20 Years of Enzioni

DISCUSSION FORUM

Amitai Etzioni—Twenty years of ‘The MoralDimension: Toward a New Economics’

This year, 2008, is the twentieth anniversary of the first appearance of Amitai

Etzioni’s The Moral Dimension: Towards a New Economics (New York: The Free

Press, 1988). The book was a major foundational text behind the inauguration

of SASE, the Society for the Advancement of Socio-Economics, from which

Socio-Economic Review originated. The editors have asked four scholars

working on the relationship between economy and society to assess the book’s

continuing importance. The Review Symposium concludes with a response

from Amitai Etzioni.

Keywords: socio-economics, economics, economic sociology, sociology, political

economy, moral norms

JEL classification: A12 relation of economics to other disciplines, A13 relation of

economics to social values, A14 sociology of economics

The road not taken: ‘The Moral Dimension’and the new economic sociology

Jens Beckert

Max Planck Institute for the Study of Societies, Cologne, Germany

Correspondence: [email protected]

The first time I read Amitai Etzioni’s The Moral Dimension (Etzioni, 1988) was as

a graduate student in New York. This must have been about two years after the

book was published. At this time I started to get interested in the relationship

between society and economy, and The Moral Dimension was a captivating

read for me. I had studied sociology and economics and was deeply interested

in the question of a sociologically informed alternative to the depiction of the

economy that I had been taught based on the neoclassical paradigm. I was pri-

marily familiar with the connections between the two fields that came from

# The Author 2007. Published by Oxford University Press and the Society for the Advancement of Socio-Economics.

All rights reserved. For Permissions, please email: [email protected]

Socio-Economic Review (2008) 6, 135–173 doi:10.1093/ser/mwm021Advance Access publication December 4, 2007

classical sociology, especially the works of Durkheim and Weber, and to some

extent from contemporary sociological theory. What I wasn’t aware of before

reading The Moral Dimension were the many dissenting voices within contempor-

ary economics upon which Amitai Etzioni based many of his arguments. I was

first introduced to the works of Amartya Sen, Harvey Leibenstein and Lester

Thurow when I read The Moral Dimension. By organizing these works around

core questions like the relationship between the individual and the community,

the concept of rationality, and a decision theory going beyond the economic

concept of individual utility maximization, the book not only gave me many

fresh insights but also helped me see the connection between these insights and

ways to apply them in the context of social theory.

Retrospectively it is evident that the late 1980s were a time when several roads

were being built that could potentially lead the way for a new sociological

approach to the economy. It was the time when crucial new developments in

the economy and in economics began to take shape. A period of profound

change in economic policies ensued. During the Reagan era, deregulation, the

privatization of large public industries, discussions about the retrenchment of

the welfare state, and the rise of the coordinated market economies in Japan

and Germany provided puzzles in social and economic development that were

calling for sociological investigation. Marxist approaches had exhausted them-

selves by then. In economics, approaches that attempted to bring some realism

back into the assumptions underlying model building gained influence, such as

information economics and the new institutionalism with their introduction of

information asymmetries and transaction costs. No one was talking about beha-

vioural economics yet, but the first experimental studies showing the role of

altruism and fairness in economic decision making had been published and

were cited in The Moral Dimension.

From the perspective of sociology, the development that later proved to be the

most influential was the emergence of the ‘new economic sociology’. In the 1980s,

works we now consider to be the classics of the new economic sociology, such as

Viviana Zelizer (1979), Mark Granovetter (1985), Harrison White (1981), Wayne

Baker (1984) and Richard Swedberg (1987), had already been published, but they

did not yet constitute a field of their own. The anthologies that became so

important for the constitution of the new economic sociology were not published

until the early 1990s (Zukin and DiMaggio, 1990; Granovetter and Swedberg,

1992; Swedberg, 1990; Smelser and Swedberg, 1994). Though the seeds for the

rapid expansion of economic sociology were planted at this time, it was not poss-

ible to foresee the powerful development that would take place in the 1990s.

Amitai Etzioni’s The Moral Dimension offered a platform that could have

formed the intellectual basis for the engagement of sociology with economics

and the economy. Yet it did not become that platform. Why it became the

136 Discussion forum

road not taken one can only speculate. One guess is that the book closely inter-

mingles two realms that today’s ‘professionalized’ sociology tries to separate as

much as possible: the analytical and the normative. The Moral Dimension is as

much about how people act in the economy as it is about how we should organize

the economy to create the conditions for what Etzioni calls the ‘I&We paradigm’.

A second guess is that the book, though undoubtedly deeply sociological, relies

heavily on dissenting voices within economics to develop its arguments. To

learn that so many insights for a sociological understanding of the economy

have been developed by heterodox economists is not an especially motivating

experience for sociologists. Even today discourse between heterodox economics

and economic sociology is thin despite many obvious overlaps.1 A third possible

reason that applies especially to American sociology is that The Moral Dimension

has a distinct Parsonian flair. The concern with the normative foundations of

society, arguably the core of the sociological enterprise, has been received criti-

cally in American sociology since the late 1960s. It is noteworthy that many of

the key contributors to the new economic sociology—among them Harrison

White, Mark Granovetter, Michael Useem and Paul DiMaggio—have been tea-

chers or students at the Harvard sociology department (Convert and Heilbron,

2007, p. 36), sometimes defining their approach in opposition to Talcott

Parsons (Beckert, 2006). The Moral Dimension might have been too close to

the tradition these sociologists tried to free themselves from.

The Moral Dimension was the road not taken by the new economic sociology.

However, 20 years after its publication, with economic sociology being a conso-

lidated field of American and, increasingly, of European sociology, one can ask

whether it has missed something by sidelining the concerns addressed in the

book. I would say it has, and I will use the remainder of this commentary to

spell out three aspects the new economic sociology could have learned—and

still can—from The Moral Dimension.

(1) The first point I want to mention is Etzioni’s deep engagement with ques-

tions of action theory. The main theme of The Moral Dimension is a critique of

the action theory of utility maximizing homini oeconomici that has defined econ-

omic modelling for over 100 years. This theory of action has even been radicalized

from its eighteenth century sources through the notions of opportunism and

‘interest seeking with guile’ introduced by the new institutional economics.

This action theory is intellectually simplistic. Nevertheless it is attractive to stu-

dents precisely because of its simplicity and to mathematically oriented research-

ers as a basis for modelling. But is the theory empirically relevant? Possibly the

most important contribution of The Moral Dimension is to show from a

1See for instance the works by Geoffrey Hodgson (1988, 2004) or the topics discussed in

post-Keynesian economics (Dequech, 2003, 2005).

Twenty years of ‘The Moral Dimension: Toward a New Economics’ 137

variety of different perspectives that decision making even in contemporary econ-

omic contexts cannot be understood on the basis of selfish utility maximization.

While this has been common knowledge in sociology at least since the writings of

Emile Durkheim, it nevertheless remains a powerful argument in the sociological

understanding of the economy. Etzioni develops this argument based on a discus-

sion of economic approaches, mostly from the 1980s, that assume that individ-

uals have more than one utility and that these multiple utilities comprise

conflicting forces (Etzioni, 1988, pp. 36ff). I am not sure whether distinctions

between preferences and meta-preferences are indeed very helpful conceptually,

but the main point is a compelling one: Actors act not just based on their

selfish interests, but take the norms and interests of the community to which

they belong into consideration when making decisions. With the development

of behavioural economics, this basic insight now also seems to be trickling

down to economics, though it does so as an impoverished version, concentrating

on the hard-wired mechanisms of neuroscience.

In the new economic sociology, there has never really been much discussion

about which action theory is actually appropriate for the analysis of the

economy, with some rare exceptions (Hirsch et al., 1990; Beckert, 2003). In his

influential programmatic statement on embeddedness, Mark Granovetter

(1985) does not embark on a discussion of action theory. The embeddedness

in social networks is to provide a structural explanation of economic outcomes,

but the relationship between social morphology and the enactment of structures

through agents is not seen as a problem. When Granovetter comes to discuss

rational choice theory, he takes an accommodating position: ‘[W]hile the

assumption of rational action must always be problematic, it is a good working

hypothesis that should not easily be abandoned’ (Granovetter, 1985, p. 506).

And indeed several network analysts combine the structural approach with a

rational choice theory of action (Burt, 1992).

I do not necessarily subscribe to the ‘I&We paradigm’ suggested by Amitai

Etzioni, since it might indeed focus too strongly on social norms to be able to

explain the integration of economic exchange in contemporary societies. But it

is clear that a sociological conceptualization of the economy must be based on

an action theory that is itself sociological. By this I mean a theory that explains

social action based not on individual predispositions but on culturally anchored

meanings, the intersubjective constitution of the actor and social macrostructures

such as norms, institutions and social networks.

(2) The second challenge entailed in The Moral Dimension that is not taken up

in the new economic sociology is seeing the economy as part of the larger social

system. Etzioni discusses the economy from the perspective of social theory. In nor-

mative terms he calls for the type of social organization of the economy

necessary to produce social outcomes that conform to the values of what he


called in the subtitle of a much later book the ‘good society’. The economy is seen as

a crucial part of contemporary society, but the normative standards by which its

performance is to be judged cannot be—at least not exclusively—the criteria of effi-

ciency. Instead the organization of the economy is judged by its contribution to

making the world a livable place by arranging the production of wealth in a way

that does not jeopardize the realization of the values of justice, freedom and fairness

in society. Etzioni’s discussion of ‘encapsulated competition’ (Etzioni, 1988,

pp. 199ff) addresses exactly this point: to be viable, the market mechanism of com-

petition must be ‘encapsulated’ by social bonds and government regulation.

The new economic sociology, by contrast, focuses on the economy in isolation

from other social realms and is much closer to the efficiency perspective of

economics. Research projects typically focus on the explanation of the operation

of a market or an industry, without seeing its embeddedness in society writ

large. This holds true when network analysis is used to investigate the social

preconditions of the operation of any given market or organization. Cultural

and institutional approaches in economic sociology do a much better job

of defining the non-economic preconditions necessary for the functioning of

markets. A prime example is Viviana Zelizer’s (1979) study on the emergence

of the life insurance industry in nineteenth century America, which shows the

cultural transformations necessary for this market to come into existence.

