On the Origin, Content, and Relevance of the Market Failures Approach
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.
KeywordsEfficiency Heath Ideal theory Market failures McMahon
Versions of this paper were presented at Northeastern University, Queen’s University, TU Dortmund University, and the University of Pennsylvania. I thank those audiences for instructive feedback. Thanks also to Julian Jonker, Santiago Mejia, Christopher McMahon, Alan Strudler, and an anonymous reviewer for this journal for perceptive comments on a draft of this paper.
Compliance with Ethical Standards
Conflict of interest
The author declares that he has no conflict of interest.
Research Involving Human and Animal Rights
This article does not contain any studies with human participants or animals performed by any of the authors.
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