Robert B. Couch

Economy suspended: the possibilities of a Badiouian business ethics

In the philosophy of Alain Badiou, ethics can only arise in relation to an evental truth procedure that breaks from the economic logic of a situation. Further, because for Badiou there cannot be economic truths per se – rather, economic matters must be understood in their relation to one or more truths in the domain of love, art, science or politics – a Badiouian business ethics would look entirely distinct from any ethics that simply places limits on certain kinds of economic activity. Although Slavoj Žižek, among others, has suggested that this marks an essential weakness in Badious economic/political theory, it may actually be the greatest strength of his position. Within a capitalist system, a Badiouian business ethics would then be a question of mobilizing economic resources in order to serve the ongoing construction of a truth procedure. For a business to be considered ethical on Badious terms, it must break – and continue to break – from the dominant logic of capitalism and its merely economic pursuit of profit maximization.

Data: an ethical overview

ABSTRACT This introduction reviews the intersection of data, ethics, and the Russian case. Its four sections, respectively, raise the ethical stakes concerning the contemporary data, outline a proverbial step toward a more humane ethics of data by normalizing certain features (such as anthropomorphic care) in the human–data relationship, reviews the leading scholarly literature on data, institutions, and social structures in specific, and summarizes the diverse contributions to this special journal issue. Each step is meant to broaden, ground, and sober the study of data in the modern moment. Taken together, the aim of this introduction, like the special issue it introduces, is to press the cutting edge of more open, humane, and critical research on data and the twenty-first century Russian case.

A Payback Approach to Generational Inequity

The payback approach to capital budgeting is proposed as a clear and intuitive way to think about fiscal policy and the normative problem of generational equity. Payback has been an enduring tool of corporate capital budgeting decisions and the home mortgage industry. As a clear and resonant conceptual tool, payback measures thus have the potential to mobilize political will for overcoming difficult fiscal policy problems, when they arise. Numerical examples calibrated to U.S. federal budget history illustrate how payback measures can be used in practice.

Education Reform and Cross-Sectoral Financing: A Practice-Based Approach

Recently, the for-profit sector has dramatically increased its market share in the education market. Although many students who otherwise would not have received an education have benefited from this trend, there are worrisome aspects to this development. Evidences suggests for-profit education frequently fails to serve the best interest of its students. Also, for-profit education fuels the focus of public discourse on only the short- and medium-term economic benefits of education, at the expense of longer term benefits to society. One reason the long-term benefits of education tend to be ignored is because they are hard to measure. Short-term economic value is easy to quantify, and it is a value about which there is broad-based consensus among key decision makers. Public value, in contrast, is harder to measure and harder to agree on. Most theoretical frameworks tend to reinforce this shortcoming by assuming, for example, that individual, utility-maximizing agents have pre-given preferences in a relatively static institutional environment. We challenge these assumptions by focusing on a meso-level conception of practices that mediates the relationship between dynamically conceived entities — namely, macro-level institutions and micro-level individuals. Inspired particularly by Alasdair MacIntyre, we present a theory of practices built from the ground up on managerial decision-making practices. In doing so, we uncover the practical mechanisms by which myopic economic values crowd out public values. Legal structures reinforce a strict boundary between for-profit and nonprofit institutions, effectively reinforcing the weaknesses of each: for-profit institutions have good access to financing, but drive out public values; nonprofit institutions foster public values, but fail to find sufficient financing. Legal reform can address these problems by encouraging collaborative financing efforts in a way that is sensitive to the strengths and weaknesses of each sector. Low-profit limited liability companies (L3Cs), for example, offer a way for nonprofit stakeholders and for-profit investors to collaborate, but there are dangers in bringing these different sectors together. Cross-sectoral legal reform must therefore prevent economic interests from co-opting other, public-values-based practices. This could be done, for example, by placing limits on the payouts or take-over provisions of for-profit investors can receive. This would prevent economic, profit-maximizing incentives from dominating the culture of mission-driven institutions, while still allowing mission-driven stakeholders to access financing in ways that are currently not possible.

Private Investment and Public Equity Returns

Because of external financing costs, private business owners often need to self-finance new investment projects. These self-financing needs create an incentive for business owners to hold financial assets whose payoffs are positively correlated with self-financing needs. If this effect is aggregated, expected returns on financial assets should be negatively correlated with aggregate private investment self-financing needs. To test the cross-sectional asset pricing implications of this conjecture, we use realized noncorporate investment growth and future forecasted noncorporate investment growth as proxies for self-financing needs. We find that our private investment model can explain a good share of the cross-sectional returns of size-, value- and distress-sorted equity portfolios, almost as well as the Fama–French factors. In contrast to the Fama–French model, however, we find the signs on our estimated coefficients to be consistent with our theoretical predictions.