Civil Economy and Organisation

Towards Ethical Business Management

Roberta Sferrazzo

• Publisher: Palgrave Macmillan
• Year: 2020
• Print ISBN:
  9783030590215
• eBook ISBN:
  9783030590222
• Topic: Business
• Subtopic: Business Ethics
• Index: Business

This book aims to move beyond the concepts of 'bureaucracy', 'hierarchical control' and 'performance' that classic organizational and managerial studies often focus upon. Instead, it  considers these managerial leverages as instruments that are liable to lead to a decline in positive worker behaviors. It proposes a shift from traditional management towards a type of organization based upon self-control, equality and liberation - a model far better suited to the turbulent business environment of today. 

In order to support this analysis, it draws on interdisciplinary research, including the Italian Civil Economy tradition, the connection between agapic love and leadership, and philosophical perspectives on management. It will be of interest to scholars working in the fields of management studies, philosophy, organisation studies and business ethics. 

© The Author(s) 2020

R. SferrazzoCivil Economy and Organisationhttps://doi.org/10.1007/978-3-030-59022-2_1

Begin Abstract

1. Premise: The Civil Economy Perspective

Roberta Sferrazzo¹

(1)

Department of Management, Audencia Business School, Nantes, France

Keywords

AgapeCapabilitiesCivil EconomyDocilityHappinessReciprocity

End Abstract

In the last decade, scholars have rediscovered the Italian tradition of Civil Economy and the different vision of the market it offers, one that is anchored on reciprocal assistance in market exchange relationships. So far, scholars are discussing Civil Economy especially in the fields of the history of economic though and in economics and philosophy. Nevertheless, this book proposes looking also at business ethics and organizational studies through the lens of Civil Economy, especially considering its connections with (a) the agapic form of love, (b) Sen’s capability approach and (c) the Thomistic virtue of docility. This chapter constitutes that premise to show, in the following chapters, the “agapic,” “liberating” and “docile relational” leadership styles. These leadership styles will enable to derive the civil-economic leadership model, as stressed in the conclusions.

1.1 The Civil Economy Approach: Genovesi’s Anthropological Vision of the Person and the Naples Tradition of Civil Economy

In talking about “Civil Economy,” we are referring to two main aspects: on the one hand, to a tradition of philosophical and economic thought that flourished in Italy in the eighteenth century, on the other hand, to a contemporary laboratory of knowledge, practices and experiences from the world of work, education, politics and associations.

Antonio Genovesi – holder of the first world chair of Economics in Naples in 1754 – was the founder of Civil Economy. He used and developed for his students a text entitled “Lezioni di commercio o sia di economia civile.” Some Italian scholars – especially Stefano Zamagni and Luigino Bruni – have recently rediscovered Genovesi’s thought, revitalizing the Civil Economy topic through several articles and books.

According to Genovesi – as specified in the “Lezioni” – economy can be defined as “civilized” in as much as it takes care, firstly, of the good of nations, secondly, of the good of individuals. Civil Economy, in particular, deals with wealth and power, but even with the wisdom, politeness and virtue of the nation (Genovesi 1824[1765–67]. The two things are, according to Genovesi, united by a deep bond that makes the virtue of citizens correspond to the good performance of commercial transactions and vice versa.

Today, Bruni and Zamagni (2016) have enriched this definition, by pointing out that Civil Economy is a tradition of thought which, in order to save the market economy, recalls the economy to its ancient and original vocation to be an ally of the common good; to represent a place of freedom, sociality and expression of the capabilities and ‘vocations’ of people, in particular the vocation to work. Civil Economy is a tradition of thought and a study perspective on economics, which reads the whole economy in a different way from the still dominant tradition of Anglo-Saxon capitalism. Specifically, Civil Economy speaks to the whole economy and society, offering a criterion of judgement and action for both the government and multinationals’ choices; for consumers’ choices (critical and responsible consumption), and for responsible savers.

Over time, there have been many attempts to bring the most objectionable behaviour of companies within strict ethical constraints, but even today there is still a lack of precise references to the idea that, for a company, maximising profit for shareholders is the one and only ethically responsible purpose. Civil Economy helps to read in an alternative way the current economic system, through a relational, cooperative and gratuitous key. Taking up some of the founding elements of the Civil Economy tradition, and comparing them to business economics studies, it is possible to change the current perspective, which is already known about economics.

