IDEAS home Printed from https://ideas.repec.org/a/kap/jbuset/v178y2022i3d10.1007_s10551-021-04767-7.html
   My bibliography  Save this article

Between Market Failures and Justice Failures: Trade-Offs Between Efficiency and Equality in Business Ethics

Author

Listed:
  • Charlie Blunden

    (University of Utrecht)

Abstract

The Market Failures Approach (MFA) is one of the leading theories in contemporary business ethics. It generates a list of ethical obligations for the managers of private firms that states that they should not create or exploit market failures because doing so reduces the efficiency of the economy. Recently the MFA has been criticised by Abraham Singer on the basis that it unjustifiably does not assign private managers obligations based on egalitarian values. Singer proposes an extension to the MFA, the Justice Failures Approach (JFA), in which managers have duties to alleviate political, social, and distributive inequalities in addition to having obligations to not exploit market failures. In this paper I describe the MFA and JFA and situate them relative to each other. I then highlight a threefold distinction between different types of obligations that can be given to private managers in order to argue that a hybrid theory of business ethics, which I call the MFA + , can be generated by arguing that managers have obligations based on efficiency and duties based on equality to the extent that these latter obligations do not lead to efficiency losses. This argument suggests a novel theoretical option in business ethics, elucidates the issues that are at stake between the MFA and the JFA, and clarifies the costs and benefits of each theory.

Suggested Citation

  • Charlie Blunden, 2022. "Between Market Failures and Justice Failures: Trade-Offs Between Efficiency and Equality in Business Ethics," Journal of Business Ethics, Springer, vol. 178(3), pages 647-660, July.
    • Handle: RePEc:kap:jbuset:v:178:y:2022:i:3:d:10.1007_s10551-021-04767-7
    DOI: 10.1007/s10551-021-04767-7
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10551-021-04767-7
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s10551-021-04767-7?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. Nicholas Lawson, 2011. "Is Collective Bargaining Pareto Efficient? A Survey of the Literature," Journal of Labor Research, Springer, vol. 32(3), pages 282-304, September.
    2. Singer, Abraham & Ron, Amit, 2020. "Prioritizing Democracy: A Commentary on Smith’s Presidential Address to the Society for Business Ethics," Business Ethics Quarterly, Cambridge University Press, vol. 30(1), pages 139-153, January.
    3. repec:cup:buetqu:v:29:y:2019:i:01:p:127-141_00 is not listed on IDEAS
    4. Joel Slemrod & Jon Bakija, 2008. "Taxing Ourselves, 4th Edition: A Citizen's Guide to the Debate over Taxes," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262693631, April.
    5. R. G. Lipsey & Kelvin Lancaster, 1956. "The General Theory of Second Best," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 24(1), pages 11-32.
    6. 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.
    7. Mark Blaug, 2007. "The Fundamental Theorems of Modern Welfare Economics, Historically Contemplated," History of Political Economy, Duke University Press, vol. 39(2), pages 185-207, Summer.
    8. Harry J. Holzer & David Neumark, 2006. "Affirmative action: What do we know?," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 25(2), pages 463-490.
    9. Beaurain, Guillaume & Masclet, David, 2016. "Does affirmative action reduce gender discrimination and enhance efficiency? New experimental evidence," European Economic Review, Elsevier, vol. 90(C), pages 350-362.
    10. Peter Lindert, 2004. "Social Spending and Economic Growth," Challenge, Taylor & Francis Journals, vol. 47(4), pages 6-16.
    11. Mueller,Dennis C., 2003. "Public Choice III," Cambridge Books, Cambridge University Press, number 9780521894753, September.
    12. Abraham Singer, 2018. "Justice Failure: Efficiency and Equality in Business Ethics," Journal of Business Ethics, Springer, vol. 149(1), pages 97-115, April.
    13. Jason Brennan, 2019. "Should Employers Pay a Living Wage?," Journal of Business Ethics, Springer, vol. 157(1), pages 15-26, June.
    Full references (including those not matched with items on IDEAS)

