* Article: Reframing the Commonwealth: Commercial or Civic. By Marvin T. Brown.

(This essay is now available in Michael Boylan, editor, Business Ethics, 2nd Edition (Wiley/Blackwell, 2013)

Part 3 of an important essay from Marvin Brown:

* Dealing with disagreements

“Would it not be nice if some “invisible hand” or “divine providence” took care of our conflicts and dilemmas, and somehow, behind our back, so to speak, would wring some good out of whatever we did? While the civic provides a platform for connecting the commons and the commercial, and allows the commons to be the foundation for the commercial, it does not resolve disagreements and conflicts about how we should design the different systems of provision that make up a civic commonwealth. There are differences of opinion about how all this should fit together, and no group has all the right answers or even the right questions. In fact, it is only by tolerating disagreement that the participants in civic conversations can both individually know more than they knew before and as a group see their way toward a course of action that is supported by the best contributions of all sides. To engage in this process, participants must take on the identity of citizens and members of a civil society that transcends their social differences, but does not erase them. Diversity is essential for making the best decisions possible.

The process of dealing with disagreement involves more than listening to and learning from different points of view. It also requires a common acceptance of the general principles that we outlined previously about a good system of provision—fulfills its purpose, fits in the larger whole, and protects the value and dignity of its parts. These general norms provide a common basis for dealing with disagreement (people will only effectively disagree with each other when they share some broader agreements) and also provide some normative standards for evaluating the different positions. Successful civic conversations, in other words, must be guided by civic norms.

Where do such conversations take place? They can occur in any of the organizations that are contributing to the goal of any system of provision. In fact, if we are to actually change from a commercial to a civic commonwealth, they need to occur in businesses and corporations as well as in nonprofits, government agencies, and voluntary associations. Civic conversations, in other words, are not limited to some special civic location, such as city hall, but rather are limited by the openness of different types of organizations to facilitate a civic identity and conversation in their offices and workplaces.

Facilitating such conversations would appear to be one significant contribution that business ethics could make not only to business but also to the work of designing effective systems of provision. This does not mean that we should make corporations “citizens.” Just as we do not name religious organizations or nonprofits “citizens,” nor should we give the name to corporations. They are not citizens, but we can institute civic conversations among their members. In fact, that may be one of the most important civic obligations of corporations. Businesses and corporations, in other words, should participate in the governing of a civic commonwealth, but they should also recognize the limits of their reach.

* Governing the civic commonwealth

Governing is about steering systems of provision toward making provisions for all, and, at the same time, moving toward a just and sustainable economy. The old economics of property assumed that all we really had to do was to protect individual rights to property and most other things would take care of themselves. This has turned into one of the biggest mistakes in human history. It has placed our whole planet in danger. Through the privatization of land, labor, and money, we have stretched the bonds of human communities about as far as they can go. Considering this situation, one can sympathize with those who have given up on government, on democracy, and on our capacity for collective action. The fact is, however, the ship of state is heading toward disaster and we need to take hold of the steering tools we have and to change course.

Borrowing from Kenneth Boulding’s work on managing systems, we can posit three different types of steering mechanisms: (1) persuasion—getting people to share similar values and visions; (2) incentives—rewarding people for doing what needs to be done, and (3) regulations—forcing people to obey laws and regulations (Boulding 1989). Although all three are always present in any successful system, each one has its own possibilities. Unfortunately, corporations control many of these possibilities. If we are to move from a commercial to a civic commonwealth, we will need to make some changes.

* Governing by persuasion

Contrary to what many may believe, persuasion is perhaps the most powerful of the three. Persuasion is what maintains the current emphasis on economic growth, even in the light of solid evidence that such growth is totally unsustainable. Corporations spend around 200 billion dollars a year in advertising. Shopping has become not only an American pastime, but even an important part of the American Dream. In light of the corporate control of the mainstream media, some people have given up on traditional educational institutions. Others see another option. For them, the Internet and social media offers a new means of educating citizens about what is actually happening in the world as well as new opportunities for engagement in making significant changes.

Still, the education we need is civic education. We need people to understand themselves as citizens, as members of the same generation whose decisions will affect future generations. It would certainly help if employees gained the rights of citizens in the workplace. That would require that they have a voice in the design of their workplaces and even a voice in the distribution of company profits. It would mean, in other words, a shift from property relations to civic relations at work. Some people in business ethics have argued for this, but it has not been a major theme (see Brenkert, 1994; Brown 2005; McMahon 1994). Perhaps it should become one.