However, the new economic sociology hardly pays any attention to the social

effects produced by the organization of the economy. Traditional sociological

concerns of social inequality, alienation or exclusion have yet to find a prominent

place in the research program. In its disregard for criteria other than efficiency (or

survival) it even shares a joint perspective with economics, only in a more limited

way. The normative perspective of economic theory emerges from the claim of an

indissoluble connection between individual wealth maximization on the one

hand and a harmonious social order on the other. Economic sociologists for

the most part would not share this claim, but they do not offer an alternative

normative perspective either. I maintain that they can afford to do so only by

shielding themselves from questions about the social effects of the observed

organization of the economy. Once the effects of markets come into focus, the

economy is analysed within its societal contexts and a profoundly different

perspective emerges because the centre of attention is no longer only the func-

tioning of the economy as such, but also its role within society. It might not be

hopelessly outdated to suggest that the task of sociology as a discipline is to

understand societies at large and not just the operation of their functionally

differentiated parts—though the careful analysis of the parts is the precondition

for any enlightening social theory. It is only recently that these concerns have been

expressed more directly in the new economic sociology (Fourcade and Healy,

2007; Zelizer, 2007). While The Moral Dimension might intermingle analytical


and normative concerns too closely, one can learn from it that the two

dimensions cannot be completely separated either.

(3) A third learning opportunity for the new economic sociology provided by

The Moral Dimension relates to the concept of performativity, which has received

significant attention in recent scholarship (Callon, 1998; MacKenzie et al., 2007).

The assertion is, in a nutshell, that the function of economic theory is not so

much to describe economic reality but rather to inform economic actors how

they should act. The more actors in the economy make use of the templates pro-

vided by economic theory, the more likely it is that subsequent economic pro-

cesses will indeed conform to the descriptions in economic theory. Empirical

studies from commodities markets (Garcia-Parpet, 2007) and from financial

markets (MacKenzie and Millo, 2003) provide detailed analyses of such processes.

On a more abstract level the argument is that it is economic theory that makes the

coordination of economic processes possible.

This claim presupposes that an economy can indeed operate the way neoclassi-

cal theory tells us it can. Amitai Etzioni (and many others before him) warns us

about this by claiming that economic action in the form propagated by economic

theory potentially undermines the social preconditions necessary for the function-

ing of the economy. As Etzioni writes: ‘[C]ompetition is not self-sustaining; its very

existence, as well as the scope of transactions organized by it, is dependent to a sig-

nificant extent upon contextual factors [. . .] within which it takes place’ (Etzioni,

1988, p. 199). In his congenial tableau of intellectual positions regarding the social

effects of capitalism, Albert Hirschman (1986, p. 109) has called this position the

self-destruction thesis. Capitalism would undermine its own basis if it did not

reproduce the social and moral preconditions on which it rests. One chief reason

for this process, according to observers of capitalism, is the destruction of religious

values leading to increasingly hedonistic and selfish action orientations.

These two perspectives—the performativity thesis and the self-destruction

thesis—do not necessarily contradict each other in an empirical sense, but they

do constitute a paradox worth exploring: While economic theory provides a

focal point in economic practice for coordination games, this focal point is at

the same time inherently unstable because it does not consider the non-economic

preconditions of economic exchange.

Amitai Etzioni’s The Moral Dimension is the road not taken by the new econ-

omic sociology. Twenty years after the book’s publication, with the new economic

sociology having developed into a consolidated approach, it is worthwhile con-

templating whether to set out on this journey again. Opening up interesting,

unexpected vistas, a new road can take us beyond the insights gained by economic

sociology thus far. As Robert Frost wrote: To take the road ‘less traveled by [. . .]

has made all the difference’.


References

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‘The Moral Dimension’ and its meaning foreconomic ethics

Bettina Hollstein

Max Weber Center for Advanced Cultural and Social Studies, University of Erfurt, Erfurt, Germany


1. Preliminary remarks

When Etzioni published his book The Moral Dimension: Towards a New Econ-

omics (Etzioni, 1988) 20 years ago, he was already considered—mostly because

of his book The Active Society: A Theory of Societal and Political Processes

(Etzioni, 1968)—one of the most important sociologists in the USA. In this

book from 1968, he had developed a very ambitious alternative to the dominant

approach in social theory, that of Talcott Parsons. Etzioni took up some elements

from Talcott Parsons and connected them with elements from systems theory and

cybernetics as well as phenomenological and interactionist ideas and ideas


developed in conflict theory (Joas and Knobl, 2004, p. 681). In addition to these

theoretical works, Etzioni published a great number of empirical studies, mostly

in the field of organizational sociology, and was the leading scientific policy

advisor in the White House under President Carter. He is one of the most fre-

quently cited authors in sociology (Coughlin, 1996, p. 15), and founder of a

research centre (Center for Polity Research at Columbia University), a scientific

organization (Society for the Advancement of Socio-Economics—SASE) and a

new social movement (the Communitarian Network; Sciulli, 1996, p. 3).

In light of his many activities and the broadness of debate concerning Etzioni’s

work, it could seem questionable that—20 years later—there is anything new to

be said about this book, which was widely received, although primarily in the

social sciences. One way to discover new aspects of this book or to see old findings

in a new light is to take a decisively interdisciplinary perspective and to consider it

from a deliberately different—not sociological—point of view. My perspective

here is shaped by economic ethics1 and the attempt to combine sociological,

economic and ethical insights. In this article, I attempt to highlight the

meaning of The Moral Dimension for economic and business ethics on the one

hand and to develop new perspectives on Etzioni’s contribution on the other.

2. Points of contact for economic ethics

The English title of Etzioni’s work already insinuates a possible affinity with the

economic ethics debates. Actually, however, no traces of Etzioni’s work can be

found in the most influential writings in this area. The reason for this might

have been that in the USA, this debate is more or less concentrated on business

ethics. The US business ethics movement is primarily concentrated on practical

question of everyday business life (Grabner-Krauter, 2005, p. 166). Relevance

according to the orientation on concrete business problems and applicability

were essential elements of US business ethics (Galtung, 1985); in this regard, it is

not surprising that an integration into higher ranking economic or sociological

macro theories is generally lacking in these business ethics approaches.

In the European context, however, where beyond business ethics economic

ethics also exists—internally differentiated in various more or less institutiona-

lized approaches—different philosophical traditions were used to fertilize these

debates. Generally, these approaches have affinities to political philosophies in

the realm of liberalism, i.e. to authors such as Rawls or Habermas. Etzioni’s

theory, however, has affinities with the critique of Rawlsian liberalism, which

had its starting point with Sandel’s book Liberalism and the Limits of Justice

1This point of view is particularly influenced by the European debates on economic ethics, which have

a more theoretical character.


(Sandel, 1982). This critique stresses the aspect of community for political, social

and economic action and differentiates several dimensions of the concept of

community. It led to communitarianism, a philosophical tradition that was dis-

cussed in a controversial manner during the debate on liberalism versus commu-

nitarianism but was not taken up in economic and business ethics.2

On the level of political theory, mutual learning processes of liberals and

communitarians have taken place. Liberal philosophers have reacted to critiques

by communitarians and Etzioni, who is clearly not an anti-liberal thinker, labels

himself a ‘communitarian liberal’ (Reese-Schafer, 2001). It is not necessary to reiter-

ate this philosophical and sociological debate here; but the differences of Etzioni’s

position against liberal theories have consequences for the economic and business

ethics approaches grounded on these theories. So, the possibilities for connecting

economic and business ethics to the socio-economics of Etzioni on a solid theoretical

ground are to be demonstrated, as well as the fruitfulness of such an enterprise.

2.1 The relation of interests and morality

With The Moral Dimension, Etzioni laid down the theoretical bases for socio-

economics, which can be characterized as a heterodox economic3 theory with

an affinity to the philosophy of communitarianism (Biesecker and Kesting,

2003). Etzioni constructs socio-economics on the bases of what he calls the

‘I&We paradigm’—thus his concise formulation (Etzioni, 1988)—that is

grounded in a moderately deontological ethic.4 The ‘I’ of the ‘I&We paradigm’

has not so much to do with an isolated individual, but rather is related to the

‘I and thou’ of Buber (Buber, 1937), who was one of Etzioni’s teachers. Instead

of assuming the maximization of individual utility as the only goal of human

beings, as is done by neoclassical economists in their main presumptions,

Etzioni makes the assumption that people make moral judgements and use

these to evaluate their goals and interests. So, besides the desire to realize their

goals and interests, people have the need to live in accordance with their moral

values. The ‘moral dimension’ is thus not only a dimension that affects action

in a ‘moral system’ which is completely separated from the economic one, but

2For a summary, see Joas and Knobl (2004).

3Characteristics of heterodox economic theories are the openness to cultural and normative aspects

of economy and the contestation of models of homo oeconomicus as the only possible approach to

explaining human behaviour and action. For a more precise characterization and some examples,

see Hollstein (2007).

4The moderately deontological approach finds its expression in the assumption that the subjects of

action feel obliged by values and principles, but while responding to these obligations, they

consider the outcomes of their actions as well. They are no pure adepts of an ethic of conviction.


directly affects economic action. To that extent, the systems theory and its proper

separation of differentiated systems is contested. Even the ‘I’, according to this

paradigm, is no pure homo oeconomicus, but rather it is affected by society. ‘A

society that considers itself to be only the sum of isolated individuals following

their own interests, undermines in this [socio-economic] view its own bases’

(Biesecker and Kesting, 2003, p. 152). In contrast to neoclassical theory, the socio-

economic paradigm sees value-based commitments not as mere restrictions of

individual freedom of action, but as legitimate and integral parts of everyone’s

existence. ‘Individuals and community are both completely essential, and

hence have the same fundamental standing’ (Etzioni, 1988, p. 9).

