In a functionally differentiated society there is no unifying, society-wide code, other than perhaps communication/non-communication. There is certainly no unifying moral code. There is no top or outside from which human action can be judged as moral/immoral.
This is in contrast to a society differentiated by stratification. Under stratification, there must be an apex, as in a pyramid, where everything comes together. This apex is the Good, and it’s a thing-in-itself, not just one side of the good/bad distinction. God is supposed to be omnipotent, omniscient, and omnipresent. The “great chain of being” ends with God at the top–and God is also outside of His creation. Politically, the emperor, king, or pope is supposed to be perfect, infallible, and laws and moral rules are therefore unnecessary and do not apply to the ruler. The people are unified in the person of the perfect ruler, who represents God on earth.
Under functional differentiation, we have many codes without a middle ground; they are digital rather than analog. These codes serve to make improbable communication more probable. These codes are associated with symbolically generalized communication media, the purpose of which is to make improbable communication, understood broadly, more probable. For instance, I cannot simply ask a car dealer for a new car. I need the symbolically generalized communication medium of money before I can “get a yes.” The exchange of money (or the offer and acceptance of debt) is a kind of communication. Power is another symbolically generalized communication medium. If a person has power, which implies the possibility of imposing unpleasant sanctions on others, she is more likely to have her demands met. The car dealer (or bank offering credit) doesn’t care how immoral I might be in my personal life as long I can make the car payments, and the person carrying out an order doesn’t care if the person giving the order is a “good” person; the order-giver just has to have the authority/legitimacy to give the order. In science, it doesn’t matter if a theory makes us happy or sad; it just needs to be true. It also doesn’t matter if the scientist cheats at poker or neglects her family as long as she follows proper scientific procedures.
In the economy, morality is replaced by credit rating. I can buy a car or house or get a credit card if I have a decent credit rating. Paying one’s debts on time is the measure of morality in this system.
To gain possession of the car or to have the desire met, or to go from wanting to having, is to cross the inner boundary of a two-sided form. Binary codes facilitate this crossing.
As Luhmann writes,
The particularity of codes as compared to other distinctions [distinctions with a middle value] is that the transition from one side to the other, the crossing of boundaries, is facilitated. If a positive value such as true is accepted, there is no difficulty in determining by another operation what is consequently untrue, namely, the opposing statement. . .
What mainly facilitates crossing the inner boundary of the codes is that no moral consequences ensue. It is not that one passes from good to bad, let alone that one becomes wicked. However, learning this is a protracted evolutionary process. As long as society is still stratificationally differentiated, thus presupposing integration at the apex to which moral qualities are attributed, the moral neutralization of media codes cannot be achieved. (Theory of Society vol. 1, p. 216)
In terms of morality, what people (in a functionally differentiated society) do care about is honesty. We may not care about a president’s sex life, but we need to trust him or her. Trust is essential to communication. Lying is therefore considered the greatest moral failing. Lying is like using counterfeit money. Its breaks a fundamental rule on which society as a system depends. Communication is already improbable enough in itself. Lying makes it just about impossible.
The importance of law has not declined, but if someone is breaking a moral rule but not any laws, then other people (people other than family and friends or close associates) aren’t in a position to object. Moral rules that society feels strongly about become laws–i.e., part of the legal function system. However, those laws must be grounded in the law/non-law code rather than morality. The laws must be consistent with the body of settled law. This means that legal communication can only link up with legal communication, not moral communication.
Of course, professions have ethical standards and policies, but this isn’t the same as a general morality that applies to everyone. These kinds of ethical standards for different professions and organizations seem to have filled the void left by the absence of a general moral system. People can be kicked out of an organization if they break the ethical standards, but it doesn’t necessarily follow that they are considered immoral.