IDEAS home Printed from https://ideas.repec.org/a/kap/jbuset/v159y2019i1d10.1007_s10551-017-3761-6.html
   My bibliography  Save this article

The Implicit Morality of the Market and Joseph Heath’s Market Failures Approach to Business Ethics

Author

Listed:
  • Marc A. Cohen

    (Seattle University
    Seattle University)

  • Dean Peterson

    (Seattle University)

Abstract

Joseph Heath defends competitive markets and conceptualizes business ethics with reference to Pareto efficiency, which he takes to be the “implicit morality of the market.” His justification for markets is that they generate Pareto efficient outcomes, meaning that markets optimally satisfy consumer preferences. And, for Heath, business ethics is the set of normative constraints—regulation and beyond-compliance norms—needed to preserve that outcome. The present paper accepts Heath’s claim that the economic justification for markets is ethical, in that satisfying consumer preferences is a good. But, contra Heath, the ethical consideration at work is a consequentialist one; and acknowledging this consequentialism exposes limitations of Heath’s “market failures” approach to business ethics. We suggest two limitations, and we expect many will accept our argument that Heath’s conception of business ethics is too narrow. The present paper outlines two broader implications. First, acknowledging that the justification for markets is ethical eliminates the apparent—and false—conflict between purportedly amoral economic activity on one hand and ethical considerations on the other; instead, business ethics is a matter of weighing the consequentialist ethical benefit of economic activity and markets against other moral arguments/other ethical considerations. Second, Heath restricts business ethics to the constraints needed to protect the market’s ability to efficiently satisfy consumer preferences, constraints he calls “efficiency imperatives”; this restriction (inadvertently, perhaps) supports the widespread tendency to think that all social problems are economic; and, a business ethics so-conceived diminishes the perceived importance of noneconomic values—this attitude is dangerous.

Suggested Citation

  • Marc A. Cohen & Dean Peterson, 2019. "The Implicit Morality of the Market and Joseph Heath’s Market Failures Approach to Business Ethics," Journal of Business Ethics, Springer, vol. 159(1), pages 75-88, September.
  • Handle: RePEc:kap:jbuset:v:159:y:2019:i:1:d:10.1007_s10551-017-3761-6
    DOI: 10.1007/s10551-017-3761-6
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10551-017-3761-6
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.

