Is it a requirement of justice to democratize private companies? This question has received renewed attention in the wake of the financial crisis, as part of a larger debate about the role of companies in society. In this article, we discuss three principled arguments for workplace democracy and show that these arguments fail to establish that all workplaces ought to be democratized. We do, however, argue that republican-minded workers must have a fair opportunity to work in a democratic company. Under (...) current conditions, this means that a liberal order must actively promote workplace democracy. (shrink)

Should the democratic exercise of authority that we take for granted in the realm of government be extended to the managerial sphere? Exploring this question, Christopher McMahon develops a theory of government and management as two components of an integrated system of social authority that is essentially political in nature. He then considers where in this structure democratic decision making is appropriate. McMahon examines the main varieties of authority: the authority of experts, authority grounded in a promise to obey, and (...) authority justified as facilitating mutually beneficial cooperation. He also discusses the phenomenon of managerial authority, the authority that guides nongovernmental organization, and argues that managerial authority is best regarded not as the authority of a principal over an agent, but rather as authority that facilitates mutually beneficial cooperation among employees with different moral aims. Viewed in this way, there is a presumption that managerial authority should be democratically exercised by employees. Originally published in 1994. The Princeton Legacy Library uses the latest print-on-demand technology to again make available previously out-of-print books from the distinguished backlist of Princeton University Press. These editions preserve the original texts of these important books while presenting them in durable paperback and hardcover editions. The goal of the Princeton Legacy Library is to vastly increase access to the rich scholarly heritage found in the thousands of books published by Princeton University Press since its founding in 1905. (shrink)

The paper discusses the structure, applications, and plausibility of the much-used parallel-case argument for workplace democracy. The argument rests on an analogy between firms and states according to which the justification of democracy in the state implies its justification in the workplace. The contribution of the paper is threefold. First, the argument is illustrated by applying it to two usual objections to workplace democracy, namely, that employees lack the expertise required to run a firm and that only capital suppliers should (...) have a say over the governance of the firm. Second, the structure of the argument is unfolded. Third, two salient similarities between firms and states regarding their internal and external effects and the standing of their members are addressed in order to asses the potential and limits of the argument, as well as three relevant differences regarding the voluntariness of their membership, the narrowness of their goals, and the stiffness of the competition they face. After considering these similarities and differences, the paper contends that the the parallel-case argument provides a sound reason in favor of democracy in the workplace—a reason, however, that needs to be importantly qualified and that is only pro tanto. (shrink)

This chapter serves as an introduction to the collected volume. In the first section, we aim to provide background on important themes in social egalitarianism and to set the context for understanding which significant questions the chapters in this book pose and attempt to answer. In this section we focus especially on what could be said to characterize socially egalitarian relationships, on which relationships are of concern, and on what might make social egalitarianism distinct. In the second section, we provide (...) a brief explanation of the structure of the book and each of its chapters. (shrink)

The republican case for workplace democracy is presented and defended from two alternative means of ensuring freedom from arbitrary interference in the firm—namely, the right to freely exit the firm and workplace regulation. This paper shows, respectively, that costless exit is neither possible nor desirable in either perfect or imperfect labor markets, and that managerial discretion is both desirable and inevitable due to the incompleteness of employment contracts and labor legislation. The paper then shows that WD is necessary, from a (...) republican standpoint, if workers’ interests are to be adequately tracked in the exercise of managerial authority. Three important objections are finally addressed— that WD is redundant, that it is unnecessary provided that litigation and unionism can produce similar outcomes, and that it falls short of ensuring republican freedom compared to self-employment. (shrink)

I suggest that the post-Hegelian tradition presents us with three contrasting normative models of work. According to the first model, the core norms of work are those of means-ends rationality. In this model, the modern world of work is constitutively a matter of deploying the most effective means to bring about given ends. The rational kernel of modern work, the core norm that has shaped its development, is on this view instrumental reason, and this very same normative core, in the (...) shape of advanced technology and more efficient, time-saving production, can help to liberate it. The second model, by contrast, takes the core norms of work to be internal to working activity. Rather than work gaining its normativity from something external to it, from ends to which the work is a contingent means, on this second view the core norms of work are expressions of values or meanings that are immanent to working practices themselves. The expressive model of work regards the actual world of work to be constituted historically by work-specific norms, norms which working subjects themselves have invoked and mobilised around in the course of their struggles for emancipation. According to the third model, the core norms of work have to do neither with instrumental rationality nor authentic self-expression. Rather they concern norms that relate either to individual achievement or contribution through work (in the form of esteem) or to the conditions that must in place for individuals to participate in the exchange of services by which market societies reproduce themselves (in the form of mutual respect). (shrink)

John Tomasi's Free Market Fairness treats both traditions with depth, nuance, and unremitting fair-mindedness, and then points us toward a synthesis. Social democrats and libertarians equally need to read this book.

