For four decades, there was a near-universal consensus that consumer welfare was the sole and appropriate purpose of antitrust law. That consensus is breaking apart. For the first time in two generations, a growing group of scholars and policymakers is challenging that orthodoxy. They reject the consumer welfare consensus, and argue that antimonopoly policy should and can have much broader social goals, and serve democratic ends, not merely efficiency ones.
This group is unified by its shared protest, but lacks a shared positive platform. It does not itself have a consensus on what goals should replace the monotheistic approach of the last generation of thinkers. It is, rather, a collection of people with a shared rejection of consumer welfare. This means that one of the most interesting and important theoretical challenges for antitrust is fleshing out the goals.
In this Paper, I argue that one of the goals of antitrust laws should be the cultivation of freedom, and the impact on us as citizens. Society can be structured in a way to support civic, imaginative, public-facing individuals, with developed moral faculties: antitrust policy, along with education policy, public support for libraries and arts, and election law, one of the key mechanisms for creating those supports.
This view is recurrent throughout history, but has been neglected and rejected in the last few generations. Both modern liberals and modern republican theorists have given short shrift to the moral and civic development that is made possible by a more decentralized market. This dismissiveness marks a sharp break from the past. Liberal, republican, and libertarian scholars assumed the essential role of the decentralized power; small and medium-sized businesses, trade associations, private-sector unions. To be fair, republican theory was historically split between those like Rousseau (who disdained markets as a necessary evil) and those like Adam Smith (who saw them as integral to moral life). It has now shifted to a tendency to treat commercial activity, however structured, as amoral at best. Instead of investigating market structure as a possible mode of enabling freedom, modern republicans like Sandel tend to treat markets like a tolerable infectious disease that should be contained. The more modern corporate social responsibility scholarship, where one might expect to see some exploration of these topics, is dominated by Panglossians who believe that moral choices have essentially no economic cost, and is in a state of confusion regarding the status of freedom in business ethics.
I argue that one of the purposes of antitrust law should be the distribution of moral space throughout the economic community. This moral space creates the possibility for moral action, for more moral discussion and debate, for more social community in which moral questions are debated, and for character development of individuals and civic development of the culture. Highly concentrated moral space, held only by a few managers and directors in large multinational companies, is less likely to be exercised freely in pursuit of the public good than more distributed moral space. In short, there is a complex, dynamic interaction between the distribution of economic discretion and the collective moral experience of a society.
In Middlemarch,[1] one of the better treatises on the relationship between morality and markets, the young, enthusiastic Doctor Tertius Lydgate moves to a small town in order to practice medicine. He has a broad moral imagination, discourses openly on the problems of corruption in medicine, and is outspoken in his criticism of Bulstrode, a wealthy, cold-hearted banker with a secret past. But after Lydgate marries and his new family situation creates financial requirements, he feels forced to beg for favors from Bulstrode. Soon after, Bulstrode cruelly withholds treatment from a dying enemy, an act that arguably constitutes manslaughter. Lydgate does less than he could to address Bulstrode, as he is tied to Bulstrode by financial dependency.
Throughout the novel, we watch the slow shrinking of the moral space that Lydgate operates in. He begins as someone with broad moral capacity, who thinks and explores moral questions, who aspires to goodness on a regular basis. He gradually becomes someone whose moral ambitions are far broader than his capacity to act on them. Because of this, his ambitions themselves are gradually replaced—he dwindles and changes, and becomes bitter and small, instead of the man he could have been.
Middlemarch is, among other things, a brilliant, insightful exploration into how the structure of a market, and dependency, can shape our moral lives. The reality Lydgate confronts is not that Bulstrode has money and he has none, a simple class conflict, but that Bulstrode is the only one in town with money to lend. Lydgate cannot even choose which wealthy man to be dependent on—he must choose Bulstrode. Because of this limitation, he not only changes his actions, he changes the scope of his interior life—which in turn changes his actions, and so on. There is a self-reinforcing cycle that tends towards solipsism and attendant unhappiness.
What does this have to do with antitrust? A lot, it turns out. If dependency on Bulstrode changes Lydgate as a citizen, and suppresses the potential engaged spirit, then extreme dependency of the kind that develops in monopolized societies will also be suppressing the human spirit on a grand scale.
In the early history of the debates surrounding different forms of industrialization and capitalism, the relationship between freedom, morality, and markets was central to political theory discussions, and public debate.[2] Many people understand that one of the roles of law was the cultivation and protection of a vibrant, morally engaged citizenry. Today, while we are in the middle of an intellectual upheaval and questioning about the nature of economic markets and their relationship to politics, it seems worthwhile to visit our current assumptions about the role of law—in particular economic law—and the cultivation of virtues, and to revisit the question of how market structures shape private conversations and public morality. Different market structures necessarily create different configurations of the possibilities of moral action—essentially, different configurations of freedom. Should we, in our policies, support the distribution of freedom to make choices, and in particular moral choices, in markets as an independent value?
I argue yes; that our economic policy broadly, and market structure policy specifically, should take into account the distribution of nodes of freedom. Unlike some easily quantifiable measurements, decentralized freedom isn’t easy to measure, and will always be a matter of degree. However, the scope of freedom can be quite different depending on the nature and different antimonopoly policies. Antimonopoly laws can shape the number of people who have some discretion and power over all aspects of production, service, and finance. Antimonopoly policies can enhance the importance of small and medium businesses, and therefore can reshape the character of rural areas, the funders of civic activities, the potential places for moral conversations to occur, and the relationship of workers to their unions and of workers to their employers.[3]
There are some areas of law where the interaction between law, culture, and the cultivation of civic habits play a central and unquestioned role. In the law of politics (sometimes called the law of democracy, or election law), the way in which structures impact citizens as people is at the core of decades of debate and evaluation.[4] Polls, referenda, district shapes, gerrymandering, campaign contributions—all of these structures are scrutinized for how they might impact who we are as citizens, and how they give life to, or take life away from, the democratic spirit.[5] For instance, the knowledge that big donors can have an outsize impact in an election leads to the appearance of corruption, and so people rightly ask whether that belief in corruption therefore discourages engagement. That question has been center stage in forty years of debate about how to fund campaigns. I would argue for a similar centrality when we talk about antimonopoly and its interaction with humans: does concentration of private power lead to fear, for instance? If it does, how does that fear in turn directly implicate the integrity of our politics? Does the inability to leave a job shape one’s empowerment in local elections?
We are in the middle of a fascinating reevaluation of antitrust law and antimonopoly policies. This conversation includes both technical and purposive debates. There is a major reevaluation of the consumer welfare standard as the appropriate tool for interpreting existing antitrust laws and proposals for new laws.[6] This leads to very live questions about what the purposes of antitrust law should and could properly be.[7]
This Paper begins by discussing the purposes of antitrust and explores how we might think about how the structure of an economy impacts the freedom and moral life of its citizens as constituent elements. In so doing, it tries to bridge the gap between political and academic paradigms. In the collective public imagination, independent businesses have long been the center of moral action in the American narrative. They are sometimes accorded a kind of hero status, and might be second only to veterans in the degree to which they are publicly adored (like veterans, this public adoration does not translate into support). Politicians regularly hold up entrepreneurs as essential drivers to a thriving economy, but also as essential leaders of a thriving society. This can feel like pandering, and is clearly not universally true: there are plenty of narrowminded shopkeeper/producers. But that doesn’t mean there aren’t grains of truth, and when business structures are radically concentrated—as they are today—small business owners simply don’t exist, or they end up effectively working for big corporations, subject to their whims. Something significant is lost in civic life and the moral vitality of the democratic community when that happens. Likewise, when unionized workers have more power to leave their job within an industry, they gain not only power to increase material rewards above starvation wages, they also gain in their freedom to debate, engage, say no, and have dignity.
The Paper proceeds as follows. In Part I, I look at broad approaches towards the purpose of American antitrust laws, and explore how moral space and market structures were once central to a theory of monopoly laws—we’ll call it the Brandeisian frame—and how those laws came to be understood solely through a consumer welfare frame, and how that framework is collapsing. In Part II, I show how modern liberals, republicans, and neoliberals have all (largely) joined together in categorizing the market as a sphere for immoral or amoral action, and in so doing, shut out questions regarding moral freedom in the market. In Part III, I argue that decentralized moral space should be a goal of antitrust laws. One note: this Paper focuses on one aspect of antimonopoly law—breaking up big corporations, or antitrust. However, the other aspects of antimonopoly law (utility regulation, nationalizations, rules against conflicts of interest) would also lead to more individual freedom and flourishing.
There are two big, sometimes conflated, fights within antitrust law. The first concerns how to interpret and apply existing laws. The second concerns how to understand the goals of the body of law. My interest in this Paper is solely on purposes, divorced from all practical questions about administrability. The importance of goals is recognized across the ideological spectrum. The efficiency advocate Professor Robert Bork once argued that “everything” flowed from an interpretation of antitrust laws’ purposes.[8] A modern antagonist of Bork, Law Professor Maurice Stucke recently wrote, “The battle over antitrust begins with its goals.”[9]
Before we get to the discussion, I want to call out a few distractions that frequently derail a rich goal discussion. A goal need not be unitary; it need not have historical basis; and it need not empower judges to interpret whether a particular violation achieves the goal.
Because the scope of existing and potential antitrust law is broad—it includes a huge range of rules shaping market structures and power—the range of potential goals could be infinite. Nothing in antitrust precludes any possible goals. Despite this, an enormous amount of debate presumes that we need historical support to argue for particular goals. Unlike, say, rent regulation, where we understand that the goals of housing policy should be driven by the needs of the moment, there is no similar recognition that antitrust is fundamentally legislative, and therefore designed to be responsive to the needs of the moment. Although I also turn to history in this Paper, and rely on thinkers of the last few centuries, we are not constrained by history in considering what the goals of antimonopoly laws might be. Antitrust is not, as it were, constitutional, even as it is constitutive. We could conclude that new goals, invented out of whole cloth, are the appropriate goals: were we to do so, we would then push for passing new laws to implement those purposes. Nothing in existing antitrust and antimonopoly laws themselves limits the goals to a singular purpose, or solely economic purposes.[10]
Goals and jurisprudence can also get confused in modern antitrust thinking because advocates of a single-purpose understanding, like consumer welfare, often worry that multiple goals/purposes will lead to judges deciding to block a merger because of the particular political or social impacts of a given merger.[11] This argument falls apart quickly under inspection. First, most areas of policy (i.e., housing) have multiple goals. Second, multiple goals of a policy need not mean that a judge is given the power to determine whether a given merger leads to greater or lesser achievement of the goals. By way of parallel, the fact that our First Amendment law has been shaped by the goal of enabling engaged, lively citizenry does not mean that judge wonders in a particular case—or should wonder—whether a particular infringement of the First Amendment has any salutary effects. The fact that the speed limit reduces deaths, and is designed to do so, does not mean a judge should look at evidence showing the lack of dangerousness of a given driver as a defense to a speeding ticket.
In this Part, I summarize this history of thinking about purposes, with a focus on one goal that is compelling and worthy of revival. This goal was essential to Brandeis, and involves a theory about the relationship between market structures and moral citizens. I then briefly address the Chicago School’s narrowing of purposes and introduce the collapsing consensus around consumer welfare.
A. “The Great Developer Is Responsibility”
The antimonopoly spirit goes back to the founding of the United States, when Sam Adams and John Hancock forcefully opposed the British East India Company.[12] Part of the liberty they sought in the revolution was the liberty to engage directly with each other in the commercial sphere, without being directed from above by a giant multinational corporation. As journalist Barry Lynn recently testified in front of the Senate Judiciary Committee, the Founders of the country were committed to “rough economic equality” among citizens and freedom in economic affairs.[13] Lynn argued that Madison saw the right to be free from arbitrary commercial power to be an essential right, and essential to just government: “[t]hat is not a just government . . . where arbitrary restrictions, exemptions, and monopolies deny to part of its citizens that free use of their faculties and free choice of their occupations which not only constitute their property in the general sense of the word, but are the means of acquiring property strictly so called,” Madison wrote.[14] His essay has been frequently used to explore his vision of the centrality of property in liberty, but the appearance of monopolies as agents of anti-freedom is noteworthy.
Antimonopoly laws were seen as providing democratic and civic freedom in a way that enabled vigorous, engaged, moral citizens for most of the nineteenth and twentieth centuries.[15] Most observers assumed that antimonopoly laws were designed to ensure that a market made up of small and medium-sized companies could thrive, and that a decentralized market was inherently preferable to a highly concentrated market.[16] The goals of this preferred structure were economic, political, social, and moral.
Industrialization, urbanization, and the rise of new corporate forms in the late nineteenth and early twentieth centuries led to widespread collective anxiety about the ways in which large, concentrated corporations were corrupting, corrupted, increasing inequality, threatening small and medium-sized companies, and threatening moral and civic life.[17] The Sherman Act was a significant federal embodiment of that anxiety, a trust-busting law called “A Charter of Liberty” by its author.[18] The overwhelming majority of historians who have looked at it—whether kindly or unkindly—have recognized that the original purpose of the Sherman Act was not merely political and economic, but also moral and civic.[19]
Monopolies and oligopolies were looked on with suspicion because of their ability to block new entrants, their ability to hike prices, their tendency to engage in price fixing, and their ability to create political power, coordinate in the political arena, further entrench their market advantage, and dictate policies.[20] They were also seen as a threat to the civic, generative, creative, and moral elements of community that a small and medium-sized business environment allowed.[21] Antimonopoly laws protected not just consumers, but producers’ civic life and freedom. The cultivation of the faculties of citizenship, including the moral faculties, was widely understood as an essential purpose. Moral freedom on the part of the economic participants in a community was understood to be essential to the moral fabric of a democratic community.[22]
Two of the most consequential political philosophers of the early twentieth century, Louis Brandeis and John Dewey, both struggled with how to reconcile modern industrial economies and self-government. To that end, they both promoted engagement, dissent, disagreement, contestation, and the support of institutions which enabled all of these practices, which they understood to be essential to freedom and citizenship and the cultivation of character.[23] As K. Sabeel Rahman argued in his 2017 book, Democracy Against Domination, both were institutionalists in their foci on structures and laws that established essential rituals of debate, learning, and moral development.[24] While Dewey focused on the ways in which education could create moral habits by instilling habits of freedom, Brandeis focused on the structure and nature of power, the relationship between rules and civic flourishing, and the relationship between human flourishing and civic flourishing.[25]
I will focus on Brandeis, because one of his most central passions was antitrust. Brandeis’s legal and political theory flowed from his theory of human nature. Above all, Brandeis understood people as changeable, and saw institutions and people as engaging in an ongoing dance: the institutions shaped human character, human character shaped the institutions. In his famous concurrence in Whitney v. California,[26] where he advocated for a broad set of speech rights, Brandeis wrote that “the final end of the State was to make men free to develop their faculties; and that . . . the deliberative forces should prevail over the arbitrary.”[27] The Framers, he wrote, “valued liberty both as an end and as a means. They believed liberty to be the secret of happiness and courage to be the secret of liberty.”[28] In Whitney, Brandeis contrasts arbitrariness not with rationality, but with deliberation. Widely distributed deliberation is not merely a means to a material ends, but also the end itself. Speech rights enable individual and cultural development. And note what he puts at the center of democracy: happiness and courage.
