Skip to main content Accessibility help
×
Home

Rawls on Markets and Corporate Governance

  • Wayne Norman (a1)

Abstract:

Like most egalitarian political philosophers, John Rawls believes that a just society will rely on markets and business firms for much of its economic activity—despite acknowledging that market systems will tend to create very unequal distributions of goods, opportunities, power, and status. Rawls himself remains one of the few contemporary political philosophers to explore at any length the way an egalitarian theory of justice might deal with fundamental options in political economy. This article examines his arguments and conclusions on these topics. It argues that contemporary Rawlsians will reach different conclusions if they take more seriously than Rawls himself did: (1) the implications, for the political culture and the democratic regulatory state, of large firms competing in adversarial markets characterized by the inevitable “fact of market failure,” and (2) the relevance of ownership and governance relationships involving different kinds of business firms. And with respect to the second point, Rawlsians and other egalitarians have much to learn from contemporary economic, legal, and sociological theories of the firm, and the role of these theories in the structure of and rationale for corporate law. This is the kind of social theory that Rawls believes is relevant to the justification and application of theories of justice, but he himself did not appeal to it in his writings on political economy. Contemporary egalitarians can and should appeal to it now, and in doing so correct errors and omissions in Rawls’s analysis. But taking seriously the two points mentioned above will also force egalitarians who support efficient markets to face difficult dilemmas or compromises of their own.

    • Send article to Kindle

      To send this article to your Kindle, first ensure no-reply@cambridge.org is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about sending to your Kindle. Find out more about sending to your Kindle.

      Note you can select to send to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be sent to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

      Find out more about the Kindle Personal Document Service.

      Rawls on Markets and Corporate Governance
      Available formats
      ×

      Send article to Dropbox

      To send this article to your Dropbox account, please select one or more formats and confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your <service> account. Find out more about sending content to Dropbox.

      Rawls on Markets and Corporate Governance
      Available formats
      ×

      Send article to Google Drive

      To send this article to your Google Drive account, please select one or more formats and confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your <service> account. Find out more about sending content to Google Drive.

