Table Of ContentTowaar d
Theoloogyft he
Corporation
ReviEsdeidt ion
MichNaoevla k
ThAeE PIr ess
PublfiotsrhhA eem re rEinctaenrI pnrsitsiet ute
WASHINGTON,D .C.
1990
Michael Novak holds the George Frederick Jewett Chair in Religion,
Philosophy, and Public Policy at the American Enterprise Institute,
where he is director of Social and Political Studies.
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Houecdks,Th. e J,ud eo-Christian Vision and the Modern Business Corpora
tion (NotDraem Ien,dU .n:i veorNfso itDtrayemP er e1s9s8,A1 n)e .a rvleyro sfi on
thsee ccohnadp atpeprei anMr iecdh Naoevlaa nkJd o hW.n C oopeedrsT,h.e ,
Corporation: A Theological Inquiry (WashiDn.gCAt.mo:en r,iE cnatne rprise
Inst1i9t8u1t)e., M.N.
Distributed to the Trade by National &x>k Network, 15200 NBN Way,
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Library of Congress Cataloging in Publication Data
Novak, Michael.
Toward a theology of the corporation IM ichael Novak.-Rev. ed.
p. cm.
Includes bibliographical references.
ISBN 08- 447-3744-5
1. Business ethics. 2. Corporations-Moral and ethical aspects.
3. Corporations-Religious aspects. 4. Social values.
5. Capitalism-Religious aspects. I. Title.
HF5387.N68 1990
174' .4-dc20 903- 9934
CIP
7 9 108 6
© 1981, 1990b y the American Enterprise Institute for Public Policy Research,
Washington, D.C. All rights reserved. No part of this publication
may be used or reproduced in any manner whatsoever without permission
in writing from the American Enterprise Institute except in the case of
brief quotations embodied in news articles, critical articles, or reviews.
The views expressed in the publications of the American Enterprise
Institute are those of the authors and do not necessarily reflect the views
of the staff, advisory panels, officers, or trustees of AEI.
The AEI Press
Publisher for the American Enterprise Institute
11501 7th Street, N.W., Washington, D.C. 20036
Priinntt heUedn iStteadot Afem se rica
Contents
INTRODUCTION TO THE REVISED EDITION 1
1
CAN A CHRISTIAN WORK FOR A CORPORATION? 7
Six Sources of Distortion 11
Some Observations on Matters of Fact 18
Elements of a Theology of Economics 27
Democratic Capitalism and the Corporation 31
The Praxis of Democratic Capitalism 34
2
TOWARD A THEOLOGY OF THE CORPORATION
39
The Multinational Corporation 40
Theological Beginnings 43
Problems of Bigness and Other Accusations 49
Three Systems-Three Fields of Responsibility 56
BIBLIOGRAPHY
62
Introdtuotc hRteei voinEs deidt ion
There is a story behind the early history of this book. During the
early 1980s, the SmithKline Corporation sponsored a series of brief
essays by a long list of American intellectuals on topics of national
interest; it then published these essays in a colorful four-page spread
of Time and Newsweek magazines including, in 1980, an essay of mine
emblazoned with the banner "a free people in the midst of the
passions of the eighties." The response to this essay was quite
overwhelming-more than 10,000 letters. This had never happened
before.
Then in 1981 SmithKline approached me to write another commen
tary. The topic I chose this time was "democratic capitalism," striking
the note that systems that promise "bread first, liberty later" regu
larly fail. Readers were invited to write in for other pamphlets in the
series, plus a free copy of Toward a Theology of the Corporation, which
had just been published by the American Enterprise Institute. The
response was even larger, and thus this monograph found a large
audience not anticipated in its conception.
So striking were these returns that SmithKline commissioned a
study to find out why the response had been so great. Although
inconclusive, the results did suggest a great hunger in the land to
learn more about the moral underpinnings of American life. I cannot
say I was surprised, because the subject had been for too long
neglected and the desire to hear more about it was palpable.
