Communitarian and Individualist Ideas in Business

Do Community Rights Override Individual Rights?

One of the hottest controversies in social philosophy these days is whether communitarianism or individualism is the more appropriate theory for describing the relationship between the individual and society. The dispute reaches beyond academic social theory to have a direct impact on beliefs and practices in the business world. The split on this issue in the academy is mirrored in the beliefs and practices of the business world. This is unfortunate. It is unhealthy for the business world and has potentially damaging consequences. If communitarianism becomes the prime mover of social thought, it will become increasingly difficult to sustain a modern economy.

First, what are individualism and communitarianism? Broadly speaking, we might say that individualism is the view that each individual (but only individuals) has, and should regard himself as having, moral significance and inalienable rights. Communitarianism is the view that communities also have moral significance and certain rights. Let us add to this initial distinction with some history and some precision.

The idea that individuals possess inalienable rights goes back in American social thought beyond the founding of the Republic to the struggle for independence, and in English social thought at least a hundred years earlier to John Locke. It has its roots in the Magna Carta of the thirteenth century. The result of these developments was that individual human beings, not kings or the government, came to be regarded as the most valuable.

Locke’s Two Treatises of Government represented a direct theoretical challenge to the idea that kings ruled others by divine right. According to monarchist theory, the king and the land are one, and no one has any rights not granted by the king. Since the king is the personification of the social order, no one can dissent from the social order without affronting the king, and therefore the land itself. Locke’s early individualism argued for the personal sovereignty of each over his own life, liberty, and property. In Locke this personal sovereignty is based on the idea that the rights of each are of divine origin, but not all individualist theories are based on this premise. Many modern individualists argue that rights are a useful social construct: respecting rights produces the greatest benefits overall. Still others derive a theory of individual rights from arguments about the necessity for personal freedom and autonomy for self-actualization and growth.

The Communitarian Challenge to Individualism

The essence of communitarian thought is that the community can be thought of as a bearer of rights, or at least as the holder of interests, to which an individual’s interests may have to be subordinated in some cases. Marxist communism and socialism are clear examples of this idea, although modern American social thought is full of additional examples. Like tribalism, monarchism is an early and common example of a communitarian theory, but some communitarians are sincere democrats. Modern American thought does, indeed, contain elements of different strands of communitarianism (although whether this is a virtue remains to be seen). For instance, the idea that we should all be required to sacrifice a portion of our income in order to provide for common goods such as roads, schools, and farm subsidies is justified in terms of the “good of society.” Military conscription is another such idea.

As with individualist social thought, there are many different versions of communitarianism. Although they differ in regard to, say, the relative values of the community’s interests versus the individual’s interests, or the nature of the community, they share the fundamental premise that communities have rights and interests which may occasionally override individual rights or interests.

Commerce: Communitarian or Individualist?

There are several aspects of the commercial world, some of which seem to rely on or demonstrate communitarian ideas and some of which seem to be based on individualist ideas. For examples let’s look at two of the fundamental structures of the business world, the corporation and the entrepreneur. The corporation is a highly structured, hierarchical organization. It is typically, although not necessarily, owned by large or small groups of investors. The investors provide financing, and employ a group of executives to run the company. The top-rank executives in turn hire managers and supervisors for the various departments essential to the company’s function. The company might have separate departments responsible for production, research, sales, accounting, and so forth. The result is a structured web representing the division of labor.

Each employee is accountable to someone higher up in the chain of command, right up to the chief executive. The chief executive, of course, is accountable to the shareholders. Each employee plays a particular role in the working of the corporation which aims at the overall success of the company. Like a football team, the successful corporation requires the best possible contribution from each worker, but no single employee can carry the team. Individual success is futile if the corporation fails. Just as a star player’s efforts are wasted when his team has a losing season, a single employee might be the best accountant in town, but that won’t matter if the company can’t sell its product.

Each contributes to the good of the whole individual achievement is valuable only to the extent that it contributes to collective success. Corporatism as a commercial mode parallels communitarianism as a social theory. The idea of being a “team player” in the corporate hierarchy parallels the idea of contributing to the “common good” in social theory. In communitarian social thought, each person is supposed to subordinate individual preferences (to varying degrees) to the good of the community, and indeed, frame his or her conception of self-interest in terms of service to the community. In the corporation, each employee is supposed to think of individual needs in terms of the needs of the company.

