Michela Betta

We propose to understand the global financial crisis of 2008 as an historical event marked by public decisions, economic evaluations and ratings, and business practices driven by a sense of subjugation to powerful others, uncritical conformity to serendipitous rules, and a levelling down of all meaningful differences. The crisis has also revealed two important things: that the free-market economy has inherent problems highlighting the limits of (financial) business, and, consequently, that the business organisation is not as strong as is usually assumed. We reconstruct some of the most dramatic events of that time by using the narratives of two former Lehman Brothers insiders. We then provide an interpretation of that world by using Heidegger’s notions of being and care. Our investigation uncovers persistent inauthentic relationships nourished by the public structure of the financial market, which, drawing on Heidegger, we call the they. In the financial market the what of the world becomes more important than authentic being and self. But a hitch-free switch to authenticity becomes possible through anxiety and the call of conscience.

In this chapter I examine three events that had unprecedented effects on the capitalist economy, business, and society of many Western countries, and to some extent of the whole world. I refer to the collapse of Australian HIH and American Enron in 2001 and the collapse of Global Lehman Brothers in 2008. The reconstruction of some of the most relevant facts surrounding their fall provides new insights into the causes of their bankruptcies. The reasons behind their crises and failures were to some extent unique. There were outdated managerial practices in the case of HIH, audacious managerial and accounting practices related to risk taking in the case of Enron, and out of control financial, banking, and managerial practices related to the securitization of toxic obligations and debts in the case of Lehman Brothers. But the three businesses had one bad habit in common: the accumulation of debts based on borrowed money and speculative thinking in terms of their profit. It now appears that HIH and Enron paved the slippery slope that led to the Great Recession, also known as the global financial crisis (GFC), of 2006–2010. These three cases serve as a reminder that even powerful corporations can capitulate when their actions and transactions breach the conventions of good economic and business practices that still represent the commonly accepted limits of the free market economy.

In this chapter, I continue my historical contextualization of capitalism. I deal with how capitalism became synonymous with liberalism and, later, neoliberalism. The terms liberalism and neoliberalism came to describe the politico-philosophical discourse underpinning capitalism. Drawing on some of Foucault’s works, I reconstruct how liberalism grew out of a reflection about good government. To describe liberal thinking about government, Foucault used the term governmentality. Governance became central to liberalism. It was exercised over people via economic interest. In developing the notion that individuals are driven by material interests, rather than abstract liberties, governmentality made people’s economic interest its goal. The most crucial innovation of liberalism was the market where economic interest could be pursued. Through their economic interest, individuals became predictable from a governmental viewpoint. In being predictable they became governable. Although liberalism created the market as a place where individuals could exercise their economic freedom, liberalism always retained the ultimate responsibility about the free market economy. Later forms of liberalism, also known as neoliberalism, introduced a more radical understanding of government by shifting from governance to self-governance. Government became minimal and responsibility for economic activity was transferred to individuals in the market.

In this chapter, I discuss the works of Joseph Schumpeter. He was mainly concerned with capitalism and the conditions for its survival. He understood capitalism to be a rational organizational form that included a capitalist system (economy and business), a capitalist order (capitalist institutions and government, politics, and bureaucracies), and capitalist society (culture, mentality and habits, schemes of moral values, and middle-class expectations). Schumpeter argued that the capitalist system contributed to the prosperity of order and society. But he also thought that the capitalist system was exposed to internal contradictions that made it unstable. Threats came also from external sources. He viewed bureaucracies as being driven by political elites too eager to regulate the capitalist system, while cultural movements embodied by public intellectuals condemned capitalism for social and ethical reasons. Schumpeter linked their criticisms to a fundamental inability of capitalism to make itself emotionally attractive.

In this chapter I discuss four concepts developed by Aristotle in the Nichomachean Ethics. These are virtues, skills/means, the mean (conceptual/ideal mid-point), and self-sufficiency. I am interested in evaluating their influence on today’s life. In order to do this, I discuss Aristotle’s virtue of courage in relation to the behavior of two former Lehman Brothers’ employees. More broadly, I relate Aristotle’s ethics to business ethics. Business ethics is the field of enquiry that focuses on ethical behavior within business, and increasingly within organizations. From this chapter it becomes evident that business ethics could be seen as a variant of Aristotle’s ethics—as if he had sown the seeds long ago. Aristotle has been criticized by contemporary philosophers for his notion of the mean that sets an absolute preference for moderation. But from the study carried out in this chapter it appears that moderation is frequently good, and in certain situations even the only options left for a good life. Despite his limits, Aristotle is still in the ethics game.

