Capitalism with a Purpose: Can Business Ethics Fight Inequality?
Keywords:Business Ethics; Capitalism, Shareholder value; Stakeholder value; CSR; Inequality; Economic Crisis
Economic crises - such as the Great Recession of 2008 or the 2020 crisis triggered by the Covid-19 pandemic - have always represented an opportunity to address the relationship between macroeconomic variables and business and society’s reactions to them. Indeed, negative economic conjuncture, slump and stagnation, represent a challenge and may elicit the opportunity to rethink the role of business in tackling systemic global problems of the current system - such as persisting and raising inequalities and environmental unsustainability – by focusing on Business Ethics both as a theory and a practice. Accordingly, the present work aims at shedding light on the link between the systematic production of inequality within the current economic system and the opportunities for entrepreneurs and managers to significantly reduce it by engaging in business ethics practices. For this purpose, the theoretical framework proposed rests on a step “back” to the discussion of the relation between economic sphere and society, particularly when addressing the issue of value creation/extraction and a step “forward” in the discussion on the purpose of the enterprise and the social role of the entrepreneur. In doing so, three main issues will be addressed: VALUE CREATION - the role of the enterprise in value creation between capital and labour; RESPONSIBILITY - responsible vs irresponsible capitalism; SOCIAL ACTOR - the conception of the enterprise as a social rather than only and economic actor. Bridging perspectives coming from economics, business studies and economic sociology, this paper depicts a robust theoretical and conceptual framework to be used for further empirical research.
Bapuji, H., Husted, BW., Lu, J., Mir, R. (2018). Value Creation, Appropriation, and Distribution: How Firms Contribute to Societal Economic Inequality. Business & Society, 57(6), 983-1009.
Bapuji, H., Patel, C., Ertug, G., Allen, D.G. (2020). Corona Crisis and Inequality: Why Management Research Needs a Societal Turn. Journal of Management., 46(7),1205-1222.
Bonanni, C., Lépineux, F., & Roloff J. (2012). Introduction. In C. Bonanni, F. Lépineux, J. Roloff (Eds.), Social Responsibility, Entrepreneurship and the Common Good. London: Palgrave Macmillan.
Bouckaert, L. & Zsolnai, L. (2012). Spirituality and business: An interdisciplinary overview. Society and Economy, vol. 34, no. 3, pp. 489–514.
Bowman, C., Ambrosini, V. (2000). Value creation versus value capture: Towards a coherent definition of value in strategy. British Journal of Management, 11, 1-15.
Bowman, C., Ambrosini, V. (2010). How value is created, captured and destroyed, European Business Review, 22(5), 479-495.
Bruni, L. & Zamagni, S. (2015). L’Economia civile. Un’altra idea del mercato. Bologna: Il Mulino.
Butera, F. (2020). Organizzazione e società. Innovare le organizzazioni dell'Italia che vogliamo. Venezia: Marsilio.
Constantinescu, M., & Kaptein, M. (2020). Virtue ethics and CSR: The two sides of sustainable organizational performance. In W. Wermayer, S. Looser, & M. Del Baldo (Eds.), Intrinsic CSR and Competition: Doing well amongst European SMEs (pp. 119–132). London: Palgrave.
Crouch, C. (2011). The Strange Non-death of Neo-liberalism. Hoboken: John Wiley & Sons.
DeGeorge, T.R. (2005). Business Ethics. London: Pearson College.
Edgecliffe-Johnson, A. & Mooney, A. (December 20, 2019). The year capitalism went cuddly. The Financial Times https://www.ft.com/content/da1d824a-1bd4-11ea-97df-cc63de1d73f4 , last view on the 14th February 2021
Editorial Board F.T. (March 29, 2020). Virus puts responsible capitalism to the test, The Financial Times https://www.ft.com/content/a47c734a-702e-11ea-89df-41bea055720b , last view on the 14th February 2021
Fioravante, R. (2019). Questa non è una crisi è che non ti amo più In P. Frascani, (Ed.), Le eredità della crisi. Quaderni/31. Milano: Fondazione Giangiacomo Feltrinelli.
Friedman, M. (1962). Capitalism and Freedom. Chicago: University of Chicago Press.
Friedman, M. (1970). A Friedman doctrine‐- The Social Responsibility Of Business Is to Increase Its Profits. The New York Times, Sept. 13, last view on the 14th February 2021. https://www.nytimes.com/1970/09/13/archives/a-friedman-doctrine-the-social-responsibility-of-business-is-to.html
Gallino L. (2010). L’impresa responsabile. Un’intervista su Adriano Olivetti. Torino: Einaudi.
Gallino, L. (2005). L’impresa irresponsabile. Torino: Einaudi.
Hahnel, R. & Wright, E.O. (2016). Alternatives to Capitalism. Proposals for a Democratic Economy. London and New York: Verso.
Hansmann, H., & Kraakman, R. H. (2000). The End of History for Corporate Law. The Social Science Research Network Electronic Paper Collection.
Ims, KJ. & Pedersen, LJT. (2015). (Eds.), Business and the Greater Good – Rethinking Business Ethics in the Age of Economic Crisis. Cheltenham, UK and Northampton: Edward Elgar Publishers.