Of course, being employed at a corporation is a voluntary arrangement; being subject to the laws of the government isn’t. I’m not suggesting that corporations are communitarian governments. There is simply a structural parallel between the way communitarian social thought and corporate commercial institutions depend on the idea of subordinating one’s individual preferences to the common goal. In both cases, risks and benefits are pooled. This might lead corporate leaders to conclude that communitarianism is as appropriate in the political realm as corporate structures are in the commercial realm.

The Entrepreneur

Entrepreneurship is another key institution in the business world. Typically, the entrepreneur is conceived of as the bold, individualist go-getter, so it will come as no surprise that there is a parallel between the role of the entrepreneur in the world of business and individualist social theory. Unlike the corporation, the entrepreneur assumes the risks and reaps the benefits of the enterprise. In some cases the entrepreneur has a new concept, good, or service to offer which propels the venture; in other cases he or she simply offers a more efficient (or otherwise more attractive) way of performing an existing service. In either case, the entrepreneur stands for his or her own vision and gambles on his or her own ability to succeed. Like the theoretical individual of political theory, the entrepreneur makes his or her own decisions in accordance with his or her own judgments for the benefit of the enterprise.

Naturally, the entrepreneur will frequently find it advantageous to cooperate with others in order to secure some mutually beneficial end. Entrepreneurship as a practice cannot rule out cooperative ventures; indeed it may often depend on them. But this fact is not only mirrored in individualist political theory, it is presupposed by individualist political theory. For placing primary emphasis on the rights of the individual does not besmirch the value of social cooperation, and individuals will frequently find it mutually advantageous to cooperate in the pursuit of some shared goal.

What distinguishes cooperative social ventures in an individualist theory from cooperative social ventures in a communitarian theory is that in an individualist setting, all such ventures are entered voluntarily on the basis of a perceived mutual benefit, whereas in a communitarian setting, some arrangements might be imposed “for the good of society” which do not serve a particular participant’s interests. The parallel in business is that entrepreneurs do things because they think it would be best, while corporate employees do things because they have been ordered to do so for the good of the company.

Individualism and Corporate Commerce

Clearly, though, not everybody in a modern economy can be an entrepreneur. There are some enterprises that are more efficiently operated as corporations. The business world needs both entrepreneurship and corporatism. But corporate commerce must beware of its affinities with communitarianism.

In short, the business world would be better off embracing individualism wholeheartedly, and rejecting communitarianism. Even though corporate structures can be interpreted as microcosms of communitarianism, they need not be. Indeed, were communitarian ideas to become predomi nant in our legal system, this would undermine one of the prime energizers of modern corporate commerce, namely, the initiative or choice of all corporate participants to be part of the enterprise. If, as communitarianism implies, the corporation must be an arm of public policy, it will function grudgingly, as do all who work in a condition of involuntary servitude.

What can corporations gain from embracing individualism? Business organizations certainly will continue to require the same hierarchical structure and the emphasis on team effort. But they can make changes in the way they regard employees. Managers would do well to foster an atmosphere of individualist cooperation, thereby encouraging team effort with the motivation of mutual benefit. Obviously, if the corporation does not do well, the people in the corporation do not do well. But that does not mean that management policy ought to reduce employees to cogs in a machine. A smart manager would treat each employee as an individual whose efforts are crucial to an enterprise the success of which benefits that employee. It might be impractical to treat every corporate employee as an entrepreneur, but attempts to encourage employee innovation and excellence might be enhanced by just a bit of this approach.

Furthermore, the more the corporate world endorses a theory which subordinates individuals to groups, the more society as a whole will be encouraged to subordinate both corporations and entrepreneurs to vaguely defined community interests that may benefit no one and actually be injurious to the businesses involved.

Some social critics, such as Amitai Etzioni, Michael Lerner, and, most famously, Ralph Nader, have proposed that corporations ought to be subjected to public control for the common good. If such constraints were widely accepted, corporate executives would swiftly find that business had taken a turn for the worse. Besides being the social theory that is most conducive to individual human well-being, individualism is the social theory that best serves the business world, corporate as well as entrepreneurial.