This chapter is concerned with three intersections between ethics and entrepreneurship. The first intersection is related to entrepreneurs’ specific responsibility which is increasingly influencing writings about entrepreneurship. This intersection is about ethical value creation and the values of the entrepreneurs. Important in this intersection is also the role of the entrepreneur vis-à-vis the capitalist. The distinction between the two acquires an ethical importance particularly with regard to how entrepreneurship could be seen as an activity that is perceived as being distinct from capitalist activity. The second and third intersections refer to the application of entrepreneurship to practices that aim to create innovation and social change at the personal level. The importance of these intersections lies in the type of change that the entrepreneurial process brings about consisting either in personal innovation or personal emancipation, which are processes of change captured in the notion of self-entrepreneurship. Entrepreneurship has become a critical field for ethics. Through entrepreneurship it is now possible to have ethics focus on what people concretely do, and thus operate as a mentality rather than a distant theory.

In this chapter I discuss the rise of the managers in the first half of the twentieth century and the implications that managerial practices had, and still have, on business in general. I use this analysis to gain additional insight into the collapse of Australian HIH, American Enron, and Lehman Brothers. Management is a relatively new phenomenon that emerged more forcefully with the rise of the corporation in the early years of the twentieth century. The rise of the managers had an enormous effect on ownership. Prior to the advent of incorporated businesses the private owners or the family owners had also managerial responsibility for their businesses. With the rise of new business forms and incorporated risks the managers took a more predominant role and as a consequence a separation of ownership from management occurred. In other words, when managers took control over the means of production, which also includes services, the owners lost direct control over how their money was used and invested. The incorporated firm became the working place of the managers in the roles of chief executive officers, chief financial officers, and chief operational officers, also known as executive managers. The managers represent a separate group/class driven by self-interest. Not only employees and workers are subjected to the decision-making power of the managers. So, also, are owners, shareholders, and, increasingly, societal stakeholders.

In this chapter the focus is on the shift in the importance of money where debt seems to have lost its social stigma. In the economic and financial domains debts have also changed status and become a popular monetary instrument for investments that are not linked to any enterprising activity. To make sense of what is currently happening to our relationship with money I dwell on the difference between being important and having importance. It seems that what is generally important might have no particular importance for people. It also seems that things acquire importance through people’s care. A question arising from here is whether the present status of debts has to do with people seemingly caring less about money particularly when money takes the form of credits. There are ethical issues related to this shifts in importance from credit to debt. But the motives behind such a shift are difficult to establish. There is a sense here that traditional ethics theory is not capable of sorting these motives. But a theory of care alone might not provide an answer either.

An argument is made in this article that there exists a trend in today's society toward a phenomenon that can tentatively be calledneocharismaand that this trend poses important challenges to organization theory and the modern organization. This phenomenon, it is suggested, is expressed in today's intense pressure for innovation, something that makes it imperative to develop a distinction between constructive and destructive innovation. Organization theory has some difficulty in handling innovations, radical change, and irrationality, as a review of the literature shows. In order to better understand a phenomenon such as neocharisma, it is proposed that organizations be seen as embedded in society in a typology based on Max Weber's four types of social order (tradition, instrumental rationality, value rationality, and charisma). The article ends with a comparison between charisma and neocharisma, a discussion of what differentiates constructive from destructive innovations, and suggestions for future research related to neocharisma.

Ethicmentality is an innovative book. It blends ethics with mentality to capture the interdependence of ethical life and social life creatively. The book is also innovative because of the way this interdependence is explored. By focusing on practical ethical behavior in today’s economy, business, and society, Michela Betta has advanced an understanding of ethics freed from the burden of moral theory. By introducing a new type of analysis this book also contributes to methodological innovation. Familiar issues are revisited through the notion of ethicmentality. Capitalist economy is presented in terms of a mentality embedded in society, culture, and politics. Government is revealed as mentality about how to govern economically through market freedom rather than human rights. The rise of the financial economy is described as challenging the traditional capitalist mentality of equal opportunities. A money mentality around debts and owing is perceived as having replaced credit and owning, and the rise of corporation managers as having destroyed the old mentality of ownership. Ethicmentality shows the potential of constructive critique from economic, business, and society perspectives. It also breaches traditional limits by developing the idea of ethical capital and entrepreneurial ethics. Ethical thinking is infused with the Aristotelian notion of virtues and moderation to reflect about modern work. Ethicmentality helps us see the complexity of social and personal life. Given the pervasive nature of mentality and ethics’ focus on individual deliberation, ethicmentality represents their productive combination, a new blend for ethical and social analysis.

