Abstract
This article introduces the Normative Representativeness Requirement (NRR) on any moral objection to a decentralized, profit-oriented system of political economy. I develop and defend the NRR and then show why the most important recent critique of the profit system—which I call The Moderate Critique (developed by, for instance, Elizabeth Anderson)—fails to meet the NRR. This article also defends the radical claim that no objection to the profit system itself, rather than just key aspects or salient instances of it, succeeds in meeting the NRR. Critics of the profit system should not seek an alternative to the profit system, but, at most, an alternative within it.
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Notes
On the nature of profit, see Child (1998).
For a sophisticated critique that avoids such tendencies, see Satz (2010).
I also discuss the NRR in work in progress, applying it to radical critiques of market exchange in addition to moderate critiques of firm governance as discussed here.
As I say below, recognizing the epistemic need to lower one’s confidence in the value of reform is entirely consistent with maintaining rationally that reform ought to be carried out.
As will become clear, to say this is not to claim that reform is never justified.
Thanks to an anonymous reviewer for discussion on this point.
Largely, but not entirely—on which more later.
Moral objections to the firm are distinct from but related to economic objections. See Buchanan (1985).
Nor is it necessarily ethical. (I will often use “ethical” and “moral” interchangeably herein.).
Hasty generalization is also called the fallacy of “defective induction.”.
There is also a related issue. Even if the data generalize to the set of firms now, will they generalize months or years hence?
This model is popular in, for instance, France, Germany, and Sweden.
This model is popular in, for instance, Argentina, Canada, France, India, Israel, and Spain.
How and how far Anderson supports such replacement in the case small firms is not entirely clear. As noted later, her objection has to do with hierarchical power in for-profit firms.
On Anderson’s account relative to the many millions of firms, see Otteson (2019: 162–163).
On power relations between for-profit firms, citizens, and political leaders, see Brown (2019).
I have added the case names.
Anderson’s cumulative case that type-3 firms are dictatorial and abusive is further strengthened by the fact that employees are often disciplined or even fired for activity outside of the job: objectionable Facebook posts or Tweets, insulting the boss’s friend outside of work, and so on. Ibid., pp. 49–50.
Henceforth I sometimes use “abuse” as a general term to capture employee degradation, mistreatment, etc.
Anderson proposes to change the system of type-3 firms to a German codetermination model or some other (2017: 143). This is a proposal far more ambitious in scope than a proposal to strengthen anti-discrimination law and wrongful law, increase market competition, and enhance exit options. Her proposal is thus far more debatable than more modest proposals.
Firms are not markets themselves (as, e.g., they lack prices) but centralized, hierarchical structures—islands within markets—that take resources out of the market economy, transform them, and put them back in—hopefully, adding value to consumers and society broadly. See Coase (1937: 388) and Anderson (2017: 52, 50–55), criticizing the theory of the firm.
Many advocates of laissez faire capitalism or anarcho-capitalism will sympathize with Andersons’s worries, seeing the development of hierarchical firms as an imposition on liberty.
True, one might say of the argument that abuses could be far less common than Anderson lets on that the mere fact that firms could be abusive is enough to render a system of firms morally objectionable (or, if not objectionable, at least nonideal). Still, the fact that Anderson and others present empirical data (as in the cited worker reports and the cases of Diapers, Disciplinary Action, Sexual Harassment, and Sweatshop) implies that these critics recognize the evidential value of showing the prevalence of actual abuse in an argument condemning the type-3 system even on republican-domination grounds. This section accordingly examines what we in fact know about this claimed prevalence. If one buys my argument, one will need to conclude at least that Anderson’s and Sandel’s (discussed later) accounts are not nearly as epistemically able as many believe to morally diagnose the type-3 system.
See Huff (1954) for a classic articulation of how statistics can mislead.
Anderson (2017: 135) acknowledges the relatively paucity of germane aggregate statistics. But it is not clear that statistics can even account in principle for the kinds of context-specific information needed to identify certain abuses of workplace authority.
We can also fail due to ethical blind spots, for instance. See Bazerman and Tenbrunsel (2011).