Brandeis’s view of speech and the role of the First Amendment were deeply connected to his vision of the importance of decentralized market power. Debates, contestation, and discussion among the shopkeepers and producers of the country and the people who interacted with them were not just about short term uncovering of truth (or “discovering” price), but about the development of sensibilities and character traits that were needed for self-government.
Unsurprisingly, then, the same human faculty-development thesis that he shared in Whitney was also present in his extensive dissent in the antitrust case Louis K. Liggett Co. v. Lee.[29] At issue in Liggett was the legality of Florida’s anti-chain store legislation.[30] The Court struck down Florida’s law, causing Brandeis to write a long, powerful, polemical dissent in support of laws that limit big business.[31] He not only supported states’ ability to use taxation for something other than economic bottom line, but gave a history lesson in generations of Americans using regulation to ensure that equality and autonomy were not threatened by big corporations.[32] Big corporations, he argued, threaten to throttle creativity and vitality. In the most important passage for our purposes, he argued, “only through participation by the many in the responsibilities and determinations of business can Americans secure the moral and intellectual development which is essential to the maintenance of liberty.”[33] The exercise of being directly engaged in a market society as a seller was important for the character traits that enabled freedom. A vigorous, moral, creative life depended upon the existence of an entrepreneurial and small business world.[34]
At the heart of his human nature thesis, then, is a thesis about learning. According to Brandeis, people could be courageous or weak, they could be fickle or reliable, they had “fallible” judgment, they could feel confident or insecure, they could be fearful or optimistic, they are “wee thing[s],” but above all they have the capacity to learn and change.[35] In his briefs, Brandeis’s emphasis on facts was an emphasis on moving away from abstraction to lived experience—to the “real world”—and in his decisions he emphasized the importance of the experience of citizens and how that shaped them and improved their capacities.[36] The desired humans that could, under the right circumstances, freely emerge from this mess of possibilities, were educated and morally tough.[37]
Human development, he believed, could and should lead to public love, moral courage, and learning. Public love, moral courage, and learning would in turn lead to overall societal well-being. And the virtuous chain of events begins with institutional structure.
While this thesis is everywhere in his writing, Brandeis expressed his views most succinctly in a 1922 letter that he later called his “creed,” arguing that “everywhere the intellectual, moral and spiritual development of those concerned will remain . . . the main factor . . . in real betterment.”[38] Development happened, he argued, through giving people responsibility over decisions. He wrote, “[t]he great developer is responsibility. . . . [P]articipation in, and eventual control of, industry is likewise an essential of obtaining justice in distributing the fruits of industry.”[39] The difficult task of democracy requires moral fiber, and that fiber is forged through experience: “development is attained mainly in the process of common living.”[40] Brandeis was echoing concepts that Madison and Jefferson had developed about the ways in which the structure of the political economy, and the activities and independence that it allowed or did not, had a huge effect on the character, thinking, and actions of citizens.[41]
For Brandeis, both excessive power and powerlessness weakened morality. Power tended to corrupt, to abuse, or, as he said, echoing Lord Acton, “lead[] to excesses and to weakness: Neither our character nor our intelligence can long bear the strain of unrestricted power.”[42] Therefore, we must oppose monopoly as we oppose despotism, because it leads to arbitrary, self-centered, careless behavior. Powerlessness, on the other hand, also fails to create the opportunities for the development of moral faculties. Freedom—of speech, and within the market—is the essential sphere of development, just as freedom to explore and self-direct within structured education was essential to Dewey’s theory of human development.[43] Brandeis’s freedom was not the freedom of the consumer, choosing between goods, but the freedom of the producer, taking responsibility for right actions; and the producer living in the network of local communities, so that purchasers and workers were also embedded in the producers’ choices. The producer is not an isolated atom to whom we look to as a savior for special treatment: the producer’s responsibility, interacting with other producers’ responsibilities, created cultures of moral development; and the interaction of free producers with free customers was another potential moral interaction, both because the customer’s morality could engage with that of the producer, and because the producer’s power creates power in those who interact with him.
Brandeis was brilliant and original, but not peculiar: he reflected a widely held “small democratic” sensibility, and while being among the best-known jurists of moral development, market structure, and freedom, he was not alone. The Brandeisian worldview was an updated-for-industrialization version of traditional republican political theory, and was seen for decades afterwards in antitrust cases. When the legendary Second Circuit Judge Learned Hand in 1945 looked at the personal and civic impacts of concentration, he suggested that “unchallenged economic power deadens initiative, discourages thrift[,] and depresses energy.”[44] He concluded that “[i]t is possible, because of its indirect social or moral effect, to prefer a system of small producers, each dependent for his success upon his own skill and character, to one in which the great mass of those engaged must accept the direction of a few.”[45] Thirteen years later, in 1958, the Supreme Court described the Sherman Act as serving many purposes, including “providing an environment conducive to the preservation of our democratic political and social institutions.”[46]
The impact of the Brandeisian worldview, in combination with Thurman Arnold’s enforcement strategy, was significant. It led to a default suspicion of mergers and of concentration in business. In the heyday of federal antitrust enforcement, the primary tool—but by no means the sole tool—in the antimonopoly toolbox; the government regularly sued to block both horizontal and vertical mergers on the grounds that they would lead to an undesirable structure; and more broadly on the grounds that mergers, in general, led to pernicious societal effects.[47]
Courts attempted to enable competition and a decentralized market in what is known as the “structural era” in antitrust enforcement, a jurisprudential era that lasted from the 1940s to the late 1970s.[48]
In sum, an influential set of public theorists, including Brandeis, argued that decentralized power was and should be the policy of our country because of its moral and civic side effects. In 1965, just before the antitrust revolution—described in the next Section—two authors writing on the goals of antitrust for the Columbia Law Review summarized it thusly: “Another political objective of antitrust is the enlargement of individual liberty. . . . In the absence of strong countervailing considerations, we favor freedom of action and the wide range of choices that freedom implies.”[49] Antimonopoly policy served freedom, happiness, courage, and decentralized moral decisionmaking, as well as low prices.
Not all advocates of structuralism also adopted Brandeis’s view that there were noneconomic goals of antitrust, and not all of those who adopted the noneconomic goals of antitrust adopted Brandeis’s particular vision of the central, dynamic interaction between the human spirit and the structure of the market. Arnold, for instance, is often held up as a structuralist in practice (using simple rules to enforce antitrust) but, unlike Brandeis, he was never concerned about power imbalances on their own, but about the inefficiency and consumer harms that flowed from unfair competition.[50]
B. “The Only Articulated Goal”
The structuralist jurisprudential approach, undergirded by the Brandeisian theory of purposes, was displaced in the 1970s and 1980s by the Chicago School, which transformed the way we understand antimonopoly law in two significant ways.[51] Firstly, and most importantly, Chicago School antitrust orthodoxy exiled all noneconomic purposes of antitrust laws from scholarly, public, and judicial discussion. The most significant literature involved in this transformation is Robert Bork’s article, The Crisis in Antitrust, and his book, The Antitrust Paradox. In them, he argued that antitrust law was not designed to serve political, civic, or social ends. Bork argued, “[e]verything . . . follows from the answer we give” to this question: “What is the point of the law—what are its goals?”[52] His own answer was that moral and civic purposes were not part of the original intent. The goal of antitrust law, he argued, was singular, solely economic, and solely about efficiency.[53]
Plenty of others have persuasively argued how Bork’s reasoning was bad history and bad law, and I do not rehearse those objections here. As Robert Pitofsky—by no means a Brandeisian—summarized it, Bork’s argument is “bad history, bad policy, and bad law.”[54] Pitofsky argued that one of the clear purposes of antitrust was “a desire to enhance individual and business freedom by reducing the range within which private discretion by a few in the economic sphere controls the welfare of all.”[55]
But for the purposes of this Paper, what is most interesting is the way in which Bork engaged with—and rejected—the Brandeisian moral faculty-development thesis. In the seminal article, The Crisis in Antitrust, he uses Learned Hand’s statement (from United States v. Alcoa, quoted above) as a stand-in for the whole body of thought.[56] Hand, you’ll recall, argues that a society could reasonably choose to support small business owners for “moral” or “social” reasons.[57] Bork responds that it would be “hard to demonstrate that the independent druggist or groceryman is any more solid or virtuous a citizen.”[58] Bork’s book has a similar rejection, stating that there “is no persuasive evidence that a middle level executive is socially or politically a more desirable creature than if he ran his own business.”[59] He argues that a vision of antitrust which required supporting small and medium businesses constituted an “ugly demand for class privilege.”[60]
Bork’s rhetorical moves in rejecting Hand are twofold. While the Brandeisian tradition does argue that the small shopkeeper has more access to moral action than the big CEO, Bork presents this as an empirical question in which the burden of proof is on Brandeis, Hand, and generations of observers of moral and political life. Given that Bork was swimming against the tide of political theory and history, it would seem that the burden should be on those that would disprove the claim, rather than the other way around. Brandeis and others had a clear thesis for how and why small concerns would have greater moral engagement, and Bork does not himself engage that thesis. He rejects it for lacking empirical research, while presenting none of his own.[61]
Second, he recasts Hand’s (and by association, Brandeis’s) view that small and medium-sized businesses can have an indirect impact on moral development and civic culture as a view that small and medium-sized businesses deserve special treatment. It is a clever move but a false one. Neither Brandeis nor Hand saw antitrust as a reward for virtuosity or a call for special treatment; instead they played a social function in the development of a moral community, by enabling moral freedom and discussion and diversity in the world of work and stuff. The Calvinist gloss that Bork tries simply doesn’t reflect the republican/character development soul of the argument. In both of these moves, Bork atomizes the shopkeeper/producer, and neglects the dynamic interaction between moral space and broader cultures of moral debate and action.[62]
He made an astonishing historical claim, stating that the “dominant ideal” is that businesses should thrive based on their service of customers.[63] The caveat within the sentence was that the ideal was frequently flouted by legislative practice—in other words, the ideal is “dominant” despite being frequently not dominant. Dominant for whom?
At all events, the efforts to engage with the moral and development thesis are insubstantial at best. Instead, the essence of Bork’s move is to use administrability to argue purposes. Bork argues that social, moral, and civic purposes cannot be the purposes because they make law difficult to administer, and give too much discretion to judges.[64] This is a logical red herring. The law could be badly drafted, or difficult to administer: that does not change the purposes themselves.
Having rejected non-economic reasons for all antitrust laws, Bork and allies then embraced a particular understanding of how economies function, focusing on price above all as the best measure for consumer welfare. Within this new economic vision, business actors were presumed to be rational profit maximizers. Failure to act as a profit maximizer would be punished, and therefore if the market included non-profit maximizers, they would cease to exist.[65] Potential competition serves the same ends as actual competition.
The antimonopoly law and scholarship post-Chicago School almost exclusively focused on antitrust, and the antitrust focused almost exclusively on consumer welfare. Starting in the late 1970s, the Supreme Court adopted the consumer welfare model as the way to understand the legitimate purposes of antitrust laws.[66] The Reagan Administration’s 1982 merger guidelines replaced Kennedy’s structuralist approach with a focus on price.[67] Since then, non-pricing interventions—for instance, on the ground of lower quality services or harm to innovation—have almost always cast in consumer welfare terms. Easily measurable outcomes, like price and output, became overwhelmingly important in jurisprudence.[68]
While there were serious debates within the antitrust field, the consumer welfare framework was dominant for decades. The degree of narrowing was best expressed by Herbert Hovenkamp, who described the ascendant Chicago School this way: the “only articulated goal of the antitrust laws is to benefit consumers.”[69] For forty years, courts and most scholars started with this as the core proposition of antitrust laws.
C. The Collapsing Consensus and the New Brandeis School
In the wake of the 2008 financial crisis, a new awakening to the power and danger of big technology platforms, and an ongoing consolidation wave across sectors, a new body of scholarship has emerged challenging this consumer welfare consensus. This new literature has challenged consumer welfare on grounds of history, statutory interpretation, and the usefulness of the antitrust laws to help address current crises. This new, post-consumer welfare body of work, sometimes called the “New Brandeis School,” ranges from fairly modest proposals to tweak jurisprudence to more ambitious efforts to rethink what antimonopoly laws are for.[70] At the same time, a separate strand of antitrust thinking is growing, in which academics and practitioners heavily criticize recent failures in antitrust, but argue for keeping most of the analytical framework.
Jonathan Baker, for instance, argues for greater enforcement and greater attention to structure while still hueing fairly closely to a consumer welfare purpose.[71] Baker is hardly Brandeisian: he approaches questions through a model of fairly mechanistic incentives operating on mechanistic individuals towards consumer welfare ends. When Baker analyzes Learned Hand’s Alcoa discussion, for instance, he transforms a passage about character and vitality into a passage about incentives and innovation.
