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The 'logic of gift' in business

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  • Argandoña, Antonio

    () (IESE Business School)

Abstract

Traditionally, the Social Doctrine of the Church was founded on principles and virtues. Then, the Encyclical Letter Caritas in veritate introduced the "logic of gift" and the "principle of gratuitousness" as essential ingredients of economic life. In contrast, the traditional theory of the firm, based on contracts, has no place for love; and likewise, the economics of altruism and gift is inspired in self-interest, a paradigm that is alien to behavior ruled by love. This paper discusses the relationship between Benedict XVI's ideas on love and gift and the "logic of virtues", which has already been incorporated into the theory of the firm. Following an analysis of the concepts of love, gift and gratuitousness and of the role of virtues in management, a parallel is developed between acting in a virtuous way and "donating goods", material or otherwise, including developing virtues and "giving love". This argument is developed in three areas: the market (exchange of equivalents), the State (duty), and civil society (fraternity). The Encyclical underlines that the "logic of gift" should be present in all three, not only in the third sector.

Suggested Citation

  • Argandoña, Antonio, 2011. "The 'logic of gift' in business," IESE Research Papers D/936, IESE Business School.
  • Handle: RePEc:ebg:iesewp:d-0936
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    File URL: http://www.iese.edu/research/pdfs/DI-0936-E.pdf
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    References listed on IDEAS

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    1. Ernst Fehr & Klaus M. Schmidt, 1999. "A Theory of Fairness, Competition, and Cooperation," The Quarterly Journal of Economics, Oxford University Press, vol. 114(3), pages 817-868.
    2. Harbaugh, William T, 1998. "The Prestige Motive for Making Charitable Transfers," American Economic Review, American Economic Association, vol. 88(2), pages 277-282, May.
    3. Smith, Adam, 1776. "An Inquiry into the Nature and Causes of the Wealth of Nations," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number smith1776.
    4. Smith, Adam, 2008. "An Inquiry into the Nature and Causes of the Wealth of Nations: A Selected Edition," OUP Catalogue, Oxford University Press, number 9780199535927 edited by Sutherland, Kathryn.
    5. Khalil, Elias L., 2004. "What is altruism?," Journal of Economic Psychology, Elsevier, vol. 25(1), pages 97-123, February.
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    Keywords

    Love; gift; gratuity/gratuitousness; virtue; theory firm;

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