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Every business is a social structure. Critical realist sociology tells us that social structures influence the decisions that persons within them make by presenting restrictions (penalties for violating norms) and opportunities (rewards for taking up advantages offered), that frequently alter those nonetheless free decisions. Thus, a business can encourage or discourage virtuous decisions, and over time it shapes the moral character of its employees. Pope Benedict XVI stressed the role of “gratuitousness” in all economic life, arguing that reciprocity (a combination of gift and contract) is key to creating trust. Virtues of all kinds flourish in workplaces where trust prevails.

Years ago, I had a visit at my office from the Rev. Nicholas Holtam, who was then vicar of the Anglican Church of St. Martin in the Fields in London. He was on a sabbatical at the Collegeville Institute, located on our campus, and he wanted to know what advice I would have given in a situation where, some months earlier, he hadn’t been sure what counsel to give. The CEO of one of the largest banks in London described several of his outstanding bank vice presidents in their fifties who had each told him they intended to retire early and then “do something worthwhile” with their lives. The CEO wondered whether it was possible for work as a senior executive at a bank to be “worthwhile enough,” meaningful enough, for a fulfilling Christian life. He hoped it was. The banker’s question is a good one as we consider the role of virtue in business in this project undertaken by Hannah Stolze, Kenman Wong, Michael Naughton, and me.

This essay will not answer that question adequately, but it will provide background for doing so by considering every business as a social structure. It identifies what sociologists know about how structures work and how they both encourage and discourage virtuous decisions by persons within them—and how, over the long run, they shape the moral character of those persons. It then examines the process of reciprocity in economic life and its role in generating trust. Businesses—as social structures—can strengthen their role in creating trust and the social capital that trust, in turn, creates. Virtues thrive where trust flourishes.

Virtue in business as personal and structured

Why do you lower your voice when you enter a library? Why don’t people “cut in line” to save time at the grocery checkout? Why do most drivers stop at stop signs even when no other cars or pedestrians are around? Why do customers pay for lunch at a restaurant? Why do most college students submit their assignments on time?

Here we will attend to two kinds of answers to these questions. The first arises from the role of virtuous decision. Others in the library deserve a quiet place. You’re not more important than any other grocery shopper. Obeying traffic laws helps maintain a law-abiding society. It would be unjust if I didn’t pay for my lunch. College students trust their professors to guide their learning.

The second kind of reason is structural. These reasons often take the form of some “price” we’d have to pay if we don’t do as we are “expected” to do. If I talk loud in the library or cut in line at the checkout, those nearby will give me disbelieving looks or angry stares and might speak up to object. A police car down the block may mean I get a ticket for running the stop sign or be arrested for leaving the restaurant without paying. The professor will assign a lower grade for late work. These structural influences consist of restrictions that will impose penalties if we violate them.

These examples show that when things are going well, virtue and structure intermix to produce just, productive, and humane libraries, groceries, traffic patterns, restaurants, and universities. Similarly, personal vice and distorted structures combine to encourage dysfunctional, distorted, or sinful decisions.

But there is an additional similarity between virtue—particularly virtue ethics—and structure. When virtuous decisions are understood to arise from moral character, there is a reduced emphasis on the moment of decision; an opportunity to act out of vice might not even be noticed. You have the physical ability to pick up that $10 bill on an unoccupied desk of a colleague, but it doesn’t even occur to you as an option. Virtue as a disposition to act isn’t just a fund of goodwill but is a kind of moral trajectory that makes virtuous action more likely. Social structures that encourage virtuous decisions by persons within them create a similar moral trajectory. Doing the right thing is easier if there are penalties, even “soft” penalties, for doing otherwise.

To understand better how structural forces in a business can encourage and reinforce virtue, it is helpful to accomplish two things. The first is to understand how social structures work and how a business as a social structure supports or weakens virtue. The second is to understand more carefully what reciprocity within a social structure is and how reciprocity generates the trust required not only for the development of virtue but also for the productive operation of the business enterprise.

Understanding social structures

The view of social structures most helpful for Christian ethics comes from the critical realist school of sociology.1 Unlike many other sociological approaches, critical realist sociology avoids the mistakes of holism (where human freedom fades due to powerful social forces) and individualism (where there are no causal forces in society other than individuals and groups). But to engage the sociology, we need to attend briefly to the philosophical assumptions beneath it.

Philosophy of science

Three ideas from the philosophy of science are most important in undergirding the view of the world in critical realist sociology: emergence, the stratification of the world, and the reality of things that are not sense-perceptible. The point in turning to the character of the natural sciences is that some of the counter-intuitive aspects of the sociological theory of social structures become far more intuitively plausible when those characteristics are understood to be similarly part of the natural world.

