Examines Hegel’s unique understanding and assessment of capitalism as an economic, social, and cultural phenomenon.

Lorenzo Sacconi's recent re-statement of his social contract account of business ethics is a major contribution to our understanding of the normative nature of CSR as the expression of a fair multi-party agreement supported by the economic rationality of each participant. However, at one crucial point in his theory, Sacconi introduces the concept of stakeholders' conformist preferences - their disposition to punish the firm if it defects from the agreement, refusing to abide by its own explicit CSR policies and norms. (...) We take issue with him over this concept: we show that the assumption of conformist preferences is a moral premise, and it arguably weakens the normativity of the theory as a whole. As an alternative, we propose an evolutionary game theoretic approach. We draw upon recent applications of evolutionary game theory to moral philosophy , and we use a computer simulation of the trust game. According to this approach, the failure of the logic of reputation, which is the problem conformist preferences were introduced to solve, is overcome through the dynamics of interaction. (shrink)

There is, in Sarajevo, a man who comes out into the streets each day and plays his cello on the sidewalk. He does this at the same time each day, no matter how much shooting or shelling is going on, no matter how great the danger to himself. He describes himself as having decided to take a stand for beauty in the face of horror. Can the rational choice paradigm, as currently practiced in the various disciplines of economics, philosophy, political (...) science, and law, offer an account of this man's decision and his behavior? This admirable man seems to be a rebuke to the philosophies of calculated self-interest. Can we offer some account of his behavior, without descending into the tautological claim that he did what he did because he wanted to? Can we offer some insight into his wants that will make him intelligible? And not only intelligible, but can we account for him in a way that highlights his admirability, rather than suggesting that he is in some way an aberration, or perhaps even a fool? There is a deep disorder within the human condition. All of the essays in the present volume point to this fact in one way or another. Some characterize the disorder as a conflict between virtue and self-interest. Others point to the dichotomy between the individual and other persons as being the source of the tension between morality and self-interest. Some of the essays attempt to resolve the tension by collapsing the two categories into each other. (shrink)

Can private companies legitimately regulate sharing markets, and if yes, how? Whereas scholars have either criticized sharing platforms for expanding into private and public arenas or welcomed them to counterbalance encroaching government regulations, studies document their unbridled popularity. On the basis of a special version of social contracts theory pioneered by James Buchanan, we develop a heuristics that helps guide reasoning about the legitimacy of the sharing economy’s regulatory function. First, we discuss the conditions under which free and responsible individuals (...) deliberately subject themselves to rules without their prior direct participation, that is, exit, voice, and constitutional limits. Second, we suggest sharing platforms can use novel ordo-responsibilities to establish a sharing constitution that takes these conditions into account. Third, we argue that sharing platforms can legitimately do so within an enabling institutional environment in society, the provision of which relies on the joint efforts of sharing platforms, political actors, and civil society. (shrink)

States of emergency are declared frequently in all parts of the world. Their declaration routinely implies a suspension of basic constitutional rights. In the last half century, it has become the norm for constitutions to contain an explicit ‘emergency constitution’, i.e., the constitutionally safeguarded rules of operation for a state of emergency. In this paper, I ask whether inclusion of an emergency constitution can be legitimized by drawing on social contract theory. I argue that there are important arguments, both against (...) and in favor of constitutionalized emergency provisions, and that social contract theory—as applied by economists—can be of some help when deciding whether to have, or not to have an emergency constitution. This paper introduces a novel argument for justifying emergency constitutions. It argues that they can serve as a commitment mechanism protecting both citizens and politicians from overreacting to rare but significant threats. (shrink)

