Creating moral capital


Morality is a bottleneck, the critical success factor in the development of society as well as business; success stands in direct proportion to the available moral capital. Every one can make a personal contribution to the common fund of moral capital. The precondition is that we untiringly look for a higher directive – how we do it is a private matter.

Meaning in the machine

In a finite perspective every game becomes barren and meaningless. The greatest ambition of our forefathers was to transcend this unhappy condition, finding and defining an omniscient and omnipotent God. Frustrated by this self-defeating task, we have declared Him dead but His omnipresence still haunts us in the infinite. God and non-God are both self-immunizing concepts, inaccessible to penetrating analysis. If we substitute them with slightly more transparent Good and Evil, the latter appears to me as pure negation with no independent existence. In this monistic view, evil is adequately defined as the absence of good. The best we can do is to play by the good rules and boldly make our own moves, balancing precariously on the edge between chaos and creativity.

Man acquires substance only when he aims at some higher goal, fulfilling his faith. I do not advocate a blind faith but a daring hypothesis, a sublime exertion of our collective creativity. Genuine faith seeks contact with the totality of existence and is tantamount to a practical creed, a strong personal commitment. By such faith we have, in internal competition, created a steadily expanding value universe which knows no bounds. Faith has no court of appeal and is thus singularly susceptible to adulteration and fraud. It must remain free to pursue its purpose and should never be used in any sense of the word.

The global impact of Western culture stems from a multi facetted pluralism which may superficially resemble value-neutralism. A good message nevertheless pervades the whole game. The interpretation of right and wrong is not left in the hands of professional sages but is the personal responsibility and daily task of the progress dynamos, the collective conscience of the cultural coalition. Despite the absence of explicit ends, our culture is a hermeneutic whole which depends on general adherence to sanctifying means, if it is to yield a rich return. The main determinant is the passion to improve, enhance and enrich the world. I call it meta-capitalism, the morality of wealth.

“Do not despair but work and pray”. In my view, this simple precept of St. Benedictus has sustained fifteen hundred years of unprecedented human emancipation. Our values can be regenerated only by the daily penance of self-reproval: moral tenets of everyday ethics are indicators of the quality of faith. We need something more to defend than our personal well-being, we ache for a higher authorization but cannot prescribe how the inmost accounts should be settled. One way or the other, man is dependent on contact with God. Left to his own devices, he is sooner or later reduced to a robot or a monster, or at worst to both.


The power of the governed over the governors, the circularity of power, expresses the principle of democracy in a nutshell. But the power of the people is open to many abuses − the tyranny of the majority by arbitrary and unjust government. Democracy is the least bad form of government, but also the most demanding; success is directly proportional to the available moral capital.

The cogency of democracy depends on its powers of self-purification and self-renewal. A relatively modest amount of moral capital is sufficient to start a virtuous spiral of self-improvement. In a democracy it is not necessary for the majority to possess remarkable civic virtues. Neither does the socially committed minority face superhuman moral demands. But more and better morals go hand in hand with societal success and prosperity. This thesis is empirically validated.

The destruction of the moral capital always precedes the collapse of Government. The tax burden increases and the productive segments of the population lose out. The elite have betrayed their mission as stewards of the societal plus-sum game, a recurring pattern in world history. Only the modern democracies have so far managed to maintain and perhaps even to increase their moral capital despite the steadily rising living standards. Genuine democracies avoid great upheavals but instead move from one minor crisis to the next – a bewildering sequence of minuscule moral challenges.

Our ability to perform in extended, exceptionally fruitful plus-sum play depends on public morality. Spontaneous solidarity is buttressed by ethical principles and agreed rules of the game; the concord crystallizes around abstract but attractive symbols – king and country, flag and fatherland. Constitutions, norms, and judicial systems are levers which augment our weak moral forces in steering the overarching plus-sum game. But the available moral capital sets a ceiling for the size and complexity of a society. Just like corporations, states tend to collapse if their ambitions exceed the moral resources.


The strength and weakness of democracy is that it is neither better nor worse than its citizens. We are all carrying the ball – you, me, everyman. But can morality be produced by peer pressure? Should I be my brother’s keeper? A lift of individual moral standards will anyhow make itself felt in public life by setting a good example, whereas decrees from above may appear only as hypocritical political correctness.

In the United States, dropping litter is, in general, heavily fined – to little avail. An American business friend of mine once unthinkingly threw away a cigarette butt at the railway station in Zürich. When he turned around, he noticed an elderly Swiss gentleman picking it up and putting it in the trash bin. My friend said to me: “I have never been so ashamed in my whole life”

A democracy cannot work without democrats but no superhumans are required to mold our future, only customary (or uncustomary) civil courage. Faith in God, faith in the future and a sound self-confidence are all connected, independent of religious or ideological quibbles. It is so terribly simple. Openness and honesty suffice – the good will to search for a shared truth. The love for and of God cannot be distinguished from the love for thy neighbor, the superior plus-sum game.

