Business, Society and the Human Community

Somewhere between “society” and “community,” the concept of “living together” is still searching for its right formula, as can be seen in settings like the family, religious associations, sport and work teams, and in the Church or in business. Indeed, Jürgen Habermas argued that community or society are not alternatives.[1] In every human life, both are necessary.

Of course, our organized world tends to exclude any reference to the community, for the exclusive benefit of society. The latter, with all it presupposes in terms of institutions, organizations and rules, necessarily complements the community by virtue of its political character. The limitation of community is that it seems to concern only interpersonal relations and friendship, where feelings and freely given reciprocal aid play a more important role than transactions, which tend to be rational if not always calculable. Consequently, in today’s liberal world, community is relegated to the margins, as a purely private matter. In reality, any business enterprise in which the collaboration of several people is required must combine the characteristics of community with those of society. But how to do this?

“Every effort must be made to ensure that the enterprise is indeed a true human community, concerned about the needs, the activities and the standing of each of its members,” wrote Pope John XXIII in 1961, in his encyclical Mater et Magistra.[2] Thirty years later, in 1991, on the occasion of the centenary of Pope Leo XIII’s fundamental encyclical Rerum Novarum, John Paul II recalled that “a business cannot be considered only as a ‘society of capital goods’; it is also a ‘society of persons’ in which people participate in different ways and with specific responsibilities, whether they supply the necessary capital for the company’s activities or take part in such activities through their labor.”[3]

The challenge is to make every business a community of people. Why? And how can an enterprise that has developed as a company become a community?

Community and society

As applied to business, the distinction between community and society is a modern one. It originated with the rationalism of the 17th century, in the writing  of the social contract theorists. The modern notion of society is thus in direct opposition to the Christian perspective. It stems from an association of free citizens who, by contract, decide to create by their individual will alone, a society that will be recognized as such and to which all will submit, alongside its founders. In contrast to Christian anthropology, the individual therefore is emphasized over the person, who is a being of relations in a human community.

It is not difficult to perceive in this modern approach to the creative individual the “somewhat infatuated certainty of European hegemony over all other thought.”[4] It is only through language that individuals are already in community. From birth, the child, even though unable to speak, is welcomed by a community: familial, tribal, ecclesial, national, fraternal or other. Children are never exempt from the relationships that constitute them as human beings. Individuals can, of course, invent new forms of society – they will not hesitate to do so, particularly in the field of economic enterprise – but they certainly cannot be the foundation of the “society of persons” advocated by John Paul II.

At the end of the 19th century, at a time when, in Rerum Novarum, Pope Leo XIII was drawing moral lessons from the new social configuration, Ferdinand Tönnies also criticized the individualism inspired by modern ideas.[5] His assertion was in line with Marxist thought. Karl Marx, in fact, criticized the Declaration of the Rights of Man of 1789: “None of the so-called rights of man transcends […] the selfish man, man as a member of bourgeois society, that is, a man separated from the community, withdrawn into himself.”[6] In fact, the relations based on  proximity inherent in the community are reduced in a society where each individual chooses his associates and negotiates freely with whom he wants to bargain. In society, solidarity is a choice. Any collectivity that is not the outcome  of individual desires then appears as a permanent threat that anonymously binds the individual. Here we recognize liberal ideology, which – because of individualism based on selfishness – the popes opposed throughout the 19th century and up to the present.

On the occasion of the 80th anniversary of Rerum Novarum, Paul VI recalled that “at the very root of philosophical liberalism is an erroneous affirmation of the autonomy of the individual in his activity, his motivation and the exercise of his liberty. Hence liberal ideology likewise calls for careful discernment.”[7] Certainly, for pragmatic reasons, the Church has come to adapt to, if not adhere to, liberal democracy. Moreover, adherence to freedom of conscience and human rights has been gradually affirmed; it now constitutes one of the foundations of Christian social doctrine. On the other hand, liberal capitalism, based – Karl Marx saw this clearly – on absolute individual freedom, and dominated today by the financial sphere which reinforces its features, requires not only an intellectual challenge, but also practical responses.

The theme of the tension between the enterprise-society and the enterprise-community takes on a global dimension today, given ecological issues, which restate the problem – unresolved by liberal thought, because it is deliberately ignored – of the interpenetration between economic, social and political aspects. But, before assessing the idea of an enterprise, reduced to being only a company (in the modern sense of the term), should arouse, and before proposing practical answers, it is necessary to take note of the resistance, at first glance legitimate, that slows down change and prevents a business from living its community dimension.