Contractarians aim to derive moral principles from the dictates of instrumental rationality alone. But it is well-known that contractarian moral theories struggle to identify normative principles that are both uniquely rational and morally compelling. Michael Moehler's recent book, *Minimal Morality* seeks to avoid these difficulties by developing a novel "two-level" social contract theory, which restricts the scope of contractarian morality to cases of deep and persistent moral disagreement. Yet Moehler remains ambitious, arguing that a restricted version of Kant's categorical imperative (...) is a uniquely rational principle of conflict resolution. We develop a formal model of Moehler's informal game-theoretic argument, which reconstructs a valid argument for Moehler's conclusion. This model, in turn, enables us to expose how a successful argument for Moehler's contractarian principle rests on assumptions that can only be justified by subtle yet significant departures from the standard conception of rationality. We thus extend our understanding of familiar contractarian difficulties by showing how they arise even if we restrict the scope of contractarian morality to a domain where its application seems both promising and necessary. We show that the problem lies not in contractarians' immodest ambitions but in the modest resources rationality can offer to satisfy them. (shrink)

The Adam Smith problem refers to a claimed inconsistency between the Theory of Moral Sentiments and the Wealth of Nations, regarding the portrayal of human nature in these two books. Previous research predominantly resolved the claimed inconsistency by uncovering virtuous, less selfish character traits in the Wealth of Nations. This article voices caution. I acknowledge – on methodological grounds – fundamental differences regarding the portrayal of human nature in Smith’s behavioral ethics, i.e. the Theory of Moral Sentiments, as compared with (...) Smith’s economic research. The key argument is that Smith’s two books address different research problems and hence do not, need not and cannot adopt the same view of human nature – for methodological reasons, so my argument. Adam Smith scholarship overlooked that Smith himself in considerable degrees understood “economic man” as a heuristic abstraction. I connect to the philosophies of science of Imre Lakatos and Karl Popper. (shrink)

An influential strand in recent action-theory employs constitutivist arguments in order to present accounts of individual agency and practical identity. I argue for an extension of this framework into the interpersonal realm, and suggest using it to reassess issues in jurisprudence. A legal system is an instantiation of the solution to the inescapable tasks of self-constituting action and identity-formation in the presence of other agents. Law's validity and normativity can be enlightened when the constitutivist approach considers the external prerequisites of (...) individuals' self-conceptions qua agents. More specifically, this argumentative strategy allows a reassessment of Fuller's “internal morality of law.” Whereas, pace Fuller, morally substantive conclusions cannot be derived from formal criteria of legality, there are unconditional normative requirements that constrain law. (shrink)

This paper identifies and responds to four critiques of democratic contractarianism, as advocated in Democratic Justice and the Social Contract, to be found in this symposium. The first is that, as a contingent practice-dependent account of justice, democratic contractarianism lacks the capacity to explain civic cooperation. The second is that, despite its intentions, Democratic Justice does not lay out an authentic contractarian theory. The third is that the theory is incompatible with our considered judgements about justice. And the fourth is (...) that the ambition of Democratic Justice to use the empirical method to compensate for the failures of hypothetical contract theory fails because all social science needs interpretation. To each of these critiques, replies are offered, drawing attention to the way in which democratic contractarianism exemplifies a logic of social cooperation to mutual advantage that is compatible with justice provided the cooperation emerges from a bargaining situation of roughly equal power. (shrink)

Barbara Fried takes the view that uniform taxation—that is, a single rate applicable to all income levels—cannot be defended on any grounds of justice. She goes further by saying that, of all possible rate structures, it might be “the hardest one”? to ground in “a”? theory of fairness. Using the contractarian-constitutional perspective advanced by John Rawls and James Buchanan, this article argues that tax uniformity can be seen as a requirement of justice. After modelling how the political world realistically decides (...) to distribute tax shares (self-interested parties act under a majority constraint), I show how the uniformity principle could emerge from the constitutional contract. In other words, rational individuals would choose uniformity as a procedural constraint under a “veil of uncertainty”?; that is, with limited knowledge regarding their positions under the future application of the rule. Moreover, I elucidate how the uniformity requirement integrates generalized criteria of fairness and efficiency into fiscal politics as it precludes fiscal exploitation and constrains majorities, and their most influential subgroups, to opt for policies in the direction of the Pareto frontier, and as such promotes outcomes acceptable to all participants. (shrink)

Volume 31, Issue 1, December 2020, Page 47-66.

