According to Palazzo and Scherer, the changing role of business corporations in society requires that we take new measures to integrate these organizations into society-wide processes of democratic governance. We argue that their model of integration has a fundamental problem. Instead of treating business corporations as agents that must be held accountable to the democratic reasoning of affected parties, it treats corporations as agents who can hold others accountable. In our terminology, it treats business corporations as “supervising authorities” rather than (...) “functionaries.” The result is that Palazzo and Scherer’s model does not actually address the democratic deficit that it is meant to solve. In order to fix the problem, we advocate removing business corporations from any policymaking role in political CSR and limiting participation to political NGOs and other groups that meet the standards we set out for a politically representative organization (PRO). (shrink)

ABSTRACT:There is considerable overlap between the interests of business ethicists and those of political philosophers. Questions about the moral justifiability of the capitalist system, the basis of property rights, and the problem of inequality in the distribution of income have been of central importance in both fields. However, political philosophers have developed, especially over the past four decades, a set of tools and concepts for addressing these questions that are in many ways quite distinctive. Most business ethicists, on the other (...) hand, consider their field to be primarily a domain of applied ethics, and so adopt methods and conceptual frameworks developed by moral philosophers. In this paper, we discuss some of the salient differences between these two approaches, and suggest some ways in which business ethicists could benefit from taking a more “political philosophy” approach to these questions. Throughout, we underline the importance of seeking greater compatibility among the principles used in normative theorizing about markets, regulations, corporate governance, and business practices. (shrink)

The view of business ethics that Christopher McMahon calls the “implicit morality of the market” and Joseph Heath calls the “market failures approach” has received a significant amount of recent attention. The idea of this view is that we can derive an ethics for market participants by thinking about the “point” of market activity, and asking what the world would have to be like for this point to be realized. While this view has been much-discussed, it is still not well-understood. (...) This paper seeks to remedy this problem. I begin by showing, against some recent commentators, that McMahon’s view and Heath’s view are fundamentally the same. Second, I clarify the sense of “efficiency” at work in the market failures approach. Finally, I argue that, in its current form, this view has little relevance to the real world of business. I conclude by sketching two ways of modifying it to fit our world. (shrink)

John Rawls says that one of the requirements for stability is “[s]ociety as an employer of last resort” (PLP, lix). He explains: “[t]he lack of . . . the opportunity for meaningful work and occupation is destructive . . . of citizens’ self-respect” (PLP, lix). Rawls implies in these claims that the opportunity for meaningful work is a social basis of self-respect. This constitutes a significant shift in his account of self-respect, one that has been overlooked. I begin by clarifying (...) Rawls’s account of self-respect in A Theory of Justice, then consider some post-Theory developments in it. After exploring the nature of Rawls’s commitment to the opportunity for meaningful work, I ask why he comes to think it is a social basis of self-respect. I extract a partial answer from his writings, then speculate about his full reasoning. Finally, I consider whether Rawls is right that the opportunity for meaningful work is a social basis of self-respect. I give some reason to believe that he is. (shrink)

This is annotated bibliography of the field of business ethics. It identifies and summarizes useful journals, textbooks, anthologies, and articles.

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)

Abstract:In 2003, CEOs of the 365 largest U.S. corporations were paid on average $8 million, 301 times as much as factory workers. This paper asks whether CEOs get paid too much. Appealing to widely recognized moral values, I distinguish three views of justice in wages: the agreement view, the desert view, and the utility view. I argue that, no matter which view is correct, CEOs get paid too much. I conclude by offering two ways CEO pay might be reduced.

In early writings, stakeholder theorists supported giving all stakeholders formal, binding control over the corporation, in particular, over its board of directors. In recent writings, however, they claim that stakeholder theory does not require changing the current structure of corporate governance and further claim to be “agnostic” about the value of doing so. This article’s purpose is to highlight this shift and to argue that it is a mistake. It argues that, for instrumental reasons, stakeholder theorists should support giving all (...) stakeholders control over the corporation, in the form of control over its board. That is, stakeholder theorists should support stakeholder democracy over the status quo. A larger goal of this article is to steer the conversation about stakeholder theory toward questions of governance and control. Stakeholder theorists tend to sidestep these questions, but it is vital that they be addressed. (shrink)

This article provides an overview of the field of business ethics.

