Joseph Heath

A Market Failures Approach to Business Ethics

“Business ethics” is widely regarded as an oxymoron. The only way to be a good soldier in an unjust war is to disobey orders, or maybe even to desert. Many people believe, along similar lines, that the only way to maintain one’s ethical integrity in business is not to go into business. The reasons for this are not hard to find. Students are still routinely taught in their introductory economics classes that in a market economy, when engaged in market transactions, individuals act out of self-interest — whether it be by maximizing profits as producers, or by maximizing satisfaction as consumers. This sets up an almost indissoluble link in people’s minds between “profit-maximization” and “self-interest.” As a result, anyone who thinks that the goal of business is to maximize profits will also tend to think that business is all about self-interest. And since morality is widely regarded as a type of constraint on the pursuit of individual self-interest, it seems to follow quite naturally that business is fundamentally amoral, if not immoral.

Rawls on Global Distributive Justice: A Defence

Critical response to John Rawlss The Law of Peoples has been surprisingly harsh) Most of the complaints centre on Rawlss claim that there are no obligations of distributive justice among nations. Many of Rawlss critics evidently had been hoping for a global application of the difference principle, so that wealthier nations would be bound to assign lexical priority to the development of the poorest nations, or perhaps the primary goods endowment of the poorest citizens of any nation. Their subsequent disappointment reveals that, while the reception of Rawlss political philosophy has been very broad, it has not been especially deep. Rawls has very good reason for denying that there are obligations of distributive justice in an international context. A global application of the difference principle would have been in tension with a number of very central features of his political philosophy. There is a sense in which Rawlss claims about distributive justice, in The Law of Peoples, are under-argued. But this is primarily because they follow almost immediately from more fundamental commitments that he has adopted over the years: the idea of the basic structure as subject, the requirement that conceptions of justice be freestanding,

The robustness of altruism as an evolutionary strategy

Kin selection, reciprocity and group selection are widely regarded as evolutionary mechanisms capable of sustaining altruism among humans andother cooperative species. Our research indicates, however, that these mechanisms are only particular examples of a broader set of evolutionary possibilities.In this paper we present the results of a series of simple replicator simulations, run on variations of the 2–player prisoners dilemma, designed to illustrate the wide range of scenarios under which altruism proves to be robust under evolutionary pressures. The set of mechanisms we explore is divided into four categories:correlation, group selection, imitation, and punishment. We argue that correlation is the core phenomenon at work in all four categories.

Dworkin’s auction

Ronald Dworkin’s argument for resource egalitarianism has as its centerpiece a thought experiment involving a group of shipwreck survivors washed ashore on an uninhabited island, who decide to divide up all of the resources on the island equally using a competitive auction. Unfortunately, Dworkin misunderstands how the auction mechanism works, and so misinterprets its significance for egalitarian political philosophy. First, he makes it seem as though there is a conceptual connection between the ‘envy-freeness’ standard and the auction, when in fact there is none. Second, he fails to appreciate how idealized the conditions are that must be satisfied in order for his results to obtain. This leads him to draw practical conclusions from the thought experiment that do not follow, such as his claim that the principle of equality generates a presumption in favor of the market as a mechanism for the distribution of resources. The result is that Dworkin saddles resource egalitarianism with a set of commitments that are, in fact, inessential to that view.

Liberalization, modernization, westernization

This paper distinguishes three distinct processes of change that a system of values can undergo: modernization, liberalization and westernization. Modernization refers to the changes needed to establish compatibility with science and technology, along with the functional demands of a capitalist economy. Liberalization refers to the changes needed to bring values into alignment with the requirements of a bureaucratic nation-state, along with the specific institutional strategies used to manage cultural pluralism. In a slight regimentation of everyday use, the term ‘westernization’ is then reserved to describe the sort of influences generated through cultural contact with and emulation of the West. The goal of drawing this distinction is to show: first, that westernization, so understood, is a negligible force in the world today, and second, that despite the unimportance of westernization, we can still expect to see enormous convergence among the value-systems of different nations, due to the pressures imposed by modernization and liberalization.

Immigration, Multiculturalism, and the Social Contract

Since the failure of the Meech Lake constitutional reforms and the crisis of national unity prompted by the most recent Quebec referendum, the Canadian Multiculturalism Act has been subjected to particularly intense and hostile scrutiny. While some of the criticism of this policy reflects merely parochial adherence to particular cultural or religious traditions, some of it has raised more significant doubts about the internal coherence, efficacy, and overall desirability of the policy. Most importantly, the multiculturalism policy is faulted for attempting to pursue two simultaneously unachievable goals, viz., to integrate ethnic minority groups into the dominant institutions of the society, while at the same time to protect them against various pressures to assimilate to the dominant culture. Critics have pointed out that social institutions and cultural values are interdependent. Not only do cultural value systems provide the central legitimations for social institutions, but the internalization of these values through socialization processes provides agents with their primary motivation for conforming to institutional expectations. This means that integrating an agent into a system of institutions can only be achieved by assimilating the agent to its underlying cultural system.

Reasonable Restrictions on Underwriting

Few issues in business ethics are as polarizing as the practice of risk classification and underwriting in the insurance industry. Theorists who approach the issue from a background in economics often start from the assumption that policy-holders should be charged a rate that reflects the expected loss that they bring to the insurance scheme. Yet theorists who approach the question from a background in philosophy or civil rights law often begin with a presumption against so-called “actuarially fair” premiums and in favor of “community rating,” in which everyone is charged the same price. This paper begins by examining and rejecting the three primary arguments that have been given to show that actuarially fair premiums are unjust. It then considers the two primary arguments that have been offered by those who wish to defend the practice of risk classification. These arguments overshoot their target, by requiring a “freedom to underwrite” that is much greater than the level of freedom enjoyed in most other commercial transactions. The paper concludes by presenting a defense of a more limited right to underwrite, one that grants the legitimacy of the central principle of risk classification, but permits specific deviations from that ideal when other important social goods are at stake.