The view of Mandeville as a pioneer of laissez-faire is difficult to reconcile with his repeated insistence that private vices were turned into public benefits by the 'dexterous management of the skilful politician'. Even if references to the skilful politician are regarded as shorthand for a legal and institutional framework, there remains the question of whether such a framework is a spontaneous order or the product of purposeful experiment as Mandeville thought? Mandeville warned about the harmful effects of meddling but (...) his complaint was about the actions of fashionable do-gooders rather than government. He understood that the voluntariness of a transaction could be regarded as a defence against complaints of unfairness but he was quick to point out the limitations of voluntariness especially in the market for labour. Mandeville's objective was to teach people what they are not what they should be. He pointed to the strengths of the emerging market system but was not afraid to expose its faults. (shrink)

How to demarcate the political units within which democracy will be practiced? Although recent years have witnessed a steadily increasing academic interest in this question concerning the boundary problem in democratic theory, social contract theory’s potential for solving it has largely been ignored. In fact, contract views are premised on the assumption of a given people and so presuppose what requires legitimization: the existence of a demarcated group of individuals materializing, as it were, from nowhere and whose members agree among (...) themselves to establish a political order. In order to fill this gap in social contract theory, a distinction is made between three kinds of contract views: Lockean political voluntarism, contractarianism, and contractualism. Each of these views can be interpreted in such a way that it offers a democratic solution to the boundary problem. Ultimately, however, a Rawlsian interpretation of the contractualist solution is defended. (shrink)

Millions of people in the developing world lack access to curative drugs. Pogge identifies the cause of this problem as a lack of redistribution across borders. In contrast, this article shows that institutional shortcomings within developing countries are the main issue. These different explanations are the result of diverging analytic approaches to ethics: a cosmopolitan approach versus an ordonomic approach. This article compares both approaches with regard to how they conceptualize and propose to solve the problem of providing life-saving pharmaceuticals (...) to the poor in developing countries. (shrink)

Mainstream economics evaluates capitalism primarily from the perspective of efficiency. Social philosophy typically applies other or additional normative criteria, such as equality, democracy, and community. This essay examines the implications of these contrasting sets of criteria in the evaluation of capitalism. Its first two sections consider the criteria themselves, assuming that a trade-off exists between them. The last three sections question whether such a trade-off necessarily occurs, and explore the claim that improvements in nonefficiency dimensions of capitalist society may enhance, (...) rather than conflict with, efficiency. (shrink)

Constellations, Volume 29, Issue 3, Page 359-374, September 2022.

Public reason theories are characterized by three conditions: constructivism, representation, and stability. Constructivism holds that justification does not rely on any antecedent moral or political values outside of the procedure of agreement. Representation holds that the reasons for the choice in the model must be rationally explicable to real agents outside the model. Stability holds that the principles chosen in the procedure should be stable upon reflection, especially in the face of diversity in a pluralistic society. Choice procedures that involve (...) at least two-stages with different information, as Rawls’s theory does, will be path-dependent and not meet the condition of representation since it will not be globally coherent. Attempts to solve this problem without eliminating the segmentation of choice in the procedure will run afoul of constructivism or stability. This problem is instructive because it highlights how public reason theories must evolve in the face of increased concerns about diversity. (shrink)

The aim of this paper is to contribute to the development of a theory of economic freedom. In this endeavor, we build our framework on the Hayekian notion of freedom because it explicitly embodies the obvious link between freedom and the state: freedom is an absence of state coercion except for that which enforces abstract, general rules known beforehand. We derive two propositions from this Hayekian thesis and elaborate on them, leading to a categorization of government actions from the viewpoint (...) of economic freedom in which the criterion against which coercive governmental actions must be evaluated is the rule of law, meaning a government’s reliance on general, abstract rules. As an implication, our framework allows us to argue for the imperative differentiation between “efficiency” and “economic freedom” as two separate criteria against which government actions can and must be evaluated. We also show that our framework may help explain the process through which economic freedom enhances growth. (shrink)

