Habermas on Discourse Ethics and Deliberative Democracy - Corporate Governance and Business Ethics

We will ground our attempt to sort out the implications of political CSR in terms of corporate governance on the Habermasian theory of deliberative democracy. Habermas grounds deliberative democracy itself in discourse ethics. Central to discourse ethics is the idea of a free acceptance or rejection of validity claims raised in moral and ethical discourse (Habermas 1991). According to Habermas, moral norms claim universal validity. They are accompanied by the claim that they deserve recognition by all those affected by the application of the moral norms (Habermas 1984). Habermas formulates his Universalizability Principle (U-principle) as follows:

A morally valid norm should meet the condition that the foreseeable consequences and Side-effects of a general compliance with the norm for the fulfillment of everybody’s interests can be freely accepted by all those involved. (Habermas 1984) According to Habermas, the orientation towards reaching a universal nsensus about moral norms is built into the communicative presuppositions of discourse itself.

The gentle force of unavoidable presuppositions of argumentation requires participants to take on the perspectives and to consider equally the interests of all others. (Habermas ) These presuppositions are that participants who are oriented towards reaching mutual understanding allow all relevant arguments to be brought forward. Nobody whose interest is affected by the norms which are being discussed is excluded from the discourse. In addition, all participants have an equal chance to formulate their opinions (Habermas).

The communicative model for deliberation about, and justification of, disputed propositions fits well with what Habermas calls a post-traditional idea of justice.

The more the substance of a prior consensus about values has evaporated, as is the case in modern post-conventional societies, the more the idea of justice itself amalgamates with the idea of an impartial justification (and application) of norms. The more advanced the erosion of innate representations of justice, the more “justice” comes to be articulated as a procedural, but by no means less demanding, concept.

Since friction between various cultural forms of life both inter- and international leads to conflicts that need to be adjudicated without relying on culturally determined conceptions of justice, this procedural approach to questions of justice and morality seems to have an important advantage for the context of (international) business. The U-principle for moral discourse offers us a clear rule which indicates how everybody’s interests can be safeguarded in the discourse itself. If a stakeholder dialogue were to be organized in a way that fulfils the condition of this U-principle, the outcome of this debate would have moral validity.

Habermas explains and extrapolates the political implications of discourse ethics in his theory of deliberative democracy. This normative theory of democracy holds that, ideally, normative expectations and claims are formulated in a political public space which allows for spontaneous contributions from civil society. The formation of a political will and opinion, based on a civil society with its own autonomous public spheres, is central to this model of deliberative democracy. It is by participating in this public debate that citizens can influence the institutionalized decision making process in the political realm and exercise a form of self-governance. This enriches the self-governance made possible through elections. Deliberative democracy presupposes that governmental institutions are responsive to the themes, values, and programs which are formulated in the informal public sphere. A second central feature of the deliberative model is that it understands the rights and principles of the constitutional state as an answer to the question of how the communicative conditions of democratic procedures can be institutionalized.

Is it consistent with the model of deliberative democracy to look for ways by? which democratic procedures can be embedded within a society’s system of economic organization, including corporate governance? This seems to be compatible with the emphasis on the institutionalization of democratic procedures. In addition, this idea is reinforced by Habermas’s stated belief that processes of both informal and institutionalized political deliberation can provide the necessary solidarity within a society that is needed as a counterbalance to the systemic forces of money and political power (ibid; Scherer and Palazzo). But, if we also take into account Habermas’s theory of society, the table turns. In his theory of society Habermas points out that the communicative power of public opinion cannot rule by itself. It can only guide the use of political power in a certain direction (Habermas 1998). The functioning of the economic system can thus only be adjusted to democratically legitimized expectations by transforming the normative messages of deliberative discussions into the specific code of the law (Habermas 1996).

The basis of Habermas’s theory of society is the theory of differentiated society. Crucial to this theory is the distinction between the “life world”, which is primarily integrated by communicative action on the one hand, and the differentiated political and economic systems on the other hand. These systems are primarily integrated through their specific media: power and money (Habermas 1987).

Coordination within the economic system is organized mainly through the medium of money. Actors on the market i.e., corporations are primarily concerned with profit seeking, at least as a formal criterion of success in the market (it does not say how profits can be obtained). This all means that we must proceed cautiously in working out the implications of deliberative democracy for corporate governance. Habermas’s views of discourse ethics seem to endorse a rather radical democratization of society’s system of economic organization. But, looking at the matter from the perspective of his theory of society, it is difficult to see how democratic deliberation could influence corporations directly. Corporations do not have a need to reach agreement or mutual understanding with all stakeholders in order to secure their continued existence. Indulging corporations on this issue may, in fact, endanger their survival.

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