A Critical Discourse on 'Morality of Profit'- Sundar K Sharma -Nepal
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Transcript of A Critical Discourse on 'Morality of Profit'- Sundar K Sharma -Nepal
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Title of the essay:The Critical Discourse on Morality of Profit
Full name: Sundar Kumar SharmaMailing address: Kathmandu University, Human and Natural Resources Center, P. O.Box. 6250, Balkumari LalitpurContact telephone number: 0977-9803098006E-mail: [email protected]
A brief biography of the author:
Sundar Kumar Sharma, independent researcher in the field of Political Economy of
Globalization and Human Development. Currently researching in Political Economy of
Climate Change and Development in Least Developed Countries (LDCs)
Sundar K
Sharma
Digitally signed by Sundar KSharmaDN: CN = Sundar K Sharma, C= US, O = WorldwideFoundation /Nepal, OU =Research and Dwevelopment
Reason: I am the author of thisdocumentDate: 2010.06.25 18:05:57+05'45'
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The Critical Discourse on Morality of Profit
Abstract
This paper analyzes the discourse of ethics, morality and legitimacy pointing towards the
theme of rational morality in the present situation of globalized world. The key
arguments of morality of profit are focused on the ethical ground of making profits for
human welfare. Finally it has proposed for the social equity ventures as the emerging
enterprises for the social and human development. It has concluded the significance of
moral dimension in the framework of political economy of globalization for ending the
global poverty.
Key words:
Morality of profit, legitimacy, human development, social equity ventures, globalization
There is enough wealth in the world for everybody's need, but not enough for
anybody's greed. - Mahatma Gandhi
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Overview Discourse of Ethics, Morality and Legitimacy
The significance of the theory of discourse ethics is that it upholds the possibility of
rational normative discourse across cultures and universally valid norms. The parameters
of such discussion define the realm of morality (Moralitt). In this way, the realm of
morality is limited to procedural norms that reflect a generalizable interest. This
compatibility is due to the fact that the principle of discourse ethics and the principle of
democracy both derive from the same discourse principle. Thus, although legitimate law
has to take into account a wider range of discourses than morality. Legitimacy addresses
the issues at more concrete levels; but should not come into conflict with the demands of
morality. In our present corporate world the evaluation, however, is still in terms of the
effects of the corporations functioning vis--vis the legal-political system (and not
directly in relationship to its ability to represent a generalizable interest as is the case in
terms of judgments of morality).
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The Rational morality
Rational morality is all about realizing evolutionary dynamics, the interpretation of their
implications and how to best align ourselves with the evolutionary process. Value
judgments are heavily biased towards 20th century secular humanism. The quintessential
human value of striving for perpetual self transcendence is discounted. The underlying
evolutionary dynamics that led to human values in the first place or are implied by it are
being ignored. Wanting to continuously self improve however is in itself a fundamental
human value represented in the constant quest for knowledge, understanding, wisdom
and personal growth. The criticism gets more fundamental when realizing that human
values are the product of billions of years of evolution. Rational Morality is one of the
outcomes of historical evolution in human conscience.
Morality and corporate responsibilities
Discourse ethics, as we have seen, defines morality in terms of the potential universal
validity of norms. From this perspective, valid norms demonstrate two characteristics.
Because morality exhibits these two characteristics, discourse ethics can, in principle, be
used either to try or generate valid norms by achieving consensus on universal interests.
While talking on the issues corporate responsibilities in the globalized world, four
necessary conditions can be posited for capitalist business practice to represent a
generalizable interest.
(1) Efficiency Condition there is not an equally efficient alternative that is more
democratic, more egalitarian and/or less hierarchical;
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(2) Regulatory Condition there is effective regulation which ensures that the promised
efficiency gains are realized;
(3) Redistribution Condition there is, if necessary, redistribution of the social product
such that people actually partake in the efficiency gains which the structure promises;
(4) Anti-Colonizing Condition there are measures in place to address any factors
(viz., colonizing tendencies) that undermine the possibility of moral discourse (and the
other three conditions).
Insofar as any claims to morality for the capitalist corporation per se require the
fulfillment of these four conditions, the morality of the individual corporation can be
explored in terms of their conformity to the spirit of these conditions.
Some existing corporate fashions are in contrary to a generalizable interest and, as such,
they are the clear violations of the demands of morality. Similarly, other individual
tactics used to gain a competitive advantage (e.g., corporate espionage, bribery, etc.) that
contravene the spirit of market competition also represent violations of the demands of
morality. There is also a violation of morality where corporations do not treat labor as
social agents or human.
Current scenario of the human world
- The human conscience and morality are forgotten!
