Self-interest vs. the common good: On the change in norms within economics

Project management: Prof. Dr. Rainer Klump

The supposed conflict of interest between self-interest and the common good is one of the most frequently discussed topics at the interface of ecology and economics as well as in the areas of economic and environmental ethics.
Examples in the field of ecology include global air and environmental pollution, overfishing of the oceans, the clearing of rainforests, the destruction of plant and animal ecosystems, the overexploitation of natural resources, particularly in developing and emerging countries, CO2 emissions and the massive consumption of fossil fuels and non-renewable energy sources. Global warming and climate change appear to be directly linked to this ecological footprint left by humans.

Examples from the field of economics include the search for privileges and rent-seeking by some interest groups, the phenomenon of lobbying and political-economic corruption, the various corporate scandals of the recent past, the influence of hedge funds, private equity and investment banking, stock market speculation and manipulation, insider trading and the (supposed) (profit) greed and avarice of some managers of multi-national corporations. Such unethical behavior is reinforced by the short-term orientation of shareholder value capitalism. A lack of sustainability can be observed particularly in the area of incentive and remuneration systems (bonus payments, etc.). The widespread and short-term “thinking in quarterly figures” thus seems to contradict the long-term well-being of legitimate stakeholder groups such as employees, customers, suppliers and society as a whole. The lack of ӧeconomic, ӧcological and social sustainability can lead to a state of tragedy of the commons (Hardin/Ostrom), a state in which the excessive pursuit of self-interest (including free-riding and opportunism) can lead to collective self-destruction.

The project ‘Self-interest vs. the common good: On the change in norms within economics’ investigated the potential trade-off or compatibility of self-interest and the common good. The two norms are characterized by their central importance for economic theory formation and for the development and implementation of new economic policy regulation and control concepts.

Particular attention was paid to the development of justification narratives for the two norms and the theoretical and political concepts based on them. Since such narratives typically emerge outside of economic theory formation in the narrower sense, the interdisciplinary framework of the cluster offered ideal conditions for investigating their genesis in close cooperation with neighboring disciplines.
The clash of different and differently justified normative ideas, the resulting conflicts of objectives and their possible solutions were examined conceptually and using two case studies: the genesis and implementation of the Equator Principles, a voluntary CSR initiative in the banking sector, and the discussion about the advantages and disadvantages of a paternalistic economic policy.

The identity of self-interest and the common good, which is repeatedly emphasized in economic theory in the case of laissez-faire, is the result of a particular justification narrative that has only developed since the early modern period and is still confronted with conflicting goals that are addressed in both economic and ethical-philosophical discourses. Economic and ethical norms are only actually compatible if suitable regulatory, monitoring and sanction mechanisms are in place, which in turn must differ from paternalistically inspired interventions.

The most important events in this project:

Conference: Behavioral Business Ethics: Verhaltensökonomische und ordnungsethische Perspektiven, first “Frankfurter Tagung zur Wirtschaftsethik”, Goethe University, Frankfurt am Main, October 1-2, 2013 (in cooperation with the Arbeitsstelle Wirtschaftsethik, Gerhard Minnameier).

Conference: 10 Years Equator Principles (2003-2013): Fragment of a Normative Sustainability Order or Business as Usual?, Goethe University, Frankfurt am Main, March 14-15, 2013.

The most important publications in this project:

*Martens, W./Linden, B.v.d./Wörsdörfer, M.: “Deliberative Democracy and the Equator Principles Framework: How to Assess the Democratic Qualities of a Multi-Stakeholder Initiative from a Habermasian Perspective?”, in: Journal of Business Ethics 141, 2017, pp. 1-19.

*Klump, Rainer and Manuel Wörsdörfer: “Paternalist Economic Policies. Foundations, Implications and Critical Evaluations”, in: Ordo Yearbook of Economic and Social Order 66, 2015, pp. 27-60.

*Wörsdörfer, Manuel: “Equator Principles: Bridging the Gap between Economics and Ethics?”, in: Business and Society Review 120(2), 2015, pp. 205-243.

*Wörsdörfer, Manuel: “Inside the ‘Homo Oeconomicus Brain’: Towards a Reform of the Economics Curriculum?”, in: Journal of Business Ethics Education 11, 2014, pp. 5-40.

*Wörsdörfer, Manuel: “‘Free, Prior, and Informed Consent’ and Inclusion: Nussbaum, Ostrom, Sen and the Equator Principles Framework”, in: Transnational Legal Theory 5(3), 2014, pp. 464-488.

people in this project:

Project management / contact person

Klump, Rainer, Prof. Dr.

Project staff

Wörsdörfer, Manuel, PD Dr.