Hand wrote:
Many people believe that possession of unchallenged economic power deadens initiative, discourages thrift and depresses energy; that immunity from competition is a narcotic, and rivalry is a stimulant, to industrial progress; that the spur of constant stress is necessary to counteract an inevitable disposition to let well enough alone.[72]
Baker calls this passage out of date, and updates it with this modern translation: “There is also a general policy view that high levels of concentration undermine incentives to achieve efficiency and to innovate.”[73] Hand’s complex description of human nature is out of date presumably because of the array of character traits he calls on in this brief passage: for Baker, now we know that incentives are everything.[74]
Baker, the Chief Economist at the Federal Communications Commission (FCC) for President Obama, the Director of the Bureau of Economics at the Federal Trade Commission (FTC) under Bill Clinton, the co-author of an antitrust casebook, the former Chair of Antitrust Law Journal, and a member of the Council of the American Bar Association’s Section of Antitrust Law, has recently written a powerful book about what antitrust law can do without returning to structuralism, using the existing tools, better understood. He argues that even if we see antitrust law as maximizing efficiency and keeping low consumer prices, recent courts have gotten several cases wrong, and recent enforcers have failed to fully see the flaws in today’s economy.[75]
The New Brandeisians, on the other hand, have gone much further than Baker and argued for jettisoning consumer welfare altogether. Barak Orbach and Lina Khan have argued against the consumer welfare paradigm because of its own confusions, internal illogic, and failure to address modern challenges.[76] Orbach argues that the term “consumer welfare” confuses more than it clarifies, and that “antitrust law should now lay it to rest.”[77] Khan argues that the use of short term price and output measurements to determine competition collapses on itself because it “fails to capture the architecture of market power in the twenty-first century marketplace.”[78] She argues that these measurements obscure the many ways that companies like Amazon can use their power in one market to create an advantage in another, unrelated market, and the ways in which conflicts of interest harm an open competitive market without directly impacting short-term price or productivity.[79] She concludes that the consumer welfare framework “should be abandoned” in favor of “an approach oriented around preserving a competitive process and market structure.”[80] Since Orbach and Khan’s articles are about what is wrong with existing law, not what purposes we should recognize, we do not get to the question of what antitrust should be for.
The most essential challenge comes from those who reject the consumer welfare model—even if it works on its own terms—because it is too limited a purpose for understanding the essential role that antimonopoly laws should play in political, civic, and social society. Stucke argues that citizens’ “well-being” must be at the root of antimonopoly purpose, and that, as an initial premise, competition policy ultimately must improve citizens’ well-being, or at least not hinder the communities’ right to pursue it.[81] If, as a result of a country’s competition policy, its citizens’ physical and mental health deteriorate, their isolation and distrust increase, and their freedom, self-determination, and well-being decrease, then the policy is not worthwhile.[82] It follows, he argues, that any theory of what kind of competition we want should “promote (or at least not impede)” overall well-being.[83] Drawing on happiness research, he argues that the goal of antitrust should not be maximizing consumer surplus if so doing is at the cost of “freedoms, autonomy, environmental protection, and democracy.”[84] Tim Wu argues that we should return to Brandeis, and recognize the freestanding perils of size to freedom itself.[85]
Tim Wu’s recent book, The Curse of Bigness, argues for a return to structural approaches to market power, and advocates for an aggressive approach towards big technology companies. Wu argues for a post-consumer welfare approach that returns to the “protection of competition” as the goal, which he says is at least as manageable, if not more so, than the consumer welfare standard, which has been far more difficult to apply than advertised. The question we should ask, he says, is whether an action is merely part of competition, or designed to “suppress or even destroy competition?” Some of the most important rethinking of antimonopoly policy comes from outside the antitrust field. In his recent book, Democracy Against Domination, Sabeel Rahman also argues that antimonopoly laws should serve—as they have before—non-domination purposes.[86] Rahman argues that the two prominent strains of modern political thinking are laissez-faire and managerialism, and while they seem to be opposed to each other, they are connected to each other through their disinterest in questions of domination and power.[87] While managerialism works to correct problems of inequality through good policy, it does so by expertise and shutting out the public in active deliberation. Laissez-faire shuts out the public by concluding that the market is mechanistic, with no real need of public choices regarding it. Rahman argues, in opposition to these paradigms, that the central moral problem of modern politics is domination.[88] He calls for greater democratic participation in economic policy and in regulation itself, along with renewed antimonopoly enforcement.[89] According to Rahman, antimonopoly laws are an essential tool in supporting democratic politics—when antimonopoly laws are not just about consumer welfare, but about freedom from domination.[90]
These are just a few of the New Brandeisians. They are bound together by a belief that consumer welfare is a wrong and dangerous model for understanding the best, highest uses of antimonopoly laws. In November 2019, several of these New Brandeisians came out with what they called “The Utah Statement”—an expression of shared goals. The statement started with four premises:
(1) Subjecting concentrated private power to democratic checks is a matter of constitutional importance;
(2) The protection of fair competition is a means to a thriving and democratic society and an instrument for both the creation of opportunity and the distribution of wealth and power;
(3) Excessive concentration of private economic power breeds antidemocratic political pressures and undermines liberties; and
(4) While antitrust is not an answer to every economic distress, it is a democratically enacted and necessary element in achieving these aims.[91]
The Utah Statement was a beginning of a positive vision of what the purposes of antitrust might be, but they (we) still lack a more complete shared positive political and economic theory. This new moment, therefore, creates a number of fascinating and consequential questions. If antimonopoly laws need not be about consumer welfare, but instead about distributing power, what is a more specific set of goals that these set of laws should serve? If democracy is a goal, is one of the possible purposes of antimonopoly law the distribution of greater moral freedom, or moral space, in an economy?
In the next Section, I explore this possibility. First, I turn to other areas of law that explore these issues.
D. Moral Space and Markets in American Legal Thought
A great deal of American legal scholarship has focused on moral space in the explicitly civic environment, and on the particular expression of moral action that is speech or speech related. For many scholars, freedom of expression is at least in part about the desire to create the possibility for moral expression, regardless of the rightness of the view. American law has developed so that the choice to make repugnant statements is not threatened by criminal penalties, leaving a good deal of moral space. There is a rich discussion about the reasons for the importance of this freedom, which I will not canvass here; suffice it to say that for some, including Robert Post, one value of our First Amendment protections is that they shape our character and habits—who we are.[92]
Freedom, morality, and character have also been explored within the scholarly literature of the professions, where significant scholarship explores the importance and role of moral discretion. There is a rich debate about moral space and moral development in the legal ethics field. Anthony Alfieri, for instance, argues that the rise of risk management in law firms actually diminishes the moral process that lawyers should go through.[93] Alfieri’s argument is that by outsourcing moral decisionmaking, and transforming difficult questions and moments into technocratic ones, lawyers do not constantly remind themselves of the ethical underpinnings of their calling.[94]
By diminishing a lawyer’s individual responsibility for making moral choices about his role in law and society, firm-devised risk spreading systems may induce a kind of moral apathy. Institutional indifference to the daily necessity of individual discretion in determining the scope of lawyer obligation to clients, third parties, and the public inhibits moral development and hobbles professional independence.[95]
Others see risk management as enhancing moral thinking.[96]
In medicine, some scholarship has explored how to create moral space and encourage moral development on the part of doctors. One recent paper, for instance, argued for extending the time period for decisionmaking on the grounds that the greater time one had, the more likely one was to make the right moral decision.[97] The technical medical proficiency carries with it an ethical dimension. For instance, Margaret Walker argues that moral spaces are “patterns, structures, routines, and channels of communication that clarify the moral responsibilities and mutual accountability of all parties.”[98] She proposed then not merely the freedom to engage in deliberation, but the processes of deliberation themselves as creating moral space. Moral spaces are places where reflection, deliberation, and negotiation can happen. However, outside of medicine and law, there is less discussion of the importance of freedom and the cultivation of moral autonomy inside the workplace, especially from the perspective of the business owner. Doctors, like lawyers, are currently culturally understood to play three roles: technical (craft), commercial, and ethical roles. Doubtless there is other literature regarding other professions in these three roles. But what if we call on us to see all professions as including these three features, regardless of whether there is a specific Hippocratic Oath or history of legal ethics? Or rather, what if we imagine that one of the jobs of society is to encourage systems of work where reflection, negotiation, and deliberation can happen, as all of these are valuable for citizenship?
It goes without saying that political power structures have an impact on the nature and distribution of freedom; less often said is that economic power structures do, too. As Hand suggested, the impact of market structures is both direct and indirect.[99] Structures can have a direct impact by enabling open decisionmaking by individuals and institutions. Structures can have an indirect impact by creating nodes of thought, discussion, debate, and community that support the development of moral capacities throughout a broader community. In turn, these nodes also create habits that in turn make the use of those faculties more likely. Someone who regularly carries heavy boxes will be able to help move a car, whereas someone who has not used their arms for decades will not even think about her ability to get a friend out of the snowbank, and instead will call others to help (or simply drive by). Likewise, someone who regularly engages in moral questions, and has a habit of exercising willpower against temptation, may be more ready to turn down an additional profit if that profit has a detrimental effect on others. Just like other capacities, the development of moral capacities is work. Freedom, and a community in which moral conversations and action can both occur, are two conditions that enable the exercise of those faculties.
Imagine, for instance, a seller of Christmas lights who depends upon the distributor, a corporation Happy Lovey to get all her goods to market because no one but the company Happy Lovey distributes Christmas lights in a broad way. Happy Lovey is run by an anti-equality CEO. The current lights the seller makes cost four dollars; and she celebrates with signs that say “Love Is a Terrible Thing to Hate,” and “Love Wins.” When she is making her decisions about what to put on her signs, her own beliefs about what kinds of messages will create a more loving and moral community may be central to her work. Happy Lovey can call her up and tell her that she needs to change the words on the lights, or they won’t distribute: they don’t need to tell her if she refuses she will be out of work. She is arguably dominated, and not fully free in relationship to Happy Lovey. She still retains some freedom: she may be able to quit her work, but that freedom of exit, as political scientists call it, allows only for high risk and rare expression. Her range of discretion in making Christmas lights is constrained. In a related scenario, Happy Lovey has no view, but nobody is interested in buying her Christmas lights, with the phrases, so she is arguably in the same position. But in the first instance, she is constrained by general social facts; in the second instance, she is constrained by a powerful gatekeeper. If we had a different market structure, if, instead, there were fifteen different companies selling Christmas lights, then Happy Lovey would not have the same power to dictate Christmas messages. Market structure and the possibility of political expression are therefore tied to each other.
Relatedly, imagine someone who works for the same corporation as a janitor, and notices that it does not hire non-Christians for work, and thinks this is problematic. If he has no mechanism of raising the issue with the company, his choice is to leave or stay; and if the options for other work are limited, the stakes of raising the issue are very high. If, on the other hand, there are channels—formal or informal—for pointing out the problematic treatment, the worker has the possibility of raising the issue. The employer may or may not respond, but the possibility of having the conversation shapes the scope of moral space available to the worker. Market structure and the possible scope of deliberative discussion are therefore tied to each other.
Or imagine that a toymaker is told by her primary purchaser that she will lose her livelihood unless she stops supplying goods to a family friend. If she loses this purchaser, she will be unable to take care of her family. She is faced with a straightforward moral question with many ways she could think about it. The choice between two actions is a very limited choice. She can choose to betray her friend or to lose her livelihood. The two options create a limited moral space; the environment is highly constrained. On the other hand, if the toymaker is simply asked to betray a friend, and no longer supply her with goods, with no accompanying threat, she has a great deal of moral space to decide whether or not to stop supplying her friend. She is free to choose to cut off the business relationship, or not. In a third scenario, she may be told to stop supplying the family friend or she will lose some income from the purchaser, but that loss will not mean that her company has to fold. In that scenario, she has a decision to make, and she can choose to make that decision for moral reasons, taking into account the impact on her family of the reduced income and the impact on her friend. She has less moral space than in the last instance, but far greater moral space than in the first.
The more common way in which market structure, discretion, and moral decisionmaking is tied up involves the thousands of small decisions that make up the day. For instance, imagine being an owner of a small restaurant. A patron leaves without paying his bill. The owner can choose to run after him, or leave him be. If she chooses to run after him, she can choose to call the police, or not. She can yell, or be calm. All of these are within her purview, if she owns the restaurant. However, if she is a middle manager in a restaurant with clear guidelines that could lead to her getting fired, she has none of the discretion; she must call the cops, or not, depending on the manual, and she can take no role in deciding what to do. The muscle that engages when one makes choices is left to atrophy.
Not all freedom involves morality, and in fact the freedom to engage in bad choices and wrong choices is required for freedom to be meaningful. Freedom, broadly, includes the power to act, speak, and think; without those thoughts, words, or actions being banned, or otherwise made impossible. Freedom requires both an absence—the lack of domination or dependence—and a presence—the capacity to exert one’s will in the absence of these constraints.
My conception of freedom draws heavily on what is sometimes described as “Republican freedom,” in reference to conceptions of liberty that have been dominant in the thinking of major republican theorists, like Machiavelli, Montesquieu, and Madison.[100] Here, I borrow a definition from Philip Pettit, who is widely regarded as one of the most important contemporary republican thinkers. For Pettit, republican freedom, like negative freedom, is also focused on absence, but the absence of domination by an arbitrary power, not all non-interference.[101] In other words, the republican theorists could not tell you whether a man dying in the desert without water is free or unfree, unless they also knew the role the man played in arriving at this condition. If any arbitrary power put him there, he is likely unfree, but if he was an active part of a legitimate democratic government that chose to exile him, he is free, even as he dies. In this view, freedom is inseparable from political and economic superstructures.[102] When the interferer is legitimately representative and the interfered-upon had power to constitute the interferer, the interference is not arbitrary, and therefore not freedom-reducing.[103] (Pettit arguably over-formalizes a spirit that in practice resists this kind of formalization, but such formal categories might at least help us investigate how we might think about freedom in the commercial sphere.)[104]
With this view in mind, what is freedom at work, or freedom as a business owner, and how does it shape how we are more broadly in society? In what ways do the scope and distribution of the capacity for moral action in the private commercial sphere impact moral reflection, and does that, in turn, impact social structures and moral action? Market structures themselves lead to discretionary space—moral space—which enables a kind of deliberation, thought, and action, which itself leads to greater societal joy and functioning.
Freedom in the business realm—like freedom generally—is necessarily a matter of degree. Choices are never absolutely constrained, nor can they be infinite. There is always some capacity, however tiny, to shape one’s actions in relationship to one’s perception of good and bad. On the flip side, there is never absolute capacity to act. Therefore, the question is not, “does this person or institution have moral space?” but rather “how much moral space does she or it have?” Moral space of a business owner is shaped and constrained by the coerciveness of the environment, including law and the structure of a market.