Emergence and a stratifled world

The natural world is characterized by both stability and novelty. The characteristics of an atom of hydrogen or a molecule of water are stable. The novelty comes in how hydrogen and oxygen combine to make water. “Emergence” occurs when two or more “lower-level” elements combine in the existence of a “higher-level” element that is both thoroughly dependent on those lower-level elements for its existence and yet has characteristics not possessed by them.

Although made of hydrogen and oxygen, water will extinguish a fire, while hydrogen and oxygen will intensify it. We cannot detect in either hydrogen or oxygen this capacity of water, a capacity that “emerges” in the formation of water. In this sense, water exists at a “higher” level than the atoms of hydrogen and oxygen necessary for its existence. But the natural world is laced with other examples of emergence. Deep within the atom, protons and neutrons emerge from up quarks and down quarks. Some four billion years ago, the first elemental forms of life appeared on the earth, emerging from a slurry of lifeless chemicals. And human consciousness itself is an emergent reality, arising out of the electro-chemical synapses in the physical brain.

The second contribution from the philosophy of science is that this fact of emergence throughout the natural world means that the world is “stratified” into different levels. Living in a stratified world, we learn that different levels will require different assumptions and techniques of the sciences to investigate them. Physicists have developed remarkably precise ways to explore the physical world, but chemists have come up with additional procedures and assumptions necessary to deal with the complexity of their work. In turn, biologists study living organisms that cannot be adequately described or understood by the assumptions and procedures of chemistry and physics. So too, psychology moves beyond what biology sets out to do. Because we live in a stratified world, we must learn to move among the sciences when we move among the levels of stratification of the world. We will soon see that we need the insights of sociology to understand the stratification of the social world because social structures emerge from but exist at a higher level than the actions of individual persons.

The ontological reality of invisible things

The third insight from the philosophy of science helpful here is controversial in the field, though not for most scientists. The British philosopher Roy Bhaskar developed a philosophy of science that he called “critical realism.” His work arose out of dissatisfaction with the assumptions of the dominant perspective in the philosophy of science: empiricism.

Empiricism has ancestors in ancient Greek philosophy and support from earlier British philosophers like John Locke, but David Hume is widely recognized as the father of modern empiricism. Hume argued that the only real knowledge we can have arises from our five senses. One of the key results of this perspective was that Aristotle’s four forms of causality (formal, efficient, material, and final) no longer qualified as knowledge. Instead, the cause of an event became no more than another event that always and unconditionally precedes the one to be explained.

Yet despite this rather thin view of causality, empiricism entails a remarkably strong understanding of scientific laws. Isaac Newton’s brilliant insight that created the law of gravity (stating that the attraction between two bodies is inversely proportional to the square of the distance between them) not only represented a giant step in understanding the forces governing the universe but contributed significantly to the prestige of modern science. For our purposes here, the primary thing to notice is an important influence on common parlance. When I remove my hands from the book I am holding, it hits the floor because of the law of gravity.

Bhaskar spent a lifetime objecting to this understanding of both science and the world. He argues that it is more accurate to understand the sentence that Newton wrote about gravity (i.e., the law of gravity) as the human creation it is. The law of gravity is a human description of something beyond itself, namely, the force of gravity that causes the book to fall to the floor. Bhaskar argues that it is the relation between the book and the earth that causes the book to fall when I release it. This relation would be quite different if I were standing 250 miles above the earth, in the international space station, where the book would remain suspended after I release it because the force of gravity would be so much weaker. Putting it briefly, the book hits the floor not because of the law of gravity but because of the relation between the book and the earth that generates the force of gravity, an ontologically real cause in the world, even though we cannot perceive that force with our five senses.

In this, Bhaskar accuses empiricism of committing “the epistemic fallacy.” Empiricists interpret the ontologically real relation between the earth and the book as no more than a matter of our knowledge of its sense-perceptible consequences: that one event follows on another. But both we and the physicist in the lab understand that there is indeed a real force in the world, called gravity, which causes the book to fall. We cannot perceive it with our five senses, but it is an ontologically real “thing,” similar to a magnetic field.

Recognizing the ordinariness of emergence, the stratification of the world, and the reality of things we cannot detect with our five senses, we can now turn to understanding social structures, and crucially, the business firm as a social structure.

The sociology of social structures

According to critical realist sociology, a social structure is an ontologically real “thing,” a system of relations among (pre-existing) social positions that have emerged over time from the interaction of the decisions of individuals.2 In the social structure we call a university, there are many such relations. For example, the relation of the position of student to the position of professor, the position of student to the position of campus security officer, the position of faculty member to the position of dean, and many others. The same is true at a business, whether a multinational giant or a small-town store. There are many relations among positions. Each person who steps into one of these positions will find that the relation of that position to other positions existed long before they arrived to take up that position and that the relation generates restrictions and opportunities that do not determine choices but do penalize or reward them, and thereby often alter those choices.

