Ethics

A reflection on democratic legitimacy, law and ethics

States are not moral agents, people are,

and can impose moral standards on powerful institutions.

Noam Chomsky

1. Introduction

The aim of this essay is to elucidate to what extent democracy is needed in order to establish an ethical system reflected in a legal framework and to enforce the rules derived from it.

The existence of ethical codes and the process for them to be transferred into positive law has been discussed thoroughly by philosophers, political scientists, sociologists and lawyers. The same can be said of the process of enforcing the laws produced by the original ethical code. It is in this theoretical framework that our question arises: does democratic legitimacy make any difference in these two processes? And if so: to what extent?

The relevance of this discussion, as we can derive from what we stated in the previous paragraph, is twofold, first when considering the process from ethics to law and second, when the observation of the law is enforced back to the individuals or the corporations. When citizens are just passive objects of the law to which they are subjected with no power to change them: are these laws positive reflections of the general ethical code of the nation? Moreover, if the rule of law, basic in democracy, is diminished in absence of proper democratic arrangements such as the separation of the three political powers, yielding a system in which citizens and firms cannot defend themselves against the plaintiffs during the enforcement process: is there any legitimacy in the whole system?

Human history has a plethora of examples in which an individual or a group of individuals have tried to impose their own ethos to the majority. Most of the countries nowadays, not only the democratic ones but also those with autocratic regimes are struggling to impose a set of behavior rules to business. But whereas in the democratic regimes individuals and companies have a say in the process, in the autocratic regimes they have not. Are these two systems equal in terms of legitimacy? And last: is this legitimacy key to the problem of policy-making and law enforcement?

Having posed these questions, mostly of a philosophical nature, open to interpretation, and therefore, with no unique answer, we will try to at least place a common intellectual framework in which we will be able to contextualize the discussion. First we will discuss about the topic of ethics and democracy, the process of democracy acquisition, the ability of democracy to reflect the dominant ethical code and, business and business ethics being our main subject of study, we will discuss the role of firms or corporate citizens in the system. After that, we will try to show the most important issues in the legislative process. Finally we will discuss the importance of democracy, democratic rules and therefore of democratic legitimacy to the whole process of transferring ethical codes to positive law and to enforce them.

2. Ethics and democracy.

The ancient Greeks did not consider the existence of an ethical sphere differentiated of the political one, their conception of ethics was �the quest of the good life in the polis’. This oneness of ideas was linked to the classic Greek conception of virtue and the invention of democracy . In modern times however a split has occurred between ethics and politics and these concepts are no longer together.

Generally speaking we can say that there should not be democracy without ethics although there is ethics without democracy. Following Giusti (2006) we can define ethics as:

(…) an evaluative conception of life, a system of beliefs or a scale of socially shared values that encourage the interpretation of reality and act as foundations of the different institutional organization forms.

From this definition we can infer what seems evident: not all the ethical codes are democratic, there are some which are deeply antidemocratic such as the aristocratic or collectivist ones.

2.1 Democracy as an outcome of a particular ethics system.

Before we define the concept of democracy and identify the democratic legislative and enforcement processes and, having said that there are plenty of ethical codes, most of them non-democratic, we should recognize the ethical values underlying democracy.

The surge of modern democracies in the western world in the 18th century is usually linked to the existence of some predominant values that overcame the ancient collective values of theocentrism. These new principles, crucial to understand the appearance of democracy, can be reduced to just two, namely: the supreme value given to the individual as opposed to collectivity, and egalitarianism as opposed to elitism. These values shape the institutional framework and processes in democracy and derive in a system in which the rule of law and the separation of powers balance the whole system.

2.2. Individualism, free market, democracy and the firm.

The ethical values underlying democracy are usually connected to Christian protestant ethics and had before led to democracy been the underlying values of capitalism; therefore we can link both systems, modern (or liberal) democracy and capitalism .

Both concepts are linked have common origins in the recognition of the individual as a bearer of rights (property being one of them). Therefore we can conclude that the concepts of democracy and the free market are central to the appearance of the firm and both have its origin in the recognition of the individual as a supreme value. The firm being the collective person under which the individuals act in the free market, it is submitted to the rule of law, and although it is not a bearer of political rights as are individuals, it can express the political aspirations of its owners and is a subject of duties and rights in the enforcement process of law.

From this definition of the firm we can assume a role for the firm in the democratic process, not just a passive one but also an active one, therefore the term currently heavily used of corporate citizenship that incorporates the idea of firms having not only duties as members and agents in society but also the rights that unequivocally accompany those duties.

Morrison (2003) explores this concept building a whole new set of relationships or social contracts as she refers to:

Companies as entities are analogous