In recent years, many economists, political scientists, sociologists and philosophers (Sen, Yunus, Latouche) are proposing criticism of our capitalist system. However, such criticisms have not recounted a non-capitalist market economy yet. In reality, Civil Economy is an inclusive and open process, where there is room for all those who are not satisfied with today’s financial capitalism. The Civil Economy approach is a great source of inspiration for new thinking, capable of profound questions; it is another market history, another way to market economy, different from the dominant one that is shaping the world and our minds (Bruni and Zamagni 2016).

Genovesi wrote almost at the same time as Adam Smith, starting from the same question on how to achieve the common good. But the two authors read differently the same phenomenon, i.e. the exchange factor. To enter into Smith’s thought, let me start again from his famous phrase on the benevolence of merchants: “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest. We address ourselves not to their humanity but to their self-love, and never talk to them of our own necessities, but of their advantages” (Smith 1869). For Adam Smith, market relations allow us to satisfy our economic needs without having to depend on others, as was the case in feudal society, characterized by few benefactors and many “dependent” on their charities.

According to such a vision, friendship cannot be a characteristic of normal market relations. “Benevolence” or “sympathy,” as Smith underlines in his “Theory of moral sentiments” (1759), is a fundamental characteristic of the human being, but it is not a typical feeling of economic relations. From this perspective, it is the extension of trade that produces reputation and trust, and not vice versa, as Genovesi thought. Moreover, according to Smith, even if agents pursue personal interests and deal with economic relations only instrumentally, civil society is “providentially” (providence understood in the concept of Enlightenment deism) designed so that the overall effect resulting from individual actions is advantageous to all, but the advantageous result, namely the wealth of nations, does not require agents to include the common good among their objectives.

This is Smith’s vision of the relationship between sociality and the market that emerged in the economy of the nineteenth and twentieth centuries. Nevertheless, the Italian tradition of Civil Economy was broadly different on this point. Genovesi 1824[1765–67], indeed, saw the economic market relations as relations of “mutual assistance” and not only of mutual advantage, therefore not impersonal, nor anonymous. He understood the market as an expression of the general law of civil society, the reciprocity one, which governs the whole society, including the market, in its various forms: economic, political and ethical. Looking at Genovesi and Smith’s opinions, another difference between their thoughts can be found in the aim of the economy, which has not only the objective of satisfying human needs, but also that of making people happy.

In the light of the above, it is not by chance, therefore, that civil economists, in their treaties, took an interest not only in exchanges, but also in the conditions and ways in which the government should help the economy and the development of what today we call “social capital.” For Genovesi, in fact, economy as a science was inseparable from politics and the art of government, and it was not by chance that he dedicated his book to Tanucci, the Prime Minister of the Kingdom of Naples. In extreme synthesis, the Civil Economy tradition combines the ethical dimension of economics with the problems of justice, the duties of government, relations between people, their motivations and their individual needs.

The central idea of the Civil Economy tradition consists in conceiving the experience of human sociality as a unitary reality: friendship and genuine reciprocity are considered dimensions to be exercised within even a normal economic life. In the Civil Economy there is therefore an emphasis on the intrinsic value of social interactions: they are not, as for Smith and the liberals, essentially means for the development of the civilization of society, but they are not always exploitative relationships either; economic relationships are instead an expression of civil life.

Nevertheless, Civil Economy has not become a dominant tradition in the economic thought of the nineteenth and twentieth centuries, not even in Italy, where the judgment on this school pronounced by the most influential Italian economist of the nineteenth century, Francesco Ferrara, was heavy. According to Ferrara, true economic science could not be found within the Italian classics. Even Ferrara’s successors, for example Pantaleoni and Pareto, continued to look outside Italy, neglecting to develop the tradition of Civil Economy.

In spite of this, the Civil Economy approach never died out and continued to live as a karstic river in Italian (and not only) economists, entrepreneurs and economic operators, who cultivated, in various ways, an idea of economy linked to civil virtues and public happiness, which does not forget the role of institutions. To continue the tradition of Civil Economy, however, were not mainly theoretical economists, but applied economists, political scientists, jurists and some exponents of the Italian tradition of business economics. But in a certain sense, the most authentic continuers of Genovesi and Dragonetti’s civil economy notions were the creators of the Italian cooperative movement and the many animators and founders of rural coffers, consumer and production cooperatives that – without perhaps ever having heard of Genovesi or Filangieri – have constituted that incivilisation theorized by Genovesi and civil economists. Adriano Olivetti can also be counted within this tradition.