A business owner, purchaser, or worker is free in their gainful employment if they can make decisions and if they have discretion. The freedom is arguably enhanced, and becomes a meaningful moral freedom, if they can make decisions based on what they consider to be right or good, and to avoid that which they consider to be wrong or bad. Freedom involves a range of possible actions, whether that action is to make a policy decision, to say something, or to engage in the use of force. For it to be meaningful, it depends upon both the capacity either for moral reflection or to think freely regarding the appropriate moral action to take, and the access to the means to transform that thought into some kind of action. The scope of discretion could simply be the meaningful freedom to leave a job and choose another, or it could be the ability to make choices within that job.
To be clear, freedom does not require that one act on that freedom, or that one use any kind of moral faculties to explore the decisions governing the human choices facing us. One can have moral space without autonomy, by having freedom to act in certain realms and the capacity for moral reflection but choosing not to use reason to govern one’s own actions. Moreover, the category of decisions that might be autonomously made is broader than the category of decisions made in a moral space, because autonomy covers the whole range of ways—both the moral and the amoral—in which an individual can fully express his or herself, not merely the ways in which the person expresses or acts upon moral reasoning.
Market structure is, of course, not the only determinant of freedom, and if you have people making six dollars an hour, or ten dollars, or fourteen dollars, they lack freedom in other ways, so maximizing freedom does not mean minimizing legislation about how workers are treated. A doctor treating a dying patient has a legal obligation to treat him and not abandon the treatment part way. The doctor has little moral space; he must do what most of us would consider “right or good” or face imprisonment. He still has the moral space to refuse treatment, but it is limited by the consequences. In the corporate realm, business owners are limited in how they can treat their employees, the safety they must provide, the disclosures they must make, the taxes they must pay, etc. They may be doing what some would consider “good,” but moral space is not merely the freedom to act well; it necessarily includes the freedom to act badly.
The instances of constraint and space that most concern the policy question of this Paper are those in which the commercial decisions of an owner of a company are technically free, but we would all recognize that they are far more highly constrained than others. A seller of shoes learns that he can stop using a highly toxic chemical that risks leaking and hurting his community. However, if he is going to replace it with a non-toxic chemical, he will no longer be able to sell his shoes, and he has to shut down his business and work in a factory. He is technically free—he can choose exit, in the exit-voice parlance—but so highly constrained that his moral space is miniscule.
Again, that same seller of shoes could face a similar choice that is actually very different: he can stop using the same highly toxic chemical and make less money, but still make enough of a profit to care for himself and his family, to contribute to the community, and to survive for several decades. Few would call him unfree.
A. Direct Impacts of Distributed Moral Space
To explore what I mean in terms of moral space and market structure, imagine five different ways in which shoes could be made and distributed within a society:
- Four companies control all the distribution of shoes. These four companies contract with ten thousand shoemakers around America who make the shoes. They distribute to make a profit to survive, but have discretion in several areas about the workforce, environment, and quality. The shoemakers lack almost all discretion; they must do what the distributors demand or leave the business.
- The same structure exists, but the four distributors have no meaningful discretion because they are wholly subject to profit maximization demands from their investors. The distributors must either do what investors want or quit the business.
- Five hundred shoe distributors contract with ten thousand shoemakers. In order to continue to exist as distributors, the distributors need to make a profit, but not maximize profit. The shoemakers also need to make a profit, but not maximize profit, to stay in business. Both the distributors and the shoemakers have ample discretion.
- Four distributor-producers directly own all the shoemaking in the country. They have some discretion over how they operate, and are not wholly subject to investor demands.
- The government controls the distribution of shoes and sets shoe prices, which ten thousand shoemakers follow. The shoemakers must do what the government demands or quit the business.
Set aside all other considerations—including all quibbles with the plausibility of the hypotheticals—what do these five configurations mean for the moral life and development of a society? What do these configurations mean for the character, courage, and happiness of the society? What is different when the number and nature of moral decisionmakers are different? We need not walk through each model to see how differently these structures might impact thought and action. Five hundred nodes of moral freedom by five hundred distributors will likely lead to a fundamentally different society than four distributors, all else being equal.
If, as Brandeis argued, an essential feature of moral development is the capacity to be free, to make one’s own decisions—if responsibility is the great developer—these distributional choices matter a good deal. They matter because greater distribution means greater distribution of responsibility, which in turn means greater distribution of moral faculty development.[105]
Of course, extreme distribution, which disconnects owners from impacts, can have the reverse impact. Greater distribution of responsibility also results in institutions—business corporations—that are able to better manage the people and properties under their care, precisely because the owner/manager is in direct contact. As Berle and Means, as well as Lippmann have argued, the moral content of ownership is transformed—for the worse—when the owner is splintered into one hundred thousand investors, socialized across an investor class.[106]
Despite Bork’s quick dismissiveness, the existing evidence does in fact show that small business owners are more likely than large business owners to understand themselves as serving multiple purposes, not the single purpose of profit, and more likely to see their role as morally important.
In her recent book on Adam Smith and Hegel and the invention of the market, Lisa Herzog muses on Smith’s assumptions that commercial exchanges have a moral valence, and whether those assumptions hold true today.[107] She argues that while in Smith’s (and Hegel’s) world, people did not discard morality upon entering the commercial world, it is more likely that modern business men and women do not “carry their basic . . . convictions into the market” and instead “act as pure utility maximizers.”[108] She gives three reasons: the “self-fulfilling character of social theories,” the fact that most major actors in the market are big corporations, and third, the complexity and scale of modern markets, connecting pension-holders in California to investment funds which in turn invest in German companies.[109] The chain to connect moral sentiments in the modern market is now both long and obscured. The implication of her argument, of course, is that if we rethink market structure—both in terms of enabling the dominance of big corporations, and in terms of promoting financial market control of the production of goods and services—morality is more likely to be central in the commercial sphere.[110]
The structure of markets, and of moral space, will also have subsidiary impacts on purchasers, citizens, workers, and others. For instance, a collapsed discretionary structure, like that of Model D, will have an impact on local communities. The absence of local business owners often means the absence of support for local charities, sports teams, and local voluntary associations, all of which themselves become nodes of moral action.
In a decentralized economy, new nodes of moral freedom also create new arenas of moral freedom on the part of those who interact with anyone with power. For instance, a purchaser of shoes who never personally encounters anyone with decisionmaking power over how shoes are made has two major choices: to stop buying shoes made in a way she thinks is unethical, or to keep buying them. She can also choose to organize others to keep buying them or to stop buying them. We see this in the modern model of boycott strategies, organized by large online communities. However, a shoe purchaser who has direct contact with a shoemaker has other options: she can engage the shoemaker in direct conversation about the ways in which the shoes are made, and she can bring others into that conversation. Her own human interactions with the decider have character-impacting effects on her. Even if she chooses never to address the issue, the mere fact that she could raise the issue changes the shape of her moral imagination.
While most people will not know shoemakers, even in a decentralized economy, most people will know someone who is a producer, or a retailer with discretion. In one town it might be someone making chips for computers; in another, jam. But the routinization of interactions with people engaged in production and retail opens up a moral space that might not otherwise exist, except for the most zealous of citizens. In short, a decentralized economy also shapes the life of small towns and communities within cities, because those holding power are scattered throughout communities. As William James reminded us, “[h]abit is thus the enormous fly-wheel of society,” and moral habits are results of structures.[111] The habit of moral conversation is part of the habit of moral freedom. Just as greater exercise of the limb creates greater strength of the limb when faced with steep or difficult physical tasks, so the greater exercise of the moral limb creates greater strength when faced with coercion, making the coercion relatively less powerful. The community members who are not in the explicitly representative role will be witnesses and participants in the decisions, creating the training for representation, but also enabling the development of moral skills. Where the representative is instead one in a million, the shape of conversation is likely different. Efforts to influence, being asymmetrical, are more likely to be strategic than moral; “how can we get him to do x?” instead of “why is x good?” Worse, strategy can devolve into gossip; “how weak is x?” because people are so distant from power.
To be clear, centralized moral discretion allows for dramatic moments of moral leadership. For instance, the existence of Burger King and McDonalds has made it easier for groups like the Humane Society to get massive changes in the treatment of animals by working solely on pressuring those companies to change their rules for suppliers. As of 2016, there are free range eggs available at all Burger Kings, due to the work of animal welfare groups. I happen to think this is a good thing. However, because Burger King plays such a dominant role in the way that chickens are raised, local purchasers and members of the community have less ability to pressure their local diner (because their local diner is likely a Burger King). Because they cannot imagine pressuring Burger King from their posture as “three concerned citizens of Akron,” their moral space is collapsed, as is their moral imagination.
Moreover, if we continue with the Burger King example, a collapsed discretionary structure means that workers have less power as well, and less moral agency themselves. If you work for one of four distributors of shoes—or one of a few fast food joints—and are disturbed by what your employer is requiring you to do, it is unlikely that you can quit your job and get a job with another distributor, if only because it is unlikely that the distributors are near each other. When there are only a few distributors, the ease with which they can either directly collude, or collude without communication, rises substantially. All four may choose to dump toxic waste in a river (assume it is legal), something that might raise the hackles and concerns of workers. They could still make a profit without so doing, but it is easier than disposing of the waste safely. The concerned worker cannot go to the competitor, because the competitor does the same thing. In a market with five hundred distributors, it is far more likely that a few use their discretion to choose not to dump, making it more feasible for the worker to shift jobs, and thereby changing the moral life of the worker. Even if the worker does not change jobs, she is faced with a meaningful moral choice that previously did not confront her, and the freedom to respond to it.
Robert Taylor made a similar point in his recent article, Market Freedom as Antipower, and book, Exit Left.[112] Taylor is a true-blue Philip Pettit republican, and makes a full-throated argument in favor of competitive markets as essential for freedom within the republican tradition.[113] For Taylor, competitive markets enable freedom from the kind of domination that Pettit discusses.[114] Therefore, Taylor’s approach is based primarily in the importance of the freedom to exit situations of dominance, and emphasizes the ways in which big corporations, especially monopsonies, and labor unions limit the space for living in a non-dominated way.[115] Inasmuch as neo-republicanism is concerned both with freedom from arbitrary power and with the cultivation of civic virtues, Taylor focuses more on the freedom from power, and less on the ways in which freedom creates character. Taylor also does not see the business owner as a locus of freedom. He adopts and embraces the imagined business landscape as always consisting of impersonal, profit maximizing businesses. In other words, Taylor looks at the ways in which competition and decentralized power increases the freedom of workers, but not at the ways in which decentralized power increases a vigorous civic culture.
Another set of subsidiary impacts are the impacts on the business owners in the concentrated market space. Those in power tend to become drunk with that power, and diminished in their capacity to love the public; the political value of equality is not merely what that equality is, but what that equality does. Those with unchecked power in whatever realm tend to become more self-serving, and lose the spirit of the public.
Finally, concentrated power is more likely to corrupt representatives, and to spend energy creating temptations for representatives to betray their obligation to the public good. I have written elsewhere why centralized economic power is more likely to spend energies corrupting politics than decentralized power;[116] I leave that as a given for this Paper.
B. Market Structure and Intermediate Organizations
Trade associations cannot be meaningful parts of civic moral life if there are no small and medium-sized business—with discretion—to be in their membership. Therefore, the distribution of moral space also has a significant impact on associational life, which in turn has a significant impact on politics and moral habits.
For millennia, business associations have been centers of civic life. In ancient Athens and in Rome, professional associations flourished and played a central role in the emotional and civic life of the citizens.[117] Since then, professional associations, formed by bonds between similar professions, have played a central role in economic life. Professional associations have typically had relatively egalitarian internal structures, and fairly broad scope of work, ranging from the transactional to the informational to the benevolent.
For much of the nineteenth and twentieth centuries, political theory assumed that business associations were essential to self-government. Associational life and business associational life play a strong role in the political theory of Hegel, Durkheim, and Weber.[118] Hegel, for instance, was cheered by the ways in which cosmopolitanism and trade enabled personal freedom, but saw the threat of a mechanized society as a threat to human flourishing and character, and believed trade associations played a critical counter-balance.[119]
Ethical participation in capitalist society, he believed, required intermediary institutions that enabled involvement.[120] As Hegel understood it, an essential feature of a stable society were structures that created public-facing obligation, so that men would be connected to their own governance structures. He wrote: “[u]nder modern political conditions, the citizens have only a restricted share in the public business of the state, yet it is essential to provide men—ethical entities—with work of a public character over and above their private business.”[121] The way this essential task was performed, he argued, was through “the Corporation,” by which he meant trade associations and labor unions.[122]
Working within a union or trade association, according to Hegel, transforms the private citizen into someone who has as his purpose a “thoughtful ethical mode of life.”[123] For Hegel, unions and trade associations provided the key linkage between the atomistic individual and the publicly-oriented citizen. Without the trade association or union, the individual had no opportunity to exercise this public-facing function. Hegel argues that the key difference between atomistic selfish work and work through the corporation is that the corporation (trade association) transforms the experience of the person to be both self- and public-seeking, and that new role of a public-seeking person is necessary to understanding.[124] While like is attracted to like, joined similar elements go through the alchemy of public orientation to transform self-oriented behavior into an elevated, publicly-oriented behavior.
A century later, the French sociologist Emile Durkheim put trade associations in a central role of his political philosophy as well, calling for a corporative reorganization of modern society. Like Hegel, Durkheim placed trade associations and unions in a critical mediating role. He started from a place of industrial optimism—assuming that industrialism increased social harmony, he wanted to understand how social harmony was possible. The problem of anomie and alienation could be solved, in part, through collectives. The “centerpiece” of Durkheim’s program is the push towards a corporatist society.[125] Durkheim imagined local and regional and national “corporations”—trade associations—who would be, in a sense, equally distant from the atomized individual and from the state. He saw the twin threats of modern society as being an all-encompassing controlling state, and an absolute dissipation of individuality; a society made up of isolated, anomic individuals brought a fairly conservative vision to bear. Durkheim saw trade associations as a kind of relief from the egotism of modern society and that the institutions that provided that relief were family, the state, and occupational groups.[126]
Like Hegel, this was not merely respite for psychological pain, but enabling moral action. Durkheim argued that “wherever a group is formed, a moral discipline is also formed,” and that one of the advantages of the corporation was that it gave life and sentiment to selfless activities, breathing them full of energy.[127] The corporation would replace geography as the center of sentimental activity. “We may even reasonably suppose that the corporation will be called upon to become the foundation, or one of the essential foundations, of our political organisation.”[128] We must all collectively work on “constituting the moral forces” that give laws shape.
