Summary: Claus Dierksmeier argues that economic philosophy ought to be reintroduced into business education in order to inspire both economic theory and business ethics.

With the cultural complexity of the global economy growing, the factors that influence decision-making inside the boardrooms are less and less calculable. Uncertainty about the future and limited knowledge about the diverse social and natural environments wherein today’s businesses operate reduce the operability of traditional case-based and/or rule-based management systems. Principle-oriented deliberation processes – that hold their ground even in drastically changing surroundings – must ultimately replace them.

Philosophy, not economics, is the discipline that scrutinizes the validity of guidance principles, and how to apply them to different cultural contexts. This is why economic philosophy can help management where conventional economics and traditional business ethics have little or nothing to offer.

The open-ended nature of future events does not imply that long-term strategies are altogether unfeasible. People are people after all. People construct laws, people run businesses and people create the various symbolic systems (religion, arts, science, etc.) in which they communicate their ideas and coordinate their efforts. In order to operate efficiently within this wide web of social systems today’s business leaders must understand what drives people and how symbolic systems function.

What individuals and societies require of their economies is influenced by normative conceptions and ideas. Clarifying the social value standards and identifying individual needs, has forever been the mission of philosophers. In applying the faculties of philosophic research to the business world, economic philosophy has very important services to offer the corporate world.

One such benefit is enhanced prognostic precision. Unlike predicted by the homo oeconomicus-model of conventional economics people do behave unselfishly at times. Their moral ideals frequently demand altruistic actions wholly unconceivable within the matrix of traditional economics. Hence theories that neglect the internal realm of normative ideas, and look into externally observable factors alone, fail more often than not in their prognoses.

Another advantage of a philosophical approach to economic problems is the fostering of creativity. Usually defined as “thinking outside the box”, creativity depends on certain favorable conditions. Chief among those, you must be aware of your “box of reference” in order to overcome it. To make explicit and challenge the implicit axioms of the current socio-economic paradigm (neoclassical economics, utilitarian ethics, neoliberal politics) is precisely what economic philosophy is all about.

Not availing themselves of the alternative methods proffered by economic philosophy, traditional economics and business ethics have long since been behind the times. Their reaction to the environmental impacts, human rights concerns, governance problems and, above all, to the cultural effects of economic globalization have been so unimaginative that more and more societies – including traditionally liberal societies (like in South America) – flirt openly now with relinquishing the “open society” altogether. If only to avoid practical revolt theoretical reform must be had.

These days, hardly any renowned economist endorses neoclassical economics without major stipulations. Surprisingly enough, though, its fundamental premises still serve as benchmarks of academic economics, and, unfortunately so, as the predominant conceptual framework for business ethics.

One cannot solve problems with the very model that brought them about. As the neoclassic paradigm has proven resistant to internal revision, external efforts to transcend it must be made. Economic philosophy is such an attempt; it finally brings ethical inspiration and visionary thinking back to economics and business ethics.

Claus Dierksmeier is professor for political and economic philosophy at Stonehill College, in Easton (Boston), Mass., USA, email: cdierksmeier(at)stonehill.edu.
He adds: “I wish to thank my research assistant Amanda Bosson for helping me smooth out my Teutonic English”.