Ims, KJ. & Zsolnai, L. (2015). Social Innovation and Social Development in Latin America, Egypt and India. In Enderle G. & Murphy PE. (Eds.), Ethical Innovation in Business and the Economy (pp. 197-213) Cheltenham UK and Northampton: Edward Elgar Publishers.
Kaplan, R. S., Serafeim, G. & Tugendhat, E. (2018) Inclusive Growth: Profitable Strategies for Tackling Poverty and Inequality. Harvard Business Review, 96(1), January–February, 127-133.
Kaplinsky, R. (2014). From Redistribution with Growth to Redistribution through Growth. In G.A. Cornia G.A. & F. Stewart (Eds.), Towards Human Development: New Approaches to Macroeconomics and Inequality. Oxford: Oxford University Press.
Ketola, T. (2008). A holistic corporate responsibility model: Integrating values, discourses and actions’, Journal of Business Ethics, 80, 419-435.
Kolk, A. & van Tulder, R. (2006). Poverty alleviation as business strategy? Evaluating commitments of frontrunner multinational corporations. World Development, 34, 789-801.
Lazonick, W. & O'Sullivan M. (2000). Maximizing shareholder value: a new ideology for corporate governance. Economy and Society, 29(1), 13-35.
Mazzuccato, M. (2019). The Value of Everything: Making and Taking in the Global Economy. London: Penguin.
Melé, D. (2003). The challenge of humanistic management. Journal of Business Ethics 44 (44), 77-88.
Milanovic, B. (2019). Capitalism, Alone: The Future of the System That Rules the World. Harvard University Press.
Pennacchi, L. (2020). La democarzia economica nell’epoca del triplice connubio “Rivoluzione tecnologica/pandemie/secular stagnation. Economia & Lavoro Democrazia economica, Anno LIV, 55-73.
Piketty, T. (2019). Capital and Ideology. Harvard University Press.
Pinkston, T.S. & Carroll A.B. (1996). A retrospective examination of CSR orientations: have they changed?. Journal of Business Ethics, 15, 199-206.
Porter, M. E. & Kramer, M. R. (2011). Creating Shared Value. How to reinvent capitalism and unleash a wave of innovation and growth, Harvard Business Review, 89(1-2), 62-77, January-February.
Reed, A. (2014). The Crisis of Labour and the Left in the United States. Socialist Register, 51, 351-375.
Rodrik, D. (2011). The Globalization Paradox. Harvard University Press.
Rusconi, G., Dorigatti, M. (2006). (Eds.), Impresa e responsabilità sociale. Milano: Franco Angeli.
Sacconi, L., Blair, M. & Freeman, E.R. (2011). Corporate Social Responsibility and Corporate Governance. Palgrave Macmillan UK.
Sapelli, G. (2018). Oltre il capitalismo. Macchine, lavoro, proprietà. Milano: Guerini e Associati.
Schlag, M. & Melé D. (2020). Building Instinutions for the Common Good. The Practice and Purpose of Business in an Inclusive Economy. Humanist Management Journal, 5, 1-6.
Schüz, M. (2019). Applied business ethics - Foundations for study and daily practice. Singapore, New Jersey, London: World Scientific.
Sen, A. (1987). On Ethics and Economics. Malden, MA: Blackwell Publishing.
Sheehy, B. (2015). Defining CSR: Problems and Solutions. Journal of Business Ethics, 131, 625-648.
Skidelsky, R. (2018). Money and government. The Past and Future of Economics. Yale University Press.
Solomon, R. C. (1999). A better way to think about business—How personal integrity leads to corporate success. Oxford and New York: Oxford University Press.
Stiglitz, J. (2012). The Price of Inequality. New York: W. W. Norton & Company.
United Nations (2015). Transforming our world: The 2030 agenda for sustainable development. New York: NY, USA, USA: Retrieved from: https://www.un.org/sustainabledevelopment/32.
Utting, P. (2007). CSR and equality. Third World Quarterly, 28(4), 697-712.
Waddock, S. (2018), Beyond CSR to System Change: Creating a New Socio-economic Narrative. Corporate Social Responsibility. Business and Society, 2, 377-401.
Zsolnai, L. (2011). Moral agency and spiritual intelligence. In Bouckaert L. & Zsolnai L. (Eds.), Handbook of Spirituality and Business (pp. 42-48). London: Palgrave Macmillan.
Zsolnai, L. (2015). (Ed.), The spiritual dimension of business Ethics and sustainable Management. Cham: Switzerland: Springer.
Zsolnai, L. (2015b). Materialistic versus Non-materialistic Value-orientation in Management. In Ims K.J. & Pedersen LJT (Eds.), Business and the Greater Good – Rethinking Business Ethics in the Age of Economic Crisis (pp. 107-116). Cheltenham: Edward Elgar Publishers.
How to Cite
Copyright (c) 2021 The Authors & LUMEN Publishing House
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
Authors who publish with this journal agree to the following terms:
- Authors retain copyright and grant this journal right of first publication, with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work, with an acknowledgement of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g. post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g. in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as an earlier and greater citation of published work (See The Effect of Open Access).
Postmodern Openings Journal has an Attribution-NonCommercial-NoDerivs