A system of morals is always the affair of a group. To the extent the individual is left to his own devices and freed from all social constraint, he is unfettered by all moral constraint. It is not possible for professional ethics to escape this fundamental condition of any system of morals. Since, then, the society as a whole feels no concern in professional ethics, it is imperative that there be special groups in the society, within which these morals may be evolved, and whose business it is to see that they are observed.
For professional associations to be a building block of morality, professional associations must first exist. The pressure of individuals to be moral in a society without a sub-society of companions facing similar moral threats is too much for the individual to bear. And for professional associations to exist, production and retail must be widely distributed within a society. A highly centralized society has no need or room for professional associations of any real moral/civic value.
In modern political philosophy, the absence of business associations is striking, and may be explained in part from a changed vision of pluralism: the rich pluralism of Hegel and Durkheim (and Brandeis) is replaced by a thin pluralism of Mancur Olson, who started with a dim view of trade associations and ended with a dismal one: according to the late Olson, they embodied rent-seeking at its worst.[129]
III. The Immoral/Amoral Market
One of the reasons there has been so little recent discussion of moral space and market structure is the reconstruction of human nature over the last several decades, driven by the Chicago School. In his recent book on markets, Michael Sandel has a wonderful discussion of the novelty of “incentives” as part of public language.[130] He explores how the model of human nature as constructed by economists—via the mechanistic operation of incentives—also assumes a scarcity approach toward virtue.[131] Inasmuch as virtue exists, it is in limited supply, and is not something that is dynamically developed through habits and structures. Sandel connects Kenneth Arrow and Larry Summers via their stark understanding of the limited store of virtue, something we must not rely on too much, lest it run out.[132] Character traits have been replaced with a mechanistic understanding of how humans operate—a mechanistic approach only gently tweaked by modern behavioral economics.
But this is not the only reason. There has been a surprising and recent convergence of very different traditions around the view that the commercial sphere is a domain for egocentric, individualistic, and materialistic interactions. This perspective was long held by Marxist theorists but is now held by both “free market” neoliberals and republican market skeptics. The impact is substantial. Because so many neo-republicans, neoliberals, and socialists now share the view that commercial spheres are largely amoral or immoral markets, they do not ask how public policy around market structure might impact the democratic spirit, because such a question presupposes a premise—that the market is a possible space for moral development—that they reject.
This Part traces that development. While liberals and republicans traditionally saw the public and private spheres as equally important for moral action, the neo-versions of each tradition are different. Modern/neo republicans still treat the public sphere as sustaining, communal, and essential for freedom; while tending to treat the private sphere as amoral, alienating, and essential for providing material goods, but little more.
In sum, most modern economic thinking assumes that commercial activity is amoral or immoral. The value it brings is in people getting what they want and not paying too much for it. It is not creating cultures of responsibility and moral debate.
A. The Rise and Fall of Doux Commerce
The republican Baron de Montesquieu, who was the “fountainhead” and chief authority for the Framers of the American Constitution, perhaps best represents the conflicting attitudes toward markets within the republican tradition. He both loved and feared open markets. First, the fear: Montesquieu was deeply concerned with what he called “the spirit of commerce,” the tendency to turn all things into commercial transactions.[133] He wrote, in The Spirit of Laws, that “[w]e see that in countries where the people move only by the spirit of commerce, they make a traffic of all the humane, all the moral virtues; the most trifling things, those which humanity would demand, are there done, or there given, only for money.”[134] The “spirit of commerce” is not the existence of a market, but a kind of cultural relationship to the market. According to Montesquieu, a “spirit of commerce” creates a demand for what he calls “a certain sense of exact justice, opposite, on the one hand, to robbery, and on the other to those moral virtues which forbid our always adhering rigidly to the rules of private interest, and suffer us to neglect this for the advantage of others.”[135] Unfairness is recast as a private matter instead of a public one, and while the logic of wrong and right are appealed to, they are appealed to as private rights and wrongs separate from the good of the public.
At the same time, Montesquieu saw commerce as an essential tool for smoothing human relations, writing that “[c]ommerce is a cure for the most destructive prejudices; for it is almost a general rule that wherever we find agreeable manners, there commerce flourishes; and that wherever there is commerce, there we meet with agreeable manners.”[136] Montesquieu wrote that “[c]ommercial laws, it may be said, improve manners for the same reason that they destroy them. They corrupt the purest morals. This was the subject of Plato’s complaints; and we every day see that they polish and refine the most barbarous.”[137] Montesquieu’s internal split was reflected in thinking for generations afterwards, as eighteenth and nineteenth century liberals and republicans split between those who celebrated the market as a central moralizing and civilizing force, and those who feared its corrosive impacts on the human soul and spirit. Rousseau is perhaps the archetypal version of the markets as corrupting approach, an attitude that markets are dangerous and infectious, that market exchanges degrade the person.[138]
This approach is often clustered in a line of thought that has become known as doux commerce, a term originating in seventeenth century France and popularized by A.O. Hirschman, who tied it to Montesquieu.[139] The doux commerce thesis is that markets enable high degrees of interaction, which in turn reduces interpersonal violence, encourages honesty, and enables friendship and compassion.[140] At its heart, doux commerce is a comparison between rule-based markets and feudalism.[141]
In the United States, this market-as-virtue-creator aspect was ascendant. The radical Samuel Richard said that commerce creates attachment because of mutual need, but that mutual need and the attending discipline created a kind of moral seriousness.[142] “Through commerce,” Richard wrote, “man learns to deliberate, to be honest, to acquire manners, to be prudent and reserved in both talk and action.”[143] Adam Smith, as well, had this view. He may be best known for his portrait of the egotistical butcher, but Smith was anything but neutral about the potential moral-development role of markets. He was deeply interested in how markets cultivate moral sentiments and enable empathy and friendship. In his Lectures on Jurisprudence, Smith argued that repeated contacts with neighbors led to honesty, whereas isolation led to the tendency to cheat.[144] Smith, like Paine, did not distinguish between the purchaser and the owner of the concern, but tended to see the world through the lens of the producer/retailer.
As modern political theorist and historian Michael Sandel has shown—exploring in the republican tradition of the late eighteenth and early nineteenth century—“the world of work,” and in particular, the world of small business owners and producers, was seen “as the arena in which, for better or for worse, the character of citizens was formed.”[145]
Throughout the nineteenth and the better part of the twentieth centuries, the view that open markets are sources of moral development was fairly widespread. Some doux commerce writers argue that success in the market sphere requires the cultivation of various virtues—the virtue of innovation, of honesty, of caution, of courage, of hope.[146] Others see these virtues as superficial, essentially skills with positive social spillover effects.[147] But all see it as character-improving.[148] Not all people saw competition through such a romantic light, but the doux commerce hypothesis was an essential part of public debate and of the justification for open markets.
Doux commerce was grounded in an implicit comparison between feudalism, an economic regime organized from above, and markets organized by general systems of rules. It arose as part of a defense of an anti-monarchical, anti-feudal system.
It has wilted in importance over the decades, for different reasons. First, the threat of feudalism declined, and monarchism was no longer taken seriously as a possible alternative mechanism of economic organization. Today, prominent modern republicans have mostly abandoned doux commerce for a Rousseau-ian rejection of markets or, like Pettit, simply showed less interest in markets.[149] Neoliberals and liberals on the other hand have mostly abandoned (with exceptions) doux commerce and jumped to the Gauthier view that perfect—and desirable—competition is a moral-free zone.[150] In the next Sections, I summarize these trajectories.
B. Modern Republicans: Markets are Bad for Us
In the late 1990s, Michael Sandel wrote a tour de force history of republican economic thought in the United States. He ended the book with great sympathy for the many forms of republicanism that had come before, but with something of a shrug: republicanism was perhaps too coercive to be embraced in the modern day.[151] In Sandel’s 2012 book, What Money Can’t Buy: The Moral Limits of Markets, the shrug turns into a scowl, as he concludes that markets on the whole play a negative force in modern society and moral and civic life.[152] I use Sandel not merely for himself, but as a stand-in for the skeptical turn away from markets in modern neo-republicanism.
Sandel makes both a historical and a normative claim in his book. As a historical matter, he argues that what he calls “market values and market reasoning” have recently intruded far more aggressively into arenas of life that were once seen as sacrosanct from the market.[153] Sandel claims that when something enters into the marketplace it becomes something that we value for its exchange, and not for itself.[154] For Sandel, markets become a short-hand for price, and pricing is bad for us. Sandel argues that the act of putting a price on things changes how we value them, and how we value each other.[155] For instance, a woman whose son needed ten thousand dollars for college sold a tattoo on her forehead to an online gaming site: selling her skin devalues her relationship to her body.[156] Lobbyists pay homeless people to stand in line for congressional/Supreme Court hearings, changing the public into the private.[157] He argues that in child rearing, procreation, civic life, and military endeavors, market reasoning erodes the value of the thing we seek.[158] There are areas of life, Sandel argues, where markets “don’t belong.”[159] Markets in areas where they don’t belong leads to higher inequality, he says, but also corrupts the things themselves—“[m]arkets leave their mark.”[160]
By dividing the world into market and non-market spheres, the “non-market” plays a large role in Sandel’s sphere, and he writes it in a way that makes it presumptively more benign. Of course, coercion from state authorities is a form of non-market distribution of goods and services. For instance, “the market” does not dictate how many taxes we pay, or how that money is spent on other goods. One “non-market” way to distribute the goods would be to provide public schools and fully fund them via taxes: this represents the benign model. Another “non-market” mechanism is for governmental leaders to collect taxes and use them to pay their relatives to do no-show jobs. World history is littered with non-benign, non-market distribution schemes.[161] Sandel does not engage in the non-market flaws, and in that failure, writes off the terrifying abuses of the state, as if they can be cordoned off and dealt with separately, instead of understanding and engaging in the harder discussion of different kinds of abuses.
What is interesting for our purposes is that Sandel accepts and reinforces the deep association between markets and price-based consumerism. Knowing the history of republicanism as well as anyone, he then ignores the ways in which markets might also enable and support and cultivate certain virtues. Markets, according to Sandel, are no more than “a tool” for “organizing productive activity.”[162] Sandel, who fifteen years earlier wrote so eloquently about the other values that markets provide—moral and civic[163]—simply accepts a mechanistic, always-low prices model without question.
Sandel’s failure to engage in the potential value of markets is undermined by some of his most intriguing examples, which are commercial, and profit-reaping, but not profit-maximizing. For instance, he uses the example of Bruce Springsteen concerts.[164] Springsteen sets the highest price at his concerts at ninety-five dollars, when he could charge much more.[165] Why not allow scalpers to resell these goods?[166] Sandel describes this as Springsteen creating something that is both market and non-market.[167] This is an astonishing characterization because it defines all moral activity in the market as “non-market.” In most of market history, being in the market does not mean charging the highest possible price or maximizing profit.
Essentially, Sandel denies markets the possibility of morality, the possibility of playing a role in moral freedom and development, because once commercial decisions include morality, they become non-market decisions.[168] This is circular: that which is moral is non-market, therefore what is market is non-moral. The result is a blinded imagination: in his creation of a binary of things that are inside the market and outside the market by price, he rejects the possibility of different kinds of markets with different kinds of relationships to morality.
Sandel, like many modern non-Marxist leftists, treats markets as a kind of necessary infectious disease that one must cordon off: he accepts the economists’ argument that markets and the language of “incentives” accompany each other instead of understanding how markets can exist with humans powered by courage and patience and compassion.[169]
Richard Dagger—also associated with the neo-republican school—cautions that while “markets are fine in their place,” they are not fine “when they spill into, and corrupt, other parts of life. In particular, neo-republicans must doubt that the market will always work toward the accomplishment of political equality, freedom as self-government, deliberative politics, or civic virtue.”[170] Dagger, like Sandel, treats markets as creating problems that public entities need to fix, instead of as creating spaces for freedom and moral and civic development.
The impact of this approach towards markets is that it makes Brandeisian thinking invisible or impossible, for two reasons. First, if market interactions qua market interactions are demoralizing, then we simply want to limit how they occur, instead of thinking about how we might restructure market freedom. Second, while Sandel’s world has sellers and buyers, the models he presents are repeatedly powerful buyers and weakened sellers (the tattoo seller, the homeless men, and women standing in line).[171] To be a seller is, in Sandel’s imagined world, often to be destitute and barely inching along with a tiny bit of dignity. His book contains no sellers who are wealthy enough but not overwhelmingly so, and who have a little freedom to make decisions (except Springsteen).[172] The seller is isolated and overwhelmed by the buyer, and not in an enviable situation, frequently with her back against the wall; again, this model moves us away from market structure and freedom debates.
The ancestors of the modern neoliberals were as deeply invested in doux commerce theory as the ancestors of modern neo-republicans. Traditional liberalism does not imagine that the freedom created by the separate spheres would lead to amoral or egotistical behavior. Instead, that freedom created the opportunity for good or right action in the private sphere.[173] Locke’s vision of liberalism does not imagine amoral actors protected from a tyrannical government, but moral actors protected from government.[174] The public would have family life, religious life, and also market life, and freedom within each sphere. Later liberals argued that commercial life is the font of many virtues; it has the potential to moralize and civilize as well as atomize and demoralize. Not only Adam Smith, but the influential economist Friedrich Hayek was committed to meaningful choice as a precursor to moral action—and moral growth. For Hayek (sounding a good deal like Brandeis), choice in the commercial sphere enables “inherent responsibility” which enables morality.[175] He wrote, “[i]t is only where the individual has choice, and its inherent responsibility, that he has occasion to affirm existing values, to contribute to their further growth, and to earn moral merit.”[176] Hayek worried that systems with too much centralization transformed the man into bureaucrats, taking them out of their capacity as decisionmakers and planners, who try, and fail, and thereby learn, into watchers of the system—working watchers, but essentially passive.[177] One of the essential reasons for his support for the free market was the level of engagement it required.
In the face of this disintegration of a traditional theory, there are a few modern proponents, mostly from the right, who continue to espouse it.