To underpin his paradigm, Etzioni first deconstructs various existing utility-

based economic theories. As other authors5 before him, but in an outstandingly

clear manner and with the incentive to counter new developments attempting to

install economic utility concepts as a general paradigm of rational choice in the

social sciences,6 he points out (1988, p. 31):

All concepts of utility are defective because they do not offer an expla-

nation of the sources of preferences and the factors that cause them to

change, nor do they explain how consumers allocate their income

among alternative goods to begin with.

For economic ethics, Etzioni’s paradigm offers the advantage that the rational

interest-related elements are explicitly presented as equal to moral and emotional

aspects, which avoids the fruitless debate as to whether economic aspects have to

be subordinated to moral ones or the other way round.

2.2 The role of community

By taking into consideration the values of the acting individuals, the communities

in which individuals live become visible. In fact, the genesis of values is related to

experiences in social communities and to a social and cultural context, in which

the economic sphere is embedded (Polanyi, 1978 [1944]). Stressing the ‘embedd-

edness’7—the integration of the economy in social and cultural contexts8—is an

aspect Etzioni shares with a lot of other social scientists and other heterodox

traditions in economic theory. Critiques of the economic paradigm by the

5For a general view, see Sen (1977).

6This position is prominently represented by Becker (1993).

7Etzioni does not refer to ‘embeddedness’, but to ‘encapsulation’ and relates this term especially to the

social framing of economic competition, which can be realized by social bonds or laws (Etzioni, 1988,

pp. 199ff).

8We should not forget that especially Western culture is itself strongly affected by economic thinking.


social sciences often claim to analyse economics in the context of society and to

conceptualize the economy as an embedded one. In this context, a new theoretical

discussion in the area of economic sociology has evolved, mainly initiated by

Swedberg and Granovetter (1992, p. 7).

In the context of economic ethics, the concept of an ‘embedded’ economy has

been interpreted in two different ways. On the one hand, it has been conceptual-

ized as the necessity of setting an external juridical and institutional framework of

action, within which the economy can evolve according to its own logic. For

example, Homann9 represents this conception. Consequently, the systematic

place for economic ethics in this view is the framework of action. Economic

ethics is the discipline which deals with the question ‘which norms and ideals

can/should be valuated under conditions of modern economy and society’

(Homann, 1992, pp. 7f). On the other hand, ‘embeddedness’ can be understood

as the fact that each economic action is interwoven in its context and that a sep-

aration of action and framework of action is only possible on an analytical level,

so that even on a theoretical level, embeddedness or ‘interwovenness’ of action

has to be taken into account.10 Etzioni’s view is closer to the second version.

To analyse the economy as embedded in this last interpretation also includes

the reflection in an economic–ethical and political–philosophical way of the

theoretical assumptions which are the foundations of economy, as well as the

analysis of the institutional framing conditions. This approach is also shared

by Ulrich, the main representative of ‘integrative economic ethics’, which is

another very important ‘school’ of economic ethics (Ulrich, 2004, p. 56).

The assumption that in addition to rationality, social contexts and normative

values are pertinent even for economic contexts is widespread in sociology and in

some economic traditions. But the ways to conceptualize this embeddedness and

the concrete relations between both elements are quite different. This can even

include attempts of synthesis of economics and social sciences. Weber, for

example, stressed the importance of values (‘Wertideen’) which are necessarily

connected to the perception of reality and explained that this point of reference

is necessary if economic science intends to be a cultural science (Weber, 1973

[1922], pp. 161ff, 176). The endeavour to consider aspects of economics and

social sciences and to give to both factors an important and necessary function

is not a singularity of Etzioni, but rather a step in a long range of very different

attempts in this respect in sociologic theory, as, for example, Weber’s approach.

9Karl Homann is one of the most important representatives of an economic theory of ethics, which

can be considered as one of the predominant ‘schools’ in economic ethics. For a short overview on

Homann’s approach with more references, see Hollstein (1995).

10For a differentiated analysis of several forms of being embedded in contexts and meanings, see

FUGO (2004).


In economics, however, these attempts were not noticed, in spite of the fact that

Etzioni’s approach is particularly promising for economic theory.

The assumption of ‘embeddedness’ is of crucial importance for economic

ethics, which tends to argue in a macro-theoretical way and is stressed—in differ-

ent ways—by most of the economic ethics approaches. On this basis, concrete

claims can be formulated concerning the responsibility of corporations for the

contexts affected by their activity. These themes are articulated in the Corporate

Social Responsibility (CSR) debate and in the stakeholder approach,11 which are

important fields of discussion in business ethics.

One problematic question, when stressing the genesis of values in real commu-

nities, is how universalistic value consensus can be generated from particular

values and norms of communities. How can universalism rise, or how can a gen-

erally accepted and valued morality be generated? Consideration of articulation

and narrativity seem to be of crucial importance in this field (Taylor, 1994,

pp. 94ff), along with the implicit consequences for (economic) ethical discourse.

I cannot discuss this topic in detail here.

2.3 Moral acts

From an economic ethics perspective, the socio-economic approach is very inter-

esting because it contests the assumption of given preferences of neo-economic

theory and investigates the formation of preferences. The main source of evalu-

ations, that is, the source of the formation of preferences, according to Etzioni—

besides pleasure—is morality. Crucial in this context are ‘moral acts’. Etzioni dis-

tinguishes four criteria that define moral acts (Etzioni, 1988, pp. 41ff): ‘moral acts

reflect an imperative, a generalization, and symmetry when applied to others, and

are motivated intrinsically. (Each criterion is necessary by itself but not sufficient;

in conjunction that may serve to define a moral act.)’ Imperative (a) means that

people feel obliged to act in a specific way, but not due to external coercion.

Generalization (b) is related to a sort of universalism in the sense of Kant. The

claim for symmetry (c) could be interpreted as a special case of criterion

(b). Etzioni tends to exclude by this criterion racist ideologies or ‘moral’

systems. On the other hand, we could interpret it as a hint concerning reciprocity

approaches, which are possible to integrate in Etzioni’s world, but are never

discussed in a consistent manner by him. This point, which could lead to fruitful

new insights, will be discussed later (see Section 3.1). Also, the question

concerning intrinsic motivation (d) which is grounded in personality and

based on personal experiences provides an occasion for further inquiry which

will be discussed in what follows (see Section 3.2).

11Etzioni himself discussed the Stakeholder Theory in a communitarian perspective (Etzioni, 1999,

pp. 27–42).


The four criteria of moral acts are well suited to relate to them some new ideas

for economic ethics in light of socio-economics. The first criterion (imperative

quality) of moral acts concerns two main aspects:

(a) The autonomy of the liberal subject is challenged when values that bind

people cannot be entirely referred to a deliberative act. Community-building

processes and experiences of self-transcendence have an impact on the

genesis of values (Joas, 1999). A commitment to values is not comparable

with free choice. Here, we can find parallels with Nussbaum’s (2003) critique

concerning the autonomous subject and findings in economic ethics by

Sen (1987). Etzioni himself has a more sophisticated view which has been

too often simplified in the literature. An orientation along the idea of ‘the

good’ and the capabilities of subjects is a perspective that might initiate inter-

esting research in economic ethics, which is mainly dominated by discourses

on justice—as can be seen with regard to Sen’s works.

(b) Beyond this, the ‘imperative quality’ challenges the assumption that the

acting individual is mainly determined by external constraints or

incentives. It is crucial for economic ethics to challenge this assumption as

demonstrated by the example of moral consumption as developed by

Priddat (2000, pp. 128–151). One example for moral consumption is

I prefer carpets from Nepal to those from Persia, but only if they are

produced without child labor. Moral consumption is defined as the

renunciation to what somebody prefers, because he does not want to be

guilty in a moral sense regarding circumstances during the production of

the preferred good that are not compatible with human rights, ecological

issues or other moral aspects (Priddat, 2000, p. 129). It is not the good

‘carpet’ that is immoral, but the justification of the other actions of the

producer.

Moral consumption has two economic effects (beside the satisfaction of

living according one’s own values): first, it can lead to a significant reduction

of demand, as was the case for Shell during the Brent Spar Affair; second, it

demonstrates—independent of its effect on demand—to one’s fellow man

that someone is a moral human being. A gaining of reputation through

moral gesture is achieved (Priddat, 2000, p. 131). Because moral consump-

tion is dependent on mediality, it is reasonable in economic terms to do

moral consumption only when it is socially communicated, because other

moral consumption lacks the ‘boycott competence’12 which can only be

12‘Boycott competence’ means that moral consumption leads to a perceivable reduction of demand

and generates consequences for the corporation’s policy. Without a reduction of demand, moral

consumption remains unknown and without effect.


achieved by attaining certain thresholds (Priddat, 2000, pp. 132f). In

these cases, individual values are not decisive, but rather values which

are common to a greater group relevant for the market and which are com-

municated in this group. The preferences for moral consumption are, in this

perspective, already challenged on the economic level and dependent on

social communication processes. And these communication processes

cannot be referred to as external constraints on individuals. Beyond that,

we hold for certain that these communication processes are in a close recipro-

cal relationship to value convictions on a deeper level because moral

consumption is an act of articulation of strong valuations and helps to

make them evident.

The second criteria concerning universalism is crucial for a lot of our everyday

actions and is integrated into ‘everyday ethics’ for most of us. The golden

rule13 is a prominent example for this. It addresses an individual person who is

confronted with another person who can try to understand him by desisting

from his own subjective experiences. Human behaviour is then analysed and eval-

uated through the eyes of both concerned partners of interaction. The golden rule

is hence a maxim that is useful for seeing human behaviour between actors in a

more objective way, for those cases when individuals are confronted with other

identifiable individuals. But the golden rule finds its limitations in the economic

context. The social subsystem called the economy is regulated by the code

‘money’. In the economy, signals given by prices govern actions like buying or

selling. In this frame of logic, ethics cannot be effective. Fundamental problems

in communication occur and lead to the practical fact that corporations that

act in a moral way within the economic system are punished by the market.