It is a commonplace of academic conventional wisdom that Marxian theory is not to be judged by the historical experience of actually existing socialist societies. The reasons given in support of this view are familiar enough, but let us rehearse them. Born in adversity, encircled by hostile powers, burdened with the necessity of defending themselves against foreign enemies and with the massive task of educating backward and reactionary populations, the revolutionary socialist governments of this century were each of them denied (...) any real opportunity to implement Marxian socialism in its authentic form. Nowhere has socialism come to power as Marx expected it would – on the back of the organized proletariat of an advanced capitalist society. For this reason, the historical experience of the past sixty years can have no final authority in the assessment of Marxian theory. The failings of Marxist regimes – their domination by bureaucratic elites, their economic crises, their repression of popular movements and of intellectual freedoms, and their dependency on imports of Western technology and capital – are all to be explained as historical contingencies which in no way threaten the validity of Marx's central conceptions. It is not that Marxian socialism has been tried and found wanting but, rather, that it has never been tried. (shrink)

Conventionalism as a distinct approach to the social contract received significant attention in the game-theoretic literature on social contract theory. Peter Vanderschraaf’s sophisticated and innovative theory of conventional justice represents the most recent contribution to this tradition and, in many ways, can be viewed as a culmination of this tradition. In this article, I focus primarily on Vanderschraaf’s defense of the egalitarian bargaining solution as a principle of justice. I argue that one particular formal feature of this bargaining solution, the (...) baseline consistency requirement, may stand in tension with other features of conventionalism as an approach to the social contract and limit the scope of Vanderschraaf’s theory to societies in which de facto an egalitarian sense of justice evolves. It limits the scope of Vanderschraaf’s theory in the face of moral diversity. A similar limitation applies to Vanderschraaf’s theory of democratic political authority. Despite these minor limitations, Vanderschraaf’s theory can only be seen as a major success and significant contribution to social contract theory. (shrink)

ABSTRACT Self-Interest and Public Interest in Western Politics showed that the public, politicians, and bureaucrats are often public spirited. But this does not invalidate public-choice theory. Public-choice theory is an ideal type, not a claim that self-interest explains all political behavior. Instead, public-choice theory is useful in creating rules and institutions that guard against the worst case, which would be universal self-interestedness in politics. In contrast, the public-interest hypothesis is neither a comprehensive explanation of political behavior nor a sound basis (...) for institutional design. (shrink)

Schools of economic ethics inspired by Buchanan propose viewing ethical conflicts as prisoners’ dilemmas to facilitate solutions based on Pareto-improving institutional changes. Given that healthcare is determined by complex institutional arrangements, it has been claimed that this approach is also suitable for business ethics in healthcare. To scrutinize this claim, this research systematically searched for studies reporting PD structures in healthcare. PubMed, EconLit, and EconBiz were searched to find articles in German and English. Study type, characteristics of the game, and (...) the proposed means to overcome the dilemma were extracted and analyzed for aspects supporting or challenging the claim. Across 53 studies, 68 descriptions of various dilemmas in healthcare and public health were identified. Many authors successfully developed proposals for institutional change to overcome these dilemmas. However, many of these analyses exhibited limitations such as oversimplifications or inconsistencies. Also, the quality of evidence on both the characteristics of dilemmas and the effectiveness of proposed solutions was very poor. The subsamples of studies that explicitly cited the ethical approach were disjunct from those that applied empirical methods to analyze the dilemmas. The large number of identified PDs indicates that economic ethics is relevant to healthcare. However, there is a need for further evidence to substantiate both the descriptive and prescriptive claims of this ethical theory. It should thus be seen as a complement that needs justification, rather than a substitute superior to other ethical frameworks. (shrink)