      Rawls on Markets and Corporate Governance
      Available formats
      ×

Copyright

References

Hide All
Alchian, Armen A., and Demsetz, Harold. 1972. “Production, Information Costs and Economic Organizations.” American Economic Review 62(5): 777–95.
Anderson, Elizabeth. 1995. Value in Ethics and Economics. Cambridge, MA: Harvard University Press.
Applbaum, Arthur. 1999. Ethics for Adversaries. Princeton: Princeton University Press.
Armour, John, Hansmann, Henry, and Kraakman, Reiner. 2009. “What Is Corporate Law?” In The Anatomy of Corporate Law: A Comparative and Functional Approach, 2nd ed., ed. Kraakman, Reiner et al., 134. Oxford: Oxford University Press.
Armour, John, Hertig, G., and Kanda, H. 2009. “Transactions with Creditors.” In The Anatomy of Corporate Law, 2nd ed., ed. Kraakman, Reiner et al., 115–52. Oxford: Oxford University Press.
Arnold, Denis G. 2013. “Global Justice and International Business.” Business Ethics Quarterly 23(1): 125–43.
Arnold, N. Scott. 2009. Imposing Values: An Essay on Liberalism and Regulation. Oxford: Oxford University Press.
Berle, Adolf A., and Means, Gardiner C. 1932/1991. The Modern Corporation and Private Property. Repr. New Brunswick, NJ: Transaction Publishers.
Blair, Margaret, and Stout, Lynn. 1999. “A Team Production Theory of Corporate Law.” Virginia Law Review 85(2): 247328.
Blanc, Sandrine, and Al-Amoudi, Ismael. 2013. “Corporate Institutions in a Weakened Welfare State: A Rawlsian Perspective.” Business Ethics Quarterly 23(4): 497525.
Boatright, John. 1996. “Business Ethics and the Theory of the Firm.” American Business Law Journal 34(2): 217–38.
Boatright, John. 2004. “Employee Governance and the Ownership of the Firm.” Business Ethics Quarterly 14(1): 121.
Brennan, Jason, and Jaworski, Peter. 2016. Markets without Limits: Moral Virtues and Commercial Interests. New York: Routledge.
Buchanan, Allen. 1996. “Toward a Theory of Ethics of Bureaucratic Organizations.” Business Ethics Quarterly 6(4): 419–40.
Chandler, Alfred D. Jr. 1977. The Visible Hand. Cambridge, MA: Belknap Press.
Child, James W., and Marcoux, Alexei M. 1999. “Freeman and Evan: Stakeholder Theory in the Original Position.” Business Ethics Quarterly 9(2): 207–23.
Ciepley, David. 2013. “Beyond Public and Private: Toward a Political Theory of the Corporation.” American Political Science Review 107(1): 139–58.
Coase, Ronald. 1937. “The Nature of the Firm.” Economica 4(16): 386405.
Dow, Gregory K. 2003. Governing the Firm: Workers’ Control in Theory and Practice. New York: Cambridge University Press.
Dudley, Susan E., and Jerry, Brito. 2012. Regulation: A Primer. 2nd ed. Washington, D.C.: Mercatus Center at George Mason University.
Easterbrook, Frank H., and Fischel, Daniel R. 1991. The Economic Structure of Corporate Law. Cambridge: Harvard University Press.
Enriques, L., Hansmann, H., and Kraakman, R. 2009. “The Basic Governance Structure: Minority Shareholders and Non-Shareholder Constituencies.” In The Anatomy of Corporate Law, 2nd ed., ed. Kraakman, Reiner et al., 89114. Oxford: Oxford University Press.
Grant, Ruth. 2012. Strings Attached: Untangling the Ethics of Incentives. Princeton: Princeton University Press.
Hansmann, Henry. 1996. The Ownership of Enterprise. Cambridge, MA: Harvard University Press.
Hartman, Edwin. 2001. “Moral Philosophy, Political Philosophy, and Organizational Ethics: A Response to Phillips and Margolis.” Business Ethics Quarterly 11(4): 673–85.
Heath, Joseph. 2006a. “Business Ethics without Stakeholders.” Business Ethics Quarterly 16(4): 533–57.
Heath, Joseph. 2006b. “An Adversarial Ethic for Business: Or When Sun-Tzu Met the Stakeholder.” Journal of Business Ethics 72(4): 359–74.
Heath, Joseph. 2014. Morality, Competition, and the Firm: The Market Failures Approach to Business Ethics. Oxford: Oxford University Press, 2014.
Heath, Joseph, Moriarty, Jeffrey, and Norman, Wayne. 2010. “Business Ethics and (or as) Political Philosophy.” Business Ethics Quarterly 20(3): 427–52.
Heath, Joseph, and Norman, Wayne. 2004. “Stakeholder Theory, Corporate Governance and Public Management: What Can the History of State-Run Enterprises Teach Us in the Post-Enron Era?Journal of Business Ethics 53(3): 247–65.
Hsieh, Nien-hê. 2005. “Rawlsian Justice and Workplace Republicanism.” Social Theory and Practice 31(1): 115–42.
Jensen, Michael. 2000. Theory of the Firm: Governance, Residual Claims, and Organizational Forms. Cambridge: Harvard University Press.