In 2005, the worlds billionaires just 497 people (approximately 0.0008% of the
worlds population) were worth $3.5 trillion (over 7% of world GDP). In 2008, the
World Wealth Report indicated that a lot of money had been lost as a result of the global
economic crisis. The evidence makes it clear that we are living on a world in which
poverty and hunger is the norm. Some 1.1 billion people in developing countries have
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inadequate access to water, and 2.6 billion lack basic sanitation. Millions of the world's
poorest children are among the principal victims of climate change - caused by the rich
developed world, a United Nations report said recently, calling for urgent action. The 48
poorest countries account for less than 0.4 per cent of global exports. The alleviation of
poverty across the world must be the top priority of all peoples.
The UN's World Food Programme warned: "As the global financial crisis deepens,
hunger and malnutrition are likely to increase as incomes fall and unemployment rises. If
emissions are not brought under control, within 25 years, the report states:
310 millions more people will suffer adverse health consequences related to temperature
increases, 20 millions more people will fall into poverty; 75 millions extra people will be
displaced by climate change. The study compares for the first time the number of people
affected by climate change in rich and poor countries. "The world is at a crossroads.
Simple changes could help alleviate big problems. The report says South Asia's
governments need to urgently increase social spending to meet the challenge.
According to the World Bank, three quarters of the population in South Asia, almost 1.2
billion people live on less than $2 a day.
Muhammad Yunus describes this in terms of social business, a no loss, no dividend
company with social objectives. For Africa to develop sustainable
food policies partnerships are key. Banks and corporations and countries go bankrupt.
The human world is becoming more inhumane as the original human conscience and
morality are forgotten.
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Situation of Growth and Distribution
- Is this development?The rich countries, comprising less than 1.4 billion people, were represented in The
World Economic Forum, January, 2009, in Davos. The wealthiest people and
corporations, and governments, in the world, gathered to discuss solutions to the failing
world economy. It is not acceptable that 0.0015% of the world's population control 80%
of the global wealth! Most people in the world today are poor, and living in appalling
conditions. Approximately half the worlds population now lives in cities and towns. The
financial systems of the world are interconnected business beyond banking.
Discussions on Morality of Profit
-Are profits morally justifiable?
While neoclassical economists have traditionally endorsed the pursuit of profits, many
moral philosophers have challenged profit making on a variety of ethical grounds.
Entrepreneurship can be considered as a legitimate source of profit, while the recent
advances in welfare economics weaken the case for the morality of profits. Ethical
dimension, covering the right to profits from economic rent; the morality of how profits
are used--those directed toward library or university endowments, for example, are
considered morally acceptable--and whether or not profits are deserved. Morality of
profit should be structured with moral and political philosophy, as well as with recent
genuine works in legal, political, and moral theory. The role of self-interest and religion
in morality, moral relativism, moral truth and objectivity all are equally important to
shape the discourse of Morality of profit. The comprehensive discourse should include
representatives of traditional moral theories as well as contemporary works on moral and
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legal theory. Morality of profit should reflect the breadth of the philosophical and
political spectrum in the globalized world. One the one hand Morality of profit can guide
the self-interest and morality, rule utilitarianism, war and terrorism, cloning, capitalism,
democratic government, multiculturalism, and reparations. Can morality be founded upon
facts about human nature, social agreement, volition, subjective preference, a priori
reasoning, intuition, or some other basis? To answer all these practical queries the ethics
and morality of profit is to be reviewed. What is the proper place of virtue in a complete
moral theory? It is critical to think whether objective moral truths can be grounded in an
understanding of the nature of human beings as rational and social animals. Finally, what
is the phenomenology of our moral experiences can reveal about moral objectivity?
-Are the markets Moral?
In most societies today, making profits are accepted as moral, if not especially
praiseworthy. This pure profit surplus accrues to a business as a reward to its
organization, for the act of entrepreneurship itself. The theory goes that the competition
in the product market ensures that value creation is the only method of creating surpluses,
by limiting, and eventually eliminating, all possibilities of value-grab. The new love
your profits morality makes an implicit assumption of existence of perfect competition
in the market, and views all profits as purified by the trial of fire by Competitive Markets.
Although attempts to resolve economic and moral issues are welcome, Economy and
Morality has deep-rooted problems. Moral values must be universalizable. A moral value
is universally acceptable to all persons in a society who have a common interest in social
coexistence, a moral value is universally valid as the standard that enables the survival
and coexistence of human beings, permitting the pursuit of their plural conceptions of the
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good, virtue is linked to a wide range of socially established cooperative human
activity. Shared principles of justice will promote a just society through public reason.
Evils of unregulated capitalism and industrialization has exacerbated inequalities,
poverty, unemployment, exploitation, alienation, and mammonism.