Production in sweatshops entails an elevated risk of occupational injury and sickness due to accidents and exposure to dangerous working conditions. As most sweatshop locations lack basic social security systems, health problems have severe consequences for affected workers. Against this background, this article considers what obligations employers of sweatshop labor have to their workers, and how they should meet them. Based on core libertarian concepts, it shows that they are morally responsible for health problems caused by their management decisions, that (...) they should compensate affected workers, and that they must prevent potentially irreversible health problems. In line with Nozick’s contractarian method, the article further argues that these obligations should be implemented through a compulsory employment injury insurance system. Such a system would impose industry-wide health and safety standards, in contrast to the view that libertarianism excludes any labor regulation for the protection of workers, as an illegitimate interference in voluntary labor contracts. (shrink)

Michael Oakeshott’s account of political economy is claimed to have found its ‘apotheosis under Thatcherism’. Against critics who align him with a preference for small government, this article poin...

: Accusations of infeasibility or utopianism are common in debates over libertarian institutions, but exactly what we mean when we say an idea is “utopian” or “infeasible” is often left unspecified. After reviewing recent philosophical work attempting to clarify the concept of “feasibility,” I consider how the concept has been deployed in the debate among libertarians […].

In his posthumous work Power and Prosperity , the economist Mancur Olson asked why the economies of many of those countries of the former Soviet Union and other emergent countries that had at last adapted to the theoretical and practical presuppositions of the market economy had not seen themselves, notwithstanding, recompensed with the prosperity that this economic model promises to all those who follow its rules. The core of the answer was in a long paragraph that is perhaps elemental to (...) a jurist but may be original and worth remembering as an innovative thesis in the world of economists. (shrink)

This article offers an overview over the wide scope business ethics has reached in German speaking countries; works which in their majority are not yet available in English translation. The proposed concepts range from a focus on the individual manager and a focus on moral education of managers, via the procedural model of discourse ethics to pressure group ethics and business ethics from a Christian point of view. Other authors suggest an economic theory of moral behaviour, or see ethics as (...) an assurance for decisions under uncertainty or argue for a more enlightened concept of economic rationality. (shrink)

The paper critiques the relationship between personalist ethics and institutional economics, and accepts that institutional economics can be difficult to reconcile with humanistic management that builds on personalist ethics. Even so the paper connects impersonalist ethics with institutional economics. On this ground, the paper demonstrates how theory and practice of personalist humanist management can lean on impersonalist ethics, i.e., institutional economics. Three pathways are laid out for such leanings. It is argued that to understand these alignments is important to improve (...) the success of humanistic management, when a market economy context is given. The paper further contends that personalist humanistic management may imply abandoning the market economy when it positions itself in opposition to institutional economic reasoning that underpins the market economy. (shrink)

What kind of institutions are needed to stabilize and foster democracy? Clearly elections are crucial and much of the institutional and legal surrounding of elections has been subject to research. Two institutional variables have been neglected though, specifically in empirical research: Electoral Management Bodies and International Observer Missions. Can EMBs and EOMs foster free and fair elections? If yes, under what conditions? And what kind of competences are needed for them? We hypothesize that both can become crucial institutions for free (...) and fair elections. Whereas independent central banks or audit courts control special issue areas in order to take certain decision out of the realm of politics, EMBs control the moment of the set-up of government—the election, when conflicts of interest of politicians are at its peak. Although other kinds of independent administrative agencies have been the subject of political science and economic research, EMBs and EOMs have also been neglected here. This article undertakes to outline a conceptual framework for testing various hypotheses on the institutional set-up of EMBs. Hypothesizing that deiure and defacto independence of EMBs foster fair elections, the detailed institutional set-up of EMBs as independent variable is outlined in order to test for the level of democracy as a dependent variable. Furthermore, the importance of EOMs as well as their interaction effect with EMBs is analyzed. Although by now EOMs are sent to almost any country with elections, their impact has not been analyzed in an encompassing way in spite of that the mission have intensified in their work, have become more costly and their verdicts are gaining ever more publicity. (shrink)