Finally, acting as a moral individual along the premises of the golden rule

would probably lead to the elimination of all ethically acting corporations in

the market. Individual ethics, for example as articulated in ‘the golden rule’

encounter limitations when the individual is not facing another identifiable

partner, but a complex, interdependent and global system. Problems in the

sector of environmental politics illustrate this aspect very well.14 For this

reason, social ethics approaches are necessary, and in this respect, a macro-

theoretical approach is required in addition to the micro-theoretical one that is

predominant in business ethics. In this perspective, this second criterion high-

lights the necessity for a more complex and macro-theoretical founding of

economic and business ethics.

13‘All those things, then, which you would have men do to you, even so do you to them’ (Matthew

7:12).

14For more details, see Hollstein (2001).


3. Possibilities for further development of the socio-economic

approach

By looking at the two further criteria for moral acts mentioned below, I see

possibilities for developing Etzioni’s work in a perspective of economic ethics

and for resolving in a fruitful way some of the existing ambiguities in his

approach.

3.1 Symmetry and reciprocity

I want to interpret Etzioni’s claim for symmetry as a dimension of reciprocity in a

theory of action.15 Etzioni offers advice in several places to expand his paradigm

to a dimension of reciprocity but does not actually take this step. Referring to

Henaff (2002), not only can we differentiate between actions oriented towards

utility or actions oriented towards values, but we have to, in addition to these

two dimensions, take into account actions oriented towards reciprocity, and

this dimension cannot be reduced to one of the other ones.

Out of Henaff ’s description of the phenomenon of the gift, I want to retain the

following systematic elements for a theory of reciprocity 16:

(1) The phenomenon of the gift is neither an economic act, as an exchange of

goods or a preliminary stage to it, nor is it a moral act as the self-forgetful

caritas present, but can only be understood within a theory of reciprocity sub-

stantiating relationships of recognition.

(2) Phenomena which are generated by relationships of recognition in a reci-

procal way are very diverse concerning their historical specificity and

depend on the cultural context in which they occur. In modern societies,

reciprocal relationships of recognition are mostly generated in the private

sphere and in local small units—an aspect that is emphasized by

communitarians.

(3) These relationships of recognition also lead to ethical requests, namely the

request for reciprocity including freedom. The gift illustrates challenge

and appeal for the encounter of autonomous beings that show by the

exchange of gifts that they are willing to recognize each other and to

commit to one another without abandoning their individual freedom. I

think that this aspect can be related to the claim for symmetry that

Etzioni postulates.

15Etzioni offers some links in this direction, for example, concerning the role of the gift for social

relations (contextual gift-giving/gifts often serve to reaffirm relationships; Etzioni, 1988, p. 75) or

regarding illegitimate material for exchange (Etzioni, 1988, p. 81).

16For more details, see Hollstein (2006).


(4) Although money is a universal substitute and an inevitable means allowing

for processes of individualization and autonomization of free subjects

through fair exchanges, the exchanging of gifts provides relations of recog-

nition that are necessary for the genesis of social bonds.

To enlarge the socio-economic paradigm with a theory of reciprocity would also

lead to the possible objection of a too pronounced dichotomy of utility versus

morality and emotions17 and clarify how the all-important community is held

together by social bonds.

3.2 Personality and intrinsic motivation

The personality of the subjects expresses itself in N/A factors18 [including strong

valuations (Taylor, 1994) that determine characters and intrinsic motivations].

Etzioni always analyses in these factors values and emotions as crucial

elements for individual action. But the relation between values and emotions

is not very clear. Here, the concepts of Joas could be helpful. Joas is—as a

neo-pragmatist—close to communitarian thinking and has analysed the role of

emotions for the genesis of values in reference to the work of George Herbert

Mead (Joas, 1999). Emotions interfere with not only rational action—a fact

that Etzioni shows with a large amount of empirical evidence—but also moral

action. At this point, the danger of a dualistic picture is imminent, showing

the individualistic impulses and desires on the one hand and the moral values

on the other—in contradiction to Etzioni’s programmatic aim to overcome

such dualisms.

Finally, the last criterion of moral acts, the intrinsic motivation of the person,

also refers to the dimension of meaning in human life. Barkhaus and I have devel-

oped some ideas concerning this issue, concentrating on the role of meaningful

activities which are personally fulfilling and socially recognized (but not necess-

arily paid; Barkhaus and Hollstein, 2003, pp. 287–306). From these, we have

found arguments for an activating and sustainable welfare state. Other appli-

cations in economic ethics as well as in economic politics could be developed

by following this path.

As a result of these reflections, we maintain that Etzioni’s book offers, even

20 years after its first edition, a wide range of impulses for the economic ethics

debate which are far from being exhausted. They could serve to overcome

some fixed debates in economic ethics and provide a helpful macro-economic

framework for business ethics. At the same time, it seems worthwhile

17See also Section 3.2.

18Normative–affective factors (Etzioni, 1988, pp. 93ff).


to extend (Etzioni’s) socio-economic paradigm with an economic ethics

perspective—especially with regard to reciprocity, recognition, emotions and

motivation—and in this way to enhance this approach in its theoretical and

practical respects.

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‘The Moral Dimension’ and ‘The Action Frameof Reference’: lessons for sociologists

Edward W. Lehman

Department of Sociology, New York University, New York, NY, USA


Comparison of The Moral Dimension with the ‘action frame of reference’ displays

how Parsons’ approach to social action and social order have influenced Etzioni’s

work. Nevertheless Etzioni significantly advances the sociological understanding

of both issues. His approach to action provides a more sombre view of the rational

capacity of humans but also adds a ‘deontological’ aspect to action’s normative

component, thus opening the way for observers and participants to transcend

moral relativism. Etzioni’s approach to order clarifies how a ‘social capsule’

regulates self-interested competition and conflict, introduces the key role of

‘macro-actors’ and highlights the inevitable and complex interplay of normative

and coercive factors in fostering order.

1. Introduction

‘Why do we need The Moral Dimension’, a skeptical sociologist colleague

remarked right after its publication. ‘After all’, he continued, ‘isn’t Etzioni just

repeating in different terminology what Parsons said back in 1937 in The Struc-

ture of Social Action?’. Although I quickly filed these words away as an expression

of theoretical naıvete, they puzzled me over the next two decades. Why? It is

incontestable that The Moral Dimension offers economists a starkly alternative

vision of their discipline’s key issues. But, I repeatedly asked myself, does it

contain any new, core lessons for sociologists? (I am thinking here of sociologists

generally and not just those who call themselves economic sociologists, political

economists or socio-economists.) This paper is my opportunity to put this puzzle

to rest.

To answer the question, one must compare Amitai Etzioni’s 1988 book with

Talcott Parsons’s The Structure of Social Action ([1937] 1968)—and, to a lesser

degree, contrast the trajectories of each scholar. I first examine their similarities

since I know (from conversations over the years) that Etzioni has great respect

for Parsons’s contributions and hence no one should be surprised that The

Moral Dimension displays Parsonsian influences. Acknowledging the similarities,

however, is essential for isolating the differences. It is only by finding these


divergences that The Moral Dimension’s pivotal contributions to the resolution of

fundamental sociological issues become manifest.

2. Similarities

The two books’ central similarity is a common agenda: to preserve what is best in

the Utilitarian tradition. This claim may appear counter-intuitive to readers who

view Parsons and Etzioni as ‘notorious’ critics of the excesses of instrumental

rationality and individualism. Yet the aim of The Structure, as Jeffrey

C. Alexander (1983, pp. 8–45, 1987, pp. 22–35) reminds us, was to buttress Uti-

litarianism’s defense of reason and freedom in the face of totalitarian assaults on

democracy in the 1930s and not just to jettison the tradition’s unsatisfactory

rationalistic and individualistic presuppositions. Etzioni’s agenda was more con-

crete than Parsons’s metatheoretical exercise but was basically the same. He is

advancing an empirically sound economic theory. The Moral Dimension attempts

to save (not eliminate) what is valuable in neoclassical economics (Utilitarian-

ism’s most viable social-scientific progeny) by synthesizing it with a ‘deontologi-

cal paradigm’ to forge a more theoretically multidimensional and empirically

open socio-economics. Both authors augment Utilitarianism’s contributions to

the Western cultural legacy—although Parsons’s focus was on the metatheoretical

grounding for all the social sciences while The Moral Dimension concentrates on

building a more robust social science of economic life.

Etzioni’s socio-economics implicitly embraces The Structure’s most essential

metatheoretical contribution: the action frame of reference (see Parsons [1937]

1968, especially pp. 727–775). This formula posits that ‘social action’ is the fun-

damental building block of all social-science analysis. It consists of an individual

capable of making choices (the actor) embedded in a material social situation

(made up of enabling means and constraining conditions) pursuing goals (or ‘uti-

lities’ in economic terminology, i.e., desired future states of affairs) with all of the

former marinated by a set of norms (subjective definitions of appropriate

conduct). Parsons wanted to synthesize two competing views: the largely

Anglo-American rationalistic tradition of Utilitarianism which valorizes a proto-

scientific actor struggling to carve means out of conditions but which left goals

unaccounted for; and the mainly Continental idealistic approach (whose exem-

plars remain Max Weber and Emile Durkheim) which focuses on symbolic

actors pursuing normatively inspired goals, an approach that coped unsatisfacto-

rily with the world of means and conditions.

The action frame of reference asserts that social action is simultaneously

rational and material, on the one hand, and non-rational and ideal (normative)

on the other. And it tells us that since norms permeate all social situations they

shape not just actors’ selection of goals but also how these will be pursued,


i.e., which conditions actors will attempt to convert into means. Moreover,

Parsons’ classic suggested that this formula grapples with the two fundamental

questions of social-science analysis: not only social action but also the problem

of social order. Alexander (1987, pp. 1–21) calls the two ‘presuppositional’ in

the sense that they ‘refer to the general assumptions’ that analysts inevitably

must make (either consciously or not) as they encounter social reality (1987,

p. 10). He credits Parsons with helping to clarify why each is basic to

social-science inquiry (although contending that Parsons often conflated the

two). The problem of social action asks about the interplay between rationality

and non-rational factors in framing the building block for social science analysis.