The reasons for resistance: performance, rationality and safety

The evidence for the productivity of liberal capitalism may be seen in the reduction of mass poverty (but not of the poverty of those on the margins) and the commonsense attitude – already affirmed by Thomas Aquinas – that we care more for what belongs to us than for what belongs to the community. In a word, the material gains of modern societies based on individual initiative, ownership and responsibility all weigh enormously in favor of business enterprise as a model for society.

Let us not insist further on instrumental rationality, on the search for the closest possible connection between objectives and means; this is the essence of every enterprise. To this must be added the scientific and technical progress favored by competition, based on the rationality governing the phenomena of nature. We content ourselves with recalling the “limited responsibility” advanced by those who defend the corporate concept of business.

Unlike in the community, in a corporation each person is bound to do only what that person has been contractually committed to do. In this we see the reflection of the freedom of the business world, far removed from the freedom of the Gospel proclaimed in the Gospel of Matthew: “So in everything, do to others what you would have them do to you, for this sums up the Law and the Prophets” (Matt 7:12; cf. Luke 6:31). In essence what modern culture reproaches the community with is that in it the interlocutor is a neighbor and not an anonymous third party (toward whom we have only the duties prescribed by the leaders of the business). Consequently, celebrating the community gives the false impression of discrediting the political dimension of human life in society. False, because this argument reduces the political dimension of society to the distributive justice that presides over the distribution of wealth, responsibilities and honors.

Another argument in favor of the corporation versus the business community is that liability seems to be all the more productive the more limited it is. Indeed, every business enterprise is a gamble on an expected market outcome  in the hope of making a profit. This involves a risk, that is, the possibility of harm. To stem the risk, we develop compliance, which consists in conforming  to rules, paragraphs, protocols, regulations, decrees and procedures. The idea of an efficient organization governed by hierarchical constraints converges in central modern values: rationality, efficiency, security.

This scrupulous submission to these systems was based, for more than a century and until recently, on the ambiguous idea of “scientific and technical progress.” Today compliance is demanded in the name of safety. Its cult does not easily foster human relationships in the company, which are better received in innovative start-ups where reactivity is riskier. Fear of risk dictates this. But this retreat into rules can only penalize  bureaucratic and ultimately inhuman industries, compared to innovative ones, which mobilize extensive networks, and where quality and performance flourish at the boundaries of an intelligent dialogue between designers and those involved in operations, maintenance and after-sales service. In the financial sphere, the personal relationship based on trust between customer and banker is giving way to automated transactions, where each person is reduced to a statistically defined category.[8]

We cannot overlook the many industry lobbies that find it advantageous to twist the law to suit their own interests. Nor can we forget the greed that wants to achieve the expected results of the three libidos feeding the human passions: libido sentiendi, libido dominandi and libido sciendi (passion for experience, will to power and desire for knowledge). Because, as Saint Ignatius of Loyola makes us understand in his Spiritual Exercises, sin is always part of a story; it is not a creation ex nihilo without regard for individual passion.

To stick only to the logic of the system, in this fertile ground that fosters a selfish attitude, the company-corporation is in line with the logic of the process of giving and having, a commercial logic, quite opposite to  the Gospel of grace. This logic gives rise to  a constant tension, less toward efficiency (which would presuppose a meaningful objective and therefore a certain gratuitousness) than toward performance. Hence the  polarization on the fight against waste.

Of course, fighting waste can have a community aspect. Our grandparents used to remind us that “wasting is worse than stealing.” They were not saying that stealing is good, but they were saying that wasting is worse. How so? Because, they said, the thief testifies by their very crime, to the value of the product. Evidently they could not imagine the perversion that sometimes hides behind gratuitous destruction, with no other reward than the pleasure of destroying; nor could they consider  the violent social protest that is often expressed by destroying the symbolic objects of society: once telephone booths, more recently turnstiles, toll booths or motorway junctions.

In this cultural context, the temptation for companies and their stakeholders is to think not in terms of efficiency, which links means to a meaningful goal, but in terms of performance, which consists of comparing one’s results (financial and otherwise) with those of competitors. Competition creates distance, or even exclusion, and leads the winner to a certain isolation. One is always alone at the top of the podium.

In the service of the enterprise conceived as a company, the discussions that inflame political debates are not exempt from this idea of performance in security. But rarely are the questions that would open the debate on the human dimension inherent in community asked: “Productive” of what? For whom? For when? Under what circumstances? For a capitalist, “productive” is that which generates a profit, an income, a monetary interest, and ultimately some kind of benefit.

