Institutional Ethics: The State Regulatory Framework

Abstract

Institutional ethics must provide a framework that enforces moral behavior in business. In the following, we will examine the Prisoner's Dilemma as the fundamental problem of institutional ethics, and introduce the codes of ethics that should enforce ethical behavior in business practice.

The economy produces consumer goods and capital goods for society. This is vital for society, but there are also other products that society needs. This is above all inner stability, which is to be understood not only as internal security, but above all a low crime rate, in general the harmonization of the citizens and thus the smooth running of social (also economic) processes. For this, there are many prerequisites: above all, social rules, laws and institutions, and the organizations to enforce them, but these prerequisites are not enough. Social morality, good manners or courtesy are further prerequisites for the smooth running of social processes. The institutions and organizations cannot control, monitor and enforce everything. If, on the other hand, no social rules were respected by anyone, the social system would collapse immediately. Where laws and control cease, morality begins. Morality regulates human behavior so as to prevent social harm.