Civilization, culture and the free market

Ethikos president Dr. Paul J. Voss writes that the free market — which conforms to and upholds the dignity of the person and has created more wealth for more people than any other economic system in history — is not completely free. He contends that the free market depends on telling the truth; it depends on ethical behavior of the participants . . .

More than ever, businesses lately find themselves in cost-containment mode. During these challenging economic times, companies must focus with laser-like precision on revenue, inventory, margins, employment, interest rates and other financial metrics. Indeed, in this environment, businesses tend necessarily to fixate on the bottom line — almost to the exclusion of everything else.

Such attention, of course, might display prudence (the queen of all virtues according to St. Thomas Aquinas), and prudent companies stand a better chance of surviving (and even flourishing) than imprudent ones. However, when properly considered, business has a higher function and nobler calling than mere numerical metrics can attest. Ultimately, business is fundamentally a human activity, conducted by humans for a human purpose and to fulfill a human need. Companies that ignore this human dimension of business — the ethics of business — do so at their own peril.

Fully appreciating this point rests upon the distinction between civilization and culture. Although many people use these terms interchangeably, the words mean different things. Clarity on this issue remains crucial for a Catholic understanding of business.

Civilization refers to those attributes that make life (and work) possible, including abundant supplies of drinking water, medicine and food, not to mention public sanitation, transportation, education and social harmony. In North America, this impressive civilization allows for a life expectancy of nearly 85 years for females and 78 years for males. Our civilization continues to provide new technological advances in medicine, communication, transportation and other aspects that make long, healthy lives possible.

Culture, on the other hand, consists of those things that make life (and work) worthwhile — including those products of the human imagination such as art, music, literature, baseball, architecture and more. Culture is not merely life-sustaining, it is life-edifying. Culture is not simply the production and distribution of food (more proper to the sphere of civilization), but rather the pleasures of Mexican, Chinese or Italian cuisine. Culture, derived from the Latin word cultus (meaning, among other things, “to cultivate”) requires hard work and attention. We create culture by how we think and relate with each other within a community. If civilization refers to the “what” we do, culture refers to the “how” we do it.

How does this apply to business and ethical behavior? Consider again the word “civilization.” In business, civilization is the “what” you sell, produce or market. Civilization is the end product. In most cases, we have little or no control over the civilization. Technology advances rapidly and we adapt to the changing civilization. Civilization is a given and widespread. Other people likely sell, produce or market the same things (the same what) that your company does. In other words, everything is becoming a commodity as intellectual capital becomes dispersed over the supply base.

Consequently, since the what is readily available for consumers (i.e., we have numerous choices for the goods and services we purchase) the only meaningful way to differentiate your business in a marketplace is to have a higher quality how. In fact, as we move forward, the what you sell, produce or market will matter less and less than how you sell, produce or market that good or service.

What connection does this distinction have on individual ethics, integrity and faith? Here’s the link: The how you sell, produce or market a product has a clear and conspicuous ethical dimension. The how you do something is the human side of business and we need to get the human side of business right.

Pope Benedict XVI discusses the distinction between civilization and culture in his encyclical Caritas in Veritate. He acknowledges that, at first glance, it’s not clear what the Church might have to say about business per se and that “the Church does not have technical solutions to offer” to individuals or states in the form of policy. In this sense, the Pope refers to the civilization of business — those activities most properly suited for engineers, managers and scientists (and not theologians). But he then explores in-depth the  human dimension of the market and the impact our thinking and relating has on culture and the Catholic Church. In other words, he examines the how of human business.

In working with clients, I advocate a conspicuously free-market approach to business. The free market, which conforms to and upholds the dignity of the person, has created more wealth for more people than any other economic system in history — allowing more families the opportunity to secure an education, own a home, take vacations and realize a secure future. But the free market is not free: The free market depends on telling the truth; it depends on ethical behavior of the participants. Plato wrote that “in order for us to live together in society, we must tell the truth to each other about basic matters.” Likewise, the Gospel says that “he who is faithful in little things is also faithful in much” (Lk 16:10).

Without truth and truth-tellers, the free market will fail. Thus, people of faith must conspicuously cultivate lives of honesty — both within their homes and their companies. If we cannot turn to men and women of faith to tell the truth about basic things, then the future of the free market is indeed uncertain.

Paul J. Voss, Ph.D., is president of Ethikos, a professional organization offering ethics training, and an associate professor of literature at Georgia State University.