But for other stakeholders? “Useful” to whom? In what particular situation? All of these  discussions feed on the idea of “national economic competitiveness” and are exacerbated when they involve tax competition. Even candidates for election who rail against “predatory” corporations end up voting for subsidies and tax breaks to attract corporations to their constituencies. Understandably, this procedure is frowned upon by international partners, even though the maneuver has often been used by those who now criticize it.

Increasingly clear reticence

The only permissible constraint in line with the modern idea of enterprise seen as a society is that of competition. Now competition – like contests or sporting competitions – is never anything but a means of selection by exclusion. It is therefore understandable that the theorists of enterprise – in the modern sense of society – have not failed to seek the patronage of  Charles Darwin: in the name of the evolution of species by “natural” selection, they invoke the Survival of the Fittest to the advantage of the strongest, identified with the “best” (for whom? until when?).

Against this anthropology that generates violence, the Scholastics would certainly have evoked the necessary harmony of the three justices (“commutative,” which regulates interpersonal relations between members; “distributive,” which specifies the duties of the collectivity toward each of its members; and “legal” – not social – which appeared only in the 19th century, to designate the duties of each toward the collective: paying taxes, defending one’s country, advising politicians). The Scholastics would have seen in society – in the modern sense – the flattening of distributive and legal justice, at best, into commutative justice alone. The state and the community then become partners to negotiate with in the commercial logic of do ut des, or quid pro quo. One behaves with public bodies as one behaves with the baker or the carpenter. The common good no longer exists; the general interest is no more than an indispensable inconvenience to compensate for the disbursements given to it.

The human cost of this performance-oriented rationality in safety remains the blind spot for managers, department heads and executives. When the business enterprise is seen only as a corporation that brings together individuals in pursuit of their own interests, what is free is all the more difficult to achieve, bordering on the impossible, whatever the social purpose of the enterprise.

Considered in its national context, does the company benefit from a reduction in taxation? For the state, is it an unproductive, even pointless loss of earnings? Not always, if this reduction fuels the hope of attracting businesses that, in the long run, will strengthen the productive potential and the ability to provide for social needs. If the tax reduction serves to mend the economic and social fabric of a region abandoned by, for example, the steel industry, can it be said that a tax difference between Hesse (Germany) and the Mezzogiorno (Italy) is not justified?

Today, the performance value of capital is incorporated in its growing value: the search for greater security, which makes risk appear negative. The management of risk is entrusted to private or public financial bodies, insurance companies or the state, which take it on, often with caution, sometimes recklessly, sometimes  maliciously. Risk can be experienced as a challenge that locks companies in a mortifying complacency; it is the stoic attitude, complementary to individualism.

The business enterprise – however humanitarian – must keep in mind the results, ignoring what the humanists of the Renaissance reminded us, following many others, but in a more lapidary form: the only true wealth is that of the person, that is to say our capacities of initiative, of imagination, of reactivity, of sensitivity, with all that this implies in terms of aspiration to gratuitousness and of risks, that is, in the final analysis, of possibility of failure. When in a business enterprise, each person strictly limits his or her contribution to what is specified in the employment contract, there is no free help given to colleagues, no lending a hand, without reluctance.

When everyone feels they have done what is necessary by obeying the letter of the regulations, in a sort of economic Pharisaism, indifferent to the harmful consequences for others, the social climate becomes tense, the atmosphere becomes painful and the company’s results suffer. Now, this logic of compliance can only intensify under the pressure of the individualism proper to the enterprise conceived in the manner of a contractual society. As François-René de Chateaubriand observed: “In the absence of great moral power, great coercive force is necessary.”[9]

When technical progress, which increases the productivity of labor, is no longer there, capitalism is content to reduce the value of labor. To do this, there are two methods: either lowering the value of goods needed by workers, slowing social claims and reducing or capping wages; or putting workers in competition through immigration. The expansion of the economic area, by increasing competition between products and services from more countries, acts simultaneously on both levers.

This instrumental rationality – in which everyone adapts their objectives to the means at their disposal – seeks the greatest possible security by fitting in with financial logic. “Sleep, I want it, and I’ll take care of the rest,” the financial system seems to whisper in everyone’s ear, giving the impression that monetary manipulation or financial speculation can be relied upon to control the future. Risk-sharing makes it possible to demand higher, even extravagant, returns from every business enterprise. By diversifying investments, the financial expert reduces his or her own risks by increasing the risks generated by the system as a whole. The dangers are not eliminated, but are increased for each firm. The illusion is to believe that one can hedge oneself, not against the risk of  the bankruptcy of Fiat or Kodak, but against the risks of the system as a whole.

