ABSTRACT

 

The social contract model is one of the most promising theoretical constructs which is presently available to argue for norms of corporate morality. This model was originally used in the seventeenth and eighteenth century to argue the conditions for the legitimate exercise of political power. In the twentieth century the model was used as a basis for a theory of social justice. Its use as a framework for corporate morality thus constitutes an entirely new field of application and it is with respect to this new use that I make two central claims. Both claims primarily involve a fundamental criticism of current contractarian business ethics (CBE), but if these criticisms can be sustained they also constitute conditions which any future contractarian theory of business ethics must meet.

 

The first claim, which I label the self-discipline thesis, asserts that current CBE would considerably gain in focus if more attention were paid to the manner in which the social contract argument is properly set up. If we consider the manner in which the argument was used in these two other application fields, it is clear that the model has its own characteristic method of argument, by which it seeks to support certain normative conclusions. For ease of reference I will call this the internal logic of the model. In its turn, this internal logic may be shown to form part of an argumentative strategy which can only be fully appreciated by taking into account the aim or purpose the theorist sought to establish by invoking the contract model. Such political usage of the theory I will refer to as the external logic of the social contract model. The self-discipline thesis then involves a twofold criticism of current CBE. The first criticism is that moral norms derived by present contractarian theories of business ethics pay insufficient attention to the internal logic of the social contract model, such as was exhibited by some of the famous earlier contract theories. A second, related criticism is that current CBE suffers from an insufficient understanding of the external logic, or to put this point more precisely: it expects too much from the social contract model. Whereas in earlier applications the contract model was essentially used as a formal argument, contemporary contractarian business ethicists erroneously seek to derive concrete, substantive norms for business ethics from the model.

 

The second central claim, to which I refer as the domain-specificity thesis, argues that current CBE needs to be better adapted to this new field of application. A social contract theory applied to business ethics will work properly only if the argument is fine-tuned to the ‘circumstances of business ethics’. This means, among other things, that we need to pay proper attention to the domain characteristics of business ethics and the assumptions made by theoretical representations of this field and consider how a social contract theory needs to be set up so as to fit the questions and issues central to business ethics.

 

I will substantiate these two theses on the basis of a comparative analysis of present CBE with two earlier families of social contract theories along a number of points of comparison. This will make clear that, as applied to these two other domains, there was a clear external logic to social contract theories which in turn set the scene for their internal logic. On the basis of a comparison how the contract model operates in these established domains, I will then go on to indicate how the contract model should be adapted to the realm of business ethics.

 

The upshot of this exercise in the history of the social contract argument is to clear the way for a further development of a sound CBE. Even though the potential of contract-centred evaluative thought has been questioned (Pettit, 1993^[i]), I think that the social contract model still is one of the most promising approaches for normative theories, including theories of business ethics.^[ii] More particularly, CBE may be able to answer questions which are left unanswered by the much more current stakeholder theory.^[iii]

 

^[i] Philip Pettit, The Common Mind: An Essay on Psychology, Society and Politics, OUP 1993, chapter 6. Pettit distinguishes a separate category of evaluative social sciences which he indicates as political theory. Apart from law and philosophy this also consists of parts of modern political science and economics. For the purposes of this article, I take business ethics to form part of this same category. The drift of Pettit’s criticism is that contract-centred evaluative theories are either defective (in their economic interpretation) or redundant (in their political interpretation).

^[ii] Cf. Jean Hampton, Contract and Consent. In R. Goodin and P. Pettit (Eds.), A Companion to Contemporary Political Philosophy 1995, pp. 379-393. Oxford: Blackwell. Hampton discusses some problems of this method of argument but also the promise behind the contract device.

^[iii] For a survey of the present state of stakeholder theory, see Mitchell, R. K., Agle B. R., & Wood, D. J., Towards a Theory of Stakeholder Identification and Salience. Academy of Management Review, 1997, vol 22, pp. 855-865.