The major contribution provided by this sociological perspective is that it replaces the predominant individualistic understanding of the business firm.

Most people think of the dynamics within a firm as a series of relations between persons. My boss does this or that. My subordinates act this way. Yes, we recognize that the boss’s boss is really influential, but we say that’s due to the interaction of those two people. Critical realist sociology gets us thinking about the pre-existing restrictions and opportunities that face any person taking on any particular position. And this affects our view of the role of ethics in business.

Consider the example of the 2008 financial crisis, including the subprime mortgage crisis enabled by the securitization of debt. Dozens of financial firms were convicted of fraud. There were many op-ed columns calling for greater virtue by CEOs. While a more virtuous moral agency could have helped, this call represents an individualistic understanding of the situation. If a CEO showed the virtue required in forgoing the profits that competing firms were making in the red-hot market of the day, he would soon be replaced by someone else who would attend more carefully to the interest of the firm as defined by the board of directors. Problems of virtue at any level in the firm need to be seen as a combination of personal virtue and the restrictions and opportunities facing any persons who take on positions within the firm.

But before focusing on virtue, or even the business firm, the first thing to notice is how consistently our daily lives are enmeshed in social structures.

We move among a dozen or more social structures each day, counting on the predictable actions of others, which are made more likely because those others face structured restrictions (job requirements, potential disapproval from customers, etc.) and opportunities (wages, approval from co-workers, etc.). My newspaper is delivered every morning, the bus arrives at the appointed time, the household trash is collected regularly, a mechanic is available when my car malfunctions, my primary care doctor gives me a physical as scheduled, and cans of green beans are always for sale at the local grocery.

But, of course, this isn’t only about others. Our own human agency faces opportunities and restrictions in the social structures that we move into and out of daily. The bus allows me to read on the way to work (an opportunity), but if I’m late, I’ll miss it (a restriction). My newspaper informs me of what’s happening around me, but if I don’t pay the subscription price, it will stop coming. I benefit from vegetables in my diet, but when I buy them, I must wait quietly in line to pay and then use United States dollars or an accepted credit card. I love my job as a professor but must give grades to my students, or I will lose my job, and I must lead an interesting class, or I’ll encounter student disapproval. The influence of social structures in our lives is pervasive.

Before we get to a moral evaluation of social structures, it’s important to simply consider the causal interactions here. There are two kinds: downward and upward causality.

Downward causality

Downward causality refers to the effects on our agency caused by social structures (which exist “above” personal life). Social structures often lead us to make decisions we otherwise wouldn’t make, but they do this without determinism. We could decide to ignore the restrictions, but we would pay a price. The most noticeable way this occurs is through restrictions that structures generate and that people in social positions face: If you do X, Y will happen to you (i.e., something bad). But opportunities can also change our decisions.


Missing the bus (and either waiting for the next one or finding alternate transport) is a penalty I don’t want to pay, so I arrive at the bus stop on time. Few would perceive the bus schedule as a restriction of their freedom. The same conclusion applies to the restriction that I must pay for the groceries I want to take home. The requirement to pay seems nearly as “natural” as the inconvenience encountered when missing the bus, yet both are structurally generated restrictions.

But what about the restriction on faculty that they must give grades in university classrooms or will lose their jobs? My own view is that grading is an adequate (though imperfect) way to convey the quality of academic performance to students and others both within and outside the university who want to see a student’s GPA. Still, some educators are convinced that grading undermines real learning. The restriction behind required grading (threatening even the termination of a tenured faculty member) is a vivid causal force in the moral agency of those who give grades against their own best judgment. For me, I hardly notice that grading is required. Yet the requirement stands in the background, applying to me too, of course.

Similarly, a host of economic requirements are examples of downward causality. I must teach my classes or the social structure we call a university won’t pay me. This requirement—work or you won’t get paid—is universal in businesses, but like other social structures, a host of other restrictions enforced by softer penalties than firing occur throughout the business world. Negative performance reviews, skeptical looks from the boss, and the disapproval of one’s co-workers (“Come on, Fred, do your share”) are frequently penalty enough to bring about an employee’s compliance with the restrictions implicit in job requirements. In all sorts of social structures in every age of human history, social structures have brought about compliance by threatening penalties for non-compliance. Moral agency occurs amid constrained freedom.


Structures also alter our decisions when they offer opportunities: If you do X, you’ll get Y (i.e., something you like). Getting to join the starting team often motivates college athletes to work harder in practice. “Being on sale” can lead you to buy something. The lower price isn’t the only reason to buy (you have been thinking about that), but it influences your decision. A bonus of a free vacation may motivate members of an auto dealer’s sales team to sell more cars. Bank of America recently took out a full-page ad in the New York Times touting its being rated “The #1 Top Company for Workers” for a diverse and inclusive workplace, career development programs, benefits, and pay, with hourly wages starting at $23.3

Because opportunities (which are optional) are less objectionable than restrictions, businesses, universities, and many other structures rely on opportunities when possible. People can forgo the opportunity without penalty, and often don’t even note that there is a social structure trying to alter their decisions.

