Economic Rationality, the Transaction Cost Theory, and Morality. An Extended Approach

The economist Josef Wieland propounded a well-developed theory of business ethics, which includes a mechanism of allocation for the ›economy and ethics‹ ratio that he considers as an alternative to hierarchic and dualistic concepts. Despite its many strengths, some concerns are raised about Wieland’s theoretical approach and some proposals are made for developing his work further. The key objectives of this paper are: 1) to restate the objection of instrumentalization to Wieland’s program, 2) to discuss it under consideration of arguments in favor of and against so-called moral incentives, and 3) to address the question, under what conditions Wieland might succeed in rejecting any hierarchy between economics and ethics within his Ethics of Governance framework, without damaging the concept of morality.