Stakeholder theorists distinguish between normative stakeholders, those who gain moral standing by making contributions to the firm, and derivative stakeholders, those who can constrain the corporate association even though they make no contribution. The board of directors has the legal authority to distinguish among these stakeholder groups and to distribute rights and obligations among these stakeholder groups. To be sure, this stakeholder formulation appropriately seizes on the firm’s voluntary, associative character. Yet, the firm’s constituents contribute assets and incur risks to (...) participate in market, economic activities. And, as such, the firm’s “stakeholders” must share an imperfect language to assist in making two key economic decisions: (1) who are the legitimate and who are the derivative stakeholders; and (2) who should sit on the board? Still, stakeholder theorists have good reason to be skeptical of neoclassical economics. Its assumptions that all act opportunistically and that all can calculate rationally and fully hardly correspond to studies on the managerial experience of corporate coordination. However, advances in behavioral law and economics now provide a cogent economic logic that readily fits into a stakeholder mode. In brief, we argue that (1) the firm’s economic purpose designates legitimacy to core stakeholders, to those who add value, assume unique risk, and can incur harm; (2) the board serves as the principal who coordinates these core stakeholders to sustain competitive advantage and new wealth creation; and (3) state incorporation law, Delaware in particular, reinforces the board’s function. These, in turn, supply selection criteria for board membership. We aim to synchronize concepts from behavioral law and economics with stakeholder theory. (shrink)

Recent work in applied ethics has advanced a raft of arguments regarding individual responsibilities to address collective challenges like climate change or the welfare and environmental impacts of meat production. Frequently, such arguments suggest that individual actors have a responsibility to be more conscientious with their consumption decisions, that they can and should harness the power of the market to bring about a desired outcome. A common response to these arguments, and a challenge in particular to act-consequentialist reasoning, is that (...) it “makes no difference” if one takes conscious consumption action or not – that one is “causally impotent” to change an outcome. In this paper, I break causal impotence objections into three distinct lines of argument and present causal indeterminacy as a third, unexplored variation of much more common causal impotence lines. I suggest that the causal indeterminacy argument presents additional challenges to consequentialist moral theory because it acknowledges that individual actions can have an impact on outcome, but suggests instead that the outcome can neither be known nor secured by the action itself. (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)

According to the Maximin principle of distributive justice, one outcome is more just than another if the worst off individual in the first outcome is better off than the worst off individual in the second. This is often interpreted as a highly egalitarian principle, and, more specifically, as a highly egalitarian way of balancing a concern with equality against a concern with efficiency. But this interpretation faces a challenge: why should a concern with efficiency and equality lead us to a (...) concern only for the very worst off? Egalitarian proponents of Maximin tend to meet this challenge by showing that it possible to formally derive Maximin from surprisingly weak conditions relating efficiency and equality to justice. But in this paper, I argue that this reply fails. The issue is not that the proofs are invalid, but instead that every existing proof of Maximin transforms into an impossibility result as soon as we realize that any reasonable conception of equality must satisfy a certain formal property. The upshot is that even if it is possible to defend Maximin on other grounds, there is no known way to defend it on the grounds that it balances a concern with equality against a concern for efficiency. Further, more general implications of this result for egalitarian theories of distributive justice are also explored. (shrink)