Downward causality, in the form of structural restrictions and structural opportunities, often does change decisions. Whether in a business, a university, or the Thursday evening bridge club, the threat of a penalty for violating a restriction or promise of an advantage for taking up an opportunity affects us and often lead us to a decision we otherwise would not have made.

Virtue in the face of downward causality

Any consideration of the moral impact of social structures must begin with the awareness that, in the vast majority of situations, the effects of the restrictions and opportunities that social structures daily present to us are morally good or neutral. The regularity of buses, newspapers, trash collection, repair shops, physicians’ offices, and grocery stores is most often morally good. It increases the time and energy we have to devote to less predictable parts of life. Alfred North Whitehead observed that “civilization advances by extending the number of important operations which we can perform without thinking about them.”4 The predictability generated by social structures plays a big part in that beneficent inadvertence.

A social structure—whether a university, a business, or the Tuesday night bowling league—can encourage virtuous decisions by both restrictions and opportunities. In a corporation, formal policies (enforced by Human Resources) or just widely held principles (enforced by individuals saying, “Jane, we don’t do that here”) are examples of restrictions on moral agency encouraging virtues through their downward causality. Opportunities can move decisions in the same direction: medical leave for treatment of addictions, promotion for demonstrated virtuous leadership (though it’s not often referred to this way), time off for volunteer service, etc. Both restrictions and opportunities can, as Hannah Stolze states in her essay, move a business toward “a harmonious relationship between faith, commerce, and the betterment of human lives.”5

But downward causality can thwart virtue and encourage vice. Restrictions generated within social structures can penalize morally virtuous choices. Extreme examples include a drug cartel’s restrictions on its members that require the assassination of journalists who publicize cartel activity; a member who refuses the instruction to kill stands in danger of a similar fate. But less severe examples include investment banks whose policies instruct employees not to explain the full risks of the securities the firm sells.

In his essay, Kenman Wong reports the example of summer interns at a public accounting firm who under-reported the hours they spent on particular tasks in order to appear more efficient than others.6 The penalty for such under-reporting was termination, but the rule was not enforced (and was perhaps unenforceable), so the evaluation of interns based on this sort of efficiency presented a hard-to-resist opportunity to lie, especially when it was clear to each intern that others were doing it. And one way to interpret Michael Naughton’s call for the interdisciplinary requirements of “the university principle” is that business students should be subject to the rigors (read restrictions and opportunities) implicit in the humanities disciplines so often ignored in business education.7

Private sector organizations have no monopoly on this. The “blue wall of silence” names the all-too-frequent, unwritten restrictions facing police officers that they must not report the crimes or even the misdeeds of fellow officers. The whole point of whistleblower laws is to provide some protection to employees willing to exercise their moral agency to break their organization’s restrictions against disclosing corrupt or otherwise illegal activity.

Opportunities generated in social structures are equally able to discourage virtue. There are opportunities in historically racist police departments to abuse persons of color with impunity. A history of corruption provides an opportunity for business firms to bribe public officials—and for those officials to extort payments if the offers don’t come first. Lax corporate policies can provide an opportunity for sexual harassment.

When faced with restrictions or opportunities that discourage virtue, a virtuous person might nonetheless refuse the opportunities and violate the restrictions. If they do, they typically will pay a price. When they do, their action constitutes a challenge to the structure. We will consider this exercise of upward causality presently.

A virtuous person will prefer employment where structural incentives are not oriented toward evil, and, of course, one feature of a “good” job is that we are not bothered (morally or otherwise) by the restrictions we face there. And the more robust our virtue, the more likely we are to decide to pay the price for violating restrictions that would push us toward making sinful decisions. (That is, personal virtue remains critically important within structures.) But even the virtuous in a good job can face unexpected, even life-defining choices. A colleague of mine in Latin America gives workshops for local and regional government leaders and tells of the mayor of a small city who was offered a $50,000 bribe by a drug cartel, along with the threat that his son would be kidnapped if the bribe were refused. Few of us face so difficult a choice. Still, we all encounter tensions or outright conflicts between our moral values and the goals implicit in some of the restrictions and opportunities we face in social structures.