Kraakman, Reinier, Armour, John, Davies, Paul, Enriques, Luca, Hansmann, Henry B., Hertig, Gerard, Kopt, Klaus, Kanda, Hideki, and Rock, Edward, eds. 2009. The Anatomy of Corporate Law: A Comparative and Functional Approach. 2nd ed. Oxford: Oxford University Press.
Krouse, Richard, and McPherson, Michael. 1988. “Capitalism, ‘Property-Owning Democracy,’ and the Welfare State.” In Democracy and the Welfare State, ed. Gutmann, Amy, 79106. Princeton: Princeton University Press.
Lipsey, R. G., and Lancaster, Kelvin. 1956. “The General Theory of the Second Best.” Review of Economic Studies 24(1): 1132.
Mäkinen, Jukka, and Kourula, Arno. 2012. “Pluralism in Political Corporate Social Responsibility.” Business Ethics Quarterly 22(4): 649–78.
Martin, Dominic. 2013. “The Contained-Rivalry Requirement and a ‘Triple Feature’ Program for Business Ethics.” Journal of Business Ethics 115(1): 167–82.
McMahon, Christopher. 1994. Authority and Democracy: A General Theory of Government and Management. Princeton: Princeton University Press.
McMahon, Christopher. 2013. Public Capitalism. Philadelphia: University of Pennsylvania Press.
Mill, John Stuart. 1848/2006. Principles of Political Economy. In Collected Works of John Stuart Mill, vol. 3, ed. Bladen, V. W. and Robson, J. M. Indianapolis: Liberty Press.
Moriarty, Jeffrey. 2005. “On the Relevance of Political Philosophy to Business Ethics.” Business Ethics Quarterly 15(3): 455–73.
Néron, Pierre-Yves. 2015. “Rethinking the Very Idea of Egalitarian Markets and Corporations.” Business Ethics Quarterly 25(1): 97128.
Norman, Wayne. 2010. “The Financial Theory of the Firm.” In Finance Ethics: Critical Issues in Theory and Practice, ed. Boatright, John, 143–59. Hoboken, NJ: John Wiley & Sons.
Norman, Wayne. 2011. “Business Ethics as Self-Regulation.” Journal of Business Ethics 102(1): 4357.
O’Neill, Martin. 2008. “Three Rawlsian Routes toward Economic Democracy.” Revue de philosophie économique 8(2): 2955.
O’Neill, Martin, and Williamson, Thad, eds. 2012. Property-Owning Democracy: Rawls and Beyond. Boston: Wiley-Blackwell.
Orts, Eric. 2013. Business Person: A Legal Theory of the Firm. Oxford: Oxford University Press.
Phillips, Anne. 2013. Our Bodies: Whose Property? Princeton: Princeton University Press.
Phillips, Robert A., and Margolis, Joshua D. 1999. “Toward an Ethics of Organizations.” Business Ethics Quarterly 9(4): 619–38.
Rawls, John. 1971. A Theory of Justice. Cambridge, MA: Belknap Press.
Rawls, John. 1999. A Theory of Justice. Rev. ed. Cambridge, MA: Belknap Press.
Rawls, John. 2001a. The Law of Peoples. Cambridge, MA: Harvard University Press.
Rawls, John. 2001b. Justice as Fairness: A Restatement. Cambridge, MA: Harvard University Press.
Rawls, John. 2003. Political Liberalism. New York: Columbia University Press.
Richardson, H. 2002. Democratic Authority: Public Reasoning about the Ends of Policy. New York: Oxford University Press.
Ridley, Ann. 2007. Company Law. 2nd ed. Abingdon, UK: Hachette Livre UK.
Rosenblum, Nancy. 2008. On the Side of the Angels: An Appreciation of Parties and Partisanship. Princeton: Princeton University Press.
Rousseau, Jean-Jacques. 1968. The Social Contract. Translated by Cranston, Maurice. Harmondsworth: Penguin.
Sandel, Michael J. 2013. What Money Can’t Buy: The Moral Limits of Markets. New York: Farrar, Straus and Giroux.
Satz, Debra. 2010. Why Some Things Should Not Be for Sale: The Moral Limits of Markets. New York: Oxford University Press.
Singer, Abraham. 2015. “There Is No Rawlsian Theory of Corporate Governance.” Business Ethics Quarterly 25(1): 6996
Stone, Oliver, and Weiser, Stanley. 1987. Wall Street. Directed by Stone, Oliver. Los Angeles: Twentieth Century Fox Film Corporation.
Sunstein, Cass R. 2013. Simpler: The Future of Government. New York: Simon & Schuster.
Sunstein, Cass R. 2014. Valuing Life: Humanizing the Regulatory State. Chicago: University of Chicago Press.
Toenjes, Richard H. 2002. “Why Be Moral in Business? A Rawlsian Approach to Moral Motivation.” Business Ethics Quarterly 12(1): 5772.
Tomasi, John. 2012. Free Market Fairness. Princeton: Princeton University Press.
Whelan, Glen. 2012. “The Political Perspective on Corporate Social Responsibility: A Critical Agenda.” Business Ethics Quarterly 22(4): 709–37.

Keywords

Related content

Powered by UNSILO

Rawls on Markets and Corporate Governance

  • Wayne Norman (a1)

Metrics

Full text views

Total number of HTML views: 0
Total number of PDF views: 0 *
Loading metrics...

Abstract views

Total abstract views: 0 *
Loading metrics...

* Views captured on Cambridge Core between <date>. This data will be updated every 24 hours.

Usage data cannot currently be displayed.