Globalisation Disputes:Markets attack Ethics ... Ethics break in Markets

Eduardo Ibarra-Colado

Organization Studies Research Group

UAM-Iztapalapa, Mexico

What’s To Be Done About Management Ethics?

Symposium – 16 December 2004

1. Modernity: Three Forgotten Ideas

1. Modernity’s origin: the

“invention” of America (the

modern self and “the other”)

2. Modernity’s project is based on an ethics of domination: the Conquest of the

Other

3. It’s not the same to think

reality from the Centre than

from the margins: The silence of the

Other

“P

rogre

ss”

What is Globalisation?

– It isn’t the triumph of reason

– It really is the current exacerbated stage of modernity – instrumental reason

carried to its limits

Limits of Modernity’s Project of Domination

Speculation Production

Knowledge Democracy

Domination

profits vs. well-being consumerism vs. basic needs

How to... vs. Why… fear and emotions vs. projects

• External debt – IFI’s

• Movements of capital – Big Corps.

• Shrinking markets

• Environmental destruction

• Irrational consumption of energy

• The “visible hand” controls free trade

• Standardization of mind

• “Enlightened ignorance” • Legitimation of free market society

• Regulation of power relations

Violence Destruction• Control of people’s aspirations

• Discipline and obedience

Limits of Modernity’s Project of Domination

Hypothesis: today the world faces the limitations of

the use of force to perpetuate domination, since the

mutual capacity for destruction has been

superimposed upon the capacity for domination.

Dilemma: the irrationality of domination is found in the annulment, for one side as well as the other, of any possible future.

Opportunity: Globalisation is that historical moment of

modernity in which domination ceases to be viable, but

it also brings us the opportunity to build a new ethics.

2. Building the Corporation

Free-market and economy

Nation-state and politics

The Privatisation of the Corporation Its Legal Recognition as a “Person”

3. Protection of privacy

• Secret information

• Limited liability

• Protection of managers

• Protection of the rights of the shareholders over the power of managers

• Governance structures

1. Protection of private property and freedom

• Free exercise of corporate power to act in its own best interest

• Limited state to preserving individual freedom and protecting free competition

2. Freeing corporations from any social responsibility that isn’t legally mandated.

• “The best interests of the corporation” principle.

– Economy and society swap positions, placing the private interests of the “individual” over the well-being of society

The Corporation as a “Person”: Some Consequences

– Deregulation of the economy vis-a-vis regulation of State intervention in the economy, limiting public control over private actions

– Establishment of legal rules to limit the right of society to oversee after corporations

– All these open the door to corruption, fraud and unethical behaviours.

3. Constitutional Order, Liberalism and Corporate Power

• The constitutional order has been the way to transform the liberal principles into operative terms.

• It facilitates the consolidation of the private corporation as the main organizational form of economic activity in modernity.

• This system and their modifications explain the increasing power of corporations.

• Liberalism gives the doctrinal support to legitimate corporate power and its marginal ethical content.

The Fingers of the “Invisible Hand”:

Markets Attack Ethics Operative freedom

Naturalization of inequality

Marginal ethics

Disarticulation of social fabric

Dissolution of politics and the public sphere

(means instead of ends)

(Darwinian adaptation)

individual’s own marginal utiliy)

(disappearing society and general interest)

(individual solutions and ego-ism)

(rules of conduct to fulfil

Globalisation Disputes: The Conquest of Modernity

Liberalism – Market domination (XIX Century, 1970’s onward)

– Reason as calculability

– Market over Politics

– Corporations as the main power

– Marginal ethics: individual freedom

Welfarism – State domination (1st World War – 1970’s)

– Reason as well-being of society

– Politics over Markets

– State as the main power

– Totalitarian ethics: state regulation and security

And the winner is … Globalisation?(1989 to the present day)

vs.

4. From Liberalism to Neo-liberalismAsymmetries of globalisation: types of neo-liberalismNeo-liberal protectionism Neo-liberal “self”-destruction the centre the margins

• Privatisation public inefficiency induced in order to sell at a low price.

Free Trade Agreements

Private corporations

IFI’s

• Deregulation destruction of institutional regulatory settings

• Monetary stability destruction of the Welfare State, informal economy, poverty and exclusion

• Flexibilisation of work precarious work, de-unionisation, unemployment

(external debt)

(capital escape)

5. There Are Some Alternatives: Ethics Break in Markets

From a modern ethics of domination to aTrans-modern ethics of responsibility

respecting differences and alternative modes of existence

Challenges of our global present for the

negotiating minimum agreements that guarantee equity and justice for everybody

• inhabitants of the centre

• inhabitants of the margins

recognise the effects of the modern project

reject the Anglo-Euro-centrism

Accept the mestizo condition

Accept the impossibility of returning to the past

Ten Propositions for a New Ethics1. Ethics support is the reflective protection of life

2. The goal of life is the well-being of humankind

3. Dialog, participation and reflexion are the foundations to building a new ethics

4. Freedom of individuals is a basic value of society; its unnegotiable limit is the protection of life

5. The well-being of humankind must be fulfilled by the exercise of individual freedom via cooperation

6. Wealth is only a means to the end; the economy is at the service of society

7. If corporations are the mean to fulfil that end, then they are essentially social/public entities

8. Therefore, managers are at the service of the people under the principle of “best interests of society”

9. Society must regulate corporations, protecting life to build a free (diverse) global society, without the production of victims

10. In this trans-modern

world there is space

for everyone