ABSTRACT:In this address, I distinguish and explore three conceptions of wages. A wage is a reward, given in recognition of the performance of a valued task. It is also an incentive: a way to entice workers to take and keep jobs, and to motivate them to work hard. Finally, a wage is a price of labor, and like all prices, conveys valuable information about relative scarcity. I show that each conception of wages has its own normative logic, or appropriate justification, (...) and these logics can come apart. This explains some of the debate about wages and makes the project of justifying a wagesimpliciterdifficult. I identify which logic we should choose, since we must choose, and say what this means for how we should think about the justification of pay. (shrink)

Online retailers are using advances in data collection and computing technologies to “personalize” prices, i.e., offer goods for sale to shoppers at their reservation prices, or the highest price they are willing to pay. In this paper, I offer a criticism of this practice. I begin by putting online personalized pricing in context. It is not something entirely new, but rather a kind of price discrimination, a familiar pricing practice. I then offer a fairness-based argument against it. When an online (...) retailer personalizes prices, it competes unfairly for the social surplus created by a transaction. I defend this argument against objections, and offer a simple remedy: online retailers should either disclose that they are personalizing prices, or stop doing so. (shrink)

Should people who perform equal work receive equal pay? Most would say ‘yes’, at least insofar as this question is understood to be asking whether employers should be permitted to discriminate against employees on the basis of race or sex. But suppose the employees belong to all of the same traditionally protected groups. Is (what I call) nondiscriminatory unequal pay for equal work wrong? Drawing an analogy with price discrimination, I argue that it is not intrinsically wrong, but it can (...) be deceptive, in which case it is wrong. (shrink)

ABSTRACT:Debates about the ethics of executive compensation are dominated by familiar themes. Many writers consider whether the amount of pay CEOs receive is too large—relative to firm performance, foreign CEO pay, or employee pay. Many others consider whether the process by which CEOs are paid is compromised by weak or self-serving boards of directors. This paper examines the issue from a new perspective. I focus on the dutiesexecutives themselveshave with respect totheir owncompensation. I argue that CEOs’ fiduciary duties place a (...) moral limit on how much compensation they can accept, and hence seek in negotiation, from their firms. Accepting excessive compensation leaves the beneficiaries of their duties (e.g., shareholders) worse off, and thus is inconsistent with observing those duties. (shrink)

Many arguments have been advanced in favor of employee participation in firm decision-making. Two of the most influential are the "interest protection argument" and the "autonomy argument." I argue that the case for granting participation rights to some other stakeholders, such as suppliers and community members, is at least as strong, according to the reasons given in these arguments, as the case for granting them to certain employees. I then consider how proponents of these arguments might modify their arguments, or (...) views, in response to this conclusion. (shrink)

Desert plays a central role in most contemporary theories of retributive justice, but little or no role in most contemporary theories of distributive justice. This asymmetric treatment of desert is prima facie strange. I consider several popular arguments against the use of desert in distributive justice, and argue that none of them can be used to justify the asymmetry.

Packed with examples, this book offers a clear and engaging overview of ethical issues in business. -/- It begins with a discussion of foundational issues, including the objectivity of ethics, the content of ethical theories, and the debate between capitalism and socialism, making it suitable for the beginning student. It then examines ethical issues in business in three broad areas. The first is the market. Issues explored are what can be sold (the limits of markets) and how it can be (...) sold (ethics in marketing). The second is work. Topics in this area are health and safety, meaningful work, compensation, hiring and firing, privacy, and whistleblowing. The third area is the firm in society. Here readers explore corporate social responsibility, corporate political activity, and the set of ethical challenges that attend international business. -/- Issues are introduced through real-world examples that underscore their importance and make them come alive. Arguments for opposing positions are given fair hearings and students are encouraged to develop and defend their own views. (shrink)

Business ethicists have written much about ethical issues in employment. Except for a handful of articles on the very high pay of chief executive officers and the very low pay of workers in overseas sweatshops, however, little has been written about the ethics of compensation. This is prima facie strange. Workers care about their pay, and they think about it in normative terms. This article's purpose is to consider whether business ethicists' neglect of the normative aspects of compensation is justified. (...) I examine several possible justifications for neglecting compensation and show that they fail. What remains is a case for thinking that it is worthy of normative analysis. (shrink)

Justice requires giving people what they deserve. Or so many philosophers – and according to many of those philosophers, everyone else – thought for centuries. In the 1970’s and 1980’s, however, perhaps under the influence of Rawls’s (1971) desert-less theory, desert was largely cast out of discussions of distributive justice. Now it is making a comeback. In this chapter I consider recent research on the concept of desert, arguments for its requital, and connections between desert and other distributive ideals. I (...) suggest that desert-sensitive theories of distributive justice, though they face obstacles, have a promising future. (shrink)

Some writers think that John Rawls rejects desert as a distributive criterion because he thinks that people are not capable of deserving anything. I argue that Rawls does not think this, and that he rejects desert because he thinks that we cannot tell what people deserve. I then offer a criticism of Rawls's rejection of desert based on its correct interpretation.

