Winner of the 1975 National Book Award, this brilliant and widely acclaimed book is a powerful philosophical challenge to the most widely held political and social positions of our age--liberal, socialist, and conservative.

Previous edition, 1st, published in 1971.

Fifty years ago, two Princeton professors established game theory as an important new branch of applied mathematics. Gametheory has become a celebrated discipline in its own right, and it now plays a prestigious role in many disciplines, including ethics,due in particular to the neo-Hobbesian thinking of David Gauthier and others. Now it is perched at the edge of business ethics. I believethat it is dangerous and demeaning. It makes us look the wrong way at business, reinforcing a destructive obsession with (...) measurableoutcomes and a false sense of competition. It falsely characterizes or insidiously advocates a style of human behavior that is utterlyunacceptable. To put the matter quite crudely, a person who actually practiced the form of "rationality" advocated by game theory wouldbe something of a monster. (shrink)

Critics attack normative ethical stakeholder theory for failing to recognize the special moral status of shareholders that justifiesthe fiduciary duties owed to them at law by managers. Stakeholder theorists reply that there is nothing morally significant about shareholders that can underwrite those fiduciary duties. I advance an argument that seeks to demonstrate both the special moral status of shareholders in a firm and the concomitant moral inadequacy of stakeholder theory. I argue that (i) if some relations morally requirefiduciary duties, and (...) (ii) the shareholder-manager relation possesses the features that make fiduciary duties morally necessary to thoserelations, then (iii) stakeholder theory is morally lacking. (shrink)

Applying evidence from recently available public information on Enron, I defined Enron’s culture as one rooted in agency theory by asserting that Enron’s members were predominantly agency-reasoning individuals. I then identified conditions present at Enron’s collapse: a strong agency culture with collectively non-compliant norms, a munificent rare-failure environment, and new hires with little business ethics training. Turning to four possible antidotes (selection, objectivist integrity, integrity capacity, and stewardship reasoning) to an agency culture under these conditions, I argued that the currently (...) available ethics literature would have made little difference toward averting Enron’s collapse if any of the recommendations from the relevant ethics literature had been implemented. I conclude by identifying new directions for business ethics literature in order to make it more implementable under the conditions identified at Enron. Essentially, we need a way to clearly determine (1) the difference between connivance and commitment, (2) what is meant by balance with regard to the multiple dimensions of ethics and legal theories, and (3) the proper balance between agency and stewardship reasoning. (shrink)

Habermas has argued that many of the endemic socio- economic problems of Western society are either symptoms or prod ucts of a 'lopsided' process of cultural rationalization, one that has emphasized instrumental forms of rationality over communicative. But other than presenting a rather general typology of lifeworld pathologies, Habermas has not done much to specify what these problems might be, nor has he provided any 'middle-range' analysis of the mechanisms through which they might be generated. This paper discusses some of (...) the ways in which, consistent with Haber mas's general framework, rational choice theory can be used for pre cisely this task. In this analysis, rational choice theory is not presented as a comprehensive theory of action, but is employed as a critical- diagnostic tool that allows the theorist to identify undesirable social interaction patterns that arise from a broader instrumentalization of the lifeworld. Key Words: critical theory • Habermas • instrumental rationality • market failure • rational choice theory. (shrink)

Much has been written about stakeholder analysis as a process by which to introduce ethical values into management decision-making. This paper takes a critical look at the assumptions behind this idea, in an effort to understand better the meaning of ethical management decisions.A distinction is made between stakeholder analysis and stakeholder synthesis. The two most natural kinds of stakeholder synthesis are then defined and discussed: strategic and multi-fiduciary. Paradoxically, the former appears to yield business without ethics and the latter appears (...) to yield ethics without business. The paper concludes by suggesting that a third approach to stakeholder thinking needs to be developed, one that avoids the paradox just mentioned and that clarifies for managers (and directors) the legitimate role of ethical considerations in decision-making. (shrink)

Is morality rational? In this book Gauthier argues that moral principles are principles of rational choice. He proposes a principle whereby choice is made on an agreed basis of cooperation, rather than according to what would give an individual the greatest expectation of value. He shows that such a principle not only ensures mutual benefit and fairness, thus satisfying the standards of morality, but also that each person may actually expect greater utility by adhering to morality, even though the choice (...) did not have that end primarily in view. In resolving what may appear to be a paradox, the author establishes morals on the firm foundation of reason. Gauthier's argument includes an account of value, linking it to preference and utility; a discussion of the curcumstances in which morality is unnecessary; and an application of morals by agreement to relations between peoples at different levels of development and different generations. Finally, he reflects on the assumptions about individuality and community made by his account of rationality and morality. (shrink)

The purpose of this paper is to enter the conversation about stakeholder theory with the goal of clarifying certain foundational issues. I want to show, along with Boatright, that there is no stakeholder paradox, and that the principle on which such a paradox is built, the Separation Thesis, is nicely self-serving to business and ethics academics. If we give up such a thesis we find there is no stakeholder theory but that stakeholder theory becomes a genre that is quite rich. (...) It becomes one of many ways to blend together the central concepts of business with those of ethics. Rather than take each concept of business singly or the whole of “business” together and hold it to the light of ethical standards, we can use the stakeholder concept to create more fine-grained analyses that combine business and ethics; or more simply, we can tell many more, and more interesting, stories about business. (shrink)