Dierdre McCloskey, in The Bourgeois Virtues, argues directly from the value of market exchange for virtue. According to McCloskey, “[c]apitalism has not corrupted the spirit. On the contrary, had capitalism not enriched the world by a cent nonetheless its bourgeois, antifeudal virtues would have made us better people than in the world we have lost. As a system it has been good for us.”[178] McCloskey argues that “[l]ove, faith, hope, courage, temperance, justice, and, of course, prudence . . . both enable and are promoted by and developed through markets.”[179] Relatedly, Michael Novak, the Catholic conservative, argued that: “commerce . . . teaches care, discipline, frugality, clear accounting, providential forethought, . . . respect for reckonings . . . fidelity to contracts, honesty in fair dealings, and concern for one’s moral reputation.”[180]
Similarly, in 2018, Law Professor Oman wrote The Dignity of Commerce, a contract law theory book, in which he argues that the reason courts should enforce contracts is because contracts enable commerce, and commerce is essential to plural, open, respectful politics.[181] Commerce shapes the person, supporting tolerance and cooperation. The existence of markets requires us to see the world from another’s perspective, because one cannot sell something to another without understanding, or at least attempting to understand, another’s world view. Empathy, the skill of putting oneself in another’s shoes, flows from markets. That same skill enables reason-giving, explanation, all things that enable self-governing political systems. “It is only by acquiring the ability to see the world through the eyes of another that effective political cooperation is possible. This is precisely the skill demanded of a successful trader.”[182] Markets also enable our capacity to relate to different, potentially off-putting strangers, through impersonal criteria—not their tribe status, or friend group, but likelihood of entering into contract. This capacity is also essential for liberal democracy, Oman argues.[183]
Moreover, and relatedly, they promote ongoing continued interactions with people with different values, lifestyles, and attributes. They create a “mechanism by which those with sharply differing religious, moral, and political beliefs can peacefully” co-exist.[184] Markets create and require trust with political and ideological enemies.[185] They are an ongoing training ground on which one can practice putting aside ethnic differences, belief system differences, and interact without violence.[186]
All of this, to my mind, might be persuasive, but it bears almost no relation to the modern way that markets work. Oman recognizes that not all self-described markets should get the benefit of this description, but then he calls out as exceptions the North Atlantic Slave Trade, or markets that commodify the human person.[187] What he does not do is recognize that the features he describes of markets simply don’t exist in modern markets: he defends existing markets as if they were decentralized, and lacking the control of financiers.
Both McCloskey and Oman’s doux commerce theory depends upon commerce and commercial interactions between merchants and buyers becoming part of routine life.[188] The characters at the center of doux commerce are the merchants, not the customers (although the customers present in a secondary role). The virtues, whether superficial or deep, of thrift or love, courage or honesty, all require something more than mere consumers fighting for the lowest price. Superficial virtues (Novak) or profound ones (McCloskey, Hayek) both require that interactions beyond mere purchase and consumption occur.[189] McCloskey’s market vision makes no sense in a world made up of a billion buyers from one retailer who faces only incipient competition: it is no accident she celebrates the bourgeois virtues. Widespread civic virtue or faux-virtue isn’t generated if the market demands are not felt by a significant number of people, or the market interactions aren’t engaged in by a significant number of people.
For instance, when he writes about the virtue of having to see the world through another’s eyes—one can hardly call that a virtue in today’s eyeglass market, which has two companies that dominate the entire industry.[190] There are only two CEOs of eyeglass companies. Therefore, only two people fall into his description: two people who are in the position to develop the virtue of seeing the world through another’s eyes. One of those CEOs is foreign. Neither are engaged in a daily way with purchasers. Oman cannot mean that these two men are sufficiently morally important that their alleged moral development justifies markets, or even that their roles are truly other-oriented. His lovely but fantastical description simply doesn’t match the world as it is.[191]
It is telling that Oman’s book begins with an anecdote about Jerusalem, where he sees an active, functioning outdoor market, and the wall that fences out Palestinians.[192] In one, he sees virtues being developed by interaction; in the other, virtues being stymied by radical segregation. But the outdoor market is a terrible example for today’s economy.
One could, therefore, reject Oman’s thesis out of hand. Because he is not describing modern markets, in any meaningful sense, the thesis is wrong. Alternatively, the question should not be whether markets always improve human character, but what market structure is the most likely to have positive impacts, and the one the least likely to do so.
One does not have to be a proponent of doux commerce to see the likelihood of an importance of market structure on the person, sensibilities, and general traits. The famous economist Alfred Marshall said this: “man’s character has been moulded by his every-day work, and the material resources which he thereby procures, more than any other influence unless it be that of his religious ideals; and the two great forming agencies of the world’s history have been the religious and the economic.”[193] Marshall’s character development thesis—as used by McCloskey—requires that “every-day work” of a non-trivial number of men involve being on the producer-side of market exchanges.[194] The virtues of thrift, honesty, seriousness, courage, hope, and vitality are virtues that could only hope to develop when producers are in our midst and are us, not when there are a handful of distant producers facing a mass of consumers.
Despite McCloskey’s effort, doux commerce has largely been replaced with a static view of the human, and an accompanying dismal view of the moral role of markets. In the law and economics vision, the perfectly efficient and competitive market is a “morally free zone.”[195] Morality, in Gauthier’s vision, must step in because of market failure.[196] Markets are designed to enable freedom, but that freedom does not mean moral action or thought in the commercial realm. Or, as Murray Rothbard, the Austrian school anarcho-capitalist, argues, we are choosing between a brutal ongoing war driven by egotism, or a pleasant market-based interaction driven by egotism.[197] According to Rothbard, the market itself is egotism, but it raises the standard of living such that it “permits man the leisure to cultivate the very qualities of civilization that distinguish him from the brutes.”[198]
Gauthier’s and Rothbard’s views are essentially the same as that of Sandel: the commercial transaction is successful when morality has no role.[199] Where the market is functioning, there is no morality in the market. Market freedom is freedom of the buyer or seller from state interference, but lack of freedom in terms of discretion or judgment.
The impact of the shift towards perfect efficiency is similar to that in the republican sphere: modern scholars are more likely to ignore questions of market structure as character-building, civic, and social. Moving from doux commerce to market efficiency means that character doesn’t matter, the development of character doesn’t matter, and there is no freedom to be exercised. An efficient market requires few sellers and many buyers; a doux commerce market requires far more.
E. Virtue Ethics/Business Ethics and Markets
There is one small area in which the debate about virtue, character, and markets is very much alive: in a small subset of business ethicists. An intriguing set of scholars has been working to apply virtue ethics to modern global capitalism. They do so against a generally gloomy backdrop: many virtue ethicists have washed their hands of business. Alasdair MacIntyre, for instance, concluded that the demands of advanced capitalism were inconsistent with the development of the moral character required for a thriving society, for several reasons.[200] First, they inverted virtues and vices (for a century, until global economic capitalism was fully entrenched, what we understand as vices were often pursued as virtues),[201] elevating profit maximization as a social good, replacing temperance, courage, and the other virtues. Second, they require a kind of separation of the self—the business owner and the community member and the family person—each with different masks, a lack of integrity that itself upsets the cultivations of virtues.
MacIntyre’s objection has been forcefully opposed by business ethicists, and in particular advocates of corporate social responsibility. corporate social responsibility (CSR) developed in the 1980s with the goal of pressuring companies to act more ethically.[202] While CSR is broadly associated with ethical behavior, CSR means different things to different people. For some people it means companies living up to their legal liabilities;[203] for some it means ethical action;[204] to some it means charitable involvement;[205] and “a few see it as a sort of fiduciary duty imposing higher standards of behavior on the businessmen than on citizens at large.”[206] It is almost exclusively focused on large multinationals, not small concerns. In part because of the confusion about what CSR is, there is an essential division within the field about the nature of the moral freedom available to managers and directors. From this disagreement flow three distinct models.
One model is that public attention through CSR campaigns highlights unmet consumer needs. Essentially, this model explicitly or implicitly treats the question as not so much corporate social responsibility but corporate social accountability.[207] According to this model, the companies can be significantly constrained by public opinion, so protest and outrage makes them more likely to engage in salutary behavior lest they lose customers.[208] An extreme version of this argues that boycott and outrage shift the constrained space from one set of limited options to another set of limited options. The companies are “forced” to, say, stop cutting down rainforests to produce beef. CSR incorporates into firm reputation social values held by swaths of people who can have an impact, and CSR improves the market, because there is a market for doing good.[209]
The second model is the most Panglossian: corporate responsibility actually improves bottom line performance.[210] Therefore, there is no need to persuade corporate leaders of the rightness of CSR, because it is also profitable.[211] The language of the proponents of this view will often use the language of align, i.e., aligning profits and people,[212] and talk about the triple bottom line (TBL or 3BL), a method of accounting that registers social, environmental (or ecological) and financial impacts as equal (a weaker version of this is that corporate social responsibility itself does not improve profits, unlike, say, good management).[213]
The third model is a much more direct attack on MacIntyre’s pessimism, and his understanding of reality. This model argues that directors and officers have much greater moral freedom than they are generally presumed to have. They operate with an enormous range of options, but culture—and possibly either apathy or immorality—blind them to the scope of their moral capacity. Therefore, the role of CSR is to awaken directors and officers to their own moral capacity. Ben Heineman, the former legal counsel for Ford, argues this in several articles and books.[214] This model is directly at odds with some modern mechanistic thinking about economics, thinking that has pervaded business schools since the 1960s.[215] Therefore, this way of seeing CSR may be best understood as a unwittingly profound challenge to neoclassical economics, to the human nature described by neoclassical economics, and the mechanistic, marginal-profit seeking manager.[216] As Claus Dierksmeier argues that it is a needed corrective, and better grounded in reality; he argues, “[t]he most common practices of management presuppose the very freedom that economics has so long disregarded.”[217]
Within this model, some argue that corporate directors and officers know their freedom and have been socialized not to exercise it;[218] others that they have been trained not to know their freedom. Edward Queen, the head of Emory’s ethics program, recently wrote that “far too much of the world’s corporate leadership is driven by moral midgets who have been educated far beyond their capacities for good judgment” because “epigones of Milton Friedman have been emphasizing that the only duty of a corporation is return on investment. This lesson, drilled into generations of business school graduates, now drives tsunamis of corporate malfeasance.”[219]
While business ethics would be a natural place to explore questions of moral space and market structure, to date, I have found no interesting examination of market structure and its relationship to CSR within the CSR literature. Such an exploration would most likely fall within camp three, assuming a degree of freedom that can be appealed to.[220] However, I have no good explanation for why I have found little business ethics literature on market structure, and may merely be looking in the wrong place.
The question that Brandeis faced—and that we face now—is whether we ought to be considering ways to encourage active moral action in the market, by creating moral space, and valuing the distribution of market freedom. There are those who may see the effort to enable decentralized moral space in markets as wrong and overly moralistic. There are those who see this effort as impossible. And then there are those, like Brandeis, who understand that self-government is far more difficult in an industrial era, but not so difficult as to be discarded.
[1] George Eliot, Middlemarch (Penguin Classics 3d ed. 1994) (1871–72).
[2] See infra Sections I.A and III.A.
[4] See generally infra note 5.
[5] See Jeff Guo, Gerrymandering Didn’t Make Politics This Vicious. But Vicious Politics Will Soon Make Gerrymandering So Much Worse., Wash. Post (July 2, 2015, 7:00 AM), https://www.washingtonpost.com/blogs/govbeat/wp/2015/07/02/gerrymandering-didnt-make-politics-this-vicious-but-vicious-politics-will-soon-make-gerrymandering-so-much-worse [https://perma.cc/5SRQ-Z33J]. This Washington Post article quotes Justice Ginsburg’s opinion in this gerrymandering case, Arizona State Legislature v. Arizona Independent Redistricting Commission, 135 S. Ct. 2652 (2015):
Our Declaration of Independence . . . drew from Locke in stating: “Governments are instituted among Men, deriving their just powers from the consent of the governed.” And our fundamental instrument of government derives its authority from “We the People.” As this Court stated, quoting Hamilton: “[T]he true principle of a republic is, that the people should choose whom they please to govern them.” In this light, it would be perverse to interpret the term “Legislature” in the Elections Clause so as to exclude lawmaking by the people, particularly where such lawmaking is intended to check legislators’ ability to choose the district lines they run in, thereby advancing the prospect that Members of Congress will in fact be “chosen . . . by the People of the several States.”
Id. at 2675 (internal citations omitted).
[8] Robert H. Bork, The Antitrust Paradox: A Policy at War with Itself 50 (1978).
[9] Maurice E. Stucke, Reconsidering Antitrust’s Goals, 53 B.C. L. Rev. 551, 558 (2012).
[10] Kenneth G. Elzinga, The Goals of Antitrust: Other than Competition and Efficiency, What Else Counts?, 125 U. Pa. L. Rev. 1191, 1191 (1977).
[12] See, e.g., David M. Gross, 99 Tactics of Successful Tax Resistance Campaigns 129 (2014) (“The monopoly on tea imports that the British government enforced in the American colonies was ‘equal to a tax’ in the eyes of Samuel Adams and his fellow patriots.”); Alison Peck, Revisiting the Original “Tea Party”: The Historical Roots of Regulating Food Consumption in America, 80 UMKC L. Rev. 1, 5, 31 (2011) (“Although not acting under color of law, colonial elites like George Washington and John Hancock organized Associations, drafted specific non-consumption agreements, defined penalties for failure to comply, and published those agreements to their neighbors. . . . After Bostonians entered into a non-importation agreement established to protest the Townshend Acts, John Hancock chaired a committee of merchants to communicate with merchants and traders of neighboring towns to encourage their concurrence.”).
[13] The Consumer Welfare Standard in Antitrust: Outdated or a Harbor in a Sea of Doubt?: Hearing Before the Subcomm. on Antitrust, Competition, and Consumer Rights of the Sen. Comm. on the Judiciary, 116th Cong. (2017) (testimony of Barry C. Lynn, Exec. Dir. of Open Markets Inst.).
[14] 4 James Madison, Essay, Etc., in Letters and Other Writings 479 (Philadelphia, J.B. Lippincott 1865).
[15] See Appalachian Coals, Inc. v. United States, 288 U.S. 344, 359–60 (1933) (“As a charter of freedom, the [Sherman Antitrust Act of 1890] has a generality and adaptability comparable to that found to be desirable in constitutional provisions.”).
[16] Sandeep Vaheesan, The Evolving Populisms of Antitrust, 93 Neb. L. Rev. 370, 372–73 (2014) (summarizing the history and exploring the early focus on producer freedom).
