May 04, 2009
Re-Enchanting Corporate Law
Posted by Lyman Johnson

    In mid-April, several of us (Robert Ashford, Ron Colombo, Sarah Duggin, Mike Naughton, David Skeel, Gordon Smith, Susan Stabile, and I) gathered at the University of St. Thomas Law School in Minneapolis for a roundtable on "Exploring the Connection Between Religious Faith and Corporate Law."  We had an afternoon of lively and far-ranging conversation, and we ended by asking ourselves what venues might exist for extending and widening the dialogue.  Gordon offered us two weeks of guest blawging on The Conglomerate.  Each of us will post and comment at various times over that period.  We hope many others will join in with comments, questions, ideas, and so on.  Let me kick things off.

    Corporate law has profitably been examined from a number of disciplinary vantage points.  Economics -- whether of the older, neoclassical or the newer, behavioral variety -- along with psychology, sociology, history, and feminism all have enriched the discourse.  Recently, a decided turn toward empirical work also is discernible in corporate law scholarship.  Largely missing from these various "takes" on the corporation,  however, is sustained scholarly attention as to how religious belief and corporate law (and corporate life) might be connected.

    As an empirical matter, evidence reveals not only that vast numbers of people hold religious beliefs, it also suggests that those convictions give meaning and purpose to their lives, and shape behavior.  The issue is not whether, as a normative matter, people should or should not hold such beliefs or whether, as a scientific matter, certain scientists and social commentators think people are foolhardy or, conversely, fully justified, in doing so (Dawkins, Hitchens, and Maher -- and their respondents -- have addressed that topic).  The issue is more basic, more empirical:  people in large numbers do hold religious beliefs and they consistently report that those beliefs influence how they live.  Shouldn't this sociological fact carry significance for those who theorize about corporate decision-makers, such as investors, directors, managers, and employees?

    For example, corporate law scholars might probe the implications for contemporary theories of corporateness if, in fact, significant numbers of people in the business world -- including executives, directors, investors, and employees -- remain "enchanted" by religious faith (Max Weber having famously noted in 1919 that the modern sensibility had become "disenchanted") or other spiritual belief systems.  Again, the issue is not whether people should or should not have such beliefs.  What matters is whether, and how, as an empirical matter, various beliefs actually influence, or potentially might influence, behavior in the business arena.  Do we really know?  Or do we simply make assumptions about human decisionmaking that may be, as a matter of fact, unwarranted?

    The seeking of such an enriched model of human motivation is what lies behind recent "behavioral realist" approaches in legal scholarship.  Here, humans are no longer wholly understood to be self-serving calculators of costs and benefits, as modeled by rational choice theorists.  Rather, the influence of less visible but "pervasive, fundamental and arational cognitive processes"1 on human conduct is openly examined.  Too, growing evidence from a broad array of disciplines suggests that people may tend to naturally regard others with sympathy, and that humans both value and reward cooperative behavior in others. 

    The ways in which markets themselves vitally depend on such character traits as trustworthiness, fairness, honesty, and concern for the welfare of others is being demonstrated.  Such a more-rounded conception of people is at odds with standard neoclassical economic theory -- that humans are inherently self-centered and routinely seek to maximize personal well-being.  It is at odds too with the notion that value systems are simply constructs of human social systems.  We are seeing, in short, a growing interest in what Michael Jensen has called the "positive analysis of normative values..."2  Rather than simply positing that humans are entirely self-serving in economic settings, many observers are undertaking more nuanced analyses of how values guide human interaction.

    Data about religious beliefs both here and abroad tie into these emerging scholarly pursuits and findings.  After all, if religious faith -- for some people -- forms the very fiber and foundation of who they are (that is, their self concept) and how they interact with others (that is, their relationships), shouldn't we expect that to influence behavior in the corporate world?  The groundspring of values for many people is religious belief:  As noted by Oliver Goodenough and Monika Gruter Cheney, "[R]eligiously based virtues [such] as honesty, dependability, respect, and concern for others represent commitments by which a good person should live, and these commitments map dependably onto the kinds of mechanisms that can reframe economic life to make cooperation a dominant strategy...."3  And the Catholic Social tradition recognizes that humans "are created with an essential linkage between our personal good and the good of others.  We cannot become good persons unless we intend our lives to serve others' good as well as our own, and a vital way that we live for and with others is through institutions."4  Recognizing that faith and beliefs can affect economic behavior seems important whether one seeks simply to understand the corporation or also seeks to reform its conduct in some manner.

    I will stop here and let others from the roundtable make their quite different contributions on the broader topic, but I will pick up where I left off in a later post, where I will contend that ideology should be no impediment to an exploration of how faith might inform an understanding of corporate law and corporate life.  I will also join in commenting on posts by others as well.  Please contribute to this conversation, and thanks to Gordon and other Glommers for hosting us.


1    Jerry Kang, Trojan Horses of Race, 118 Harv. L. Rev. 1489, 1494 n. 21 (2005).

2    Michael C. Jensen, Foreward, in Moral Markets:  The Critical Role of Values in the Economy ix (Paul J. Zak, ed. 2008).

3    Oliver Goodenough & Monika Gruter Cheney, Is Free Enterprise Values in Action?, in Zak, at xxiii, xxvi.

4    Jeanne Buckeye, Michael Naughton, et al, Educating Highly Principled Leaders 5 (Draft 2009).

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