From Complexity Reduction to Moral Character: A Deweyian Reading of Luhmann's Social Systems Theory

Taking account of the widest possible range of consequences of one's action takes centre stage in John Dewey's pragmatist ethics, which likewise acknowledges that the ability to do so depends on the individual moral character. In contrast, Luhmann's theory of complexity‐reducing systems underscores the difficulties that social systems experience in registering the consequences of their operations in the overwhelmingly complex environment. Drawing upon Dewey's concept of moral character, the paper argues that social systems can be infused with an interest in controlling those consequences that pose risks to their sustainability. From an institutional economics perspective, this interest is shown to be implicated in the justification of the firm ownership in Alchian and Demsetz's theory of the firm. From the business ethics perspective, a similar interest is shown to underpin corporate social responsibility activities. Both perspectives acknowledge the effect of the corporate moral character on the predictability, reliability, and orderliness of corporate behaviour. © 2017 John Wiley & Sons, Ltd.