What’s the Point of Efficiency? On Heath’s Market Failures Approach

Business Ethics Quarterly 32 (4):1-25 (forthcoming)
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This article reviews and criticizes Joseph Heath’s market failures approach (MFA) to business ethics. Our criticism is organized into three sections. First, we argue that, even under the ideal assumptions of perfect competition, when markets generate Pareto-efficient distributions, Heath’s approach does not rule out significant harms. Second, we show that, under nonideal conditions, the MFA is either too demanding, if efficiency is to be attained, or not sufficiently demanding, if the goal of Pareto efficiency is abandoned. Finally, we argue that Heath’s appeal to regulations and specific moral requirements as a remedy for market failures is unlikely to safeguard efficiency and exposes a number of general worries regarding the moral force of the MFA. We end this article with a constructive suggestion on how to adjust the MFA to avoid these problems while preserving its contractualist and Paretian spirit.

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Author Profiles

Richard Endörfer
University of Gothenburg
Louis Larue
University of Gothenburg

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References found in this work

What We Owe to Each Other.Thomas Scanlon - 1998 - Belknap Press of Harvard University Press.
Morals by Agreement.David P. Gauthier - 1986 - Oxford University Press.
Morals by Agreement.David Copp - 1986 - Philosophical Review 98 (3):411-414.

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