[17] Carl T. Bogus, The New Road to Serfdom: The Curse of Bigness and the Failure of Antitrust, 49 U. Mich. J.L. Reform 45, 47 (2015).
[18] See Sherman Act, 15 U.S.C. §§ 1–38; 21 Cong. Rec. 2455, 2461 (1890).
[19] See, e.g., Richard Hofstadter, The Paranoid Style in American Politics 199–200 (Vintage Books 2008) (1965); Vaheesan, supra note 16 (summarizing the history and exploring the early focus on producer freedom).
[20] Lina M. Khan, Amazon’s Antitrust Paradox, 126 Yale L.J. 710, 718 (2017) (“Broadly, economic structuralism rests on the idea that concentrated market structures promote anticompetitive forms of conduct. This view holds that a market dominated by a very small number of large companies is likely to be less competitive than a market populated with many small- and medium-sized companies. This is because: (1) monopolistic and oligopolistic market structures enable dominant actors to coordinate with greater ease and subtlety, facilitating conduct like price-fixing, market division, and tacit collusion; (2) monopolistic and oligopolistic firms can use their existing dominance to block new entrants; and (3) monopolistic and oligopolistic firms have greater bargaining power against consumers, suppliers, and workers, which enables them to hike prices and degrade service and quality while maintaining profits.” (internal footnote omitted)).
[21] Ganesh Sitaraman, Unchecked Power, New Republic (Nov. 29, 2018), https://newrepublic.com/article/152294/unchecked-power [https://perma.cc/CSZ7-AQQN].
[22] “Clearly, economic freedom, in and of itself, is an extremely important part of total freedom. Viewed as a means to the end of political freedom, economic arrangements are important because of their effect on the concentration of power.” Milton Friedman, Capitalism and Freedom 9 (Univ. of Chi. Press 2002) (1962). “Like democracy, competition is a process designed to aid no one in particular. It does not promote any set of subjective moral values except those values that put the process in place. It will sometimes have harsh results, but, on balance, compared with the alternatives, it best promotes the public good.” Eleanor M. Fox, Modernization of Antitrust: A New Equilibrium, 66 Cornell L. Rev. 1140, 1180 n.144 (citing John Hart Ely, Democracy and Distrust: A Theory of Judicial Review (1980)).
[23] K. Sabeel Rahman, Democracy Against Domination 173–80 (2017).
[25] See Melvin I. Urofsky, Louis D. Brandeis: A Life 637–38 (Pantheon Books 2009) (“For Brandeis, who devoured not only the daily news but also dry corporate and government reports, free speech and an informed citizenry had practical purposes. After the debate, the people could, through their elected representatives, translate these ideas into specific policies. Citizens had the civic duty to participate in politics, to deliberate important questions. Only in that way could the state provide conditions of freedom which were ‘the secret of happiness.’ Implicit in the opinion is a notion of civic virtue that derives from classical Greek theory, and in Whitney one can easily discern Brandeis’s long fascination with ancient Greece. The sentence ‘They believed liberty to be the secret of happiness and courage to be the secret of liberty’ comes almost directly from Pericles, and much of the paragraph is fashioned after the Funeral Oration. There is a great idealism in this passage, a belief that if men and women can learn and make informed decisions, they can create a better society. However, it is not just idealism here but pragmatism as well. Political liberty is at best a fragile construct, and it will fail if citizens become inert.”); see also Lee C. Bollinger & Geoffrey R. Stone, The Free Speech Century 25 (2019) (“It may help in trying to interpret Brandeis to know that his observation about liberty being the secret to happiness and courage the secret of liberty was lifted from the Funeral Oration of Pericles, as rendered by Thucydides in his History of the Peloponnesian War. Pericles attributed Athens’ military success to the courage, awareness, and inventiveness that Athenians possessed as a result of their stimulating culture, which offered may opportunities for personal initiative and civic responsibility. His basic point was that individual, civic, and military flourishing are interconnected.” (emphasis added) (internal footnote omitted)).
[26] 274 U.S. 357, 372–80 (1927) (Brandeis, J., concurring).
[29] 288 U.S. 517, 580 (1933) (Brandeis, J., dissenting in part).
[30] Id. at 528–32 (majority opinion).
[31] Id. at 541 (Brandeis, J., dissenting in part).
[34] To be clear, in both Liggett and Whitney, Brandeis does not express these as his own views, but of the views of “the founders,” but his ventriloquism is traditionally understood to barely mask his own views. See supra note 26; supra note 29.
[35] Urofsky, supra note 25, at xii (quoting a letter to Harold Laski).
[36] Philippa Strum, Brandeis and the Living Constitution, in Brandeis and America 118, 124–25 (Nelson L. Dawson ed., 1989).
[37] Jeffrey Rosen, Louis D. Brandeis: American Prophet 147 (2016) (quoting remarks made by Brandeis in 1914 at an emergency meeting of the American Zionists at the Hotel Marseilles in New York).
[41] See, e.g., The Federalist No. 10 (James Madison); Letter from Thomas Jefferson to Thomas Law (June 13, 1814), in Jefferson: Political Writings 285, 287–88 (Joyce Appleby & Terence Ball eds., 2004).
[42] Louis D. Brandeis, An Address Delivered to the Industrial Department of the National Civic Federation (Apr. 25, 1905), https://louisville.edu/law/library/special-collections/the-louis-d.-brandeis-collection/the-desirable-industrial-peace-by-louis-d.-brandeis [https://perma.cc/XRG6-6GBY].
[43] See Rahman, supra note 23, at 173–74.
[44] United States v. Aluminum Co. of Am., 148 F.2d 416, 427 (2d Cir. 1945).
[46] N. Pac. Ry. Co. v. United States, 356 U.S. 1, 4 (1958). This approach was not universal, by any means: even Thurman Arnold, President Franklin D. Roosevelt’s antitrust chief and arguably the most aggressive federal antitrust enforcer in American history, eschewed moral and civic rationales for more narrowly transactional ones. There’s some debate about this—it may be that he simply didn’t engage in those questions to the same degree. Arnold focused on the fact that concentration often masked abuse and inefficiency, and brought more of a transactional perspective to his prosecutions.
[47] See generally John T. Miller Jr., Conglomerates, Conglomerate Mergers and the Federal Antitrust Laws, 44 St. John’s L. Rev. 613 (1970).
[48] See generally Jonathan B. Baker, A Preface to Post-Chicago Antitrust, in Post-Chicago Developments in Antitrust Law 60, 63–64 (Antonio Cucinotta, Roberto Pardolesi & Roger Van den Bergh eds., 2002).
[49] Harlan M. Blake & William K. Jones, In Defense of Antitrust, 65 Colum. L. Rev. 377, 383 (1965).
[50] Ellis W. Hawley, The New Deal and the Problem of Monopoly: A Study in Economic Ambivalence (1966). For an argument that the Bork and Brandeis fight obscures the value of Arnold, who joins structuralism with a focus on efficiency and consumer welfare, see generally Baker, supra note 48.
[51] See, e.g., William H. Page, The Chicago School and the Evolution of Antitrust: Characterization, Antitrust Injury, and Evidentiary Sufficiency., 75 Va. L. R. 1221 (1989).
[52] See Bork, supra note 8, at 50. Despite this proclamation, Bork used the conflation of purpose and jurisprudence not only to narrow jurisprudence, but to narrow purpose. He argues that because such purposes would be difficult to apply in a jurisprudential way, they should not be considered as purposes. Id.
[54] Robert Pitofsky, The Political Content of Antitrust, 127 U. Pa. L. Rev. 1051, 1051 (1979).
[56] Robert H. Bork & Ward S. Bowman, Jr., The Crisis in Antitrust, 65 Colum. L. Rev. 363, 369 (1965).
[58] Bork & Bowman, supra note 56, at 370.
[59] Bork, supra note 8, at 54.
[62] Unsurprisingly, the little research that has been done on moral distance supports the thesis that lack of interaction corrupts moral sentiments. There is extensive research on psychological distance and the urge to engage in moral action. See, e.g., The Wisdom in Feeling: Psychological Processes in Emotional Intelligence (Lisa Feldman Barrett & Peter Salovey eds., 2002); Affect and Cognition (Margaret Sydnor Clark & Susan T. Fiske eds., 1982); Feeling and Thinking: The Role of Affect in Social Cognition (Joseph P. Forgas ed., 2001); Joseph LeDoux, The Emotional Brain: The Mysterious Underpinnings of Emotional Life (1996); George F. Loewenstein et al., Risk as Feelings, 127 Psychol. Bull. 267 (2001); Paul Slovic et al., The Affect Heuristic, in Heuristics and Biases: The Psychology of Intuitive Judgment 397 (Thomas Gilovich et al., eds., 2002). There is substantial evidence that moral action and moral awareness flow from emotional connection, and that emotional connection flows from contact.
[63] Bork, supra note 8, at 216.
[65] Setting aside the profound Panglossianism of the view “[w]hat exists is ultimately the best guide to what should exist,” there are dozens of problems with this view, which I do not present here, because my interest is less in rebutting the Chicago School, and more in exploring the thinking it too quickly discarded. Marc Allen Eisner, Antitrust and the Triumph of Economics: Institutions, Expertise, & Policy Change 104 (1991).
[66] Barak Orbach, How Antitrust Lost Its Goal, 81 Fordham L. Rev. 2253 (2013).
[67] See Robert Abrams, Developments in State Antitrust Enforcement, 62 N.Y.U. L. Rev. 989, 995 (1987).
[69] Herbert Hovenkamp, The Antitrust Enterprise: Principle and Execution 2 (2005).
[70] Maurice E. Stucke & Ariel Ezrachi, The Rise, Fall, and Rebirth of the U.S. Antitrust Movement, Harv. Bus. Rev. (Dec. 15, 2017), https://hbr.org/2017/12/the-rise-fall-and-rebirth-of-the-u-s-antitrust-movement [https://perma.cc/9DL7-CFX9].
[71] Jonathan B. Baker & Steven C. Salop, Antitrust, Competition Policy, and Inequality, 104 Geo. L.J. Online 1 (2015).
[72] United States v. Aluminum Co. of Am., 148 F.2d 416, 427 (2d Cir. 1945).
[73] Jonathan B. Baker & Robert Pitofsky, A Turning Point in Merger Enforcement: Federal Trade Commission v. Staples, in Antitrust Stories 311, 315 (Eleanor M. Fox & Daniel A. Crane eds., 2007).
[74] The recent use of “out of date,” or “old fashioned” to talk about ideas that persisted for thousands of years and largely persist in the broad culture is very interesting. Kenneth Arrow, for instance, noted that the “slightly old-fashioned terminology called virtues in fact plays a significant role in the operation of the economic system.” Kenneth J. Arrow, Gifts and Exchanges, in Altruism, Morality, and Economic Theory 13, 15 (Edmund S. Phelps ed., 1975).
[75] Jonathan B. Baker, The Antitrust Paradigm: Restoring a Competitive Economy 1–7 (2019).
[76] Barak Y. Orbach, The Antitrust Consumer Welfare Paradox, 7 J. Competition L. & Econ., 133, 133 (2010).
[78] Khan, supra note 20, at 716.
[80] Id. at 738, 803. Khan’s paper is one of an array of articles about the need for a new way to see antitrust in the context of big data and the platform monopolists. See Maurice E. Stucke & Allen P. Grunes, Big Data and Competition Policy 1–11 (2016); Mark R. Patterson, Antitrust Law in the New Economy: Google, Yelp, LIBOR, and the Control of Information (2017); Frank Pasquale, When Antitrust Becomes Pro-Trust: The Digital Deformation of U.S. Competition Policy, in CPI Antitrust Chronicle (2017).
[81] Marshall Steinbaum & Maurice E. Stucke, Roosevelt Inst., The Effective Competition Standard: A New Standard for Antitrust 21 (2018).
[82] Maurice E. Stucke, Should Competition Policy Promote Happiness?, 81 Fordham L. Rev. 2575, 2579–88 (2013).
[85] Tim Wu, The Curse of Bigness: Antitrust in the New Gilded Age (2018).
[91] Tim Wu, The Utah Statement: Reviving Antimonopoly Traditions for the Era of Big Tech, Medium: OneZero (Nov. 18, 2019), https://onezero.medium.com/the-utah-statement-reviving-antimonopoly-traditions-for-the-era-of-big-tech-e6be198012d7 [https://perma.cc/A4QP-GS6A].
[92] Robert C. Post, Citizens Divided: Campaign Finance Reform and the Constitution 50–51, 54 (2014).
[93] Anthony V. Alfieri, The Fall of Legal Ethics and the Rise of Risk Management, 94 Geo. L.J. 1909, 1939 (2006).
[95] Id.; see also Russell Pearce & Eli G. Wald, Making Good Lawyers, 9 U. St. Thomas L.J. 403, 412 (2011) (arguing that seeing ourselves as atomistic and individual changes our capacity for moral development).
[96] Lynn Sharp Paine, Moral Thinking in Management: An Essential Capability, 6 Ethics Q. 477 (1996).
[97] See generally Jackie Leach Scully et al., ‘You Don’t Make Genetic Test Decisions from One Day to the Next’—Using Time to Preserve Moral Space, 21 Bioethics 208 (2007); see also Stuart G. Finder & Virginia L. Bartlett, Discovering What Matters: Interrogating Clinician Responses to Ethics Consultation, 31 Bioethics 267 (2017).
[98] Ann B. Hamric & Lucia D. Wocial, Institutional Ethics Resources: Creating Moral Spaces, Hastings Ctr. Rep., Sept.–Oct. 2016, at S22, S22 (quoting Margaret Urban Walker, Letter, Hastings Ctr. Rep., Sept.–Oct. 1993, at 45, 45).
[99] See United States v. Aluminum Co. of Am., 148 F.2d 416, 427 (2d Cir. 1945) (“Many people believe that possession of unchallenged economic power deadens initiative, discourages thrift and depresses energy; that immunity from competition is a narcotic, and rivalry is a stimulant, to industrial progress; that the spur of constant stress is necessary to counteract an inevitable disposition to let well enough alone.”).
[100] Frank Lovett, Republicanism, Stan. Encyclopedia Phil. (June 19, 2006), https://plato.stanford.edu/entries/republicanism [https://perma.cc/QSY5-3QBB].
[101] See Philip Pettit, Republicanism: A Theory of Freedom and Government (1997).