If people spend most of their lives in organizations that do not recognize their civic identity, then these institutional denials of their civic rights may be more persuasive than all the books on business ethics. Crucial are the expectations of the groups in which we live and work. Most of us live up (or down) to group expectations, and if we are to use persuasion to change the systems in which we live, we will need to learn how to change expectations. Few would deny that corporations are governing (steering) our social lives today, but mostly from a commercial rather than a civic perspective, especially when it comes to using the second way of changing systems: incentives.

* Governing by incentives

If some have difficulty understanding the power of persuasion, few will doubt the power of incentives. Isn’t it true that whoever has the money has the power? Here we need a bit of reflection. Power, in the modern world, does not really reside in money, but rather in organizations and systems. If you are the CEO of a large corporation, for example, you have power in your position, but if you leave the position, you leave the power. Also if one redesigns an organization’s structure, one also changes the power of different positions, and therefore also the structures of incentives.

Since electoral politics in the USA are currently structured so an individual’s money can buy capacity to reach voters, money does make a difference. Changing the process of elections could change this. Social media, for example, may provide an alternative means of communicating about the election that is not dependent on corporate incentives. In any case, perhaps there is no more important issue to address than the use of corporate incentives to influence government. In many ways, the power of regulation has become dominated by the power of incentives, which means that we still live in a world where the commercial dominates the civic. This must change if we are to have a viable future for everyone. The question is who should control regulation.

* Governing by regulation

For regulation to be an effective means of governing, it must not be dominated by financial incentives, but rather grounded in civic norms. Perhaps we need to apply the principle of the separation of church and state to the relationships between corporations and governments. Just as the state should not become the servant of any religion, nor should it become the servant of corporations, or, more generally, the world of commerce. At the same time, corporations are also governing bodies, and their regulations (policies and procedures) that pertain to their function in a particular system of provision should not be taken over by government.

Government needs to protect not only the civic sphere, but also the civic character of market competition. When necessary, government should develop standards of corporate conduct to ensure that workers and others are treated as citizens. Government can also create an even playing field for business competitors by developing environmental and social standards that all competitors must follow. Corporations can also participate in the development of regulation in the system of provision in which they operate. In fact, knowledge from corporate experience can be very helpful in developing smart regulation for any system of provision. At the same time, corporations should not participate in systems of provision in which they do not belong, such as the system that provides us with our political leaders—our system of democratic elections. Regulations should maintain the boundaries between different systems of provision, and prevent agencies that have legitimate influence in one system from using that influence in another where they do not belong.

If we locate the role of regulation in the various systems of provision, then its primary role will be to protect the providers of wealth—planet and people—and to provide guidelines for all participants in these systems to fulfill their systemic function. The political community has resources for legitimizing and for enforcing its regulations: the Constitution, legislation, and law enforcement. As long as these instruments of regulation remain available, the state has the “power” to regulate corporations, if it has the will.

* Conclusion

If we step back for a minute, we can say that human communities have three basic tasks: to provide for one another, to protect one another, and to find reasons for doing so. Persuasion, incentives, and regulation connect to these tasks. Persuasion maintains a meaningful world, whether by myths and rituals or corporate commercials; incentives motivate us to provide for one another, whether by norms of reciprocity or by selfishness; and regulations protect us, whether by protecting privileges or protecting equal opportunity. As a community, we must decide what types of persuasion, incentives, and regulations will enable to move us toward a mature and stable human community. This will require us to move from the current commercial commonwealth to a civic commonwealth.

Current research and reflection of the commons has given us a chance to actually develop a new understanding of “common wealth.” We live in a world of abundance. The sun shines on all the planet. It is the ultimate commons that gives our planet life. This living planet is the source of our common wealth, for this and future generations. Today, we cannot transform our common sources into human resources, however, without commercial enterprises. At the same time, we cannot survive if the commercial defines our life together. The work ahead, I believe, is the work of citizens, who through civic conversations give shape to a viable relationship between the commons and the commercial. Business leaders can participate in this work by exploring the role of their business in a particular system of provision. Ethicists and other can help to facilitate such conversations, so that the civic defines our commonwealth rather than the commercial.”