This paper addresses ways of arguing fors ome form of economic democracy from within a broadly Rawlsian framework. Firstly, one can argue that a right to participate in economic decision-making should be added to the Rawlsian list of basic liberties, protected by the first principle of justice. Secondly,I argue that a society which institutes forms of economic democracy will be more likely to preserve a stable and just basic structure over time, by virtue of the effects of economic democratization on (...) the development of an active, democratic character among citizens. Thirdly, I argue that a proper understanding of the demands of the difference principle shows that justice demands more than ex post redistribution, but also requires the ex ante redistribution of power and authority in economic life. This connects to Rawls’s discussion of the badness of inequality, and to his endorsement of a “property-owning democracy”. -/- My conclusion is that, even if we may doubt the success of this first Rawlsian argument,the second and third arguments are both successful, and together establish a strong Rawlsian case forseeing economic democratization as a requirement of justice. (shrink)

Liberalism generally holds that legitimate political power is limited and is to be impartially exercised, only for the public good. Liberals accordingly assign political priority to maintaining certain basic liberties and equality of opportunities; they advocate an essential role for markets in economic activity, and they recognize government's crucial role in correcting market breakdowns and providing public goods. Classical liberalism and what I call “the high liberal tradition” are two main branches of liberalism. Classical liberalism evolved from the works of (...) Adam Smith and the classical utilitarian economists; its major 20th century representatives include Friedrich Hayek and Milton Friedman. The high liberal tradition developed from John Stuart Mill's works, and its major philosophical representatives in the 20th century are John Dewey and, later, John Rawls. This paper discusses the main distinguishing features of the classical and the high liberal traditions and their respective positions regarding capitalism as an economic and social system. Classical liberals, unlike high liberals, regard economic liberties and rights of private property in productive resources to be nearly as important as basic liberties. They conceive of equality of opportunity in more formal terms, and regard capitalist markets and the price system as essential not only to the allocation of production resources, but also as the fundamental criterion for the just distribution of income, wealth, and economic powers. High liberals, by contrast, regard the economic liberties as subordinate to the exercise of personal and civic liberties. They are prepared to regulate and restrict economic liberties to achieve greater equality of opportunities, reduce inequalities of economic powers, and promote a broader conception of the public good. And while high liberals endorse markets and the price system as essential to allocation of productive resources, they do not regard markets as the fundamental criterion for assessing just distributions of income, wealth, and economic powers and positions of responsibility. The paper concludes with some reflections upon the essential role that dissimilar conceptions of persons and society play in grounding the different positions on economic justice that classical and high liberals advocate. (shrink)

Abstract:The organization is importantly different from both the nation-state and the individual and hence needs its own ethical models and theories, distinct from political and moral theory. To develop a case for organizational ethics, this paper advances arguments in three directions. First, it highlights the growing role of organizations and their distinctive attributes. Second, it illuminates the incongruities between organizations and moral and political philosophy. Third, it takes these incongruities, as well as organizations’ distinctive attributes, as a starting point for (...) suggesting an agenda for an ethics of organizations. (shrink)

We consider two reasons why firms should be owned and run democratically by their workers. The first concerns accountability : Because the employment relationship involves the exercise of power, its governance should on democratic grounds be accountable to those most directly affected. The second concerns efficiency : The democratic firm uses a lower level of inputs per unit of output than the analogous capitalist firm.

