Journal of Business Ethics (1):1-14 (2017)

Authors
Marc A. Cohen
Seattle University
Abstract
Joseph Heath defends competitive markets and conceptualizes business ethics with reference to Pareto efficiency, which he takes to be the “implicit morality of the market.” His justification for markets is that they generate Pareto efficient outcomes, meaning that markets optimally satisfy consumer preferences. And, for Heath, business ethics is the set of normative constraints—regulation and beyond-compliance norms—needed to preserve that outcome. The present paper accepts Heath’s claim that the economic justification for markets is ethical, in that satisfying consumer preferences is a good. But, contra Heath, the ethical consideration at work is a consequentialist one; and acknowledging this consequentialism exposes limitations of Heath’s “market failures” approach to business ethics. We suggest two limitations, and we expect many will accept our argument that Heath’s conception of business ethics is too narrow. The present paper outlines two broader implications. First, acknowledging that the justification for markets is ethical eliminates the apparent—and false—conflict between purportedly amoral economic activity on one hand and ethical considerations on the other; instead, business ethics is a matter of weighing the consequentialist ethical benefit of economic activity and markets against other moral arguments/other ethical considerations. Second, Heath restricts business ethics to the constraints needed to protect the market’s ability to efficiently satisfy consumer preferences, constraints he calls “efficiency imperatives”; this restriction supports the widespread tendency to think that all social problems are economic; and, a business ethics so-conceived diminishes the perceived importance of noneconomic values—this attitude is dangerous.
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Reprint years 2017, 2019
DOI 10.1007/s10551-017-3761-6
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References found in this work BETA

Two Concepts of Rules.John Rawls - 1955 - Philosophical Review 64 (1):3-32.
On Ethics and Economics.Amartya Sen - 1989 - Tijdschrift Voor Filosofie 51 (4):722-723.
War and Massacre.Thomas Nagel - 1972 - Philosophy and Public Affairs 1 (2):123-144.

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Citations of this work BETA

Navigating Our Way Between Market and State.Jeffery Smith - 2019 - Business Ethics Quarterly 29 (1):127-141.
The Implicit Morality of the Market Is Consequentialist.Marc A. Cohen & Dean Peterson - 2020 - Business Ethics Journal Review 7 (4):21-26.
Is the “Point” of the Market Pareto or Kaldor-Hicks Efficiency?Heath Joseph - 2019 - Business Ethics Journal Review 7 (4):21-26.

View all 7 citations / Add more citations

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