How (Not) to Connect Ethics and Economics: Epistemological and Metaethical Problems for the Perfectly Competitive Market

Research output: Chapter in Book/Report/Conference proceedingChapterAcademicpeer-review

Abstract

This paper addresses Joseph Heath’s attempt to derive moral obligations from the conditions that are specified by the model of the perfectly competitive market. Through his market failures approach to business ethics he argues that firms should behave as if they are operating in a perfectly competitive market. However, I argue that this derivation of moral obligations runs counter to the metaethical principle that moral actions need to be voluntarily chosen from a set of alternatives. To the extent that Milton Friedman’s derivation follows the same lines, my objection is also applicable to his approach to business ethics. I bring out the fact that the conditions required by the model of the perfectly competitive market cannot be realized in the actual world and argue that this causes problems for any moral obligations that might follow. My objection is illustrated by an intuitive example of someone set to an impossible task. I also bring in a way that Heath could work around this objection, but I argue that this would imply the collapse of his approach into another kind of theory that he wishes to distinguish himself from. More deeply, I show that my metaethical objection has epistemological consequences that undermine the very basis of the model of the perfectly competitive market. I conclude by stating that we need a different conception of competition, pointing to the facts that such a perspective would need to take into account, and suggesting that the concept of rivalry is up to the job.
Original languageEnglish
Title of host publicationWords, Objects and Events in Economics
Subtitle of host publicationThe Making of Economic Theory
EditorsPeter Róna, László Zsolnai, Agnieszka Wincewicz-Price
Place of PublicationCham
PublisherSpringer
Chapter6
Pages91-101
Number of pages11
Volume6
ISBN (Electronic)978-3-030-52673-3
ISBN (Print)978-3-030-52672-6
DOIs
Publication statusPublished - 2021
Externally publishedYes

Publication series

NameVirtues and Economics
Volume6
ISSN (Print)2520-1794
ISSN (Electronic)2520-1808

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