Looking back on this early exploratory work (which was written to
prepare the way for The Spirit of Democratic Capitalism, which appeared
in 1982), I remember the pleasure I felt in breaking new ground, at
least for myself. Like others, I had been taught to feel something like
faint disdain for anything to do with corporations or managers. In
line with the argument Alasdair MacIntyre was to make in his
influential study of ethics, After Virtue, my teachers placed "manag
ers" in the same category as "therapists." Managers were censured
for being interested solely in objective manipulation for prearranged
purposes-the opposite of a genuine moral enterprise. Corporate life
may be good for efficiency, the argument went, but not for nourishing
1
true virtues such as practical wisdom, justice, courage, and self
mastery.
Still, from about 1977 on, I was taking part in a series of seminars
at AEI with small groups of chief executive officers of major corpora
tions. Having participated for years in seminars for professors, col
lege administrators, political leaders, bishops, artists, and other
elites, I was struck by the intelligence, seriousness, and sensitivity of
these business leaders who, on the whole, bore comparison well with
representatives of other elites I had known. If anything, they seemed
rather more explicitly concerned with ethical and religious questions,
although in a very straightforward and unadorned language. All
these observations ran counter to my more or less unconscious
expectations.
I remember, for example, one business leader's describing a plant
run by his firm in East St. Louis; the plant employed about 4,000, its
earnings were only marginal, and some of his advisers wanted to
close it. Contemplating the social costs of closing such a plant in an
already hard-hit black community, he resolved that as long as he was
chief executive officer, and as long as he had at least a borderline
argument on that plant's behalf, he intended to keep it open. Another
told of his company's activities in Africa, which for a time he had
managed. He saw in this assignment a providential opportunity to
do everything in his power to train and to hire blacks, especially in
South Africa, to empower whole new groups heretofore inexperi
enced in the ways of business and industry. He had studied at Notre
Dame; this was his understanding of how he could practice social
justice within the bounds of the discretion his position offered him.
He intended to make the most of it.
I learned that very few of these businessmen received much help
from their academic or religious leaders in how to do their jobs better,
from an ethical or religious point of view. Nearly all of them were
Christians or Jews, and most took their religious affiliation with
admirable seriousness. They felt much neglected, if not abandoned,
by their religious leadership, which seemed to have very little to say
to them and offered little help in their daily perplexities.
How, of course, could teachers of philosophical or religious ethics
in universities or in pulpits actually be of much practical help, if they
themselves knew very little about economics, business, or corpora
tions? A huge gap loomed in the realm of philosophy and theology.
It was slowly dawning on me that a body of readings in this area of
inquiry was sorely needed. At AEI, we began to try to fill this gap
with debates and open inquiries from many points of view. (Follow
ing this book, for example, we published the proceedings of a
Summer Institute entitled The Corporation: A Theological Inquiry.)
2
I need not rehearse here the reasons why in recent generations the
traditions of philosophy and theology (and the humanities in general)
had set themselves against the modern economy, partly through
indifference to studying it and partly through the inherited hostility
of humanists to the modern order, especially in its capitalist form.
(There is an odd symbiosis between the aristocratic cast of mind,
familiar to most humanists, and socialism.) Aesthetically, at the very
least, humanists have long rejected the "vulgarity" of an economy
designed to raise the standards of living of ordinary people. They
look down upon the paper cups and napkins of McDonald's from the
distance afforded by the richer experience of linen, silver, and crystal.
Thus, I found myself invited to lecture from time to time on the
economic system that is part of democracy and on the corporation
that is its most visible and original institution. I was usually the token
participant for "the other side of the debate." Although most defend
ers of the capitalist economy have praised it for its empowerment of
the individual and its "freedom to choose," what most caught my
attention was its social structure: its system as a whole, as well as its
most distinctive social invention, the corporation. Corporations, I
came to see, are a useful instrument of social justice, a mediating
institution between isolated individuals and the omnipotent state.