This analysis, which focuses on spousal treatment in daily interactions, leaves aside most questions related to laws of coverture about property ownership and spouses’ relative capacities to execute contracts or file lawsuits. Through much of the nineteenth century, the law of coverture gave husbands in the U.S. legal power over their wives in the domains just mentioned, and abolition of this law was a moral success. This does not necessarily imply, however, that legal reforms that would abolish bosses’ power over employees should be similarly eliminated. Among other reasons, there is a disanalogy regarding freedom of exit. Exit is arguably far more feasible and thus morally valuable for employees today than it was for wives under the law of coverture and is for most spouses today (on exit options, see §6). Exiting a marriage is at least very often far more personally costly all-things-considered than leaving one job for another. Thanks to an anonymous reviewer for pressing me to clarify this point.
Survey respondents also face pervasive ordinary cognitive limitations that can threaten the reliability of statistical findings. See Kahneman (2011).
I do not mean to suggest that no amount of statistical evidence could be deployed to satisfy the NRR. This depends on how much relevant information (e.g., local knowledge) the statistics leave out.
Of course, there can also be irrationally nonfearful employees. If we account for this by bumping up (or even doubling) the subsequent numbers, the conclusion remains the same.
Likewise for large technology firms, even those that (in part) include morally concerning practices. For example, the Big 5 technology firms—Apple, Alphabet, Amazon, Facebook, and Microsoft (whose joint market capitalization is a whopping 7.5 trillion dollars)—have been accused of moral improprieties. However, it is often difficult to know whether these affect a small part of an enormous firm or pervade it. Wall Street Journal (2021a, 2021b).
The cited source (see Anderson 2017, p. 179) is an online news story: “The Ugly Walmart Truth: Some Managers Treat Workers Like Dirt.”.
This may be possible to empirically confirm. The United States is, after all, a complexly evolved-and-evolving society of roughly 330 million people intricately interlinked by countless formal and informal organizations and patterns of associations.
Of course, pursuing this option can prove tricky in practice, unless the employee can indicate an alternative justification for the transfer request.
For example, naming and shaming on social media have real impacts on managerial decision-making (see Radzik 2020 on naming and shaming (chap. 3) and boycotting (chap. 1-3)).
Of course, in a world of complex and diverse firms, it could go the other way. Work environments that appear pleasant and respectful from customers’ perspectives might actually be oppressive and dictatorial.
Statistical analyses can be insensitive to distinctions between such a firm and a firm with no history of either strikes or similar informal checks on bosses’ power. On informal rules and norms in social institutions, see Ostrom (2005).
Anderson (2017) points out that, for instance, workers may be ineligible for unemployment insurance in voluntary-quit scenarios. Some such workers can request or provoke termination if it would increase their prospects of eligibility, a benefit to weigh against potentially worse prospects for future employment were one terminated.
For a challenge to the idea of “revealed preference,” see Hausman (2000).
In some such cases, alas, workers might have “adaptive preferences” that undermine their flourishing. See Nussbaum (2001).
As Anderson (2017) reports workers do.
Enormous multinational corporations such as Accenture, Amazon, Volkswagen, and Walmart can have thousands of stores and hundreds of thousands or (for Walmart, as noted) even millions of employees. Perhaps a successful moral criticism of such large and diverse firms may need to have a narrower target than the firm itself, such as a division of the firm, aspect of its operations, or element of its corporate culture.
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Acknowledgements
I wish to thank audiences at the McDonough School of Business at Georgetown University (2022), the Society for Business Ethics (2021), The Association of Private Enterprise Education (2022), and The Philosophy, Politics, and Economics Society (2022). For helpful comments and discussion, I am grateful to Jacob Barrett, Jason Byas, Sam Director, Mario Juarez-Garcia, Connor Kianpour, James R. Otteson, Karina Robson, and Alex Tuckness.
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Robson, G.J. How to Object to the Profit System (and How Not To). J Bus Ethics 188, 205–219 (2023). https://doi.org/10.1007/s10551-022-05317-5
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DOI: https://doi.org/10.1007/s10551-022-05317-5