On the Origin, Content, and Relevance of the Market Failures Approach

2019 ◽  
Vol 165 (1) ◽  
pp. 113-124 ◽  
Author(s):  
Jeffrey Moriarty
Keyword(s):  
Market Failures ◽  
Market Failures Approach

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

2021 ◽  
Author(s):  
Charlie Blunden
Keyword(s):  
Business Ethics ◽  
Private Firms ◽  
Market Failures ◽  
Costs And Benefits ◽  
Trade Offs ◽  
Efficiency Losses ◽  
Different Types ◽  
Hybrid Theory ◽  
Market Failures Approach ◽  
Ethical Obligations

AbstractThe 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.

scholarly journals Professionalism, agency, and market failures

2021 ◽  
Author(s):  
von Kriegstein Hasko
Keyword(s):  
State Regulation ◽  
Competitive Market ◽  
Institutional Setting ◽  
Regulatory Regime ◽  
Market Failures ◽  
Market Outcomes ◽  
Corporate Managers ◽  
Professional Duty ◽  
Market Failures Approach

ABSTRACT: According to the Market Failures Approach to business ethics, beyond-compliance duties can be derived by employing the same rationale and arguments that justify state regulation of economic conduct. Very roughly the idea is that managers have a duty to behave as if they were complying with an ideal regulatory regime ensuring Pareto-optimal market outcomes. Proponents of the approach argue that managers have a professional duty not to undermine the institutional setting that defines their role, namely the competitive market. This answer is inadequate, however, for it is the hierarchical firm, rather than the competitive market, that defines the role of corporate managers and shapes their professional obligations. Thus, if the obligations that the market failures approach generates are to apply to managers, they must do so in an indirect way. I suggest that the obligations the market failures approach generates directly apply to shareholders. Managers, in turn, inherit these obligations as part of their duties as loyal agents. <div><br><div>KEY WORDS: market failures approach; professionalism; professional ethics; agency ethics; Joseph Heath; Kenneth Goodpaster.</div></div>

scholarly journals Professionalism, agency, and market failures

2021 ◽  
Author(s):  
von Kriegstein Hasko
Keyword(s):  
State Regulation ◽  
Competitive Market ◽  
Institutional Setting ◽  
Regulatory Regime ◽  
Market Failures ◽  
Market Outcomes ◽  
Corporate Managers ◽  
Professional Duty ◽  
Market Failures Approach

ABSTRACT: According to the Market Failures Approach to business ethics, beyond-compliance duties can be derived by employing the same rationale and arguments that justify state regulation of economic conduct. Very roughly the idea is that managers have a duty to behave as if they were complying with an ideal regulatory regime ensuring Pareto-optimal market outcomes. Proponents of the approach argue that managers have a professional duty not to undermine the institutional setting that defines their role, namely the competitive market. This answer is inadequate, however, for it is the hierarchical firm, rather than the competitive market, that defines the role of corporate managers and shapes their professional obligations. Thus, if the obligations that the market failures approach generates are to apply to managers, they must do so in an indirect way. I suggest that the obligations the market failures approach generates directly apply to shareholders. Managers, in turn, inherit these obligations as part of their duties as loyal agents. <div><br><div>KEY WORDS: market failures approach; professionalism; professional ethics; agency ethics; Joseph Heath; Kenneth Goodpaster.</div></div>

Business Ethics and Equality

2018 ◽  
Author(s):  
Abraham A. Singer
Keyword(s):  
Social Justice ◽  
Business Ethics ◽  
Fundamental Theorem ◽  
Market Failure ◽  
Market Failures ◽  
Second Best ◽  
Corporate Executives ◽  
Market Failures Approach

This chapter shows why concerns for equality must affect business ethics. In the last chapter, we saw that the market failures approach takes the theory of second best seriously when it comes to the first fundamental theorem; however, it does not seem to apply it to its own reliance on the second fundamental theorem. Just as we ask corporate executives to constrain and restrain themselves according to the spirit of efficiency-promoting laws in order to achieve second-best efficiency, market actors ought to shoulder some of the burden of justice in order to achieve second-best social justice. To this end this chapter introduces the concept of “justice failure” as a concept parallel to “market failure” and sketches out what a justice failures approach to business ethics would look like. The chapter concludes by responding to potential objections.

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