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Johannes Wallacher {*}

"We are Living on Tick"

An Interview with the Business Ethicist John Wallacher

 

From: Herder Korrespondenz, 12/2011, P. 609-613
webmaster's own, not authorized translation

 

    The climate, financial and debt crises in European countries and the U.S. show that the purpose of our economic activity is too one-dimensional. What is needed is the widest possible debate on what actually constitutes societal progress. We talked with the Munich expert in business ethics Johannes Wallacher about this issue. Alexander Foitzik asked the questions.

 

HK: Professor Wallacher, two years ago, it was necessary to cope with a global financial and economic crisis, and now with the European debt and banking crisis. In addition, there are the global climate crisis and a latent hunger crisis. Here in this country currently is not much talk about them but they produce dire consequences especially in the southern part of the earth. Is it possible to show the connections between these crises, or their common causes?

Wallacher: There are very strong reciprocal connections between these crises. The connection between economic crisis and climate crisis is quite obvious. We conduct our economic activities in such a way that we externalize the negative effects of our economy, i.e. we burden others with them and postpone the necessary countermeasures into the future. That means with regard to the financial crisis: risk-taking is no longer limited by adequate liability regulations. With respect to the global climate and its dramatic changes, we can only behave this way because we know, people in other continents, especially the future generations have to bear the consequences, have to foot the bill. We live on tick - that is what connects the climate, financial and debt crisis in European countries and the USA. We shift the loads into the future, and are not willing to bear the consequences of our actions.

HK: And the so-called "silent" crisis, the famine or global food crisis?

Wallacher: Here, too, close links with the financial crisis exist. It is about certain forms of financial market speculation in food and the scramble of international investors for agricultural land. In view of a globally rising demand for food, food and land become a scarce commodity, and therefore also a subject of speculation, and the hunger crisis is thus intensified. But the connection between climate crisis and famine is equally evident. Agriculture, e.g. boosts the climate change by deforestation and the planting of monocultures. Conversely, climate change impairs the growing conditions in many regions. It has already become apparent that extreme weather events are on the increase - take the current drought in Somalia as an example. Due to these extreme weather conditions, there is, of course, an increase in people's vulnerability.

 


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HK: Is there something like a common message of the various crises? Is not it necessary, in view of these findings, to ask in the end whether the capitalist economic system as a whole is obsolete?

Wallacher: A specific form of capitalism has in any case proven to be obsolete: the merely financial market-dominated capitalism, which aims at as quickly as possible short-term profits, without considering their further consequences. This can certainly be learnt from all three crises. But this does not mean that the market economy, per se, is delegitimized, because in all cases there are also many and diverse state failures. All these crises point to a considerable lack of order. It is therefore necessary to limit in concrete terms the risk-taking in the financial markets by means of appropriate liability regulations. Overall, it is necessary to arrange the normative structures of economy and the economic incentives in such a way that it pays to act in a future-oriented way.

 

"A too one-dimensional Perspective of our Economic Activities"

HK: Is currently, in the European debt and banking crisis, recognizable that the wider context of the various crises is taken in consideration while solutions and ways out are discussed?

Wallacher: A first important message is that now also the private creditors are made discharge their duties and thus a wrong incentive is corrected. They can no longer expect that they are 'ransomed' at any cost and without any personal contribution in future crises - i.e. a form of joint political liability. It is hoped that this message takes firm roots in the minds of financial market actors. As important as this first step is - regarding the structural prevention of financial crises we have made hitherto not much progress. We still apply ourselves almost exclusively to crisis management. There is still almost no progress regarding the necessary structural reorganization of the financial markets. And the climate and food crisis have almost completely disappeared from the political agenda.

HK: In the financial and economic crisis two years ago, politicians, scientists, but also the churches asked very essential questions regarding the way of our economic activities, our understanding of prosperity and societal progress, the standards of value in our life. It was symptomatic of this very fundamental discussion that the Bundestag established an enquete commission with the somewhat awkward, but very programmatically sounding title "Growth, Prosperity, Quality of Life - Paths Towards a Sustainable Economic System and Social Progress in the Social Market Economy". How may the general discomfort behind this policy debate be described?