This essay articulates a crucial and neglected element of a general theory of the ethics of bureaucratic organizations, both private andpublic. The key to the approach developed here is the thesis that the distinctive ethical principles applicable to bureaucratic organizations are responses to the distinctive agency-risks that arise from the nature of bureaucratic organizations as complex webs of principal/agent relationships. It is argued that the most important and distinctive ethical principles for bureaucratic organizations express commitments on the part of bureaucrats (...) that function to reduce the agency risks that are inherent in such organizations. This approach to the ethics of bureaucratic organizations is shown to be more illuminating than those that concentrate exclusively or primarily on determining the conditions for corporate responsibility or on the idea that the ethical obligations distinctive of bureaucracies are role-derived. (shrink)

The traditional problem of the social contract defies solution. Agents with the motivations traditionally assumed would not in the circumstances traditionally assumed voluntarily arrive at a contract or voluntarily keep it up, as we can now understand, more clearly than our illustrious predecessors, by treating the problem in terms not available to them: the terms of Prisoner's Dilemma and of the theory of public goods.

This chapter contains sections titled: Financial markets Financial services Financial management.

This second edition of the ground-breaking Ethics in Finance is an up-to-date, valuable addition to the emerging field of finance ethics. Citing examples of the scandals that have shaken public confidence in Wall Street, John R. Boatright explains the importance of ethics in the operation of financial markets and institutions and in the conduct of finance professionals." "Focusing on standards of fairness in market transactions and the duties of fiduciaries and agents in financial relationships, the author introduces a broad range (...) of practical issues related to financial markets, the financial services industry, investment decision making, and corporate financial management. In addition to the topics considered in the first edition, including unethical sales practices, insider trading, the abuse of bankruptcy, and hostile takeovers, the second edition of Ethics in Finance has a broadened scope, incorporating new discussions of issues in mutual funds, conflict of interest, and the financial theory of the firm." "This timely and comprehensive book provides an analysis of ethical issues in finance, suitable for students of finance and business ethics as well as anyone involved in financial activities."--Jacket. (shrink)

The adversary professions--law, business, and government, among others--typically claim a moral permission to violate persons in ways that, if not for the professional role, would be morally wrong. Lawyers advance bad ends and deceive, business managers exploit and despoil, public officials enforce unjust laws, and doctors keep confidences that, if disclosed, would prevent harm. Ethics for Adversaries is a philosophical inquiry into arguments that are offered to defend seemingly wrongful actions performed by those who occupy what Montaigne called "necessary offices."Applbaum (...) begins by examining the career of Charles-Henri Sanson, who is appointed executioner of Paris by Louis XVI and serves the punitive needs of the ancien régime for decades. Come the French Revolution, the King's Executioner becomes the king's executioner, and he ministers with professional detachment to each defeated political faction throughout the Terror and its aftermath. By exploring one extraordinary role and the arguments that can be offered in its defense, Applbaum raises unsettling doubts about arguments in defense of less sanguinary professions and their practices.To justify harmful acts, adversaries appeal to arguments about the rules of the game, fair play, consent, the social construction of actions and actors, good outcomes in equilibrium, and the legitimate authority of institutions. Applbaum concludes that these arguments are weaker than supposed and do not morally justify much of the violation that professionals and public officials inflict. Institutions and the roles they create ordinarily cannot mint moral permissions to do what otherwise would be morally prohibited. (shrink)

A pragmatic approach to business ethics is argued for in this volume, which demonstrates the usefulness of the approach by applying it to a variety of issues. These issues are broad and far-reaching and include the relations between rational and moral//ethical decision-making, the limits of loyalty to employers, the impact of trust on business and the role of commercial public opinion polling during elections. The author also covers advertising, tobacco promotion, manufacture and marketing of armaments, concentration and taxation of wealth, (...) and the North American Free Trade Agreement. (shrink)

This book is a provocative contribution to contemporary ethical theory challenging foundational conceptions of character that date back to Aristotle. John Doris draws on behavioral science, especially social psychology, to argue that we misattribute the causes of behavior to personality traits and other fixed aspects of character rather than to the situational context. More often than not it is the situation not the nature of the personality that really counts. The author elaborates the philosophical consequences of this research for a (...) whole array of ethical theories and shows that, once rid of the misleading conception of motivation, moral psychology can support more robust ethical theories and more humane ethical practices. (shrink)

Recent investigations have uncovered large, consistent deviations from the predictions of the textbook representation of Homo economicus (Roth et al, 1992, Fehr and Gächter, 2000, Camerer 2001). One problem appears to lie in economists’ canonical assumption that individuals are entirely self-interested: in addition to their own material payoffs, many experimental subjects appear to care about fairness and reciprocity, are willing to change the distribution of material outcomes at personal cost, and reward those who act in a cooperative manner while punishing (...) those who do not even when these actions are costly to the individual. These deviations from what we will term the canonical model have important consequences for a wide range of economic phenomena, including the optimal design of institutions and contracts, the allocation of property rights, the conditions for successful collective action, the analysis of incomplete contracts, and the persistence of noncompetitive wage premia. Fundamental questions remain unanswered. Are the deviations from the canonical model evidence of universal patterns of behavior, or do the individual’s economic and social environments shape behavior? If the latter, which economic and social conditions are involved? Is reciprocal behavior better explained statistically by individuals’ attributes such as their sex, age, or relative wealth, or by the attributes of the group to which the individuals belong? Are there cultures that approximate the canonical account of self-regarding behavior? Existing research cannot answer such questions because virtually all subjects have been university students, and while there are cultural differences among student populations throughout the world, these differences are small compared to the range of all social and cultural environments. To address the above questions, we and our collaborators undertook a large cross-cultural study of behavior in ultimatum, public good, and dictator games.. (shrink)