ABSTRACT:If an employee is committed to his firm—if he is “attached” or “bound” to it—then his firm may be able to obtain a discount on his labor. This paper asks: Is it wrong for firms to do so? If we understand just or fair pay solely in terms of voluntary agreements between employers and employees, the answer seems to be ‘no.’ Against this, I argue that, in some cases, it is ‘yes.’ In particular, it is wrong for firms to try (...) to obtain discounts on their committed employees’ labor when their employees reasonably expect that they will not try to obtain them. In the process, I probe the limits of exploitation and question the relevance of contribution to fairness in compensation. (shrink)

Many firms keep pay secret. They do not make information about what their employees are paid available inside or outside of the firm, i.e. to other employees or to the public at large. Indeed, many firms discourage their employees from, or sanction them for, disclosing their pay. Against this, I argue that there are good moral reasons for firms to be transparent about pay. Pay transparency prevents injustice, promotes autonomy, and increases efficiency. After presenting the positive case for pay transparency, (...) I defend it against objections, including the most common reasons firms give for keeping pay secret. (shrink)

Desert plays an important role in most contemporary theories of retributive justice, but an unimportant role in most contemporary theories of distributive justice. Saul Smilansky has recently put forward a defense of this asymmetry. In this study, I argue that it fails. Then, drawing on an argument of Richard Arneson’s, I suggest an alternative consequentialist rationale for the asymmetry. But while this shows that desert cannot be expected to play the same role in distributive justice that it can play in (...) retributive justice, it does not fully vindicate the asymmetry, since desert can still play an important role in the former. (shrink)

Must CEOs Be Saints? Contra Moriarty on CEO Abstemiousness by Robert KolbIn this journal, Jeffrey Moriarty argued that CEOs must refuse to accept compensation above the minimum compensation that will induce them to accept and per­form their jobs. Acting otherwise, he maintains, violates the CEO’s fiduciary duty, even for a CEO new to the firm. I argue that Moriarty’s conclusion rests on a failure to adequately distinguish when a person acts as a fiduciary from when she acts on her own (...) account as a person. Further, Moriarty’s argument assumes that the CEO knows this minimum level of compensation. However, we learn the suitability of compensation only through the market process of wage negotiation, not through some process of introspection. I conclude that a CEO who abstains from interfering with the board of directors and its compensation com­mittee is morally free to negotiate for the highest wage available. (shrink)

Most contemporary political philosophers deny that justice requires giving people what they deserve. According to a familiar anti-desert argument, the influence of genes and environment on people's actions and traits undermines all desert-claims. According to a less familiar – but more plausible – argument, the influence of genes and environment on people's actions and traits undermines some desert-claims (or all desert-claims to an extent). But, it says, we do not know which ones (or to what extent). This article examines this (...) ‘epistemological’ argument against desert. It gives reason to believe that it fails, emphasizing the importance of justice relative to efficiency and attempting to construct a practical way of measuring desert. (shrink)

According to an existing “environmental” narrative, the financial crisis of 2007-2009 was due in part to executive compensation packages in the financial services industry that incentivized excessive risk-taking. Also according to this narrative, those who have a duty to protect society – principally, government regulators, but also firms themselves – are open to blame for how executives were paid, and must take steps to change executive compensation. This narrative is important but incomplete. I offer a supplementary “agential” narrative. According to (...) this narrative, executives are open to blame for the financial crisis for taking socially excessive risks. Moreover, since executives can play a role in shaping their compensation, they have an obligation to ensure that it does not incentivize them to take such risks. (shrink)

This paper offers a sympathetic critique of Christopher McMahon’s Authority and Democracy: A General Theory of Government and Management. Although I find fault with some of his arguments, my goal is not to show that these arguments are irreparable, but to highlight issues that deserve further consideration. After defining some terms, first, I raise an objection to McMahon’s rejection of the moral unity of management (MUM) thesis. Second, I draw attention to his “moralization” of the workplace, and examine the role (...) it plays in his arguments about the relative strengths of the different kinds of authority. Third, I raise questions about his reliance on an analogy between states and firms. I suggest that states and firms are in some ways more alike, but in other ways less alike, than he allows. (shrink)

This essay provides an overview of business ethics. I describe important issues, identify some of the normative considerations animating them, and offer a roadmap of references for those wishing to learn more. I focus on issues in normative business ethics, but discuss briefly the growing body of work in descriptive business ethics. I conclude with a comment on the changing nature of the field.