Wallacher: The view on the purpose of our economic activity is too one-dimensional and only a very specific part of this economic activity is appreciated, namely the production of goods and services which is valued at money. This is without doubt a crucial aspect, but beyond a certain in Germany long since reached welfare level also quite different factors are important for what we understand as a societal and social progress. In the one-dimensional perspective on our economic activity these factors are ignored. Thus, for example, where one is one-sidedly fixed upon the growth of gross domestic product, negative consequences are not seen, as e.g. the unabated increase in greenhouse gas emissions, an ever-increasing workload, or vice versa, the increasing loss of manpower due to rising mental stress in many workplaces. For this reason, there is needed the widest possible debate about what does constitute the societal progress.

HK: What should be the future relation between growth, prosperity and quality of life? There are certainly also economists who want to prescribe the rich industrial nations, especially in view of their resource consumption a zero economic growth.

Wallacher: Growth is never an end in itself and a sufficient precondition for more prosperity and a higher quality of life. It may well be an important means for it, but ethical guidelines in two directions are needed for it. First, it must have a broad impact, i.e. arrive in the breadth of society; it must not increase the disparity; as many people as possible should benefit from growth. Secondly, growth must be environmentally compatible, resource-saving or resource-efficient and climate-friendly, in order not to diminish future generations' prospects of prosperity. A growth that is qualified by these two guiding principles is quite realistic, but for it we must ultimately accomplish politically the correct relation between necessary regulatory measures - as e.g. limiting the global greenhouse gas emissions - and economic incentives, such as emissions trading.

 


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HK: What is wrong with or is no longer correct in the equation "growth in prosperity = increase in quality of life"?

Wallacher: This is e.g. demonstrated by the results of empirical social research, specifically the so-called "happiness research". Beyond a certain income level quite different factors are crucial for life satisfaction of people. The security of one's job is here an important aspect or the question of how satisfied people are with their work, to what extent they identify with their company and its goals. Interestingly, the various opportunities to participate are also important for life satisfaction: the opportunity to participate in arranging one's workplace, but also to take part in the process of political decision-making. The question of the impact of employment on their social relationships, of whether it enables them, promotes them or makes them difficult, is increasingly important for many people. Stable, deep-reaching social relations are a very important factor for the quality of life. All these factors must therefore be included in our concept of prosperity. Or vice versa, where they are involved, one can really speak of social progress.

 

"A Certain Rethinking can Partially be Seen Already"

HK: If one compares the current debate in politics or e.g. in science with that of two years ago - is there a certain rethinking in the evaluation of growth, prosperity and quality of life? Or has one quickly returned to "business as usual" after particularly Germany has come fairly unscathed through the crisis?

Wallacher: A certain rethinking can partially be seen already. In the scientific debate for instance, it is perceptible that the economists are willing to have a rethink about their own instruments for measuring prosperity, and even more fundamentally to rethink their own standards and beliefs. The importance of ethical issues, too, is increasingly taken into consideration. Similarly, one opens to the empirical social research on the questions mentioned above about the real needs and desires of people. Especially the latter was for a long time of no importance in economy and in the theories of "homo economicus".

HK: And what about the mood among the general public, for example the discussion in the media?

Wallacher: Even though the economic development in Germany as a whole is relatively positive, there is understandably a great discomfort regarding the growing social inequality. In addition, there is still some uncertainty: Is the positive economic development reliable, won't we very quickly get into the wake of a crisis? In this regard one is obviously worried - and that not without reason. Because the current debt crisis pushes all the other problems into the background and impedes the necessary structural change. The banks are reluctant to grant loans for entrepreneurial innovations, which are urgently needed for more resource efficiency and climate protection. Due to the need to cut spending, the public budgets have little room for investments in education and research, without which our future viability is jeopardized. It is an enormous challenge for our education and training system to adapt the individual's ability to reflect to the increasing complexity of the world, and to enable him and she to understand their own actions even in very complex structures, and to orient themselves. The media are faced with the challenge to resist the temptation to superficiality and undue simplification.