In order to mitigate risk, compliance, the application of increasingly precise rules, is therefore developed, which in turn fuels individualism in which everyone feels relieved as soon as they have obeyed the law to the letter.

Toward community enterprise

Just as the common good is the good of each member of the community through the solidarity of all, so the human community of the business enterprise presupposes that each person is recognized not only for their individual economic contribution, but also as a unique human being, with purpose and capable of participating in the decisions that affect him or her. This recognition is achieved by fair wages for the employees of the enterprise, by the fair price of supplies and services paid to suppliers, by the payment of proportional taxes, but also by adjusting the demands made on subcontractors and on the public. Christian social teaching reminds us that this justice, applied to all those involved in the business, is not the mechanical outcome of commercial logic. This is clear especially in the ecological emergency – which is an issue of justice toward future generations – and must not be sacrificed.

Pope Francis, in his 2015 encyclical Laudato Sì (LS) on integral ecology, stresses that in this area we cannot be content with aiming at “halfway measures” to reconcile “the protection of nature with financial gain, or the preservation of the environment with progress,” because, he adds, “halfway measures simply delay the inevitable disaster” (LS 194). Solidarity, through which everyone receives due recognition, should ultimately be the manager’s main concern. Within the framework of a company, a manager does not simply embody the norm imposed on others, but is a party to the actions of collaborators or subordinates, because he or she provides them – or not – with the necessary norms and means to accomplish the tasks entrusted to them. The manager’s authority, which goes far beyond hierarchical power, is at stake.

Power is the ability to make the future of one’s partners or subordinates uncertain: it is a constraint imposed from outside. Authority, on the other hand, obtains the adherence of the subordinate or partner who finds meaning in the order or organization to which he or she submits. Some leaders have charisma, as they say; they seem to enjoy natural authority. But charisma proves to be cruelly insufficient if it is not supported by three conditions: first, the proposal of precise objectives; second, the provision of proportionate means, which are neither insufficient nor wasteful; finally, a sharing in the risks. Of course, the risks are not the same for all the parties involved in the enterprise – depending on the hierarchical position and legal status of the employees; depending on whether one is self-employed whether one is a creditor or a shareholder – but anyone who does not assume any of the enterprise’s risks ipso facto excludes him – or herself not from society, but from the human community of the enterprise.

The manager is certainly the guarantor of the general interest when establishing communication and safety and health management processes, without which collaborators, subordinates or partners are unable to carry out their work with dignity. These management processes, the first phase of solidarity, constitute only the skeleton of this social body which is the enterprise. In addition to the infrastructure that supports the general interest, the manager must also provide each person, in relation to the social object of the enterprise, with the conditions for his or her autonomy. This  allows the community dimension of the enterprise to develop.

The moral principle of subsidiarity reflects this tension between the general interest, which is the manager’s own responsibility, and the relative autonomy of co-workers or subordinates, which is essential to the pursuit of the common good. Human community does not necessarily imply the kind of corporate democracy often parodied in general meetings of shareholders, but best served in co-operative or mutual and co-managed enterprises. Apart from the management of democratic delegation, which is not specific to corporations, the challenge is the distribution of business risks, because common risks are the true foundation of solidarity. In capitalist business enterprises, financial risks are normally assumed by the shareholders, the owners by law. In cooperatives and mutual societies they are borne by the members. But other risks are at stake, assumed by all, giving priority to those who face the most precarious situations.

Call for caution

Assuming that these questions of authority and common risks inherent in the community enterprise have been resolved, there would nevertheless remain the requirement common to all forms of governance, even in business, that of subsidiarity. One of the pillars of the Church’s social doctrine, subsidiarity expresses managerial prudence, an understanding of particular situations. It entrusts decision-making to the level closest to those who know the terrain or to those who will suffer the first consequences. Seen from afar, it thus consists of  two dimensions: first, a political dimension – the power to decide – of those “sitting below” (sub-sedeo); then an economic dimension – the means (material, informational and organizational) to decide – hence the idea of “subsidy.”

As the Treaty of Lisbon, signed on December 13, 2007, by the countries of the European Union, reminds us, the principle of subsidiarity is accompanied by a double corollary: the principle of attribution and the principle of proportionality. Attribution consists in delimiting the areas in which the principle of subsidiarity applies. Proportionality limits the intervention of the higher level to what is strictly necessary to achieve the collective objective pursued.