Many people believe that some things, like kidneys or sex, should not be for sale. Let us call these things “contested commodities.” Against this, Brennan and Jaworksi defend “markets without limits” (hereafter: MwL). According to this thesis: “If you may do it for free, you may do it for money” (2016, p. 10). Since we can give away our kidneys for free and have sex for free, we should be able to do these things for money. Brennan and Jaworksi deftly (...) blend rigorous philosophical argument with the latest research in social science to counter some of the most prominent against commodification. But, I will argue, their arguments stop short of establishing MwL. Brennan and Jaworksi do not say enough in favor of markets in contested commodities. (shrink)

This is a review of Serena Olsaretti's book Liberty, Desert, and the Market.

This article provides some suggestions, including a list of readings, for use in teaching a course in business ethics.

This chapter applies recent work on desert to two sets of issues in business ethics. The first set of issues concerns who ought to be hired, fired, promoted, and demoted. Call these issues of “job justice.” The second set of issues concerns how much workers, including managers, ought to be paid. Call these issues of “wage justice.” I focus on job and wage justice because considerations of desert play an important, though sometimes tacit, role in discussions of these issues.

This chapter advances our understanding of the moral contours of the employment relationship. It considers what employers owe their employees, and what employees owe their employers. I begin with a brief discussion of the value and limits of contractual freedom in employment. Then I consider ethical issues in five areas: (1) hiring and firing, (2) compensation, (3) the nature of work, including meaningful work and workplace democracy, (4) privacy, and (5) whistleblowing.

Compensation has received a great deal of attention from social scientists. Characteristically, they have been concerned with the causes and effects of various compensation schemes. By contrast, few theorists have addressed the normative aspects of compensation. An exception is Elaine Sternberg, who offers in Just Business a comprehensive theory of compensation ethics. This paper critically examines her theory, and argues that the justification she gives for it fails. Its failure is instructive, however. The main argument Sternberg gives for her theory (...) points in the direction of a different one. This, in turns, helps us to see what a justification of Sternberg’s theory must look like. While focused on Sternberg, this paper is of general interest. It identifies what are likely to be important positionsand arguments in debates about compensation ethics, and thus provides a jumping-off point for further research in this neglected area. (shrink)

Aimee Barbeau advances a thoughtful critique of my article, “The Connection Between Stakeholder Theory and Stakeholder Democracy: An Excavation and Defense.” Although Barbeau does much to push forward the debate about corporate governance, she does it without undermining my thesis. For what Barbeau has shown is not that stakeholder theorists should not endorse stakeholder boards of directors, but that they should also endorse other ways for stakeholders to participate in decision-making processes within firms.

This is a review of Christopher McMahon's book, Public Capitalism.

W. D. Ross thinks it is good, other things equal, that people get what they deserve. But he denies that "the principle of punishing the vicious, for the sake of doing so, is that on which the state should proceed in its bestowal of punishments." Ross offers two main arguments for this denial: what I call the "scope argument" and the "state's purpose argument." I argue that both fail. In doing so, I illuminate Ross's distinctive views about desert and the (...) state. (shrink)

The view that justice requires giving people what they deserve is both ancient and plausible. Yet many contemporary political philosophers, including John Rawls and Robert Nozick, have put forward distributive theories that give no place to desert. In this dissertation, I give reason to believe that the contemporary rejection of desert is mistaken, and that desert should be taken seriously by political philosophers. ;This project is incomplete in the sense that I do not say how seriously desert should be taken---how (...) important it is compared to other distributive ideals . This is an important task, but I do not have the space for it. Hence, while my dissertation is an important first step in restoring desert to a place of significance in theories of distributive justice, it is not the last word. ;In chapter 1, I consider different views about what it means to be deserving, and about the necessary and sufficient conditions for desert. I do not try to solve these debates, but rather stipulate the conception of desert I am interested in. In chapter 2, I offer arguments for its use as a distributive criterion. ;In chapter 3, I consider the "metaphysical argument" against desert. Deriving from naturalistic worries about the robustness of human agency, this argument denies that people are capable of the kind of responsibility required for desert. I distinguish three versions of it, and argue that all fail. The "epistemological argument," examined in chapter 4, doubts that we can know what people deserve. In response, I suggest a way of making distribution according to desert practicable. ;I consider in chapter 5 the asymmetry of desert: the fact that desert plays an insignificant role in most contemporary theories of distributive justice, but a central role in most contemporary theories of retributive justice. I give good reason to believe the asymmetry cannot be justified, considering five potential justifications of it, and arguing that none is successful. I conclude the dissertation by summarizing what I have done, then mapping out directions for future research. (shrink)