Can businesspeople be counted on to foster virtue?

Adam Smith explained his concept of the invisible hand thusly:

[Each individual] neither intends to promote the public interest, nor knows how much he is promoting it. [He] intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it.

In short, self-interest promotes the public good.

Other economists have argued that economic integration between countries fosters peaceful relations; with broken relations comes the loss of mutually beneficial exchange. And other economists argue that for similar reasons a competitive market economy fosters social cohesion in ethnically or culturally diverse societies. Milton Friedman: “The great virtue of a free market is that it enables people who hate each other, or who are from vastly different religious or ethnic backgrounds, to cooperate economically. Government intervention can’t do that. Politics exacerbates and magnifies differences.”

But can business human resource practices foster public virtue? A report in the Boston Globe suggests the answer could be yes. It reports on a study by Gretchen Spreitzer, a professor at the University of Michigan’s Ross School of Business:

Her analysis, based on surveys taken between 1981 and 2001, shows that empowered, satisfied employees tend to live in open, peaceful societies — and that improvements in workplace empowerment often precede social changes. Employees, it seems, can take lessons learned in the workplace and apply them to social and political life.

She took measures of employee satisfaction from the World Values Survey at the University of Michigan, which collected data in 65 countries, from Argentina to Slovenia to Venezuela, for 20 years beginning in 1981. The survey consisted of some 200 questions such as “How free are you to make decisions in your job?” and “Do you follow a superior’s instructions only when you feel they are correct?”

She then compared this with data collected by the Economist Intelligence Unit on levels of corruption and violent conflict. Spreitzer found that countries where workers reported having little voice in decision-making had higher levels of unrest, and that as measures of workplace satisfaction improved, over time, indications of contentment with civic life rose, too.

The question of causation remains open:

Spreitzer uses indirect evidence of empowering practices — measures of job satisfaction, not tallies of the number of companies that have adopted specific practices. And there are other questions to consider: Do participatory management practices result in open societies, or are the businesses that use them simply more abundant in healthy, peaceable communities? And do positive changes in society reflect enlightened business practice or the impact of politically motivated changes induced by organized labor and other social movements?

And, to put a sharper point on one of those questions, Is it in the interest of business to adopt an empowered and participatory workplace if the wider community is not healthy and peaceable? Perhaps it is business practice that adapts to the culture that exists.

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