Character formation from downward causality

Wong, Naughton, and Stolze each address the importance of the development of virtue in addition to the centrality of virtuous choices. In the language of critical realism, it is essential for ethics to acknowledge the long-term effect of downward causality. Those who, week after week, decide to “go along” with a restriction, perhaps reluctantly at first, often eventually become so used to it that they come to willingly accept or even endorse the goals implicit in the restriction.8 Young people today grew up with automobile seatbelts, but in most of the United States, people of my generation first faced the requirement as experienced drivers. Many of us resented the restriction (we weren’t going to get into an accident!), but most have become so used to this restriction that we’d not go back to beltless driving even if the law were repealed. Opportunities, too, can change who we are. The thirty-year-old lawyer faces an opportunity to gain the status and income of a partner in the firm if he is willing to work seventy hours a week. Yet he often becomes the sixty-year-old partner who still works those long hours after having achieved those goals. Michael Naughton’s “college principle” is based on a similar insight: that residential life, mentoring, and immersive experiences will provide the character forming influence that most business education today ignores.

A long series of reluctant decisions to do wrong (whether in response to restrictions or opportunities) inures us to the evil involved and shapes us over time. Moral agency repeated becomes moral character. We become the kind of person who does this sort of thing. Similarly, we can become more virtuous per- sons due to the structures within which we work. A salesperson who leaves a high-pressure firm and starts at another that values customer care (an important example from Wong’s paper) may find some of his high-pressure sales techniques unwelcome. Eventually, he too may come to value this different way to treat customers.9 (This insight into the potential moral consequences of external restriction is, of course, an old one. Thomas Aquinas observed that the unvirtuous man might become virtuous under “the discipline of laws.”10)

As Daniel Daly has argued in The Structures of Virtue and Vice,11 this characteristic of downward causation in social structures (the impact of structures on the moral character of persons) is one of the fundamental advances offered to virtue ethics by critical realist sociology’s understanding of the causal impact of social structures on decision-making without determinism.

Upward Causality

Social causality also runs upward. A social structure is an ontologically real thing that exists because persons within them make decisions to accomplish their goals, whatever they are, and thereby help to “reproduce” the structure. My decisions to pay for the groceries, arrive in time for the bus, and give grades to students provide support to the social structures we call the grocery store, the bus system, and the university. Because most of us, most of the time, “go along” with whatever the restrictions and opportunities aim us toward, those structures continue to exist, and to resist change. Our choices help to keep them in existence.

Yet, at times, some people—most often those denied the privileges that others enjoy—“stand up” against what is expected within a social structure. Willing to pay the price, they stop “going along.” Famous examples include the United States civil rights movement, the South African resistance to apartheid, Black Lives Matter, the Me-Too Movement, and environmental protests. Yet student demands for more convenient hours at the campus dining hall and employee efforts to change their employer’s policy on working from home are also examples of moral agency exerting upward causality to alter structurally enforced restrictions.

In sum, the relation of social structures and human agency involves both downward and upward causality. Downward causality names the influence of structures on persons. This occurs through the restrictions and opportunities that structures generate for the persons within them. They often alter the decisions those persons make and, over the long run, can also alter their moral charac- ter. Upward causality runs from persons to structures. Choices to “go along” in social structures—living with restrictions and taking advantage of available opportunities—help to sustain them. Contrary decisions—paying the price for violating restrictions or forgoing the benefits offered by opportunities—are avenues to resist or transform social structures. Much more can be said about upward causality for greater virtue in a business. Still, the emphasis here is on understanding how downward causality can encourage or thwart the creation of trust, the seedbed of virtue in any organization.


In his encyclical Caritas in veritate, Pope Benedict XVI addressed the morality that should characterize economic transactions and business firms. Benedict spoke at length about “gratuitousness.” He taught that “both the market and politics need individuals who are open to reciprocal gift.” (#39) “Authentically human social relationships of friendship, solidarity and reciprocity can also be conducted within economic activity, and not only outside it or ‘after’ it.” (#36) He describes “reciprocity as the heart of what it is to be a human being.” (#57) And that includes persons in businesses.

In the United States, some Catholic commentators on the political right looked skeptically at the role of “gratuitousness” in the analysis of markets, as if this idea were a utopian dream. George Weigel even argued that some parts of the Pope’s encyclical were not really his doing but that of leftist underlings at the Pontifical Council for Justice and Peace. According to Weigel, “the language in these sections of Caritas in Veritate is so clotted and muddled as to suggest the possibility that what may be intended as a new conceptual starting point for Catholic social doctrine is, in fact, a confused sentimentality.”12

Weigel was wrong. We’ll get to the content he objected to, but first consider authorship. Benedict was intimately involved in the process. As usually happens with encyclicals, a committee had been formed to create a first draft, with a scheduled due date that would have allowed Benedict to publish the encyclical in 2008. (I recall being at a meeting at the Vatican in the summer of 2008 when the Cardinal President of Justice and Peace slyly let us in on a secret: that a new encyclical would be out by Christmas.) However, the drafting committee was divided between the “liberationists” from the Global South and the “democratic capitalists” mainly from the United States; it could not come to an agreement. To break the impasse, three committee members were asked to write their own proposal for the Pope’s document. Benedict took the three drafts on a private retreat for a couple of days in February, and the encyclical was publicly announced on June 29, 2009. One of the three persons at the microphone at the announcement was the Italian economist Stefano Zamagni, the only layperson on the committee. Anyone who knows Zamagni’s work can tell from the encyclical that his was the draft that Benedict found most helpful. And the Pope’s decision is a good thing for the future of virtue ethics in business.