Ideology, Irrationality and Collectively Self-defeating Behavior

One of the most persistent legacies of Karl Marx and the Young Hegelians has been the centrality of the concept of “ideology” in contemporary social criticism. The concept was introduced in order to account for a very specific phenomenon, viz. the fact that individuals often participate in maintaining and reproducing institutions under which they are oppressed or exploited. In the extreme, these individuals may even actively resist the efforts of anyone who tries to change these institutions on their behalf. Clearly, some explanation needs to be given of how individuals could systematically fail to see where their interests lie, or how they might fail to pursue these interests once these have been made clear to them. This need is often felt with some urgency, since failure to provide such an explanation usually counts as prima facie evidence against the claim that these individuals are genuinely oppressed or exploited in the first place. There is of course no question that this kind of phenomenon requires a special sort of explanation. Unfortunately, Feuerbach, Marx, and their followers took the fateful turn of attempting to explain these “ideological” effects as a consequence of irrationality on the part of those under their sway.1 While there are no doubt instances where practices are reproduced without good reason, the ascription of irrationality to agents is an explanatory device whose use carries with it significant costs, both theoretical and practical. In this paper, I will argue that many of the phenomena traditionally grouped together under the category of “ideological effects” can be explained without relinquishing the rationality postulate. Using the example of a collective action problem, I will try to show how agents can rationally engage in patterns of action that are ultimately contrary to their interests, and how they can rationally resist changing these patterns even when the deleterious or self-defeating character of their actions has been pointed out to them. I think that an approach such as this, one that is sparing in its ascription of irrationality and error, has two principal advantages. First, it allows one to engage in social criticism while minimizing the tendency to insult the intelligence of the people on whose behalf the critical intervention has been initiated. This may reduce the tendency exhibited by some members of these groups to reassert their autonomy precisely by rejecting the critical theory that impugns their rationality. The second major advantage is also practical. The vast majority of oppressive practices, I will argue, are not reproduced because people have false or irrational

Culture: Choice or Circumstance?

In this paper, I would like to discuss two recent attempts to incorporate groupdifferentiated rights and entitlements into a broadly liberal conception of distributive justice. The first is John Roemer’s “pragmatic theory of responsibility,” and the second is Will Kymlicka’s defense of minority rights in “multinational” states. Both arguments try to show that egalitarianism, far from requiring a “color-blind” system of institutions and laws that is insensitive to ethnic, linguistic or subcultural differences, may in fact mandate special types of rights, entitlements, or compensatory arrangements for members of minority groups. These proposals are attractive because they attempt to ground these special rights without reference to controversial philosophical doctrines, but merely through appeal to the widely accepted political norm of equality. Furthermore, if either of these arguments were to succeed, it would allow liberals to avoid many of the difficulties that have often led proponents of “the politics of difference” or the “politics of recognition” to adopt an oppositional stance toward more traditional forms of liberalism. Both Roemer and Kymlicka take as their point of departure Ronald Dworkin’s resource egalitarianism (which does not recognize group-differentiated entitlements). They both attempt to extend Dworkin’s mechanism for compensating those disadvantaged through circumstances beyond their control, in such a way as to license special transfers and entitlements for minority cultures. They disagree, however, on how this should be done. Roemer argues that the preference pattern induced through membership in a minority culture may prove disadvantageous, and so form the basis of a legitimate claim for compensation. Kymlicka takes a slightly narrower view. He claims that agents should be held responsible for their own preference pattern, but they cannot be held responsible for how many others share the same pattern. In cases where having a certain culturally induced preference pattern results in disadvantage by virtue of the fact that it is not widely shared, agents have a legitimate claim to compensation. Both of these proposals have problems – cases where they appear to conflict with our intuitions about justice and desert. I would like to show, using some examples of this type, that when these systems of group-differentiated entitlements appear plausible, it is because we have some respect for the value system underlying the problematic preference pattern. This suggests that the attempt to avoid directly evaluating the preferences that leave members of minority cultures systematically disadvantaged in the larger society is unlikely to succeed. I will

Attributing Weather Extremes to Climate Change and the Future of Adaptation Policy

Abstract Until recently, climate scientists were unable to link the occurrence of extreme weather events to anthropogenic climate change. In recent years, however, climate science has made considerable advancements, making it possible to assess the influence of anthropogenic climate change on single weather events. Using a new technique called ‘probabilistic event attribution’, scientists are able to assess whether anthropogenic climate change has changed the likelihood of the occurrence of a recorded extreme weather event (e.g. an extreme storm season, extreme rainfall, heatwave, drought, etc.). These advancements raise the expectation that this branch of climate science can contribute to climate adaptation efforts. This paper examines the normative underpinnings of these policy discussions. To date, the debates revolve around whether the findings of attribution science can be used to establish moral liability for harms resulting from climate change. On close analysis, this normative framework has serious shortcomings. The paper rejects the moral liability framework and suggests, through a review of the international climate negotiations under the UNFCCC, that the science of event attribution can inform adaptation policy within a risk-pooling and climate risk insurance framework. The proposed framework is defended both on normative grounds and on the basis of its potential application within the Warsaw International Mechanism for Loss and Damage under the Cancun Adaptation Framework.