Public Capitalism

Public Capitalism: The Political Authority of Corporate Executives

Christopher McMahon
Copyright Date: 2013
Pages: 208
https://www.jstor.org/stable/j.ctt3fhnw5
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  • Book Info
    Public Capitalism
    Book Description:

    In modern capitalist societies, the executives of large, profit-seeking corporations have the power to shape the collective life of the communities, local and global, in which they operate. Corporate executives issue directives to employees, who are normally prepared to comply with them, and impose penalties such as termination on those who fail to comply. The decisions made by corporate executives also affect people outside the corporation: investors, customers, suppliers, the general public. What can justify authority with such a broad reach? Political philosopher Christopher McMahon argues that the social authority of corporate executives is best understood as a form of political authority. Although corporations are privately owned, they must be managed in a way that promotes the public good. Public Capitalism begins with this claim and explores its implications for issues including corporate property rights, the moral status of corporations, the permissibility of layoffs and plant closings, and the legislative role played by corporate executives. Corporate executives acquire the status of public officials of a certain kind, who can be asked to work toward social goods in addition to prosperity. Public Capitalism sketches a new framework for discussion of the moral and political issues faced by corporate executives.

    eISBN: 978-0-8122-0726-2
    Subjects: Business

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
  3. INTRODUCTION
    (pp. 1-8)

    IN A MODERN capitalist society, the senior executives of large, profit-seeking corporations play an important role in shaping the collective life of the society as a whole. In this respect, they exercise social authority. Where we find social authority, we face the question of what establishes its legitimacy. This book argues that the authority exercised by corporate executives can be legitimate only if it constitutes a form of political authority. I call the species of capitalism that results public capitalism.

    Under public capitalism, senior corporate executives, in which group I include the members of boards of directors, possess the status...

  4. 1 THE PUBLIC AND THE PRIVATE
    (pp. 9-31)

    THE IDEA THAT the managers of the major productive enterprises operating within a society should be understood as exercising a kind of political authority seems at first sight to require socialism. In socialist systems, most productive enterprises are owned by the state and their managers are functionaries of the state. Historically, the main attempts to establish socialist systems have involved the replacement of the market, as the social device that determines what will be produced, by a central plan. But market socialism, in which publicly owned enterprises produce for the market, is also a possibility. Market socialism seeks to preserve...

  5. 2 LEGITIMACY: THE PRIVATE MODEL
    (pp. 32-68)

    I HAVE SPOKEN of the exercise of subordinating authority by people acting on behalf of a collective agent. But authority relations can take another form, one unconnected to collective agency. Individuals functioning in a private capacity can enter into relations in which one party undertakes to comply with the directives of another. Certain kinds of employment usually involve such private authority relations—for example, the employment by a homeowner of a housekeeper, gardener, or handyman. The exercise of authority in such contexts, the deference by the employee to the directives of the employer, is a private matter located within the...

  6. 3 LEGITIMACY: THE PUBLIC MODEL
    (pp. 69-110)

    IN THE PREVIOUS chapter, we explored the possibility of grounding managerial authority in a requirement of private morality. We supposed that in accepting employment, employees implicitly promise to comply with managerial directives in return for pay, or incur some equivalent obligation. I suggested that we understand in this way the idea that managerial authority is grounded in the consent of the employees, and I argued that it is doubtful that consent, so understood, can actually do what is required.

    Some political theorists have sought to base the authority of states and governments on consent. It is often said that the...

  7. 4 MORALITY AND THE INVISIBLE HAND
    (pp. 111-134)

    IF THE AUTHORITY possessed by the senior executives of large, profit-seeking corporations is to be legitimate, it must constitute a subordinate form of cooperation-facilitating authority in a larger structure of such authority under ultimate governmental control. In the Introduction, however, I mentioned another respect in which corporate executives perform a public function. Ordinary business practice in a capitalist system can involve treating people in ways that violate requirements of private morality. In general, such actions are permissible only when the people performing them have been licensed to do this by the larger society. The moral phenomena explored in this short...

  8. 5 PUBLIC MANAGEMENT
    (pp. 135-168)

    WHAT ARE THE implications for managerial decision making of the idea that corporate executives should be understood as exercising a subordinate form of political authority in a larger structure under ultimate governmental control? What are the implications for the way executives should approach the moral problems they face? The principal implication is that corporate executives should approach these problems in a way that reflects their status as partners in a collaborative effort with government to promote the public good. If it were appropriate to understand capitalist economic activity as morally private, corporate executives could adopt a posture of guarding the...

  9. NOTES
    (pp. 169-192)
  10. WORKS CITED
    (pp. 193-198)
  11. INDEX
    (pp. 199-204)
  12. ACKNOWLEDGMENTS
    (pp. 205-206)