There is a gap between health economic evaluation methods and the value judgments of coverage decision makers, at least in Germany. Measuring preference satisfaction has been claimed to be inappropriate for allocating health care resources, e.g. because it disregards medical need. The existing methods oriented at medical need have been claimed to disregard non-consequentialist fairness concerns. The aim of this article is to propose a new, contractarian argument for justifying needs-based economic evaluation. It is based on consent rather than maximization (...) of some impersonal unit of value to accommodate the fairness concerns. This conceptual paper draws upon contractarian ethics and constitution economics to show how economic evaluation can be viewed as an institution to overcome societal conflicts in the allocation of scarce health care resources. For this, the problem of allocating scarce health care resources in a society is reconstructed as a social dilemma. Both disadvantaged patients and affluent healthy individuals can be argued to share interests in a societal contract to provide technologies which ameliorate medical need, based on progressive funding. The use of needs-based economic evaluation methods for coverage determination can be interpreted as institutions for conflict resolution as far as they use consented criteria to ensure the social contract’s sustainability and avoid implicit rationing or unaffordable contribution rates. This justifies the use of needs-based evaluation methods by Pareto-superiority and consent. The view of economic evaluation presented here may help account for fairness concerns in the further development of evaluation methods. This is because it directs the attention away from determining some unit of value to be maximized towards determining those persons who are most likely not to consent and meeting their concerns. Following this direction in methods development is likely to increase the acceptability of health economic evaluation by decision makers. (shrink)

Despite the diversity and important disagreement which characterizes theorizing in political philosophy, most contemporary theories of justice yield remarkably similar verdicts on the moral adequacy of current distributions of wealth, income, and opportunity. By almost any standard of justice defended today, we live in a profoundly unjust world. It is obvious, for instance, that utilitarianism, the difference principle, equality of resources, and even modest-sounding principles of equality of opportunity all condemn the yawning gulf which separates the rich and the poor (...) of the world. Even Nozick's recommendation that the difference principle be used as a rough principle for rectifying historical injustice indicates how little immediate practical difference there is between Rawls's theory and its supposed libertarian antithesis. All this suggests that there is a surprising theoretical consensus about the immediate practical demands of justice. In short, moving toward justice requires substantially reducing the dramatic inequalities which plague our world. (shrink)

ABSTRACT:The notion of “democracy” has become a much-debated concept in scholarship on business ethics, management, and organization studies. The strategy of this paper is to distinguish between a principle of organization that fosters participation (type I democracy) and a principle of legitimation that draws on consent (type II democracy). Based on this distinction, we highlight conceptual shortcomings of the literature on stakeholder democracy. We demonstrate that parts of the literature tend to confound ends with means. Many approaches employ type I (...) democracy notions of participation and often take for granted that this also improves type II democratic legitimation. We hold this to be a mistake. We provide examples of the ambiguity of organizational procedures and show that under some circumstances a decrease in the degree of participation may actually increase legitimation because a governance structure that results in higher productivity can provide higher benefits for all parties involved, serve their interests and therefore meet their agreement. Less type I democracy may mean more type II democracy. We believe this to be an important insight for judging (and further improving) the legitimacy of both capitalistic firms and competitive markets. (shrink)

A growing literature has explored the workability and efficacy of governance without the state. The difficulties typically raised in the context of these studies concern under which conditions cooperation or Hobbesian chaos would arise in the absence of a monopolist of coercion. This paper challenges the idea of the stateless society from another vantage point, arguing the institutions articulated by proponents of the stateless society would struggle at reconciling heterogeneous views regarding the rights of third parties. This is relevant for (...) many of the most contentious policy debates, such as abortion and animal rights. (shrink)