HK: The question of why Germany has relatively well and quickly come out from the financial and economic crisis is usually answered: the reason is the quick rise in economic growth ...

Wallacher: This is certainly an important point, but there are various critical factors. Compared e.g. with Great Britain, the German economy has a much wider range and is not so dependent on individual financial centers. A help was certainly also the in itself ambivalent export strength of the Germans. And do not forget the companies' contribution to coping with the crisis, i.e. their cooperation with the unions and politics - keyword: extension of the short-time working money. That was a great social performance, which should not be underestimated. The good old corporatism, which has its cultural roots in Germany and has often been criticized and ridiculed in the recent past, was a crucial factor; because we thus succeeded in building mutual trust.

HK: Are there forms of systemic resistance which hamper the necessary rethinking or redirecting towards a "greener" growth, as e.g. a principled blindness of the market with regard to the future or the short-term thinking in politics? Are we consumers too lazy or overtaxed?

Wallacher: A socially balanced and environmentally sustainable development cannot be achieved in the long run without major structural reforms.

 


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Such reforms do not come overnight. They are dependent on the support of broad sections of the population. We all must therefore resist the temptation to complain only about the short-term thinking of politics or about the greed of the bankers. It is often ignored that crises have to do with our own life, with societal models as e.g. a widespread discounter or bargain mentality, which is probably not entirely unfamiliar with most of us. We should make ourselves more often aware of the fact that we, e.g. as consumers, willingly follow such trends. Individual decisions have admittedly always only a limited impact. And there is certainly also a feeling of powerlessness: we feel unable to make an appreciable contribution in view of the complex dependencies and the powerful stakeholders and lobby groups, which put pressure on politics. Nevertheless, personal changes in behavior and lifestyle may have an important function as role model and trendsetter. Provided a 'critical mass' adopts this behavior, this would increase the demand for sustainable products and thus improve the position of sustainably operating companies. Such "advocates of change" would be an important signal for politics: the necessary reforms find support and are enforceable.

 

"Satisfaction with Life does no longer Depend Solely on Income Growth"

HK: But how can be promoted a multidimensional understanding of growth, prosperity and quality of life? Those who talk too aggressively, e.g. about the so-called green growth, are quickly suspected to preach harsh relinquishment, and to speak out in favour of a stone age economy or of eco-dictatorship.

Wallacher: Especially the empirical research on happiness provides here incredibly good arguments: Beyond a certain level of material prosperity, life satisfaction does no longer depend solely on income growth, but quite different factors are important. You needn't conduct this debate with the 'relinquishment cudgel', if it can be shown that the quality of life increases although I do not join every new trend in consumption or tourism. It is quite well documented that individuals can gain added value from it, when they sometimes oppose such trends; or that you can achieve added value also from political participation, or from a honorary commitment. In other words, spoken in moral categories, the debate about the necessary rethinking needn't be confined only to the question of duty. All these ethical questions can also be answered in view of a positive guiding principle, namely from the perspective of a successful, good life - in the sense of the Aristotelian ethics tradition.

HK: Is it possible that the individual question of a good and successful life, the individual's search for life satisfaction becomes a guiding principle for society? How can this be achieved?

Wallacher: If it is ethically required to ask, what sense we see beyond a mere income growth in our economic activity and work, we can - based on the criterion of generalizability (and that would be the decisive contribution of Kantian ethics) - also find equally good arguments for organizing society and economy through suitable structural conditions in such a way that all people get at least basic opportunities to live a successful life. This does not necessarily require a consensus on what a good, successful life means for each individual.

