VOLITIONAL PRAGMATISM AND THE PROBLEM OF
“BUSINESS ETHICS” IN CONTEMPORARY CAPITALISM
Daniel W. Bromley
Anderson-Bascom Professor of Applied Economics
University of Wisconsin-Madison
Abstract
The central problem of “business ethics” in contemporary capitalism arises because of a lack of
clarity concerning the nature of the firm in a market economy. I shall make several related
points here. First, all firms obtain their political and social legitimacy via an explicit (or implicit)
grant of consent (endorsement) from the political community. This means that firms arise—and
continue to exist—only with the imprimatur of the political community. From this it follows that
the social legitimacy of all firms is contingent. Second, this political consent implies that the
concept of “business ethics” cannot logically be distinguished or differentiated from the ethical
commitments of the larger political community from which the legitimating charter emanates.
Third, it therefore follows that the political community cannot expect a different level of “ethics”
from firms than it expects from other entities in the community—households, government
agencies, politicians, the courts, religious houses, charities, non-governmental organizations, etc.
Fourth, this means that the idea of “corporate responsibility” is problematic on two grounds: (1)
it presumes a different level of behavior (informed by different ethical commitments) for firms
(in this case “corporations”) than for others; and (2) it lets the larger political community off the
hook by passing the burden of formulating correct “ethical standards” from the officers of that
political community (elected officials, judges, bureaucrats) to the officers of firms whose very
existence is politically contingent. This then allows members of the political community to
demonize the business community when the mood strikes.
Volitional pragmatism suggests to us that ethical norms in a political community cannot be
differentially applied. Volitional pragmatism also suggests that plausible ethical commitments
cannot be “discovered” by reading the ancients (or the High Philosophers). Rather, volitional
pragmatism insists that coherent ethical standards must be worked out by the community of
moral agents to whom those standards will then become normative. When those ethical
standards are arrived at, the idea of “business ethics” (or “corporate responsibility”) becomes
superfluous.