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A Kantian Program for Contemporary Issues in Business Ethics William Thomas Woof a Dissertation Submitted to the Faculty of Grad

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A Kantian Program for Contemporary Issues in Business Ethics William Thomas Woof a Dissertation Submitted to the Faculty of Grad A KANTIAN PROGRAM FOR CONTEMPORARY ISSUES IN BUSINESS ETHICS WILLIAM THOMAS WOOF A DISSERTATION SUBMITTED TO THE FACULTY OF GRADUATE STUDIES IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF DOCTOR OF PHILOSOPHY GRADUATE PROGRAM IN PHILOSOPHY YORK UNIVERSITY TORONTO, ONTARIO JANUARY 2016 © WILLIAM THOMAS WOOF, 2016 ABSTRACT Theoretical approaches to business ethics have been dominated by empirically oriented ethical theories that largely follow in the Enlightenment tradition whereby ethical theories play only a supportive role. However, recent problems have emerged in business that are largely systemic in nature and may have significant and longstanding impacts that are social, political and economic in nature. Climate change and resource depletion are included in these problems, as are recurrent financial crises. These problems would indicate that ethical theory could be playing a more significant role. Kantian ethical theory has been revived over the past thirty years, thanks to the work of John Rawls. However, Rawls has given Kantian theory a largely empirical orientation to make it more acceptable to mainstream currents of thought. Recently, there has been a movement in Kant studies away from this Rawlsian approach towards more metaphysically oriented patterns in Kant's philosophy, particularly in his ethical, political and social contract theory. This dissertation explores the possibility that these new streams of Kantian research could be applied to business ethics with respect to these structural problems and issues. More specifically it investigates the use of the precautionary principle as a viable approach to business problems in concert with the use of preventative strategies. It is further suggested that the precautionary principle could be used in conjunction with the doctrine of double effect as applied to principles rather than actual events. The dissertation then provides a detailed examination of the emergence of structural problems that relate to issues in the natural world (climate change, resource depletion) and in finance. For the latter, a case study is built around Long Term Capital Management, a hedge fund that failed in 1998 and which generated significant potential instability in ii financial markets. It is argued that these structural problems can build up over long periods of time and create disruptions between short and long term considerations. They also generate considerable uncertainty and make risk calculation more difficult. The dissertation concludes by building a Kantian model as the basis for analyzing problems of this nature. iii TABLE OF CONTENTS Abstract .......................................................................................................................... ii Table of Contents ......................................................................................................... iv Chapter One: Introduction ............................................................................................. 1 Preface: Revisiting the Relationship of Business and Ethics ................................. 1 Chapter Two: The Enlightenment Legacy & its Assumptions .................................... 12 Introduction ............................................................................................................ 12 The Aspirations and Objectives of the Enlightenment Project ............................. 15 The Enlightenment: Two Fundamental Assumptions ........................................... 18 Science, Complexity and the Problem of Uncertainty .......................................... 24 Acting Into Markets: The Case of Long Term Capital Management (LTCM)....... 25 Acting Into Nature: The Nature and Structure of Scientific Knowledge ............... 47 The Ingenuity Gap ................................................................................................. 54 Setting the Stage: Revisiting the Role For Instrumental Ethical Theories ........... 57 Consequentialism in the Service of Economics .................................................... 59 Structural Conflicts and the Doctrine of Double Effect ......................................... 67 Conclusion: A Final Assessment of the Enlightenment Heritage ......................... 75 Chapter Three: Kantian Ethics as a Response to the Enlightenment ........................ 81 Introduction ............................................................................................................ 81 General Overview of the Kantian Ethical Philosophy ........................................... 88 The Metaphysics of Autonomy as the Basis of Kantian Ethics ............................ 96 The Application of Autonomy to the Principles of Kantian Moral Philosophy .... 112 First, Theoretical Reason Separate From & Subordinate to Practical Reason . 116 Second, The Priority of the Right Over the Good ............................................... 120 Third, Full Individuation of the Moral Agent ........................................................ 128 Superseding Instrumental Rationality Through the Power of Moral Autonomy . 135 Chapter Four: The Metaphysical Dimensions of Kantian Ethics .............................. 140 Introduction .......................................................................................................... 140 Re-establishing Metaphysics as the Basis of Kantian Ethics ............................. 148 The Road From Hypothetical Imperatives to Synthetic a Priori Propositions .... 150 Rawls and the Constructivism of Kantian Ethics: The Road to the Good Will ... 162 The Good Will and the Metaphysics of Freedom ............................................... 174 Chapter Five: Developing the Kantian Model ........................................................... 190 Introduction .......................................................................................................... 190 Construction of the Kantian Model: The Dimension of Pure Practical Reason . 194 Construction of the Kantian Model: The Dimension of History ........................... 201 Construction of the Kantian Model: Separation of State and Civil Society ........ 208 Bringing the Kantian Model up-to-date ............................................................... 222 The Kantian Model in Action ............................................................................... 239 Conclusion ........................................................................................................... 261 Bibliography ............................................................................................................... 272 iv CHAPTER 1: INTRODUCTION Preface: Revisiting The Relationship of Business and Ethics God isn’t compatible with machinery and scientific medicine and universal happiness. You must make your choice. Our civilization has chosen machinery and medicine and happiness. Aldous Huxley1 Faith in science, which after all exists undeniably, cannot owe its origin to a calculus of utility; it must have originated in spite of the fact that the disutility and dangerousness of the “will to truth,” of “truth at any price” is proved to it constantly. Friedrich Nietzsche2 Our culture has produced the science and technology it needs to save itself. It has the wealth needed for effective action. It has, to a considerable extent, a concern for its own future. But if it continues to take freedom and dignity, rather than its own survival, as its principal value, then it is possible that some other culture will make a greater contribution in the future. B. F. Skinner3 This dissertation will argue that significant features of modern business practice, features that have developed in conjunction with the evolution of the twenty-first century capitalist system, require that the relationship of ethics and economics be reexamined. Conventional understandings of this relationship have evolved within the framework of assumptions that put ethics at the service of economics. It is in this sense that business 1 Aldous Huxley, Brave New World (Harmondsworth: Penguin Books Ltd., 1955), 183. 2 Friedrich Nietzsche, The Gay Science, (Book Five, “We Fearless Ones,” 344) Walter Kaufmann, trans. (New York: Vintage Books, 1974), 281. 3 B.F. Skinner, Beyond Freedom and Dignity revised edition (Indianapolis: Hackett Publishing Company, 2002), 181. 1 ethics is widely thought to be the handmaiden of economics and not an equal partner. What, one might ask, is the genesis of this view of the ethics/economics relationship? A longstanding historical distinction between moral philosophy and natural philosophy served philosophers and intellectuals for several centuries and became manifest in several forms: from Thomas DeQuincey’s distinction between the literature of knowledge and the literature of power4 to Immanuel Kant’s distinction between theoretical and practical reason. After Kant, under the progressive impact of positivist and empiricist thought, moral philosophy declined in relative importance vis-à-vis the philosophies of science, mind and language. Over the past half century leading philosophers have turned their attention back to ethics, viewing it largely as an unexplored frontier - in general seeking the grounds for its naturalization. Writing in 1985, Thomas Nagel complained: “The best reasons for skepticism about ethical theory are the meagerness and controversiality of its results and the lack of agreement over methods…. (E)thical theory, if there is such a thing, is in its infancy.”5 This assessment did
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