The problem of social order asks how best to conceive of the multiple acts by

multiple actors to leave open a potential for coordination, cooperation and

predictability.

That the action frame of reference was Parsons’s solution to the problem of

action seems obvious since it posits that both rational and normative com-

ponents are constitutive elements of this basic unit. But why is social order

equally decisive? Parsons’s answer focused on the failure of Utilitarianism’s

rational individualistic bent to include a collectivistic feature. In the spirit of Dur-

kheim, Parsons contended that seemingly self-interested negotiations among

apparently free-standing individuals are actually encased in a preexisting social

context whose core feature is moral. Order is made possible, he believed, only

to the degree that a collectivity (e.g., society) is also a moral community. This

normative character of collective social order, he concluded, was synonymous

with the norms within the action frame of reference.

Etzioni’s socio-economics builds on the problems of action and order as the

decisive assumptions of social science. In broad outline he accepts Parsons’s pre-

suppositional solutions to each. Starting in his earliest works, and most clearly in

The Moral Dimension, he assumes that (1) rational social action is always inter-

twined with non-rational elements (composed of normative and affective

factors) and (2) social order cannot arise from only individual self-interest but

that a pre-existing ‘social capsule’ (of which the normative is one key element)

is essential. The two presuppositional questions shape The Moral Dimension’s

organization. Parts I (‘Beyond Pleasure: the Case for Deontological Social

Actions’) and II (‘Beyond Rationalism: the Role of Values and Emotions’)

detail Etzioni’s theory of action, with a focus on economic actions. Part III

(‘Beyond Radical Individualism: the Role of Community and Power’) elaborates

his perspective on the collective aspects of social order. In these specifications of

action and order Etzioni’s departures from Parsons are spotlighted, and one is

able to recognize his unique contributions towards an understanding of the pre-

suppositional groundings of contemporary sociology.


3. Differences

Since the two questions are decisive for both authors, they provide a handy way

for organizing my discussion of how Etzioni has separated himself from Parsons.

Let me emphasize at the outset, however, that one advancement Etzioni has made

is avoiding the trap of conflating the two presuppositional subjects. Alexander

(1982, p. 119) notes (as I mentioned above) that Parsons did that insofar as he

‘often argues that to describe collective order is, at the same time, to describe

normative action’. Etzioni’s ability to keep the two fundamentals distinct was

discernible 47 years ago in A Comparative Analysis of Complex Organizations

(Etzioni [1961] 1975). There he unequivocally separates organizational partici-

pants’ actions from the compliance structures—normative, utilitarian, and

coercive—in which the actions occur. Moreover, in his isolation of these three

pivotal forms of compliance Etzioni signals that he is moving beyond Parsons’

approach to social order.

3.1 Etzioni’s theory of social action

Although the two theorists share the goal of salvaging Utilitarianism’s key contri-

butions, they differ in how they accomplish this. Parsons, from The Structure

through The System of Modern Societies (1971) never doubted the centrality of

rational action in the trajectory of history. The principal addition of the action

frame of reference was insisting, as had Weber, that rationality is always mari-

nated by normative forces and that some among the latter (e. g., the Protestant

Ethic) have been more conducive for the expansion of reason than others.

Neither Parsons nor Weber was unaware of the ‘costs’ of this process of rational-

ization but they did not doubt its inexorability.

Etzioni, on the other hand, has become increasingly skeptical about the pre-

determined primacy of rationality in social action and society generally, even

in the economic realm. In The Active Society (Etzioni, 1968) he had focused on

knowledge and values as the two key cultural dimensions of societal agency but

extensively analysed only the positive endowments of the former (see Lehman,

2006). Twenty years later, in The Moral Dimension, the situation had changed.

Rational (L/E or logical–empirical) factors in action now are seen as typically

swamped by N/A (normative–affective) ingredients. Economic action (and

social action generally) is at best normally ‘sub-rational’ and is more likely to

be ‘non-rational’ (1988, pp. 89–180) because processed knowledge plays a

limited role in choices and many decisions.

Of course, Etzioni has not collapsed into a postmodernist funk, but the shift in

mood between the two books is discernible. (Perhaps it partly reflects a reaction

to the dashed expectations of the 1960s.) He still emphasizes the vital importance


of societal knowledge and explores tools—particularly macrosociological ones—

for sharpening it. But he argues that we must ‘move beyond rationalism, to take

into account the positive roles of values and emotions in decision-making’ (1988,

p. 89). Although emotional factors are hardly left unanalysed in The Moral

Dimension, values are of greater concern (and hence provide the book’s title).

The existence of values demonstrates that humans are more than pleasure-

seeking animals; we create and apply moral meanings as well. Values thus

shape the two irreducible goals or ‘utilities’ of human economic and social life:

the pursuit of self-interested pleasure and trying to abide by one’s moral commit-

ments. And values shape the means by which humans pursue pleasure and affirm

meanings.

If some values play a more positive role in making actions rational (whether

for pleasure or the affirmation of meaning) how can social scientists recognize

them? Since values are ‘subjective’, isn’t moral relativism inevitable? Parsons

settled, as had Weber, on the solution that goals were non-rational since they

were shaped by moral forces not susceptible to scientific assessment. He saw an

unbreachable barrier between the world of ‘facts’ (however socially constructed

they are) and observers’ value judgments as well as between empirical and nor-

mative theories. Etzioni has never been comfortable with this separation and as

early as in The Active Society he offered analysts a logical–empirical basis for

judging the ‘authenticity’ of values and goals. There he gave special attention

to a theory of ‘basic human needs’ as a vehicle for bridging the facts–value jud-

gement chasm (1968, pp. 618–666).

By 1988 Etzioni recognizes that any reconciliation of observed facts about

human conduct and an observer’s value judgements must spring from a theory

of social action that moves beyond Parsons’. This is why the analysis of action

(and not just economic action) constitutes two-thirds of The Moral Dimension.

Yet a study of how values (and emotions) contour the limits of rational behaviour

(Part II, pp. 88–180) will not suffice (as they did for Parsons). A satisfactory

theory of action must also include a ‘deontological’ component (Part I,

pp. 21–87) which offers both actors and social scientists criteria to judge the

moral authenticity of competing values. Etzioni’s presentations of his ‘moderate

deontological’ position over the past 20 years require a separate essay. The follow-

ing succinctly captures his views over that time:

Its [deontology’s] core claim is that certain moral causes speak to us in

compelling terms. It does not ask where these values come from but

takes as a starting point the assumption that these values address us

without filters. This does not mean they are exempted from examin-

ation but that they first present themselves and only later do we


study them. We do not reach them through some kind of utilitarian or

consequentialist analysis. (Etzioni, 2000, p. 230)1

The addition of a deontological component to Parsons’s synthesis of rational and

idealistic approaches provides the key for reconciling empirical and normative

theories. It is not sufficient to argue that human actions are saturated by subjec-

tive meanings. Etzioni offers the possibility that observers and participants will be

able to judge the authenticity of values, the courses of action they inspire and how

both contribute to rationality. His synthesis of a deontological paradigm with

Parsons’s (and not just with neoclassical economics’, as The Moral Dimension

asserts) permits the assessment of values in a manner congenial with logical–

empirical analysis and helps avoid culture wars. Although N/A factors blur our

L/E capacities, Etzioni argues, we can identify compelling values capable of

guiding our actions towards a more decent society even when the relative ration-

ality of our acts is held constant.

3.2 Etzioni’s theory of social order

Beginning in the late 1950s Parsonsian theory was under assault, especially by

new forms of rational-choice (or exchange) and conflict theories. Both these

schools belittled morality as a sound basis for order. The former, influenced

by neoclassical economics, pointed to self-interest as a more reliable footing.

The latter, influenced by neo-Marxism, stressed the coercive power of larger

structures controlled by economic and political elites. Since Parsons had con-

flated the questions of action and order, however, he had no convincing reply

to these attacks. For him, acceptance of social order based on anything other

than morality unraveled his synthesis of rational and idealistic theories of

action.

Etzioni’s A Comparative Analysis of Complex Organizations ([1961] 1975)

stepped into this void by acknowledging that all actions have a normative dimen-

sion (thus preserving the action frame of reference) and translating the question

of order into one of compliance. In searching for a satisfactory typology of organ-

izations he zeroed in on why norms were complied with in diverse administrative

bodies and came up with his well-known classification of normative, utilitarian

and coercive compliance structures. Yes, Etzioni said, all action has a moral

dimension but social order in some settings depends on people complying

with norms because it pays to (utilitarian) or because they are afraid not to

1Etzioni has a second standard for judging the moral worth of values, functionalist analysis which

makes a brief appearance in The Moral Dimension but only receives equal time in his

communitarian writings (see e.g. 1996, pp. 6, 45–46, 89 and 243). I do not include functionalism

in the current discussion because it is not integral to the action frame of reference.


(coercive); they do not always comply because they love either the rules or the

rule givers (normative).

Nonetheless, Etzioni has continually advocated the superior efficacy of norma-

tive compliance while not making it order’s exclusive cornerstone. He suggests

that all social units (not just organizations) which strive to treat members as

the ends of action and not merely as cogs in a social machine should adopt nor-

mative compliance. Normative compliance’s advantages over utilitarian and coer-

cive forms provide a bridge to Etzioni’s socio-economic and communitarian

theories.

Part III of The Moral Dimension elaborates what the collective features of social

order look like. The similarities and departures from Parsons are there for all to

see. Like Parsons, Etzioni says: ‘Individuals do play a role, but within the context

of their collectivities’ (1988, p. 181). Moreover, he focuses on the ‘social capsule’

for ordering economic and all social conduct. Going beyond Parsons, he stresses

that when a collectivity operates as a ‘macro-actor’ (a concept alien to Parsonsian

theory) it helps make choices and decisions more rational than those made by

individuals alone by ‘increasing its L/E content and reducing the knowledge

costs. . .’ (1988, p. 182). Macro-actors play a critical role in coordinating self-

interested market competition and in enhancing overall social order. They

shape the ‘social capsule’ in which self-interested (i.e., market-like) actions are

made more orderly by either normative or coercive means—or by a combination

of the two.