These references clearly show that subsidiarity is not to be confused with the delegation of power. On the contrary, it derives from a different principle, because it establishes in theory the primacy of the subordinate level. However, this primacy is not absolute. It is inscribed in the solidarity that is indispensable for the enterprise to pursue its social purpose. This is why subsidiarity is not simply a method of mechanical application, but a matter of discernment, because it promotes the common good and is combined with the general interest of solidarity.

To implement the principle of subsidiarity, the managers must first of all be convinced that they do not have complete control over the knowledge, know-how and sensitivities of their subordinates or partners. They must also be aware that collaborators or subordinates cannot be considered, without harm to the company or without risk to the dignity of individuals, as cogs mechanically prolonging managerial action. This is all the more true in a fluid world in which the social and political terrain, marked by the knowledge economy and the functioning of networks, is traversed by contradictory currents. Subsidiarity is a managerial attitude; this is its flexibility, but also its political weakness.

As a form of prudence, subsidiarity associates the autonomy of subordinates and partners with the general interest of the enterprise. This prudence has its corollary: solidarity in the general interest is the necessary complement of subsidiarity. The defense of categorical interests, of advantages acquired by a member state, a region, a town, a district, a socio-professional category or an enterprise in a situation of private or public monopoly, is sometimes described as “citizen.” The title of “citizen,” which should express the need for national solidarity, is used as a pretext to protest against a decision at a higher level. We must be careful and not give the qualification of “citizen” to the defense of particular interests – however legitimate – even if they are circumscribed to the company in a regional administration.

Conclusion

An ancient moral principle, originating  in the wars of the Middle Ages, can inspire the manager who, in today’s economic wars, wants to respect the community dimension of his enterprise. In 1139 the Second Lateran Council condemned the use of crossbows and ballistae.[10] Why condemn these weapons of war, and not rather the scourge that spun a ball with sharp points at the end of a chain, boiling oil, the battle axe, the bow and arrow, the lance or the sword? The reasoning is understandable, although it is worth pointing out: the stones thrown by the ballistae and the darts of the crossbows are projected by mechanics and are beyond the control of the soldier, because they go so fast and so far that the soldier cannot see all the consequences of his action. Of course, the manager does not have the means to control and limit all the risks taken by his employees who use intuitive skills, tricks of the trade, mathematical tools, or difficult-to-access thought patterns. The principle enunciated in 1139 suggests an answer to this everyday problem: the relevant attitude is that of common sense, which wants us not to use the most powerful techniques, but those that can be mastered and controlled.

It is easy to understand the corollary of a managerial prudence which, in order to leave the confines of a purely contractual conception of the enterprise and enter into its community dimension, never separates solidarity from subsidiarity: the subordinate level cannot substitute itself for the superior level when the decision would hinder the implementation of the responsibility proper to the superior level. This corollary obliges the subordinate level to respect, and therefore first of all to know, the responsibilities of the superior authority. Equally, the subordinate cannot expect to ignore the objectives and constraints imposed on the higher level. On the other hand, if someone wants to develop the human community of an enterprise, the hierarchical superior cannot pretend not to know the conditions under which the subordinate must carry out any orders. To claim that “it is not my problem” would be an irresponsible, not to say inhuman, attitude.

DOI: La Civiltà Cattolica, En. Ed. Vol. 6, no.12 art. 3, 1222: 10.32009/22072446.1222.3

[1].      Cf. J. Habermas, “Espace public et sphère politique publique. Les racines biographiques des deux thèmes de pensée”, in Esprit 84 (2015/7-8) 19.

[2].      John XXIII, Mater et Magistra (1961), No. 91; 78.

[3].      John Paul II, Centesimus Annus (1991), No. 43.

[4].      P. Lefebvre, “Un concept de personne dans la Bible”,  in Choisir, No. 702, January 2022.

[5].      Cf. F. Tönnies, Community and Society, Rome-Bari, Laterza, 2011.

[6].      K. Marx, On the Jewish Question, Milan, Bompiani, 2007.

[7].      Paul VI, Octogesima Adveniens (1971), No. 35.

[8]. In this regard, the analyses conducted by the Polish-Swiss economist Paul Dembinski are interesting, in particular in Finance servante ou finance trompeuse? Paris, Parole et Silence, 2008.

[9].      F. R. Chateaubriand, Le génie du christianisme, Paris, Gallimard, 1978, 1089.

[10].    “Artem autem illam mortiferam et Deo odibilem ballistariorum et sagittariorum adversus christianos et catholicos exerceri de caetero sub anathemate prohibemus” (Lateran Council II [1139], canon XXIX, Venice, Mansi, 1776, tome XXI, column 533).