The key to understanding the role of gratuitousness in ordinary economic transactions is the notion of reciprocity, which the Pope employs without much detail. Reciprocity is a regular part of the internal culture of all organizations, including business firms. It is an ordinary part of economic life, as Zamagni and his co-author Luigino Bruni explain in their book, Civil Economy: Efficiency, Equity, Public Happiness.13 The following is an exploration and extension of their deeply helpful work.

Neither gift nor contract

Reciprocity is neither gift nor contract. It is a mix of the two. In an economic contract, person A is legally obliged to do particular things for person B and vice versa. In stark contrast, in a pure gift, person A transfers something to person B without any expectation of receiving something in return. It is true, of course, that we often “exchange gifts” at Christmas, but this indicates that what we call a gift is usually not a “pure” gift but rather an act of reciprocity.

In the classic case of reciprocity, person A does a favor for person B, but B is under no strict obligation to reciprocate. It begins with a gift. As you leave your workplace, you pass through the door and note a stranger headed toward the building carrying a box. Instead of just leaving, you wait and hold the door for a moment so the stranger with the box can easily enter. This, of course, is not a contract situation. But neither is it a pure gift. Let’s move ahead to tomorrow when the roles happen to be reversed. You are headed into the building carrying a box, and that same stranger is leaving. The character of reciprocity is apparent. You expect him to hold the door for you. And if he does, he has reciprocated. But the reciprocity need not be directed at you personally. If tomorrow you simply witnessed from afar this stranger leaving the building as a third person tries to enter while holding a box, you would likewise expect the stranger to hold the door open to make entry easier.

Highly ethical business firms, like ethical organizations of any kind, are characterized by strong ties of reciprocity that make up their internal culture. These reciprocal relationships among coworkers as well as among managers and their subordinates are ordinary and often pervasive. For example, the owner of a small factory may receive an urgent order that can only be filled on time if the employees work a considerable amount of overtime on the weekend. The manager may ask the shop foreman for a favor: to ask his crew to work overtime in the coming weekend. The foreman may well agree to do so but understands that at some point in the future the foreman may then ask the manager for a favor in turn, perhaps an afternoon off to see his daughter play soccer at school. This is an ordinary part of the relationship, even though it is not specified in the employment contract between the owner and the foreman. In his turn, the foreman now must ask his crew to work overtime this weekend, and they may well do so but may expect some consideration at some point in the future.

Although most firms today rely heavily upon the contract in dealing with other firms, reciprocity can also characterize relationships between firms. Consider the role of reciprocity between smaller firms that often interact with each other in the marketplace. One entrepreneur supplies another with products, and either firm might ask the other for a favor, for an extension of time or the provision of a delivery instead of a pickup. Out of a long-standing relationship of trust, the other might quite typically agree, even though there is no contractual certainty that a similar favor will move in the other direction. Even larger firms might have some characteristics of reciprocity in their interactions. One could imagine a purchasing agent and a supplier relying typically on contracts. Yet when there are a series of contracts one after another, one particular contract will favor one party more than the other, with the assumption that at a future time, a subsequent contract will favor the other party. What might look to some as simply a series of legally enforceable contracts may actually include a significant dose of reciprocity because each party to the contract understands and trusts the other. Thus, we see the influence that gratuitousness has on moral agency in a business firm, in accord with the teaching of Pope Benedict XVI. Gratuitousness is the beginning of an action in a reciprocal relationship. Freely given assistance is received by the other, and in a reciprocal relationship trust is built up over time.

The fragility of reciprocity

Reciprocity builds trust over time. Yet, when a person performs an act of kindness for another, it’s possible that the second person will blindly ignore the gift and not reciprocate. In such cases, there is no reciprocity, and the first person often learns and changes his behavior toward the second. This illustrates the fragility of reciprocity.

Reciprocity might not occur. In the language of today’s software programmers, this fragility of reciprocity is a feature, not a bug. It is the very uncertainty of the hoped-for response that—when the response comes—creates trust. If the response were certain (or guaranteed by contract), trust would not be needed. Reciprocity is quite ordinary, but it helps to name it, reflect on it, and to recognize how social structures can encourage or discourage it.

