Ethical Economy

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The Ethical Economy

Concept to identify the emerging new phase of the economy, developed by by Nicolai Peitersen and Adam Arvidsson.

Summary of Key Thesis

"That a generalized, technology-enhanced capacity for manifold cooperation has become the main productive force means that there is no longer any contradiction between ethics and economics. On the contrary, the ethical ability to open up to and share with others has become the most fundamental quality of a successful economic agent." (

General Description


"The ethical problematic is intimately linked to the issue of cooperation. It is because people cooperate and create things together that they are ethical beings. Traditionally ethics and economics have been kept apart. Economics have been understood as the realm of objective needs and rational calculus, while the 'softer' ethical problem of how we matter to each other was thought of as something that arose only when one left the workplace and engaged in other forms social intercourse. Now however, things like ethical consumerism, or corporate ethics indicate that this boundary is no longer as rigid as before.

Now the introduction of ethics into mainstream economic thought is precisely a response to the new economic centrality of cooperation. Of course cooperation has always been the secret productive force of capitalism. Both Adam Smith and Karl Marx stressed how the efficiency of industrial production rested mainly on its ability to create new and more efficient forms of co-operation, like the division of labour in manufacture, and latter the assembly line and the complex production and distribution systems that developed around it. Marx was particularly foresighted in this respect. In an obscure passage from Grundrisse (a collection of sketches and notebooks that he never intended to publish himself) he argues that as large-scale industry develops and becomes more complex, the main productive force will be cooperation itself. He called this General Intellect, by which he referred to a ort of social intelligence, a collection of competences, know hows and skills that arose organically out of the complex forms of cooperation and social interaction that the large factory made possible. Machines were an important part of this General Intellect, but they did not exhaust the concept. Firstly, Marx argued that machines (or technology) was the result of this social intelligence, they were a materialization of knowledge and skills that had already developed through previous forms of cooperation. Secondly, he argued that the most important contribution of machines and technology was that they permitted more complex forms of cooperation, and thus further unleashed the key cooperative, or ethical productive force.

Marx wrote this in the 19th century. When he though of General Intellect he thought of the transmission-belts of huge steam-driven factories. But today's Information and Communication Technologies has generalized this enhanced capacity for cooperation across the whole social body. The General Intellect of the factory has become a mass intellectuality that empowers the cooperative potential of social relations generally. This is the fundamental element of the new economy. The production of knowledge, of experiences, of creativity of all the immaterial goods that Globaliseringsrådet hope will keep Denmark wealthy is in every case premised on the ability to activate and utilize the productive potential of social cooperation. It is the cooperation of the many, of the networked multitude, its ability to produce an ethical surplus, social relations, experiences, knowledge and styles, that supplies the raw material for the new, ethical economy. We would go as far as to say that the main economic contribution of information economy has been that it has enabled these new forms of productive cooperation, this new ethical economy.

That a generalized, technology-enhanced capacity for manifold cooperation has become the main productive force means that there is no longer any contradiction between ethics and economics. On the contrary, the ethical ability to open up to and share with others has become the most fundamental quality of a successful economic agent. This also means that the old models for institutionalizing ethics and economics, representative democracy and private property are becoming obsolete. Politics is no longer a separate practice, best handled by expert politicians. On the contrary the basic political practice of constructing a common social world, an ethical surplus has become a fundamental aspect of economic production. A brand community is like a social movement, open source is a political program, and a self-managed slum or a cooperative micro-credit system is also a project for a different political order. Private property, particularly as applied to immaterial goods like knowledge and innovations goes against the whole logic of maximizing sharing and cooperation that stands behind the new economy. This means that a successful policy for the new economy cannot just be a matter of surface alterations to an outdated neo-liberal model. The whole institutional order of society needs to be thought through again. It must be geared towards maximizing the cooperative abilities, the ethical productivity of the many". (

The Principles of the Ethical Economy


"We use the term 'ethical economy' not because we think that present productive conditions are necessarily nicer or more socially conscious, but because the economy of technologically enhanced networks of cooperation puts the ethical dimension of human existence directly to work. This in the sense that the ethics of the particular encounter is a determining factor behind its economic productivity. Value, the value of an actor or a service becomes primarily based on his, her or its ability to matter in an ethical sense, to give something back, to expand the ethical surplus that is produced in the encounter. We suggest that the three general principles put forth by Peitersen and Skibsted can be useful to think about the ethical productivity of actors and encounters.

Proximity: Actors are best suited to matter to those things or people to which they feel closeness. This means that actors should be empowered and given maximum freedom to determine their own horizons of action. It also means that the management and evaluation of a productive activity should occur as close as possible to where it matters, ideally by the actors that are present in its proximity-horizon.

Maximization: The productive potential of each actor should be maximized by choosing the actions that generate the greatest additional value to his or her proximity-horizon. On a macro level, this means improving sharing instead of competition and encouraging self-organization instead of discipline.

Expansion: An economic agent is more productive the wider his or her horizon of proximity. Thus, it is of economic importance for the agent to continuously expand its feeling of closeness: to get involved with more people and situations. Actors should be encouraged to learn from and coach each other, policy should encourage the highest degrees of tolerance and respect. Not primarily because these are nice humanistic values, but because, as Richard Florida has so convincingly demonstrated, they are key economic resources." (