    File URL: https://libkey.io/10.1007/s10551-017-3761-6?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. David Colander, 2003. "Integrating Sex and Drugs into the Principles Course: Market-Failures Versus Failures-of-Market Outcomes," The Journal of Economic Education, Taylor & Francis Journals, vol. 34(1), pages 82-91, January.
    2. Heath, Joseph & Moriarty, Jeffrey & Norman, Wayne, 2010. "Business Ethics and (or as) Political Philosophy," Business Ethics Quarterly, Cambridge University Press, vol. 20(3), pages 427-452, July.
    3. David Carrithers & Dean Peterson, 2006. "Conflicting Views of Markets and Economic Justice: Implications for Student Learning," Journal of Business Ethics, Springer, vol. 69(4), pages 373-387, December.
    4. Heath, Joseph, 2006. "Business Ethics without Stakeholders," Business Ethics Quarterly, Cambridge University Press, vol. 16(4), pages 533-557, October.
    5. Joseph Heath, 2007. "An Adversarial Ethic for Business: or When Sun-Tzu Met the Stakeholder," Journal of Business Ethics, Springer, vol. 72(4), pages 359-374, June.
    6. Zamir, Eyal & Medina, Barak, 2010. "Law, Economics, and Morality," OUP Catalogue, Oxford University Press, number 9780195372168.
    7. Wayne Norman, 2011. "Business Ethics as Self-Regulation: Why Principles that Ground Regulations Should Be Used to Ground Beyond-Compliance Norms as Well," Journal of Business Ethics, Springer, vol. 102(1), pages 43-57, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Oisin Suttle, 2022. "The puzzle of competitive fairness," Politics, Philosophy & Economics, , vol. 21(2), pages 190-227, May.
    2. Frooman, Jeff, 2021. "Where MLM Intersects MFA: Morally Suspect Goods and the Grounds for Regulatory Action," Business Ethics Quarterly, Cambridge University Press, vol. 31(1), pages 138-161, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Frooman, Jeff, 2021. "Where MLM Intersects MFA: Morally Suspect Goods and the Grounds for Regulatory Action," Business Ethics Quarterly, Cambridge University Press, vol. 31(1), pages 138-161, January.
    2. Abraham Singer, 2018. "Justice Failure: Efficiency and Equality in Business Ethics," Journal of Business Ethics, Springer, vol. 149(1), pages 97-115, April.
    3. David Rönnegard & N. Craig Smith, 2024. "A Rawlsian Rule for Corporate Governance," Journal of Business Ethics, Springer, vol. 190(2), pages 295-308, March.
    4. Dominic Martin, 2013. "The Contained-Rivalry Requirement and a ‘Triple Feature’ Program for Business Ethics," Journal of Business Ethics, Springer, vol. 115(1), pages 167-182, June.
    5. Wayne Norman, 2011. "Business Ethics as Self-Regulation: Why Principles that Ground Regulations Should Be Used to Ground Beyond-Compliance Norms as Well," Journal of Business Ethics, Springer, vol. 102(1), pages 43-57, March.
    6. Caleb Bernacchio, 2023. "Business and the Ethics of Recognition," Journal of Business Ethics, Springer, vol. 185(1), pages 1-16, June.
    7. Christoph Luetge & Thomas Armbrüster & Julian Müller, 2016. "Order Ethics: Bridging the Gap Between Contractarianism and Business Ethics," Journal of Business Ethics, Springer, vol. 136(4), pages 687-697, July.
    8. Pierre-Yves Néron, 2016. "Rethinking the Ethics of Corporate Political Activities in a Post-Citizens United Era: Political Equality, Corporate Citizenship, and Market Failures," Journal of Business Ethics, Springer, vol. 136(4), pages 715-728, July.
    9. Pierre-Yves Néron, 2010. "Business and the Polis: What Does it Mean to See Corporations as Political Actors?," Journal of Business Ethics, Springer, vol. 94(3), pages 333-352, July.
    10. Jeffery Smith, 2018. "Efficiency and Ethically Responsible Management," Journal of Business Ethics, Springer, vol. 150(3), pages 603-618, July.
    11. Jeffrey Moriarty, 2020. "On the Origin, Content, and Relevance of the Market Failures Approach," Journal of Business Ethics, Springer, vol. 165(1), pages 113-124, August.
    12. Miguel Alzola, 2018. "Decent Work: The Moral Status of Labor in Human Resource Management," Journal of Business Ethics, Springer, vol. 147(4), pages 835-853, February.
    13. Pierre-Yves Néron, 2015. "Egalitarianism and Executive Compensation: A Relational Argument," Journal of Business Ethics, Springer, vol. 132(1), pages 171-184, November.
    14. Samuel Bagg, 2017. "When will a Darwinian approach be useful for the study of society?," Politics, Philosophy & Economics, , vol. 16(3), pages 259-281, August.
    15. Zsófia Tóth & Robert Caruana & Thorsten Gruber & Claudia Loebbecke, 2022. "The Dawn of the AI Robots: Towards a New Framework of AI Robot Accountability," Journal of Business Ethics, Springer, vol. 178(4), pages 895-916, July.
    16. Rodney Schmidt, 2023. "Are Business Ethics Effective? A Market Failures Approach to Impact Investing," Journal of Business Ethics, Springer, vol. 184(2), pages 505-524, May.
    17. Peter Jaworski, 2014. "An Absurd Tax on our Fellow Citizens: The Ethics of Rent Seeking in the Market Failures (or Self-Regulation) Approach," Journal of Business Ethics, Springer, vol. 121(3), pages 467-476, May.
    18. Pies, Ingo & Hielscher, Stefan & Beckmann, Markus, 2008. "Corporate citizenship as stakeholder management: An ordonomic approach to business ethics," Discussion Papers 2008-4, Martin Luther University of Halle-Wittenberg, Chair of Economic Ethics.
    19. Josep M. Lozano, 2022. "From Business Ethics to Business Education: Peter-Hans Kolvenbach’s Contribution," Humanistic Management Journal, Springer, vol. 7(1), pages 135-156, April.
    20. Victor Oltra & Jaime Bonache & Chris Brewster, 2013. "A New Framework for Understanding Inequalities Between Expatriates and Host Country Nationals," Journal of Business Ethics, Springer, vol. 115(2), pages 291-310, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:jbuset:v:159:y:2019:i:1:d:10.1007_s10551-017-3761-6. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.