Etzioni’s rejection of Parsons’s conflation of order and normative compliance

is his most significant addition to the understanding of social order. The complex

interplay of moral bonds and coercion on the community, political, societal and

international levels for encapsulating self-interested competition, conflict and

warfare has become his major focus from The Moral Dimension onward. In

this book, the management of economic competition’s dysfunctions by moral

communities and political authorities is the cardinal social-order topic. In his

communitarian writings (see, for example, 1996) he suggests that a society’s judi-

cious balance of self-interest and collective responsibility is best achieved by

giving priority to voluntarily building new shared values (or revitalizing old

ones) and also by assigning a secondary place to the hierarchical imposition of

virtue. Etzioni (e.g., 2004, 2007) has recently applied this principle to the inter-

national realm. His theme remains the same, however: the formation of suprana-

tional communities and institutions is vital for containing global terrorism and

ruinous inter-societal competition. In sum, the liabilities of unadulterated self-

interest on all social levels are best managed within a ‘social capsule’ which,

despite normative compliance’s unique advantages, must always be ready to be

coercive if the moral order falters.


4. Summary

One cannot fully appreciate Amitai Etzioni’s contributions to the fundamental

issues in contemporary sociology without coming to grips with how he has

been influenced by Parsonian theory. This is most evident in The Moral Dimen-

sion, which broadly embraces Parsons’ multidimensional approach to both social

action and social order. Etzioni, however, makes significant strides beyond

Parsons in both areas.

Etzioni enriches action theory by adding a deontological component to its

normative elements. Rational action, for him, is not just saturated—and often

overwhelmed—by subjective definitions. Actors and observers are also aided by

an ability to weigh the moral authenticity of these definitions. This potential

helps to dissolve (or at least thin out) the barrier between empirical and norma-

tive theories. And it assists us in ascertaining which values support the expansion

of rational action and the building of a decent society.

Etzioni’s separation of the problems of action and order allows him to avoid

Parsons’s conflation of social order with normative compliance. His emphasis on

‘social capsules’ in which macro-actors play major roles clarifies how normative

and coercive compliance must interweave to contain the costs of self-interested

competition and conflict. The wide applicability of this approach to order is

demonstrated not just in Etzioni’s socio-economics but in his writings on com-

munitarianism and international relations.

Acknowledgments

I am grateful for Mildred Schwartz’s many helpful comments. Ethna Lehman’s

intellectual, moral and emotional support was indispensable.

References

Alexander, J. C. (1982) Theoretical Logic in Sociology. Volume I: Positivism, Presuppositions,

and Current Controversies, Berkeley, CA, University of California Press.

Alexander, J. C. (1983) Theoretical Logic in Sociology. Volume IV: The Modern Reconstruc-

tion of Classical Sociological Theory: Talcott Parsons, Berkeley, CA, University of Califor-

nia Press.

Alexander, J. C. (1987) Twenty Lectures: Sociological Theory Since World War II, New York,

NY, Columbia University Press.

Etzioni, A. ([1961] 1975) A Comparative Analysis of Complex Organization, New York, NY,

Free Press.

Etzioni, A. (1968) The Active Society: A Theory of Societal and Political Processes, New York,

NY, Free Press.


Etzioni, A. (1988) The Moral Dimension: Toward A New Economics, New York, NY,

Free Press.

Etzioni, A. (1996) The New Golden Rule: Community and Morality in a Democratic Society,

New York, NY, Basic Books.

Etzioni, A. (2000) ‘Epilogue’. In Lehman, E. W. (ed) Autonomy and Order: A Communitar-

ian Anthology, Latham, MD, Rowman & Littlefield.

Etzioni, A. (2004) From Empire to Community: A New Approach to International Relations,

New York, NY, Palgrave Macmillan.

Etzioni, A. (2007) Security First: For A Muscular, Moral Foreign Policy, New Haven, CT, Yale

University Press.

Lehman, E. W. (2006) ‘The Cultural Dimensions of The Active Society’. In McWilliams,

W. C. (ed) The Active Society Revisited, Latham, MD, Rowman & Littlefield.

Parsons, T. ([1937] 1968) The Structure of Social Action, New York, NY, Free Press.

Parsons, T. (1971) The System of Modern Societies, Englewood Cliffs, NJ, Prentice-Hall.

‘The Moral Dimension’ twenty years on

David Marsden

Department of Management and Centre for Economic Performance, London School of Economics, London, UK


To many economists, it may seem strange to hear that Economics lacks a ‘moral

dimension’. At the LSE, I am surrounded by economist colleagues who work on

poverty, minimum wages, social and educational deprivation and even happiness.

They do so because they believe these are burning social issues. Other colleagues

work on financial markets, trying to understand how they work and why they are

often prone to bouts of ungrounded optimism which prove so costly to us when

they decimate our savings. Yet others work on the transition between economic

systems and the construction of market economies. One thing most share in

common is a basic training in the analytical methods of neoclassical economics.

However, it is hard to detect a uniform political or moral agenda, or a single

vision of the good society that derives from their training. Indeed, two LSE col-

leagues, one current and one former, Richard Layard and Alan Walters, collabo-

rated on an introductory text to microeconomics, very much in the neoclassical

tradition; Alan Walters was Chief Economic Adviser to Margaret Thatcher, and

Richard Layard has been a staunch social democrat of the centre-left. One can

see from recent issues, for example, of the Economic Journal and the Journal of


Economic Perspectives that many within this branch of the social sciences share

similar concerns to those of my LSE colleagues.

Nevertheless, Etzioni’s book continues to raise a fundamental challenge to our

basic approach within what is now mainstream economics, and this remains one

of the strongest justifications for his championing of Socio-Economics. It is best

captured by his argument that moral motivation and behaviour differ from their

pleasure-seeking counterparts. This is an empirical observation of human beha-

viour, and one that our theories should therefore recognize. He raises two other

major challenges: that of bounded rationality as a constraint on rational calcu-

lation and a source of our dependence on rules of action; and that many of the

most important decisions that affect our lives are taken by organizations rather

than individuals. Thus, individual calculative choice has an important but

limited place in Etzioni’s scheme. Over the past 20 years, bounded rationality

and organizations have been the subject of a great deal of work by economists,

sometimes working with other social scientists. Bounded rationality and how

to solve problems of cooperation among self-interested agents are the foun-

dations of the new institutional economics; and they, with elements of game

theory, and from experimental economics, have helped to build the new analysis

of organizational governance and strategy. Their primary building blocks remain

individual self-interested actors so that his first argument is the most controver-

sial, and arguably the most challenging for ‘cross-border’ research in the social

sciences.

The proposal for a ‘dual utility function’ predates the Moral Dimension by

some years and leads Etzioni away from the primary focus on individual self-

interested actors (Etzioni, 1986). It attracted a good deal of controversy when

it was first proposed (de Jonge, 2005), and it has never really been accepted

into the mainstream, but despite criticism (e.g. Broome 1992; Khalil, 1997) it

remains a challenging idea. Its core is very simple. The standard utility function

purports to measure the contribution to our personal satisfaction of a range of

different goods and services. In our choices, we seek the bundle of these which

will give us the greatest level of satisfaction or utility. As Etzioni argues, moral

choices fit uncomfortably into this framework: they have an imperative quality

unlike those between different goods in the market place; they relate to specific

realms of social life, such as the ‘sacred’; violation may bring retribution and feel-

ings of guilt; they are symmetrical in the sense that they apply to all similar cases

and they affirm or express a commitment. Thus, choices on moral grounds take

on very different characteristics from those motivated by their effect on one’s

personal well-being.

Etzioni recognizes the extensive debate concerning interdependent utility and

whether altruistic and other-directed acts can be logically reduced to a concern

with individual satisfaction. In a formal sense, they probably can. However, in


doing so, ‘utility’ becomes empty of content—if we are all self-interested ‘knaves’,

does the term retain any useful function? We seem to ignore the distinctions we

make in ordinary language which reflect and evolve with the everyday social prac-

tices of millions of our fellow beings. We also sacrifice empirical reference: how do

we explain the widely observed feelings of guilt and the equally evident sanctions

that are applied when we fail to respect moral obligations? How too do we explain

the existence and nature of moral argument in our societies? Surely, we are debat-

ing about the types of choices we believe that we and others should make, and not

simply about what promotes our own personal satisfaction. As the Moral Dimen-

sion shows, it is an empirical fact that, in our societies, we have areas of decision-

making in which we may consider predominantly our own personal goals, and

there are others where we are constrained by obligations which are imposed on

us, or into which we enter freely. The demarcation lines between these are

drawn differently across societies and periods of history, but this is no reason

to deny their reality.

One trap into which analysis of the relationship between moral and other

social norms and utility often falls is treating them as opposing. It is natural to

consider cases in which moral and social norms override individual utility max-

imizing because they appear to highlight the logical differences between them. A

good illustration is given by Becker’s (1971) pioneering application of choice

theory to racial and other kinds of discrimination in economic life. His strategy

was to treat it from the outset as a form of behaviour that incurred a cost to those

discriminating. Firms and workers manifest their ‘taste’ for discrimination by its

opportunity cost: how much income they will forego in order to work with

people of their own race. Firms which choose to hire only ‘White’ workers

narrow their pool of recruitment and place an upward pressure on the wages

of this group. As a result, non-discriminating firms can earn higher profits.

Thus, economic decisions based on moral, or immoral, rather than efficiency cri-

teria incur a loss of effectiveness. If discrimination is considered a strong case of a

social norm impinging on market choices, then a good dose of competition will

suffice to hold it, and lesser cases, in their place.

However, is it right to assume, as in this example, that moral considerations

always or even mostly conflict with those of efficiency and individual satisfaction?