Everybody can contribute to the common fund of moral capital by tenaciously searching a higher directive. Pragmatism is the tacit platform for productive plus-sum play but pragmatism must, like democracy, be steeped in a higher meaning. I am calling for a modern theology which would integrate our essential insights and experiences in the light of disparate beliefs.

Law and justice

The anarchist ideal is to abolish politics by leaving human interplay to be directed solely by market forces, ameliorated by the supposedly inexhaustible altruism of man. Confirmed democrats have generally been sceptical of such utopianism; politics and even morals can in fact be under stood as a reaction to blatant market failures. “What is government itself but the greatest of all reflections on human nature” was the joint exclamation of Messrs. Hamilton, Madison and Jay (in The Federalist, 1787). And they went on: “The passions of men will not conform to the dictates of reason and justice without constraint”. Neither did the founding fathers of the United States exhibit trust in the innate benevolence of magistrates, and they took considerable precautions to guard their fellow-citizens against power-hungry politicians and an entrenched bureaucracy.

The economic school of public choice, pioneered by Warren Nutter, James Buchanan and Gordon Tullock, is trying to extend the principles of economic exchange (catallactics) and a rational Homo economicus to the analysis of democratic politics. One explicit aim is to prescribe improvements in the constitution by deft ‘political engineer ing’, and thereby to optimize the politico-economical plus-sum game. The basic approach is to economize on the scarcest commodities which are civic virtue and good will –‘love’ in general.

Legal statutes are only the pinnacle of a submerged structure. They ultimately rest on a tacit code of honour – our intrinsic sense of fairness. An inherent quandary of jurisprudence concerns this foundation: how to respond to transgressions in the personal sphere? In the Western world, the notion of illegality has suffered considerable swings. Bad habits like swearing or card-playing or coffee-drinking have been outlawed; meanwhile the case of tobacco-smoking is, once again, pending. Adultery is still a crime of sorts in many places while, quite recently, prohibition comprised not only drugs but alcoholic drinks as well. The deeper questions of guile and mendacity or sin and shame are even more refractory. Generally they have been met with benign neglect but perjury and contempt of court are serious offences, at least in the United States.

In most civilized countries, respect for the rule of law is still deeply entrenched despite many absurdities, inherent in the administration of justice. A mute injunction makes us uneasy when contem plating illegal acts. The likelihood of discovery and punishment has something to do with it, but does not generally play the decisive part. This stock of loyalty is gradually whittled away in a thicket of pernickety bills and regulations. As Montesquieu remarked: “When it is not necessary to make a law, it is necessary not to make a law”.

Making money

A business enterprise fulfils its moral obligations by making money, respecting the overt and covert rules of the game. This home truth has been repeated many times over but the intellectual underpinnings are wanting. Company culture and company values have been emphasized but the central position of moral capital has rarely been spelled out in so many words. The reduction of sustainable business success to a single factor – simple morality – is indeed a bold hypothesis. I hasten to add that it can hold strictly only in the ideal case where the rules of the game are perfectly tuned to the common weal. But I maintain that our present democracies are close enough to the ideal for good morals to pay off handsomely.

Primarily, my conviction concerning the supremacy of morality rests on deductive reasoning. The market economy is evidently a plus-sum game and elementary game theory tells us that honesty and openness are the necessary and sufficient success factors. This conclusion is supported by a lot of anecdotal evidence, but thorough empirical investigations are few and far between. There are good reasons for this lack of verification (or falsification). Moral capital is very hard to measure but empirical research in this area would be highly welcome. Otherwise we must resort to circular argumentation. Long-term success is the only dependable measure of morality!

What then can be done? Teaching morality is a futile exercise. Stamping out immorality might be more practicable. Competent psychiatrists can profile psychopathic personalities although they have been duped even by serially convicted jailbirds. If psychopathic managers could be exposed at an early stage, it would be a great boon. I have in passing (in Management and Morality) touched upon a few other expedients which can be helpful in business organizations. While every company must look out for itself, our joint responsibility is to work for the improvement of the politically determined framework, the rules of the market game. This is part and parcel of the challenge of democracy, mapped out in my eponymous book.

Wealth is thus the fruit of morality, signified by postponement of material gratification. This bourgeois mindset has had many detractors but recently the virtues of money making have also received accolades.The long-term preservation and expansion of wealth is above all a moral challenge. It has been an exacting problem for most families, companies, countries and even civilizations. Success leads to self-indulgence which degrades morality. The subsequent tribulations provide a chance to restore it but in the last instance we can only fall back on our remaining moral capital.