In the years since the first appearance of this brief book, a great
explosion in business ethics has occurred. The purpose of this study
was, of course, to mark out some new foundations for such work,
because one cannot accurately address the practical ethical problems
in business life without first grasping the dynamic moral structure of
the democratic capitalist system as a whole. For Aristotle, ethics is in
one important sense a branch of politics; that is, one must grasp the
architectonics of the social whole to discern the ethical aims of
individuals within it. (In another important respect, of course, politics
is for Aristotle a branch of ethics, since in morally judging among
alternative political constitutions, one should prefer those most suited
to man's nature as a reflective and choosing animal.) One must grasp
the whole before writing intelligently about the parts.
Moreover, it seemed to me, before attempting practical work in
business ethics, a teacher also ought to understand that relatively
new social invention of the past 200 years, the corporation indepen
dent of the state. Intermediate between the isolated individual and
the state, a corporation is a mediating institution, with its own limited
social purpose and dynamic. Normally, it is not totalistic; it does not
occupy the whole social space of an individual's life, nor is it the only
social institution to which individuals belong-far from it. In coun
tries like the United States, in fact, it is quite surprising how many
3
different institutions and associations individuals typically belong to.
To grasp the genius of so free and flexible an institution, both its legal
structure and its human energy, is utterly necessary, if practical
ethical reflection is to touch reality.
Finally, since most Americans are remarkably religious (and since
most are of Jewish or Christian background), a truly realistic business
ethic ought properly to have a theological dimension. Neither Chris
tian nor Jewish ethics is concerned solely with the merely moral
dimension of life, such as nonbelieving philosophers describe it. For
Jews and Christians, the ethical life is also about sin and grace, about
resistance to God and living in the presence of God even in the midst
of daily activities. To see God in one's fellow workers and customers
and other human contacts is an expected part of Jewish and Christian
life. Most Americans receive their ethical insights and criteria from a
religious tradition, not from secular philosophy. Thus, a theological
investigation of the weaknesses and strengths of a capitalist system
or a business corporation supplies a necessary bit of realism. A
business ethic without a theology is doomed to being a thin sort of
gruel, minimalist and unsatisfying to most religious persons.
Regarding the actual execution of my argument in this book, I was
surprised by an objection raised by at least one Jesuit critic to the
image from Isaiah 53 that I placed at the beginning of chapter two.
Carrying out this theme, I had approached the conclusion of that
chapter with the following passage:
Christians have not, historically, lived under only one eco
nomic system; nor are they bound in conscience to support
only one. Any real or, indeed, any imaginable economic
system is necessarily part of history, part of this world.
None is the Kingdom of Heaven-not democratic socialism,
not democratic capitalism. A theology of the corporation
should not make the corporation seem to be an ultimate; it
is only a means, an instrument, a worldly agency. Such a
theology should attempt to show how corporations may be
instruments of redemption, of humane purposes and values,
of God's grace; ... it should also attempt to show their
characteristic and occasional faults in every sphere. Like
everything else in the world, corporations may be seen as
both obstacles to salvation and bearers of God's grace. . . .
Christianity, like Judaism, attempts to sanctify the real world
as it is, in all its ambiguity, so as to reject the evil in it and
bring the good in it to its highest possible fruition.
Despite this, the worried Jesuit father pretended to find my use of
the "humble servant " text of Isaiah "blasphemous. " He actually
wrote that I was identifying the business corporation with the Mes-
4
siah! The very thought is so repulsive that I cannot see how he could
force such an interpretation on the text. Clearly, though, he missed
the point, and so it may be useful to spell it out a little.