A common way in which moral rules and established social norms contribute to

economic life is to ‘express a commitment’ and so make cooperative production

of goods and services easier to achieve. Sometimes, these commitments, such as

honesty and fair dealing, are societal in scope. Sometimes, they are fostered by the

economic actors themselves. Akerlof (1982) argued that by paying above the

market wage, employers could engage in a partial gift exchange with their

employees: committing yourself to certain favourable employment practices

can encourage your employees to show greater loyalty and commitment, and


thus reduce the need to monitor their work closely. Fehr et al. (1998) arrive at a

similar conclusion using the methods of experimental economics. The ‘psycho-

logical contract’ literature within management has similarly placed a strong

emphasis on the value of implicit mutual commitments by employers and their

employees to support more flexible and more productive forms of work organ-

ization (Rousseau, 1995). In trying to understand why employers did not cut

the wages of their employees at the onset of the last major recession in the

USA, Bewley (1999) found that they would often stress such reasons as avoiding

loss of ‘morale’ in the workplace. In addition to whatever contractual and legal

obligations might be in place, the workplace comprised a set of unwritten

mutual commitments and social bonds, and these were essential to good econ-

omic performance. Recessions could be used to weed out hiring mistakes, but

their employees would consider it unfair to use them as a reason to cut their

pay, and this would undermine workplace cooperation.

On re-reading the Moral Dimension after 20 years, what is striking is the sheer

variety of rules of action, ranging from practical ‘rules of thumb’ to strong moral

imperatives, but there is no hard and fast line of demarcation between the differ-

ent types. Human beings more commonly follow habits and decision rules than

calculate the utility gains to be achieved by their choices. At the right time and in

the appropriate context, many rules may be practical and enhance efficiency, but

the population of rules evolves slowly and there is much inertia. This should warn

against any kind of naıve functionalism about their origins and purposes. The

consequences of not following rules also vary, ranging from a simple opportunity

cost to strong moral sanctions. The possibility that the same rule may take on a

different force in different societies and at different times also militates against

any hard and fast demarcation between moral and other types of decision rules

based on their content. For example, the moral taboo attached to both abortion

and capital punishment has varied greatly between societies and over time.

One clue as to the special nature of moral rules to emerge from the book is

that, apart from the range and variety of behavioural and moral rules, rules of

thumb, routines and so on, certain rules span many different contexts. Herein

lies an argument as to why we treat some rules as practical and others as

moral. Simon’s theory of bounded rationality underpins much of our under-

standing of why we depend on decision rules rather than trying to work out

every choice on its individual merits. Rules of thumb tend to be specific to

certain contexts and are simply a means to an end, such as Favereau’s (1989)

example of the ‘methode des deux biscottes’—to spread butter on a piece of

French toast without it crumbling, one should always place the one being

spread on top of the next one from the packet. Other rules are used across a

wide variety of contexts and may serve as means in one and as ends in

another. For example, honesty may reduce transaction costs in economic


transactions and be useful on calculative grounds, whereas in other relationships,

it may be part of the architecture, such as in marital, educational and religious

relationships where too much economic calculation would undermine the

spirit. Despite the economic rationale for writing pre-marital contracts about

how to divide property in the event of divorce, to do so, for most of us, would

undermine the spirit of a mutual commitment that should run ‘for richer for

poorer, in sickness and in health’. One reason why many public figures find

marital infidelities so hard to manage is because it is difficult to convince electors

that one can be dishonest in a personal relationship while maintaining a high

standard of probity in one’s public duties. Thus, many of our simple moral

rules have a special status beyond their economic rationale because they must

span several different walks of life and because we treat them as requiring the

same standard of behaviour in each domain. The issue is more than one of con-

sistency, as one can see from Aoki’s (2001) reflections on the linkages between the

different social and economic contexts in which we make our choices. Often, how

people choose in one domain gives us information about how they might behave

in another—as in the example of marital infidelity among public figures: we are

in the presence of ‘linked games’. Reputation damage in one spills over into the

other and may lead to exclusion from both.

The exchange between Etzioni and de Jonge in the Socio-Economic Review

suggests that there is not a lot of mileage for socio-economics in seeking to differ-

entiate kinds of utility or hierarchies of preferences and meta-preferences. They

are hard to observe, and stated preferences detached from their opportunity

costs are usually more like ‘wish lists’ than predictors of potential choices.

Surely, Etzioni is right to stress the need for parsimony. On the other hand, we

have a rich agenda in studying choices where there is both scope for self-interest

and social constraints on the range of options. The minimum wages and

measures to combat educational disadvantage that some of my economist col-

leagues work on fall into this second category. Indeed, in many of the examples

Etzioni gives, the moral imperative trumps other possible choices, such as in the

case when the mother rushes into the flames to save her child.

A second line of attack on individual rational choice in The Moral Dimension,

one that is less closely related to specifically moral norms, is that many key

decisions in our lives are not taken by individuals but by organizations. Our

bounded rationality forces us down this path because individually we cannot

cope with all the information required for some decisions. Much of what

Etzioni says in his chapters on this is very convincing. Those ‘neoclassical’ econ-

omists inspired by Williamson’s work have done much to develop the economic

contribution to our understanding of economic institutions. Their analytical fra-

mework still reflects utility maximizing by the individual agent, although the

agent in this case is often an organization and not an atomistic individual.


However, if the arguments about institutional structure are correct, it is unlikely

that we can go back to the atomistic view of competitive equilibrium and of indi-

vidual choice that seemed so much a part of the neoclassical agenda when The

Moral Dimension was written.

In my view, the problem with the approach of some neoclassical economists to

rational choice is not that the idea of goal-oriented choice is wrong, but that its

models are erroneously generalized. In some areas of life, and over a certain range

of options, we do exercise choices that are consistent with the model. But this

leaves aside the way in which our societies define these areas and enforce their

demarcations. Econometric testing informs us about the validity of economic

models within the range of our empirical observations. Beyond that, we extrap-

olate. Just as Etzioni argues that competition is ‘encapsulated’ within a social fra-

mework, so too are our individual choices. Even institutionally minded

economists tend to give too little attention to how we define and classify the

objects between which we choose, a point stressed by the French conventionalist

school, such as Boltanski and Thevenot (2006). In addition to the budget con-

straint, our choices are also bounded or encapsulated by the categories we use,

our decision rules and competencies, and by a range of social and moral

norms. It might be simpler to consider that we have one kind of utility, but

many different kinds of constraints. The constraints are not immutable, and

over time, they may evolve as a result of our choices and of moral argument.

The Moral Dimension continues to propose many good paths for further work

at the boundaries between mainstream economics and sociology, but by no

means the only ones. It would be mistaken to assume that the neoclassical heart-

land of the early 1980s is representative of all economists trained in the analytical

and methodological tradition of mainstream economics. Despite what many of

my fellow members of SASE would regard as misconceptions about the role of

institutions in the economy, and particularly those in labour markets, the

moral concerns of many economists such as those mentioned earlier are very

familiar. Arguably, their work shows a greater concern for outcomes than for

structures and processes. Choices, even encapsulated, are likely to challenge

unfavourable outcomes, and therein lies an important source of social change.

There is much to debate and much that we can learn from each other. How

market choices and competition are socially encapsulated, and the consequences

for the choices and behaviour, is a big research agenda: more than enough for my

lifetime.

References

Akerlof, G. A. (1982) ‘Labor contracts as a partial gift exchange’, Quarterly Journal of

Economics, 97, 543–569.


Aoki, M. (2001) Toward a Comparative Institutional Analysis, Cambridge, MA, MIT Press.

Becker, G. S. (1971) The Economics of Discrimination, Chicago, IL, University of Chicago

Press.

Bewley, T. (1999) Why Wages Don’t Fall During a Recession, Cambridge, MA, Harvard

University Press.

Boltanski, L. and Thevenot, L. (1991) De la Justification: les economies de la grandeur, Paris,

Gallimard.

Boltanski, L. and Thevenot, L. (2006) On Justification: Economies of Worth, Princeton, NJ,

Princeton University Press.

Broome, J. (1992) ‘Deontology and economics’, Economics and Philosophy, 8, 269–282.

de Jonge, J. P. R. (2005) ‘Rational choice theory and moral action’, Socio-Economic Review,

3, 117–132.

Etzioni, A. (1986) ‘The case for a multiple-utility conception’, Economics and Philosophy, 2

159–183.

Etzioni, A. (1988) The Moral Dimension: toward a New Economics, New York, NY, Free

Press.

Favereau, O. (1989) ‘Marches internes, marches externes’, Revue Economique, 40, 273–328.

Fehr, E., Kirchler, E., Weichbold, A. and Gachter, S. (1998) ‘When social norms overpower

competition: gift exchange in experimental labor markets’, Journal of Labor Economics,

16, 324–351.

Khalil, E. L. (1997) ‘Etzioni versus Becker: do moral sentiments differ from ordinary

tastes?’, De Economist (Kluwer), 145, 491–520.

Rousseau, D. (1995) Psychological Contracts in Organisations: Understanding Written and

Unwritten Agreements, Thousand Oaks, CA, Sage.

‘The Moral Dimension’ revisited

Amitai Etzioni

Institute for Communitarian Policy Studies, George Washington University, Washington, D.C., USA


The main question I raised in The Moral Dimension is whether the study of econ-

omic behaviour requires a new paradigm. I tried to show that the answer is in the

affirmative and that the ‘I&We’ paradigm can so serve. It assumes that the study

of human behaviour in general (economic behaviour included) must include a

study of macro societal, historical, and cultural factors. These factors must be


incorporated into the paradigm as part of the ‘We’ that encompasses and pene-

trates and, in part, forms the individual, the ‘I’.