Still today, in Italy, the Civil Economy is alive in cooperation, in social cooperation in fair trade, in the movement of justice budgets, in solidarity purchasing groups, in the Economy of Communion, in the Ethical Banks, in cooperative credit experiences and in all those forms that make reciprocity and internalized civil virtues their main reason for action. For Italian civil cooperation, the economy, or the market, is not at odds with genuine relationality, but economic action is rather an expression of civil virtues, and market competition is above all a “cum-petere,” or rather a search together. The main theorists of the Italian cooperative movement at the end of the nineteenth century, while criticizing the capitalist economic structure, did not oppose cooperation to the market or the price system, but saw in cooperation, like John Stuart Mill, a reform of the market and enterprise, a way to eliminate the capital-labour conflict at its root. Lamperto and many Italian civil economists tended to see cooperation as an expression of a more general phenomenon. Solidarity among workers, in this sense, which all the theorists of cooperation considered essential, is not an alternative principle to that of individual interest, but complementary. For this reason, it was particularly important for these co-operators to emphasize that cooperatives are essential to the development of a cooperative society.

This book is also an attempt to apply the Civil Economy paradigm to the managerial field, specifically, to the leadership style. In fact, organizations are places were “human flourishing, mutual esteem, and friendship-based reciprocity” (Melé 2014: 463) can be created. For example, the phenomenon of interpersonal relationships in organizations sometimes is anchored on trust and mutual help; other times, it spreads within an environment of distrust and self-interest, which does not aim at the common good.

A new horizon of research could consist in developing the core concepts of Civil Economy – gratuity, public trust, mutual assistance – already discussed in the literature on economics and philosophy and relating them to the organizational and managerial context.

1.2 The Notion of “Unconditional Reciprocity” (Agape) in a Civil-Economic Perspective

Turning to the managerial sphere, it was in particular Renato Ruffini (2013) who proposed the idea of “civil management,” seen as the application of Civil Economy to managerial and organizational theory and practice. In particular, in his text entitled “Economia civile e management”, Ruffini (2013) underlines a continuity between the thought of Zappa, the father of nineteenth-century business economics in Italy, and that of Antonio Genovesi.

The Italian school of business economics developed both with the complex accounting of Benedictine abbeys and, in particular, with the work of Gino Zappa (1927) with its text “Tendenze nuove negli studi di ragioneria (New trends in accounting studies).” This latter work is considered as the birth of business economics, at a time when national schools of accounting and business management were established in Europe, from Germany to Holland, to Denmark. The Italian approach to business is therefore distinct and different from the American approach of the business organization. In particular, the Italian school of business economics dwells on the institutional dimension of the company, on its being as a system or, in Zappa’s founding words: “an ongoing, established and righteous economic coordination for the satisfaction of human needs, a coordination of economic operations, of which man and wealth are vital elements” (1927: 40). Interesting in this definition of company is its reference to the satisfaction of needs as the purpose of the organization, which remains in all the classic definitions of business in the Italian tradition.

Based on this vision, the Italian tradition also calls companies the family and any institution or organization. Therefore, in the Italian tradition of business economics there is no theoretical possibility of a distinction between profit and non-profit, since the purpose of the company is not profit but, as Zappa will always stress, the satisfaction of human needs. It is precisely on this point that there is a continuity between business economy and Civil Economy, and, on the other hand, a strong discontinuity in reading the reality of companies divided between for profit and non-profit. Indeed, if the purpose of the company is to satisfy the needs of the various subjects involved in the institution, it cannot be centred on the interest, or need, of the shareholders alone, or on the interest of the entrepreneur alone.

Economic phenomena are also investigated not abstractly, but in the concrete nature of the social institution in which the...

Table of contents

• Cover
• Front Matter
• 1. Premise: The Civil Economy Perspective
• 2. Towards an Agapic Leadership
• 3. Towards a Liberating Leadership
• 4. Towards a Docile Relational Leadership
• 5. Conclusions and Future Research Prospects
• Back Matter