I have always loved Isaiah 53 for its methodinostrlucotiogn. iOfctena l
those who are romantics (a temptation of mine I admit) imagine that
we will find our ideals through grand visions, great occurrences, and
perfect institutions or arrangements. Experience then redirects our
attention. God says: "Love thy neighbor," and we imagine serving
the poor in places faraway, only to realize-with a jolt-that our
"neighbor" is close at hand in all those with whom we come in
contact during the day. Often what we sought afar lay, all unnoticed,
near at hand, and thus this lofty commandment turns out to have an
altogether humble focus. Similarly, we want to think that beauty lies
in some grand design, only to learn from experience that "God is in
the details." It is often among humble and lowly things, Isaiah 53
teaches us, that the key to our salvation and our happiness is found
not faraway, but where we are, in our everyday reality.
Rereading Isaiah 53, and meditating on it, has always impressed
this point upon me-and also a further point. Not only do I tend to
look faraway when I should be looking close at hand, but even with
regard to the things close to my own experience, the real jewels seem
often to be hidden among the things that at first seemed to me
worthy of disdain. Instead of seizing upon difficulties, setbacks, or
disappointments as fresh opportunities, I have often been tempted to
turn away from them, in rejection. At these moments, I want to
remember Isaiah 53. Even the Messiah, we learn from this text,
appeared as the least, the most lowly, and even as despised and
rejected among men. And if this could be true of the Messiah, is it
not even more true, a fortiori, of other hidden blessings in life?
I was taught, you must remember, to disdain capitalism, corpora
tions, and business activities. These are, in truth, mere worldly
things. They are not the Kingdom of God. (They are certainly not our
Savior!) Nonetheless, even though imperfect-indeed, sometimes
blameworthy-such lowly things, often disdained and rejected by
intellectuals and clergymen, have in fact proved highly useful to the
achievement of greater liberties and a more ample prosperity than
ordinary people have, in any alternative regime, ever attained. In the
very first essay I wrote on this subject, in fact, I reflected my surprise
in finding capitalism less worthy of scorn than any alternative system
I know of, and referred to it as "an underpraised and undervalued
system."1
1. "An Underpraised and Undervalued System." This essay first appeared in World
view Magazine Ouly/August, 1977). It has been reprinted in "The Moral Basis of
Democratic Capitalism," Reprint no. 115 (Washington, D.C.: American Enterprise
Institute, September 1980).
5
In any case, in several of my later books I have tried to describe in
more detail what I now call "the lowly way," or the method of
proceeding by way of the lowly. (It is not altogether unrelated to
what I once learned from "the little way" of Saint Therese of Lisieux.)
The main point is that God has given us, where we are, the means to
be united with Him-and we should not miss them through a
misplaced utopianism.
My hope remains that in this new edition this monograph will
continue to inspire further work, which might go on to offer practical
advice to the shareholders, pensioners, employees, and executives of
America's business corporations. Many such persons are serious
about their belief in God and their loyalty to Judaism, Christianity, or
Islam (and even other religions). Yet it is a continuing scandal that, in
their daily perplexities, they receive so little practical guidance from
their religious leaders. The world view of many such leaders contin
ues to seem precapitalist or premodern or at best to be locked into
the categories of the late nineteenth century. Many imagine that all
workers work in factories devoted to manufacture, whereas in fact
barely one out of six American workers is employed in manufactur
ing. Business corporations, not to mention the multitudes of non
profit corporations, have myriad shapes. Small corporations greatly
outnumber large, just as service corporations outnumber those en
gaged in manufacturing.
Theologians need much greater exposure to the world of business.
One disadvantage of graduate school education and university teach
ing, indeed, is how far it removes academics from the realities of
business life. On the other side, the whole field of business ethics
and, even more important, the whole universe of those who actually
work in business corporations-desperately needs the resources of
sustained theological reflection. So many engaged in such employ
ment are religious persons, who crave more light, depth, and guid
ance in their daily work.
In this brief study, I wanted to set high ideals well-grounded in the
dynamic realities of the life of corporations by which the behavior of
corporations could be judged. Many corporate officers seem to have
accepted these ideals as such. We now need someone to spell out
their implications for daily practice.
I hope this brief introduction continues to inspire many younger
talents to go and do better.
6
