that the risks of financial crisis, moral hazard, and immoral results cannot be avoided by financial and accounting gimmicks, and that there is no substitute for adequate capital in the creation of liquidity.     

Profit and More: Catholic Social Teaching and the Purpose of the Firm

The empirical findings in Collins and Porras' study of visionary companies, Built to Last, and the normative claims about the purpose of the business firm in Centesimus Annus are found to be complementary in understanding the purpose of the business firm. A summary of the methodology and findings of Built to Lastand a short overview of Catholic Social Teaching are provided. It is shown that Centesimus Annus' claim that the purpose of the firm is broader than just profit is consistent with Collins and Porras empirical finding that firms which set a broader objective tend to be more successful than those which pursue only the maximization of profits. It is noted however that a related finding in Collins and Porras, namely that the content of the firm's objective is not as important as internalizing some objective beyond just profit maximization, can lead to ethical myopia. Two examples are provided of this: the Walt Disney Company and Philip Morris. Centesimus Annus offers a way to expose such myopia, by providing guidance as to what the purpose of the firm is, and therefore as to what kinds of objectives are appropriate to the firm.     

God and the Market: Adam Smith’s Invisible Hand

The invisible hand image is at the centre of contemporary debates about capacities of markets, on which discussion of many other topics in business ethics rests. However, its meaning in Adam Smith’s writings remains obscure, particularly the religious associations that were obvious to early readers. He drew on Isaac Newton’s theories of divine action and providence, mediated through the moderate Calvinism of the eighteenth century Scottish circles in which he moved. I argue within the context of Smith’s general providential account of markets, the invisible hand operates restrain inequality and capital flight, thereby stabilizing the market system. Such an understanding of the invisible hand raises questions for contemporary religious and secular discussions of the capacities of markets in the wake of the global financial crisis.