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The Efficiency of Ethics: Gains from Trading with the School of Salamanca
  • Clara Jace
Clara Jace
George Mason University
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To our forebears, many aspects of the modern American business would seem peculiar. One overlooked trend has been the explosion of interest and investment in ethical training, corporate social responsibility programs, diversity and inclusion workshops, and other "in-house" business ethics activities. This paper seeks to understand what underpins this visible increase in supply, positing that it is the result of decreased trade with those who traditionally specialized in producing society's moral compass. As religiosity commonly declined--taking with it the "big laws"-- businesses (and governments) responded by imposing many "small laws" in its place. I use the School of Salamanca as a historical case study about the specialized production of business ethics, as discoveries emerged through conversations between merchants and Catholic priests. I then provide a quantitative grounding for the pattern of today's religious and corporate landscape. We are discovering a new world once again, only this time it seems to will be governed by "small laws."