There are also allusions to the immoral pursuit of profit and the great social evils of
laissez-faire. The market is not a universal solution to human problems, and it is
worthwhile to consider non-market institutions and values that might provide boundaries
to social reliance on market coordination.
-Is profit a means, or an end?
From Human development perspectives profit is regarded as economic means, such that
it is means for capability enhancement in human development. For profit-entrepreneurs
Profit is regarded as an end and pocketed or reinvested for further profit. For social
entrepreneurs profit is regarded as means and put into serving people. Profit is not the
gauge of value creation; nor is customer satisfaction; social impact is the gauge. Social
entrepreneurs look for a long-term social return on investment.
-What is the relationship between greed and profit?
Greed is a classic topic in human development and it inevitably affects many of our
choices and decisions. Although greed is typically viewed as uniformly negative and
reprehensible, we propose that people's attitudes and opinions about greed are actually
subject to change. In particular, studying economics may help legitimize and even
beautify greed. Previous research shows that economics education might make people
more self-interested because self-interest maximization is central to most economic
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models. Because greed and maximizing self-interest are sometimes difficult to separate,
conceptually or empirically, we propose that studying economics may make people view
greed as potentially positive and beneficial. In that sense accumulation (economic)
without moral and social values can be translated as greed. shared familiarity with a set of
From the perspectives of human behavior and motivation , some economic principles
emphasizes that 1) people are self-interested utility-maximizers, 2) individuals should be
unimpeded in their pursuit of their own self-interest through economic transactions,
and 3) virtually all human interactions are economic transactions.
But it is to be clear that all transactions should not be guided with the motive of greed
but should be social welfare oriented.
-Can the pursuit of profit be understood as a good in itself or a necessary evil?
In the free market system, U.S. policy is "directed at creating conditions that favor the
maximization of corporate profit." Corporate investments have fattened the profit
margins by employing labor in Mexico, Cambodia, India, Pakistan, and Malaysia. In real
estate terms, its location, location, location. In this scenario, the major challenges of
these days are- how we can integrate the self-interest and social responsibility of
globalized corporations? The basic logic of capitalism is profit. This pursuit of profit
requires economic expansion, the creation of new markets and the intensive exploitation
of existing markets. Potential profits also exist in the areas of society that have
historically sat outside capital markets, such as domestic services, recreation and leisure.
But in our world the profit accumulates within some capitalist corporations and camps.
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Reflecting to the context, Susan George, one of the world economy observatories says
Capitalism itself is not bad but the capitalist are too greedy.
-What are our core ethical responsibilities as we seek profits?
Business must have a "social conscience" and should take seriously its responsibilities for
providing employment, eliminating discrimination, avoiding pollution. The discussions
of the "social responsibilities of business" in these days are notable for their analytical
looseness and lack of rigor. What does it mean to say that "business" has responsibilities?
Only people have responsibilities. The first step toward clarity in examining the doctrine
of the social responsibility of business is to ask precisely what it implies for whom. If we
wish, we may refer to some of these responsibilities as "social responsibilities." What
does it mean to say that the corporate executive has a "social responsibility" in his
capacity as businessman? What, then, is ethics about? In the widest sense, ethics makes a
human community possible. Ethical transformation of corporations in the globalized
economy is only the viable option. There is no alternative except transforming the
institutions of globalization. Ethics is for all. And business ethics ethics as applied to
the business arena is for all business people. Enough profit is enough. While making
profits we dont have to forget the humanistic principles of social equity, ecological
sustainability, moral ethics, and human welfare etc.
Enterprises for social and human development
-solution to global poverty
We have to seek profit in the sense that profit is also on offer as new markets are created
in sectors historically the domain of governments and charitable institutions. New social
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business ventures and enterprises are created following deregulation of the economy and
redistribution of profit to social and human development sectors. Considerable business
opportunities exist within the realm of state social services like health, welfare and
education, should the government be of a mind to open these areas up. As a core social
service, education plays a pivotal role in the reproduction of society. It provides benefit to
business, wider civic society and the individual recipients of learning. It progressively
equips children with skills and aptitudes useful to business in the creation of profit and
distribution of the same for human development. In this regard, we can succeed to
maintain the ethics of business and morality of profit by educating and informing
institutions and peoples on morality of profit, promoting corporate ethics in the line of
social conscience and responsibilities, addressing the issues of enterprises solutions to
global poverty. In the present context, social equity ventures can play a vital role of
change agents and institutions in the social sector. These should be guided with a
mission to create and sustain social value (not just private value). It will teach the basic
difference between living a moral life and living a prosperous life. The new
ventures should consider social cooperation as a Standard, moral learning & the moral
sense and regaining morality in the Business. This system involves people working
together in a kind of moral economy. Moral discourse must return to a central place in
political economy of the globalization.