HK: And what about our responsibilities towards future generations, or the responsibility for a human-oriented development in the poor and poorest countries on earth? Is not it much more difficult to give here a sufficient reason for rethinking?

Wallacher: If I really reflect about what makes my life a succeeding life, I must acknowledge, it is not the material consumption alone. If I experience a high level of satisfaction by living e.g. in deep social relationships, I must really ask myself whether I want to grant that experience to others or not. This is a moral question, for sure! But I needn't abstain from something so that others also have an opportunity. I refrain from many things because I am fine. And I enable thus others to live a good life. We human beings are always relative beings. We compare ourselves with others. In society there prevail currently guiding principles which are strongly influenced by material consumption. Our categories for comparision are thus accordingly determined. However, if a 'critical mass' of people really reflects that it is not essential for a succeeding life to possess permanently and immediately the latest generation of navigation devices, then these people may become pioneers of change, towards a vision: to live well, rather than to possess much.

HK: Who should initiate or support this process of change - even against massive resistance? What role is played by civil society forces such as the churches?

Wallacher: Such processes are always running via social communities. It is therefore important that in such social communities the guiding principles have positive connotations. This may be parishes or other civil society groups. The advantage, or the great potential of the churches is that they are organized not only locally or nationally. Due to their contact to churches in other world religions, they can therefore always contribute the global horizon.

 


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The same can happen also in other civil society groups which inspire each other. Anyhow, a societal process of change comes only about, when once again a 'critical mass' of such social groups emerges. I see here a great chance in the fact that these groups are now no longer as closed as before. Today we see very interesting connections between, e.g., open-minded church groups, environmental groups, trade unionists and innovative businesses and entrepreneurs.

HK: Would not a resolute commitment especially of the Catholic Church be desirable in this country?

Wallacher: It is important to deal with internal church matters, but this must not absorb her entire energy. The church must therefore always bear in mind how important contacts are to science, enterprises, trade unions, political parties, in order to promote even more this social transformation process. It is essential to seek and find these alliances of solidarity also beyond the classical church groups. The church should show here less fear of contact.

HK: But will the churches find a sympathetic hearing, when they want to have a say in these matters?

Wallacher: The churches are still an important societal force. However, two aspects of this commitment are central: The churches must provide good arguments and not simply moral appeals. And these good arguments must go deeper than the public discourse, which often remains on the surface. The churches, theology and above all philosophy are definitely able to make this contribution. The second aspect concerns the credibility of the churches. If both aspects come together, the churches are very sought-after interlocutors, because on the part of society there is a very large demand for orientation, a great yearning for authentic and successful forms of good life.

HK: In the mid nineties, the two major churches in Germany released a "Joint Statement on the Economic and Social Situation in Germany." So they wanted to stimulate a fundamental debate about the values underlying the social market economy. In view of the financial and economic crisis, the climate and the hunger crisis, isn't here urgently needed an update? Each of the churches has separately made detailed statements ...

Wallacher: It was the great merit of this word, that the churches have together taken a stand. This was just as important for ecumenism as the image of the churches in society. Since it is necessary to update this statement on economic and social issues in view of new challenges, many arguments suggest to do it again ecumenically, the more so as there is among the churches a broad agreement about these issues.

 

    {*} Johannes Wallacher (born in 1966) holds doctorates in philosophy and economics and is since September of this year President of the Jesuits' School of Philosophy in Munich. Since 2006, he was there professor of business ethics and social sciences, since 2008 Chairman of the expert group "World Economic and Social Ethics" of the scientific working group which is dealing with the German Bishops Conference's tasks for the universal church, and since 2004 member of the German Commission Justitia et Pax. Recently published: Mehrwert Glück. Plädoyer für menschengerechtes Wirtschaften, München 2011; together with Matthias Rugel (ed.): Die globale Finanzkrise als ethische Herausforderung, Stuttgart 2011.

 

Link to 'Public Con-Spiration for-with-of the Poor'