Two centuries ago, most people lived in small communities where this sense of reciprocity was intense. Today, many of us live in large cities and interact with dozens of people each day whose names we do not know and even whom we may never see a second time. Thus, it is a more significant challenge for us today to build relationships of reciprocity. In fact, many corporations spend a lot of money to build up the corporate culture, encouraging individuals and departments to trust one another and work for the good of the whole instead of simply working anonymously for themselves.

Social scientists have long employed the notion of social capital to describe organizations and societies with a high level of trust built up within their ordinary relationships. A firm with a strong culture of mutual trust between individuals and departments within the firm can be said to have a large supply of social capital.

Acts of gratuitousness initiate relationships of reciprocity. A history of reciprocity builds up trust over time, and that stock of trust, once built up, can be recognized as social capital. Like water flowing into a bathtub, trust is the flow, social capital is the stock, and reciprocity generates the flow.

Structures, trust, and the virtues

Trust in any organization, particularly in a business, is a fundamental requirement for encouraging virtue and forming moral character. It is a fact of human life, rooted in our nature as sinful creatures, that when you live in a situation where trust is in short supply, and you must “watch your back” for fear someone will do you harm, it is far more challenging to live a virtuous life. Without trust, it is exceedingly difficult for people to take the risks necessarily involved in deepening the virtues, a real danger in business. A culture of mutual trust provides assurances that can lead even employees who were not disposed initially toward a highly ethical life to learn to live differently and become different. For this reason, we can see the importance of this social capital for moral agency and the extent of virtue in the firm. Trust among employees in a business makes the exercise of virtues less costly and more likely to occur.

Consider the virtue of courage. You are more likely to challenge the boss on a controversial policy if the underlying trust between superior and subordinate is well established. If mutual trust is present, you can be more confident that the boss will not take your complaint personally and hold it against you but will interpret your intervention as an effort to improve the group’s operations.

Something similar is true for other virtues. Fortitude becomes easier; you’ll “hang in there” on a difficult or frustrating task if you trust your co-workers. Patience is stronger amid trust. A co-worker experienced a severe problem at home, and you’re sure that “most people would be over this by now,” but you remain patient in support of a person you trust. Or consider justice. An atmosphere of trust leads subordinates to trust their superior’s resolution of accusations of injustice among the members of the group, even without their knowing all the details. And that superior will feel more able to make an exception to standard policy—an exception that justice in this situation calls for—without fear of being suspected of favoritism.

The pressures of the market, the structure of the firm, and United States case law (requiring corporate boards of directors to put the interest of stockholders first) generate restrictions and opportunities facing managers at all levels of the firm to put profits ahead of other goals. Yet, many contemporary management theories argue that corporate goals can be better achieved by “flatter” hierarchies and the creation of trust within and between departments in the firm. If we recognize that the path to trust is reciprocity, a firm may be led to identify and change restrictions and opportunities that tend to squeeze out of the system the frailty necessary for reciprocity.

Consider the incentives in a business firm (i.e., opportunities or restrictions) for accomplishing goals—whether those goals are measured in dollars, in the number of tasks completed in a week, or in some other way. The causal power of such incentives pushes the employees facing them to choose the quicker and more certain path to the goal. In many situations, this will lead them to avoid the insecurity entailed in reciprocity. For example, not offering help to another department lest it reduce the profitability of one’s own department or shunning even the expense of time to do favors for others. This can occur even though the personal morality of those workers might otherwise lead them to offer help willingly. Further, such incentives will slowly transform even virtuous persons into employees who value the quicker, more certain path over the slower and uncertain road of reciprocity. Wong makes a similar but broader claim when he argues that “institutional pursuits of efficiency, competitiveness, and profit will simply squash efforts to exercise and develop virtues.”14

A firm or even an individual manager who recognizes the long-term advantages of greater trust among employees will need to alter the prevailing restrictions and opportunities. They will need, for example, to be more tolerant of failures or delays resulting from bona fide but unsuccessful attempts at reciprocity than setbacks due to other causes such as inattention or lack of effort. And, of course, managers wanting greater trust who try to mandate reciprocity may be able to make interactions more efficient, but it will not improve trust. Trust arises when the reciprocal action is not required but does occur. One concrete recommendation from this analysis is that a manager who wants to increase trust will meet with subordinates to identify existing restrictions and opportunities that undermine trust. A variety of suggestions will arise.


We can now return to the question of that CEO of a large London bank about whether the work of a senior bank executive can be meaningful enough for a morally serious person. No adequate answer will be proposed here, but a suggestion arises from the analysis in this essay.

