Third in a Series: Time to Talk About the Public Interest
The TakeAway: In a society saturated with market values, we need to recoup the idea of civic virtue, and the civic moral obligations of wealth. This has philosophical and practical significance for any discussion of sustainability, responsible investing, and the 21st century fiduciary—something well beyond the loose canons of Modern Portfolio Theory that have led us astray.
As Steve Lydenberg has argued [in his award-winning paper Reason, Rationality, and Fiduciary Duty], the corporate responsibility and ethical investing movements have much to contribute [in altering our idea of fiduciary duty]. So, too, does the dynamic field of corporate governance, and the relatively new field of Islamic finance, the basis of the important work of the Harvard Islamic Finance Project. These various efforts shed light on the civic moral purpose of capitalism, of values in public life, because they stem from a shared set of guiding concepts and vocabulary having civic moral meaning—even if these concepts and vocabulary remain veiled.
Missing in Action: A Civic Moral Framework, Vocabulary, and Discourse
The most striking feature about contemporary discussions of sustainability and the 21st century fiduciary is the absence of concurrent discussions about the ethics and civic moral values that gird it. Missing is a civic moral framework, vocabulary, and ethical discourse that enables creative problem solving about the complex economic and political challenges before us.
Indeed, this dimension remains neglected by investment managers, policymakers, financial professionals, the media, and even corporate social responsibility (CSR) and sustainability practitioners. That’s because they often are preoccupied with “measuring what matters” and fighting injustices or climate change—themselves moral prerogatives—rather than keeping in mind and engaging in dialogue about the first-order principles and values that animate their efforts. There’s larger civic moral meaning and purpose to their work, which is why it’s important to start somewhere and reveal what that meaning and purpose represent.
You don’t have to go back to antiquity to discover that this wasn’t always the case. Throughout the 1980s and 1990s, a number of commentators, academics, theologians, and social scientists wrote about the moral dimension of economic enterprise.
Proposition One: Set aside loose canons and learn from history about the civic moral obligations of wealth.
Boston is a privileged area because of its history and values, its institutions, its culture, and its people. The birthplace of civil society, its New England roots are deeply planted in an ethic of caring and fairness, inspiring a model of governance that did not distinguish between public and private realms, a model that was to serve as the basis for democratic structures to come. The 1629 chartering of the Massachusetts Bay Corporation, followed soon thereafter by the incorporation of congregational churches and local townships, and later by Harvard College, set the stage for the virtues of representative lay governance, with moral commitments and the competitive spirit of innovation serving as the propellant for reaching community goals.
While this model has evolved and changed over time, subject to the prevailing passions and prejudices of the culture, the guiding principle of colonial life remains intact: self-governance is a means through which a free people remain free, subject to rules and conditions that derive from voluntary agreements and obedience to man-made and nature’s law, one’s conscience, and God.
At the beginning of American society, with religious faith and Enlightenment theories as a backdrop, property ownership and the marketplace were subordinate to civic virtue, and civic virtue was enshrined in our laws and institutions, including notions of trusteeship. Property ownership, as envisioned by the Framers in their design of our federal system of checks and balances, was a ticket to democratic political participation, even though politics was not the only influence on the evolving economic life of the Republic.
Religious faith and interpretation served as a subtext for how we organized our economic arrangements, and for how commerce and capitalism, particularly the emergence of the modern business corporation, came into being. Moral virtue was tied to good stewardship and the acquisition of wealth, a union sometimes at odds with the spirit of democracy (citizens without property were excluded from the business of governing, not unlike modern times wherein big money dominates the electoral process), yet driving continued public suspicion of any concentration of wealth and power.