In this chapter, I discuss recent contributions to the literature concerning development and movement of capital under current capitalist conditions. I have emphasized the critical positions of several authors. Their works have initiated a debate about political, social, and fiscal strategies for a more effective control of capital, redistribution of wealth, reduction of poverty, and improvement of incomes. Current capitalism is understood to be structurally global, socially unfair, and concentrated in the hands of financial elites. The inequality caused by capital is perceived to originate from the cultural supremacy of the capitalist discourse that continually revises the definition of merit. Although it remains difficult, and probably even impossible, to agree on a single definition of capitalism, there seems to be agreement about its effects. Today’s capitalism is considered to be fundamentally detrimental to both the economy and society, and in need of reform. What capitalism does today is not only a matter for market and political forces. Society is implicated in capitalism, and so is ethics. How far this latter implication goes remains to be seen.

In this final chapter I draw conclusions about the importance of ethics for everyday life. The difference between ethics and moral philosophy is discussed to better identify the role of ethics. It is possible to argue that ethics is broadly involved in social life, whereas morality remains a sub-system, particularly focused on narrow issues such as right and wrong. Ethics is focused on people’s deliberations and their experience. How people respond to circumstances in everyday life manifests a mentality that involves social and psychological aspects in social, practical life. How people reason in social life or personal life, and how they deliberate, becomes an issue for ethics when ethical experience is involved. I argue that ethicmentality has blended these two dimensions of human life, namely personal reasoning and public/social acting, and facilitated the analysis of familiar issues through a different analytical lens. For that reason, ethicmentality is also a concept that introduces methodological innovation. This innovation has helped develop ideas around new topics such as ethical capital and entrepreneurial ethics.

In this chapter, the formation of ethical capital is discussed. I begin by using Michel Foucault’s work on the formation of ethical subjectivity. I do so to elaborate on his idea that people can resist power through ethics, particularly through the care-knowledge nexus that sustains ethical living. I then propose to consider the ethical subject as someone who has built up ethical capital through which it becomes possible to attain independence from the power of others. Ethical capital is presented as a form of accumulation of ethical capabilities that might have started early in life. Accordingly, I suggest that birth represents the start-up of a personal enterprise from which ethical capabilities can be expanded. Ethical capabilities, although influenced by human ethical dispositions, cannot survive on their own. Hence, I further argue that ethical capabilities are the product of upbringing, education, and socialization. To make this latter point I use Carol Gilligan’s work on care. Ethical capabilities are continually improved to attain an ethical status. By being the result of human activity, ethical capital is exposed to risks and can be lost. Attempts to keep ethical capital unchanged might inadvertently lead to a decrease in a person’s overall ethical wealth. Ultimately, personal ethical capital can be protected by incessantly growing it.

Leadership research has grown into two opposing approaches, the scientific approach and the critical approach. The first is focused on leadership, the second on the leaders. For reasons of practicality, they will be described as the leadership-centric and the leader-centric approach, respectively. Each of the two approaches is characterised by two different perspectives: leadership-centric research highlights science and process; leader-centric research deals with the leader using cognitive faculties and drawing on cultural practices. This opposition has created an unproductive gap in leadership scholarship. The present article focuses on how to reduce that gap by bridging some of the differences that currently undermine scholarship. The concept of habits is used to support an argument in favour of leadership as a social phenomenon. The main idea is that a social phenomenon involves both social interactions happening in everyday shared knowledge and intentionality that influences agents’ experiences. By borrowing from the pragmatist John Dewey, leadership is conceptualised as habits embedded in social life. Habits comprise the social sharing of experience and knowledge in a meaningful world. But it seems difficult, it is further argued, to elaborate on people’s intentionality through habits. To overcome this difficulty, Edmund Husserl’s notion of doxic-theoretical experience is used. Habits, it is concluded, help make leadership-centric research less anonymous, and doxic agency the leader’s intentionality more transparent.

In this essay I propose a new reading of Michel Foucault’s main thesis about biopower and biopolitics. I argue that organisation represents the neglected key to Foucault’s new conceptualisation of power as something that is less political and more organisational. This unique contribution was lost even on his closest interlocutors. Foucault’s work on power had a strong influence on organisation and management theory but interestingly not for the reasons I am proposing. In fact, although theorists in management and organisation studies have emphasised power in relation to discipline, control and subjectivity they have overlooked the transformative meaning of Foucault’s organisation. His work on biopolitics has attracted opposition, too, as evidenced by the controversy sparked by Giorgio Agamben about Foucault’s biopolitics. From Agamben’s critique, it appears that Foucault’s notions of politics and power do not allow a deconstruction of the violence of the concentration camp. However, a critical reading of Primo Levi’s biographical narratives reveals the camp as a place where the prisoners’ability to organise their daily lives secured survival. To make sense of Levi’s revelation, I use John Dewey’s notion of habits as forms of organisation and reconnect it to Foucault’s organisation. A shared understanding of the objective conditions of human activity and experience highlights the similarities between Dewey’s pragmatism and Foucault’s pragmatic metaphysics. In the end, however, Foucault’s metaphysical background has caught up with him, pushing him away from his own most radical proposal that organisation was the new form of power and the new substance of politics.