I further suggested that such a paradigm will not merely lead to more valid

predictions than the individualistic/utilitarian paradigm but also to sounder

public policies and moral judgements that can be better justified. For example,

such a paradigm would take into account that social–political values affect the

level of savings (e.g., conservatives save more than welfare liberals); that a

policy that seeks to change the behaviour of scores of millions of people to

save more by granting them various inducements (a policy followed by the US

for more than 40 years) is going to cost much more and yield much less than

increased collective saving (running surpluses in the public budget if and when

increased saving is called for), which in turn depends in part on legitimizing

such a policy in the eyes of the voters on normative and not only economic

grounds (e.g., it is morally wrong to burden our children with debt); and that

such a policy is morally sounder (because it locates the source of the problem

in the political structures and not in individual sloth).

All this does not mean that there are no individual differences in behaviour to

be found within the same ‘We’ context. Nor is there a reason to deny that these

variations can be studied in ways more akin to the utilitarian paradigm. However,

I held that the variance explained in this way will be significantly smaller than the

variance accounted for by the ‘We’ factors.

My colleagues, especially my former student and good friend Ed Lehman, cor-

rectly point out that I was hardly the first to advance this thesis (although they

kindly indicated that I might have developed the said thesis to some extent).

Talcott Parsons did in his own way. So did Emile Durkheim, among other socio-

logists. It is mentioned less often that several Nobel laureates in economics made

related points, including Sir Arthur Lewis, Herbert A. Simon, Robert M. Solow

and Douglass C. North. It is also a key thesis of the work of Lester Throw and

Karl Polanyi, among others.

Nevertheless, attempting to develop the ‘I&We’ paradigm remained for along

time—as Jens Beckert points out elegantly—the road less travelled. Most of my

colleagues preferred to continue to study economic behaviour within the tra-

ditional utilitarian paradigm. Indeed, some extended their efforts to apply that

paradigm to non-economic behaviour such as sexual, religious and racial

behaviour. Still others tried to noodle in some historical, social and cultural

factors into the utilitarian paradigm. And many conducted studies, without

much concern for their paradigmatic affinity.

As I see it, the results have been—over the last decades—poor predictions

(e.g., concerning the effects of globalization, of speculative tsunamis, of deficits

on domestic policies and international relations and much else); poor public pol-

icies (concerning, for instance, ways to stimulate growth in Western Europe and


to lead to economic development in Africa and economic stability in Latin

America); and defective moral judgements (for instance, reflected in cruel

welfare reforms in the US and in the UK and neglecting to deal with the

harmful side effects of globalization). The increasing influence of the utilitarian

paradigm over social sciences other than economics led to similar results in

these fields, a point I cannot explore here, but suffice it to mention the studies

of the reasons people vote or marry or have children to illustrate my point.

Over the last years there have been some cracks in the mountains of ice that

block the way to progress in this area. They are often lumped together under

the title of behavioural economics. This work has been led by psychologists

and was recognized by the awarding of a Nobel Prize in economic to Daniel

Kahneman and Amos Tversky. This kind of analysis gained wide popular interest

in works such as those of Robert Schiller (Irrational Exuberance), Robert Frank

(several books) and even more so in that of Steven D. Levitt and Stephen

J. Dubner (Freakonomics).

A detailed evaluation of these works and their implications for the ‘I&We’

paradigm is overdue. I suggest that it will show (a) continued efforts to noodle

into the utilitarian paradigm factors and observations that do not find a ready

home in this paradigm, somewhat like arguing that light rays universally

advance as waves into a theory that relies on the assumption that these rays as

a rule are straight; (b) brilliant and compelling case studies of the defects of

the traditional utilitarian paradigm; (c) specific and helpful insights into

human nature and behaviour; (d) no attempts to consolidate these findings

into a new overarching paradigm or draw systematic polity and normative con-

clusions from these observations. However, all these works—as well as work in

institutional studies and several other works by my colleagues in socio-

economics—show that we are now much better prepared to cross the Rubicon

than we were when The Moral Dimension was first published.

In my own work—and social action—over the past few decades (as Bettina

Hollstein correctly points out) I have moved to focus on communitarian social

philosophy. Indeed, if I had published The Moral Dimension today, I may well

have referred to the application of the ‘I&We’ paradigm to economic behaviour

not as socio-economics but as communitarian economics (cf. Coughlin, 1999).

The communitarian position I have come to share with a considerable global

network1 of colleagues and public leaders assumes that there is a tension

between the individual (and their rights) and the common good (and hence

one’s social responsibilities) and that a good society seeks a carefully crafted

balance between the two, relying as much as possible on moral suasion and

not on power. The parallelism to the ‘I&We’ paradigm is fairly self-evident.

1See www.communitariannetwork.org


Communitarian thinking has been much more successful in the public arena

than socio-economics for reasons that remain to be explored. The time may be

ripe to extend communitarian thinking to the study of economic behaviour,

economic policy and related moral judgements, as Thatcherism runs it course

in the US and UK and may not be welcome on the continent to the same

measure, and the quest is intensifying for economic policies that balance concerns

for economic growth with concerns for other sources of human contentment. As I

see it, the greatest need for a new understanding along the ‘I&We’ communitarian

lines is a study of transnational relations, since the world is becoming ever more

one social system (see Etzioni, 2004) and economics—one of its sub-systems.

David Marsden raises several important questions about the role of the moral

dimension in economics. There is no question that the topics many neoclassical

economists write about have a moral dimension, but their theory does not guide

them in understanding it, not to mention in forming moral judgements. Thus,

why would a neoclassical economist not look for ways to increase poverty, to

enlarge inequality and so on? The moral judgements in favour of less poverty,

lower inequality etc, either come to neoclassical economists from some other,

unaccounted for world—or are indeed lacking. As a result most economists are

opposed to most government regulations and subsidies; many favour lower

taxes for income from capital than on income from labour, and favour still

higher pay for CEOs! (Reich, 2007).

Given that moral values directly and significantly affect all behaviour—I

already mentioned savings as an example, and motivation to work is

another—economists are lacking the conceptual tools to model and study this

important set of variables.

I do hold that practically all moral tenets counter pleasure. There is a sort of

economy of moral rules, as if society concluded that it should not waste ethical

capital about acts people would rush to carry out anyhow because they are inher-

ently satisfying. Hence moral rules typically concern limiting sexual engagements,

requiring giving and not taking, fasting and so on. The economist’s argument that

if people do these things they ‘must be’ pleasurable not only seeks to gloss over a

major human difference but also—evidence shows—makes those who study

economics, or are otherwise taken in by it, less moral. This alone for me is a

reason to part ways with neoclassical economics and the other social sciences

and branch off of philosophy and political ideologies based on the same basic

assumptions.

A good place to start is with the simple observation that collective factors

(group bonds, communities, shared values, shared history) determine much

more of the variance of all behaviour, economics included, than individual

choices. Hence, both the study of how to change behaviour and who is in


charge (and hence to be blamed or credited with good conduct) is to a large

extent to be found on the collective level.

This is a very simple preliminary statement. My colleagues will of course wish

to specify it, given that we are members of a variety of collectives at the same time

and so on. But we would make progress in building a collective socio-economic

theory, essential to an evolving discipline, if most of us could agree to at least such

basic propositions.

This may be a good place to mention some of the other major discussions of

The Moral Dimension. For people interested in the topic, I would suggest they rely

on the results of Internet search engines. However, I want to call attention to

several specific studies, which I will group into three categories.

The first category consists of those who found considerable merit in the thesis.

This group includes Hamish Stewart (1990), Dan Krier (1999), Charles Lockhart

and Richard M. Coughlin (1992), Michael Hechter (1989), Aaron Wildavsky

(1990) and Diane Swanson (1992). In the second category are those who had

difficulties with the thesis. This group includes Richard S. Dowell,

Robert S. Goldfarb and William B. Griffith (1998) and Elias Khalil (1997).

Finally, those in the third categories challenged the thesis. This includes John

Broome (1992) and Jan P.R. de Jonge (2005).

References

Broome, J. (1992) ‘Deontology and Economics’, Economics and Philosophy, 8, 269–282.

Coughlin, R. (1999) ‘Whose Morality? Which Community? What Interests? Socio-

Economic and Communitarian Perspectives’. In Etzioni, A. (ed) Essays in Socio-

Economics, Berlin/Heidelberg, Germany and New York, NY, Springer.

Dowell, R. S., Goldfarb, R. S. and Griffith, W. B. (1998) ‘Economic Man as a Moral

Individual’, Economic Inquiry, 36, 645–653.

Etzioni, A. (2003) My Brother’s Keeper: A Memoir and a Message, Lanham, MD, Rowan &

Littlefield.

Etzioni, A. (2004) From Empire to Community: A New Approach to International Relations,

New York, NY, Palgrave Macmillan.

Hechter, M. (1989) ‘Review of “The Moral Dimension: Toward a New Economics”’, The

American Journal of Sociology, 95, 771–773.

de Jonge, J. P. R. (2005) ‘You can lead a horse to water, but you can’t make it drink: a rejoin-

der to Etzioni’, Socio-Economic Review, 3, 157–160.

Khalil, E. (1997) ‘Etzioni vs. Becker: Do Moral Sentiments Differ from Ordinary Tastes?’,

De Economist, 145, 491–520.

Krier, D. (1999) ‘Assessing the New Synthesis of Economics and Sociology: Promising

Themes for Contemporary Analysts of Economic Life’, American Journal of Economics

and Sociology, 58, 669–696.


Lockhart, C. and Coughlin, R. M. (1992) ‘Building Better Comparative Social Theory

through Alternative Conceptions of Rationality’, The Western Political Quarterly, 45,

793–809.

Reich, R. (2007, September 14) ‘CEOs Deserve Their Pay’, Wall Street Journal, New York,

NY, A13.

Stewart, H. (1990) ‘The Moral Dimension: Toward A New Economics’, Ethics, 101,

205–206.

Swanson, D. (1992) ‘A Critical Evaluation of Etzioni’s Socioeconomic Theory: Implications

for the Field of Business Ethics’, Journal of Business Ethics, 11, 545–553.

Wildavsky, A. (1990) ‘Review of “The Moral Dimension: Toward a New Economics”’, The

American Political Science Review, 84, 279–280.


20 Years of Enzioni

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