Since John Winthrop’s 1630 call for a covenantal city on a hill and the hegemony of Yankee Protestantism (particularly Puritanism and Quakerism), the relationship between money and morality lie at the heart of two themes that continue to endure in American public life: the role of piety and faith in building and sustaining community, and the influence of competition, individualism, and self-interest in doing so. While Winthrop emphasized the predominance of faith, family, and community in realizing the American dream, this civic moral framework later gave way to the emerging capitalist order and, by the early 20th century, receded in importance as capitalists and economists, taking a cue from their 18th century secular brethren, began to utilize scientific principles in measuring and managing economic performance.
For three hundred years, the notion of money and morality was not an oxymoron; to the contrary, it was considered an article of faith in American culture, however tense that relationship might be. At the present time, the tension between private ownership (meaning corporate equity, evoking the equites of antiquarian Roman society) and the public interest continues, with trustees and directors serving as the first line of defense. Cultivating and enacting responsible ownership and fiduciary governance affects not just the manner in which financial assets are managed but speaks to the very core of what it means to be a trustee or director.
Since the birth of our Republic—a genealogical product of Enlightenment and religious traditions—these ideas, vocabularies and symbols have enriched the soil on which Americans found common ground, enabling personally held moral and religious convictions to find expression in how citizenship was defined. Even as there were carefully constructed divisions between “church” and “state”, notions of a “good society”, a “common good” and a “commonwealth” were extensions of moral and religious beliefs, mediated by adherence to public reason, the rule of law and a commitment to mutual honor and respect.
Notions of justice, liberty and fairness; of pluralism and diversity; of equity, “standing” and trust; of independence, vision and innovation; of freedom, self-governance and self-determination; of political stability, safety and security, were embedded in our social, cultural and political life.
These virtues helped define integrity—meaning, both literally and figuratively, their integration into the fabric of community, institutional and individual life. They served as building blocks for our constitutional system of representative governance, enlivened by participation and public accountability. They were predicates, too, for our economic arrangements, because business was essentially about community.
Next: “Civic Virtue as the Animating Ideal”
Editor’s Note: This is the third installment of MurnPost’s Time to Talk About the Public Interest series. Part One appeared on 8/13/2013, here. Part Two appeared on 8/16/2013, here. It’s based on a long essay submitted to the IRRC Institute Award competition on Post-Modern Portfolio Theory, written in November 2012.
 Throughout the 1980s and 1990s, a number of commentators, academics, theologians, and social scientists wrote about the moral dimension of economic enterprise, including Robert A. Dahl, A Preface to Economic Democracy (Berkeley: University of California Press, 1985); the National Council of Catholic Bishops, Economic Justice for All: Pastoral Letter on Catholic Social Teaching and the U.S. Economy (Washington, D.C.: National Conference of Catholic Bishops, 1986); Max Stackhouse, Public Theology and Political Economy: Christian Stewardship in Modern Society (Grand Rapids: Wm. B. Eerdmans Publishing Co., 1987); Amartya Sen, On Ethics and Economics (Oxford: Basil Blackwell, 1987); Amitai Etzioni, The Moral Dimension: Toward a New Economics (New York: The Free Press, 1988); M. Douglas Meeks, God the Economist: The Doctrine of God and Political Economy (Minneapolis: Fortress Press, 1989); Robert A. Dahl, Democracy and Its Critics (New Haven: Yale University Press, 1989); Thomas Donaldson, The Ethics of International Business (New York: Oxford University Press, 1989); Pope John Paul II, On the Hundredth Anniversary of Rerum Novarum – Centesimus Annus, May 1, 1991 (Washington, D.C.: United States Catholic Conference, 1991); Richard John Neuhaus, Doing Well and Doing Good: The Challenge to the Christian Capitalist (New York: Doubleday, 1992); John Reumann, Stewardship and the Economy of God (Grand Rapids: Wm. B. Eerdmans Publishing Co., 1992); Michael Novak, The Catholic Ethic and the Spirit of Capitalism (New York: The Free Press, 1993); and William James Booth, Households: On the Moral Architecture of the Economy (Ithaca: Cornell University Press, 1993).