A Civil Economy: Transforming the Marketplace in the Twenty-First Century

2. Systems of Accountability

Systems of Accountability 2 All great and honorable actions are accompanied with great difficulties. —William Bradford, History of Plymouth Plantation, written 1630–51 Sympathy, though its meaning w as perhaps originally the same [e.g ., as compassion] ma y now, however, without much impropriety , be made use of to denote our fellow-feeling with an y passion whate ver. —Adam Smith, The Theory of Moral Sentiments (1759) In the preface and in chapter 1, we asked how a market economy could be related to the idea of civil society and a moral order. We noted that Adam Smith conceived the market to be a self-regulating system operating for the common good, but in the succeeding generation the organization of corporations went against much of what he had imagined as a civil economy. Now in this chapter we will show that the social idea in Smith’s moral economy has its place today. Civil accountability can be developed in the economy. The idea of a “free market” system is misleading. Civil freedom in the economy cannot develop without civil order. It is impossible to have freedom without order; civil liberty cannot exist without rules of conduct. In a free market, we propose, a civil order develops through systems of accountability . Systems of accountability have been developing for over a century, but they often go unnoticed. They keep the market relatively stable and free, working like Smith’s invisible hand. These systems are composed of rules that enable some freedom in associations and markets, requiring less government intervention. In other words, rules of accountability must exist within organizations and markets to have some freedom and justice without government regulations. To put this another way, market freedom requires accountability, which then provides some degree of justice inside markets. We ask, µrst, what concepts deµne accountability in civil development ? Second, how do people solve problems through systems of ac- countability? Finally, how are current systems of accountability ×awed or imperfect? Basic Concepts: Theoretical Orientation The deµnition of concepts is tedious, and we make this task brief for the reader, but we must have consistency in understanding special terms. We start with the idea that a common good is relative to a market organization in which participants are socially interdependent. Nonetheless, every one must see this interdependence in order to establish systems of social accountability . Accountability is connected to a concept of a common good because everyone is interdependent within it. People who are interdependent in an organization deµne what is the common good for them. In other words, the common good carries special meanings at different levels of governance : the local community, the enterprise, the industry, the society, the nations hosting global corporations, and the globe itself. In all these cases, we see stakeholders are deµning what is good for them as an association. In this process of self-deµnition, people show some degree of social governance. Social governance is a basic concept explaining the human nature of all these interdependent levels of organization. Self-governance is a term within the former term that refers to people in organizations with some autonomy. Every market organization has some allowable measure of self-direction and independence within its interdependency. Command governance refers to systems based on a hierarchy of power and authority; that is, people work in superordinate and subordinate ofµces, or higher/ lower systems of authority. Mutual governance refers to the degree to which an organization allows for equity in the reciprocal action of its members. The task in establishing accountability requires some degree of equity and coresponsibility for stakeholders at some level of organization. Social responsibility refers to the conscientious efforts of people in markets to take into account those who might be adversely affected by corporate policies. Social accountability refers to formal structures that require people to act responsibly toward one another on the basis of established norms. Systems of accountability give assurance that certain business actions are answerable to those affected by them in the marketplace. To put this another way, parties in a system of exchange are obligated to act with norms of fairness and justice on the basis of some degree of consent. The market is based on patterns of social and economic exchange. Every economic action invokes a certain type of social action. Social accountability is important to stakeholders (people affected by a µrm) who 36 A Civil Econom y [13.59.218.147] Project MUSE (2024-04-24 12:37 GMT...