ABSTRACT:Employing utilitarian criteria, Jones and Felps, in “Shareholder Wealth Maximization and Social Welfare: A Utilitarian Critique” (Business Ethics Quarterly23[2]: 207–38), examined the sequential logic leading from shareholder wealth maximization to maximal social welfare and uncovered several serious empirical and conceptual shortcomings. After rendering shareholder wealth maximization seriously compromised as an objective for corporate operations, they provided a set of criteria regarding what a replacement corporate objective would look like, but do not offer a specific alternative. In this article, we draw (...) on neo-utilitarian thought to advance a refined version of normative stakeholder theory that we believe addresses a major remaining criticism of extant versions, their lack of specificity. More particularly, we provide a single-valued objective function for the corporation—stakeholder happiness enhancement—that would allow managers to make principled choices between/among policy options when stakeholder interests conflict. (shrink)

From Mill to, most recently, Bryan Caplan, political and economic elites have been seen as the solution to the public’s ignorance and incompetence. In order to show that elites are actually more competent than the public, however, we would have to find out what type of knowledge is necessary to enact good public policy. The empirical evidence shows that economic experts have a slight advantage over the general public in knowledge of how to achieve policy goals. But, contrary to Caplan, (...) the evidence indicates that economists don’t possess significant predictive knowledge, and that general economic laws are of little help in predicting the magnitude of the effects of a specific policy in a multi‐variable, complex world. When we adopt a more complex understanding of the reasons behind policy choice, and consider rules and principles in addition to goal pursuit, the slight edge of economic experts evaporates. (shrink)