    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. Michael Bennett, 2023. "Managerial Discretion, Market Failure and Democracy," Journal of Business Ethics, Springer, vol. 185(1), pages 33-47, June.
    2. Valentino Larcinese, 2007. "Voting over Redistribution and the Size of the Welfare State: The Role of Turnout," Political Studies, Political Studies Association, vol. 55(3), pages 568-585, October.
    3. Etye Steinberg, 2022. "Run for Your Life: The Ethics of Behavioral Tracking in Insurance," Journal of Business Ethics, Springer, vol. 179(3), pages 665-682, September.
    4. Abraham Singer, 2018. "Justice Failure: Efficiency and Equality in Business Ethics," Journal of Business Ethics, Springer, vol. 149(1), pages 97-115, April.
    5. Richard G. Lipsey, 2017. "Generality Versus Context Specificity: First, Second and Third Best in Theory and Policy," Pacific Economic Review, Wiley Blackwell, vol. 22(2), pages 167-177, May.
    6. James, Simon, 2012. "The contribution of behavioral economics to tax reform in the United Kingdom," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 41(4), pages 468-475.
    7. 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.
    8. Declan French & Frank Kee & Mark O'Doherty, 2016. "Inequality and Regional Variations in Perceptions of Work Disability: Results from the English Longitudinal Study of Ageing," CHaRMS Working Papers 16-04, Centre for HeAlth Research at the Management School (CHaRMS).
    9. Richard G. Lipsey, 2013. "Some contentious issues in theory and policy in memory of Mark Blaug," Chapters, in: Marcel Boumans & Matthias Klaes (ed.), Mark Blaug: Rebel with Many Causes, chapter 6, pages 31-62, Edward Elgar Publishing.
    10. Ganghof, Steffen, 2006. "The politics of tax structure," MPIfG Working Paper 06/1, Max Planck Institute for the Study of Societies.
    11. Mueller, Normann, 2007. "(Mis-)Understanding Education Externalities," MPRA Paper 5331, University Library of Munich, Germany, revised Mar 2007.
    12. Matthew Caulfield, 2021. "Pay Secrecy, Discrimination, and Autonomy," Journal of Business Ethics, Springer, vol. 171(2), pages 399-420, June.
    13. Ng, Yew-Kwang, 2018. "Ten rules for public economic policy," Economic Analysis and Policy, Elsevier, vol. 58(C), pages 32-42.
    14. Richard G. Lipsey, 2012. "Policy Implications of Alternative Economic Paradigms: Some surprises from endogenous technological changes," Discussion Papers dp12-16, Department of Economics, Simon Fraser University.
    15. David Silver, 2021. "Democratic Governance and the Ethics of Market Compliance," Journal of Business Ethics, Springer, vol. 173(3), pages 525-537, October.
    16. Steven G. Medema, 2020. "The Coase Theorem at Sixty," Journal of Economic Literature, American Economic Association, vol. 58(4), pages 1045-1128, December.
    17. Jun Rentschler & Raimund Bleischwitz & Florian Flachenecker, 2018. "On imperfect competition and market distortions: the causes of corporate under-investment in energy and material efficiency," International Economics and Economic Policy, Springer, vol. 15(1), pages 159-183, January.
    18. Pitruzzello, Salvatore, 2004. "Trade Globalization, Economic Performance, and Social Protection: Nineteenth-Century British Laissez-Faire and Post–World War II U.S.-Embedded Liberalism," International Organization, Cambridge University Press, vol. 58(4), pages 705-744, October.
    19. Richard G. Lipsey & Yew-Kwang Ng, 2017. "Editors’ Introduction The two authors had tried alternative drafts to reach a consensus. While they had no problem in agreeing on Part II, the final version of Part I was mainly drafted by Lipsey, par," Pacific Economic Review, Wiley Blackwell, vol. 22(2), pages 147-154, May.
    20. 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.

    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:178:y:2022:i:3:d:10.1007_s10551-021-04767-7. 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.