In the wake of the 2008 global financial crisis, an important conceptual battleground for democratic theorists ought to be, it would seem, the capitalist firm. We are now painfully aware that the typical model of government in so-called investor-owned companies remains profoundly oligarchic, hierarchical, and unequal. Renewing with the literature of the 1970s and 1980s on workplace democracy, a few political theorists have started to advocate democratic reforms of the workplace by relying on an analogy between firm and state. To (...) the extent that a firm is an organization comparable to the state, it too ought to be ruled along democratic lines. Our paper tests the robustness of the analogy between firm and state by considering six major objections to it: the objection from a difference in ends, the objection from shareholders’ property rights, the objection from worker’s consent, the objection from workers’ exit opportunities, the objection from workers’ expertise, and the objection from the fragility of firms. We find all of these objections wanting. While the paper does not ambition to settle the issue of workplace democracy at once, our goal is to pave the way for a more in-depth study of the ways in which firms and states can be compared and the possible implications this may have for our understanding of the nature of managerial authority and the governance of firms. (shrink)

We have long been accustomed to thinking of democracy as a major selling point of Western institutions. That a set of political institutions should be democratic is widely regarded as the sine qua non of their legitimacy. So widespread is this belief that even those whose institutions do not look very democratic to us nevertheless insist on proclaiming them to be such. Meanwhile, an adulatory attitude toward democracy has arisen in many quarters, and many theorists have taken up anew the (...) idea that if democracy is the way to go in political institutions, then it must also be the way to go in “other” areas, notably in economic and social institutions. So there has arisen a call for “economic democracy” — which is taken to mean, especially, that the “means of production” should be managed by their constituent workers in concert rather than by some few who own, or act for the owners of, those enterprises. Robert Dahl, in his influential Preface to Economic Democracy, sums it up nicely when he proclaims a “stronger justification” for worker participation: “ If democracy is justified in governing the state, then it must also be justified in governing economic enterprises; and to say that it is not justified in governing economic enterprises is to imply that it is not justified in governing the state.”. (shrink)

Abstract:The central problems of political philosophy (e.g., legitimate authority, distributive justice) mirror the central problems of business ethics. The question naturally arises: should political theories be applied to problems in business ethics? If a version of egalitarianism is the correct theory of justice for states, for example, does it follow that it is the correct theory of justice for businesses? If states should be democratically governed by their citizens, should businesses be democratically managed by their employees? Most theorists who have (...) considered these questions, including John Rawls inPolitical Liberalism, and Robert Phillips and Joshua Margolis in a 1999 article, have said “no.” They claim that states and businesses are different kinds of entities, and hence require different theories of justice. I challenge this claim. While businesses differ from states, the difference is one of degree, not one of kind. Business ethics has much to learn from political philosophy. (shrink)

Tocqueville pessimistically predicted that liberty and equality would be incompatible ideas. Robert Dahl, author of the classic _A Preface to Democratic Theory,_ explores this alleged conflict, particularly in modern American society where differences in ownership and control of corporate enterprises create inequalities in resources among Americans that in turn generate inequality among them as citizens. Arguing that Americans have misconceived the relation between democracy, private property, and the economic order, the author contends that we can achieve a society of real (...) democracy and political equality without sacrificing liberty by extending democratic principles into the economic order. Although enterprise control by workers violates many conventional political and ideological assumptions of corporate capitalism as well as of state socialism. Dahl presents an empirically informed and philosophically acute defense of "workplace democracy." He argues, in the light of experiences here and abroad, that an economic system of worker-owned and worker-controlled enterprises could provide a much better foundation for democracy, political equality, and liberty than does our present system of corporate capitalism. (shrink)

Christopher McMahon links political theory and business ethics and thereby takes the latter to a new level of philosophical sophistication. McMahon argues that legitimate authority, political or managerial, characteristically preempts certain of one’s judgments, so that one may reasonably submit to a directive to do something that contravenes one’s principles. Authoritative preemption does not involve weighing reasons pro and con, as one who is considering breaking a promise must do: it disqualifies competing considerations.

ABSTRACT: What kinds of markets, market regulations, and business organizations are compatible with contemporary egalitarian theories of justice? This article argues that any thoughtful answer to this question will have to draw on recent developments in political philosophy that are concerned not only with the equality of the distribution of core goods but also with the requirements for equality of status, voice, and so on, in the relations between individuals and within organizations. The dominance of theories of distributive justice in (...) egalitarian political philosophy since Rawls may have contributed, on the one hand, to the oft-recognized gulf between these theories and their theorists and, on the other, to discussions of corporate governance and business ethics. The main purpose of this article is to introduce business ethicists to some of the less-familiar features of recent relational theories of justice and equality, and to suggest that some of these notions may help bridge the gap between business ethics and political philosophy more generally. (shrink)