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

• 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.

Subject headings

HUMANIORA  -- Filosofi, etik och religion (hsv//swe)

HUMANITIES  -- Philosophy, Ethics and Religion (hsv//eng)

HUMANIORA  -- Filosofi, etik och religion -- Filosofi (hsv//swe)

HUMANITIES  -- Philosophy, Ethics and Religion -- Philosophy (hsv//eng)

HUMANIORA  -- Filosofi, etik och religion -- Etik (hsv//swe)

HUMANITIES  -- Philosophy, Ethics and Religion -- Ethics (hsv//eng)

Keyword

Joseph Heath

Market Failures Approach

Pareto Efficiency

Market Harm

Publication and Content Type

ref (subject category)

art (subject category)