I’ve talked to none of those vice presidents. I don’t even know the name of the CEO or his bank. However, my guess is that their moral concern was rooted in one of the primary moral insights that arose from the 2008 financial crisis. Large finance firms—whether investment banks or private investment houses— were shown to be willing to betray the trust of their clients. Almost every one of the large investment banks and other financial firms in the United States agreed to pay hefty fines (totaling more than $37 billion) for violating laws against fraud.15 (Most worked out agreements to higher fines in return for keeping the details of the fraud confidential.) And, of course, the bar for establishing fraud is considerably lower than for the virtue of honesty. There are important systemic issues at the level of national and international economic life, but these require applying critical realist sociology to national and global economic systems.16

This essay has argued that understanding a business as a social structure allows for the use of sociological insight to illuminate moral agency in business life. A brief review of the philosophical foundations of critical realist sociology highlighted the importance of emergence, the character of the world as stratified, and the ontological reality of things that are not sense-perceptible. Social structures like a business emerge (over centuries) from the activities of individuals and are ontologically real systems of social relations among positions. They exert downward causal power on all involved, including the lowest-paid employee and the CEO.

Like other structures, relations among positions in businesses generate restrictions and opportunities that tend to alter the decisions of persons within them. This occurs without determinism; people are free to violate restrictions and ignore opportunities, but they will pay a price for doing so. Reluctant decisions made repeatedly under this causal impact tend to alter the moral character of the person. Whether a person refuses to cooperate in an immoral situation depends most importantly on the strength of the virtue, the extent of the evil, and the severity of the penalty to be paid for resistance. Personal virtue itself remains centrally important.

Firms interested in encouraging a virtuous moral agency and the formation of virtuous moral character will attend to the conditions needed for reciprocity, actions that entail a gratuitousness encumbered with an expectation that the other will act in kind. The fragility of reciprocity—that the other might not reciprocate—is what creates trust when the gift is reciprocated. Reciprocity is what creates trust, and the stock of trust in a firm is its social capital. Virtues of all kinds flourish where trust prevails.

Cite this article
Daniel K. Finn, “Virtue, Trust, and Moral Agency in Business”, Christian Scholar’s Review, 53:3 , 5-22


  1. For a more extensive defense of the choice of this school of sociology, see Daniel k. Finn, Consumer Ethics in a Global Economy: How Buying Here Causes Injustice There (Washington, DC: Georgetown University Press, 2019), chapter 5.
  2. Douglas Porpora, “Four Concepts of Social Structure,” Journal for the Theory of Social Behavior 19, no. 2 (1989): 195–212.
  3. New York Times, A5, September 24, 2023.
  4. Alfred North Whitehead, An Introduction to Mathematics (New York, NY: Holt, 1911), 61.
  5. Hannah Stolze, “A Biblical Perspective on Wisdom and the Way of the Firm: Biblical Virtue and Strategic Orientations,” Christian Scholar’s Review 53, no. 3 (Spring 2024): 41–63.
  6. Kenman Wong, “Brightening the Prospects of Virtue Ethics in Business: Reflections from Theology,” Christian Scholar’s Review 53, no. 3 (Spring 2024): 65–84.
  7. Michael Naughton, “The Loss of Wisdom in the University and the Perils of Busi- ness Education: Recovering Practical Wisdom Through the Integration of Liberal and Professional Education,” Christian Scholar’s Review 53, no. 3 (Spring 2024): 23–39.
  8. Naughton, “The Loss of Wisdom in the University,” 23–39.
  9. Wong, “Brightening the Prospects of Virtue Ethics in Business,” 65–84.
  10. Thomas Aquinas, Summa Theologica, I-II, 95, Art. 1. Daniel Daly, The Structures of Virtue and Vice (Washington DC: Georgetown University Press, 2021).
  11. Daniel Daly, The Structures of Virtue and Vice (Washington DC: Georgetown University Press, 2021).
  12. George Weigel, “Caritas in Veritate in Gold and Red,” National Review, July 7, 2009,
  13. Luigino Bruni and Stefano Zamagni, Civil Economy: Efficiency, Equity, Public Happiness, Frontiers of Business Ethics 2 (Oxford, Uk: Peter Lang, 2007). See also, Luigino Bruni and Stefano Zamagni, Civil Economy: Another idea of the market (Newcastle upon Tyne, Uk: Agenda Publishing, 2016).
  14. Wong, “Brightening the Prospects of Virtue Ethics in Business,” 65–84.
  15. “Whistleblowers & The Great Recession of 2008–2009,” National Whistleblower Center, accessed March 27, 2024, great-recession-of-2008-2009/#:~:text=Since%202008%2C%20these%20investigations%20 ultimately,Claims%20Act%20and%20other%20laws.
  16. For one such effort, see Daniel k. Finn, Consumer Ethics in a Global Economy: How Buying Here Causes Injustice There (Washington, DC: Georgetown University Press, 2019).

Daniel K. Finn

Daniel K. Finn is Professor of Theology and Clemens Professor of Economics at St. John’s University and the College of St. Benedict in Collegeville, Minnesota.