[105] See Terry L. Besser & Nancy Miller, Is the Good Corporation Dead? The Community Social Responsibility of Small Business Operators, 30 J. Socio-Economics 221 (2001).
[106] See Adolf A. Berle & Gardiner C. Means, The Modern Corporation and Private Property 86 (rev. ed. 1968); see also Brian R. Cheffins, The Public Company Transformed 3 (2019) (“There was correspondingly a real risk that senior executives would take advantage of what Adolf Berle and Gardiner Means famously described in 1932 a separation of ownership and control to exercise their managerial authority in a manner that was contrary to the interests of stockholders and others closely affiliated with companies.”).
[107] See generally Lisa Herzog, Inventing the Market: Smith, Hegel, & Political Theory ch. 2 (2013).
[111] William James, Habit 51 (1914).
[112] See generally Robert S. Taylor, Market Freedom as Antipower, 107 Am. Pol. Sci. Rev. 593 (2013). Taylor follows Pettit’s general schema while noting that Pettit has previously been overly dismissive of the need to construct a republican theory of markets, writing in 1997 that “there is not much of interest that can be said about republican economic policy in the abstract.” Pettit, supra note 101, at 163.
[113] Taylor, supra note 112, at 594.
[116] Zephyr Teachout, The Problem of Monopolies & Corporate Public Corruption, 147 Daedalus 111, 112 (2018).
[117] See John S. Kloppenborg, Associations in the Greco-Roman World, Oxford Bibliographies, https://www.oxfordbibliographies.com/view/document/obo-9780195393361/obo-9780195393361-0064.xml#firstMatch [https://perma.cc/A9XE-5NGL] (last updated Apr. 28, 2016), for a discussion on the “typical Roman cityscape, in which occupational and cultic associations play important roles in civic and social life (e.g. voting, festivals, burial).” Ramsay MacMullen, Roman Social Relations, 50 B.C. to A.D. 284 (1974).
[118] See Max Weber, Voluntary Associational Life (Vereinswesen), in 2 Max Weber Stud. 199–209 (2002); Georg Wilhelm Friedrich Hegel, Hegel’s Philosophy of Right 152–55 (T. M. Knox trans., Oxford University Press 1967).
[119] See Georg Wilhelm Friedrich Hegel, Elements of the Philosophy of Right, at xvi (Allen W. Wood ed., H.B. Nisbet trans., 2017) (“In fact, Hegel thinks that the greatest enemy of personal and subjective freedom is a ‘mechanistic’ conception of the state, which views the state solely as an instrument for the enforcement of abstract rights; for this sets the state up as an abstraction in opposition to individuals. . . . The only real guarantee of freedom is a well-constituted ethical life, which integrates the rights of persons and subjects into an organic system of customs and institutions providing individuals with concretely fulfilling lives.”).
[120] Id. at xii (“Hegel’s name for a rational system of social institutions is ‘ethical life.’ Corresponding to ‘objective’ ethical life (the system of rational institutions) is a ‘subjective’ ethical life, an individual character which disposes the individual to do what the institutions require.” (internal citation omitted)); see also id. at xix (“Individual freedom in civil society involves much more than simply being left alone to find our way through life in a market system. If we are to be ‘with ourselves’ as members of civil society, we must also achieve a determinate social identity, a specific trade or profession, conferring upon us a determinate social estate, standing or status. Through membership in an estate, our economic activity ceases to be a mere individual self-seeking. It becomes a determinate kind of contribution to the welfare of civil society as a whole, recognized for what it is by others.” (internal citation omitted)).
[121] Hegel, supra note 118, at 278.
[122] Id. (“This work of a public character, which the modern state does not always provide, is found in the Corporation.”).
[123] Id. (“[I]t is in the Corporation that it first changes into a known and thoughtful ethical mode of life.”).
[124] Id. (“This work of a public character, which the modern state does not always provide, is found in the Corporation. We saw earlier . . . that in fending for himself a member of civil society is also working for others. But this unconscious compulsion is not enough; it is in the Corporation that it first changes into a known and thoughtful ethical mode of life.”)
[125] Emile Durkheim, The Division of Labor in Society 18 (W.D. Halls, trans., Simon & Schuster 1997) (1933) (“Just as the family has elaborated domestic ethics and law, the corporation is now the source of occupational ethics and law. But to succeed in getting rid of all the prejudices, to show that the corporative system is not solely an institution of the past it would be necessary to see what transformation it must and can submit to in order to adopt itself to modern societies for evidently it cannot exist today as it did in the middle ages.”).
[126] Id. at 26 (“To be sure, where a group is formed, a moral discipline is formed too. But the institution of this discipline is only one of the many ways through which collective activity is manifested. A group is not only a moral authority which dominates the life of its members; it is also a source of a life sui generis. Form it comes a warmth which animates its members, making them intensely human, destroying their egotisms. Thus, in the past, the family was the legislator of law and ethics whose severity went to extreme of violence, at the same time that it was the place where one first learned to enjoy the effusions of sentiment. We have also seen how the corporation, in Rome and in the Middle Ages, awakened these same needs and sought to satisfy them.”).
[129] Richard F. Doner & Ben Ross Schneider, Business Associations and Economic Development: Why Some Associations Contribute More than Others, 2 Bus. & Pol. 261, 262 (2000) (analyzing Olson’s initial skepticism, that grew to outright hostility, to trade associations); see Mancur Olson, The New Institutional Economics: The Collective Choice Approach to Economic Development, in Institutions and Economic Development: Growth and Governance in Less-Developed and Post-Socialist Countries 37 (Christopher Clague ed., 1997). Olson, whatever his virtues, was no empiricist, so this transformation seems to have occurred because he dug deeper into his initial theories, not because of new information.
[130] Michael J. Sandel, What Money Can’t Buy: The Moral Limits of Markets 85 (2012) (“The language of incentives is a recent development in economic thought.”).
[132] Michael J. Sandel, How Markets Crowd Out Morals, Bos. Rev. (May 1, 2012), http://bostonreview.net/forum-sandel-markets-morals [https://perma.cc/ZJT7-ZQEX] (“Notice that Summers’s version of virtue as a commodity is even starker than Arrow’s. Reckless expenditures of altruism in social and economic life not only deplete the supply available for other public purposes; they even reduce the amount we have left for our families and friends.”).
[133] See Charles de Secondat & Baron de Montesquieu, The Spirit of Laws (Thomas Nugent trans., Batoche Books 2001) (1748).
[134] Id. at 346–47 (internal footnote omitted).
[137] Id. (internal footnote omitted).
[138] J.J. Rousseau, A Discourse upon the Origin and the Foundation of the Inequality Among Mankind, in 34 The Harvard Classics 167, 214–15 (Charles W. Eliot ed., 1889) (1755).
[139] Albert O. Hirschman, The Passions and the Interests: Political Arguments for Capitalism Before Its Triumph 59–60 (Princeton University Press 2013) (1977). Hirschman joined Smith’s argument to a persistent strain in thought, which he called the “doux-commerce thesis.” See Albert O. Hirschman, The Essential Hirschman 216–18 (2013). Markets, he said, have long been understood to be a “powerful moralizing agent.” See id. at 218. Doux commerce thinking associated commercial activity to “sweetness, softness, calm, and gentleness . . . the antonym of violence.” Hirschman, The Passions and the Interests, supra, at 59. Markets were even supposed to improve love! The nineteenth century German philosopher Georg Simmel argued that competition developed empathy because of the need for human relationships between buyers and sellers. See Georg Simmel, Conflict & the Web of Group-Affiliations 61–62 (Kurt H. Wolff & Reinhard Bendix trans., The Free Press 1964).
Competition compels the wooer . . . to go out to the wooed, come close to him, establish ties with him, find his strengths and weaknesses and adjust to them. . . . Innumerable times, [competition] achieves what usually only love can do: the divination of the innermost wishes of the other, even before he himself becomes aware of them.
Id.
[140] Mark L. Movsesian, Markets and Morals: The Limits of Doux Commerce, 9 Wm & Mary Bus. L. R. 449, 459 (“According to the doux commerce thesis, the benefits of commerce were not limited to domestic politics. Internationally, too, commerce was thought to promote harmony by creating networks based in nations’ reciprocity and mutual interest. ‘The natural effect of commerce is to lead to peace,’ Montesquuiie wrote. . . . In fact, the more self-confident versions of the doux commerce thesis predicted a peaceful global civilization grounded in trade. . . . ‘If commerce were permitted to act to the universal extent it is capable, it would extirpate the system of war . . . The invention of commerce . . . is the greatest approach towards universal civilization, that has yet been made by any means not immediately flowng from moral principles.’”) (internal footnotes omitted).
[141] M.L. Biermans, Decency and the Market: The ILO’s Decent Work Agenda as a Moral Market Boundary (May 25, 2012) (unpublished Ph.D dissertation, Amsterdam School of Economics Research Institute) (available at https://dare.uva.nl/search?identifier=a857a549-7e13-41ed-a136-496c36894c68 [https://perma.cc/24NT-3JDW]).
[142] Movsesian, supra note 140, at 459 (“Commerce ‘is a pacific system, operating to cordialize mankind, by rendering nations as well as individuals, useful to each other,’ Thomas Paine declared in The Rights of Man (1792).”).
[143] Hirschman, The Essential Hirschman, supra note 139, at 217.
[144] See Adam Smith, Lectures on Justice, Police, Revenue, and Arms 254 (Oxford, Clarendon Press 1896) (“When people seldom deal with one another, we find that they are somewhat disposed to cheat . . . .”).
[145] See Michael J. Sandel, Democracy’s Discontent: America in Search of a Public Philosophy 268 (Harvard University Press 1998).
[146] Marion Fourcade & Kieran Healy, Moral Views of Market Society, 33 Annu. Rev. Soc. 14.1, 14.3 (2007) (“The doux commerce tradition is carried forward by arguments that the market nourishes personal virtues of honest behavior, civility, and cooperation.”).
[147] Movsesian, supra note 140, at 469 (“In his great essay on the play, ‘On Christian and Jew,’ Allan Bloom uncovers the play’s essential truth: commerce promotes only a superficial cooperation, a surface tolerance that disappears at moments of crisis. . . . Only when people agree what is most important in life can they be said to form a community—and doux commerce can hide disagreements for only so long.”).
[148] Matthew D. Mendham, Enlightened Gentleness as Soft Indifference: Rousseau’s Critique of Cultural Modernization, 31 Hist. Pol. Thought 605, 610 (2010) (“[Rousseau’ consistently found modern commerce, vanity, luxury and intellectual life to be morally disastrous, and he therefore directed his primary theoretical energies towards exposing them as such and presenting radical alternatives.”); Mark Garrett Longaker, Rhetorical Style and Bourgeoise Title: Capitalism and Civil Society in the British Enlightenment (2015) (“In the mid-eighteenth century, many discussed a third way to train character and thereby improve society: doux commerce. Smith’s lifelong friend, David Hume, was among those who though that commercial ‘refinement makes men polite . . . [and] also moralizes them.’”) (internal footnote omitted); The Oxford Handbook of Adam Smith 60 (Christopher J. Berry et al., eds., 2013) (“[M]any of them embraced the doctrine of doux commerce, according to which commerce—meaning social interaction generally, but economic trade in particularleads to douceur, or gentleness and mildness.”).
[149] See Philip Pettit, Republicanism: A Theory of Freedom and Government (1997).
[150] David Gauthier, Morals by Agreement 13 (1986) (“The first conception central to our theory is therefore that of a morally free zone, a context within which the constraints of morality would have no place.”).
[151] See Sandel, supra note 145, at 317.
[152] See Sandel, supra note 130.
[154] Id. at 94 (“The market exchange would dissolve the good that gives the prize its value.”).
[155] Id. at 89 (“[M]arketizing a good can change its meaning.”).
[156] Aaron Falk, Mom Sells Face Space for Tattoo Advertisement, Deseret News (June 30, 2005, 9:20 AM), https://www.deseret.com/2005/6/30/19900047/mom-sells-face-space-for-tattoo-advertisement#smith-shows-off-the-new-ad-site-she-plans-to-use-the-10000-to-send-her-son-brady-left-to-a-private-school [https://perma.cc/MFZ7-GDQY].
[157] Sandel, supra note 130, at 89.
[158] Id. (“But when market reasoning is applied to sex, procreation, child rearing, education, health, criminal punishment, immigration policy, and environmental protection, it’s less plausible to assume that everyone’s preferences are equally worthwhile.”).
[159] Id. at 7 (“It was the expansion of markets, and of market values, into spheres of life where they don’t belong.”).
[160] Id. at 64 (“There is something distasteful about a market in refugees, even if it leads to more refugees finding asylum. But what exactly is objectionable about it? . . . Markets leave their mark on social norms.”).
[161] To pick out any one example of corruption in public administration seems strange here—any time a lawmaker prefers his or her own family in the distribution of public funds.
[162] Id. at 10 (“The difference is this: A market economy is a tool—a valuable and effective tool—for organizing productive activity.”).
[165] Id. (“In 2009, Bruce Springsteen performed two concerts in his home state of New Jersey. He set the highest ticket price at $95 . . . .”).
[166] Id. at 35 (“What’s wrong with ticket scalping?”).
[170] Richard Dagger, Neo-Republicanism and the Civic Economy, 5 Pol., Phil. & Econ. 151, 158 (2006). Therefore, the republican, according to Dagger, must approach markets with caution, examining ways to limit wealth as a threat to political equality. Id. at 154. Dagger then proposes four elements of a republican economic theory: they are all essentially about redistribution, elements of taking the dangers of markets and then solving them through non-market means, instead of working within markets. Id.
[171] See Sandel, supra note 130.
[173] See John Stuart Mill, On Liberty (Batoche Books Limited 2001).
[174] See John Locke, Two Treatises of Government (Peter Laslett ed., Cambridge Univ. Press 1988) (1690); John Locke, Essays on the Law of Nature (W. von Leyden, ed., Oxford Univ. Press 2002).
[175] F.A. Hayek, The Moral Element in Free Enterprise, FEE (July 1, 1962),
https://fee.org/articles/the-moral-element-in-free-enterprise [https://perma.cc/YT9J-G2YC].
[176] F.A. Hayek, Studies in Philosophy, Politics and Economics 230 (Simon and Schuster 1969) (1967).
[178] Deirdre N. McCloskey, The Bourgeois Virtues: Ethics for an Age of Commerce 29–30 (The Univ. of Chi. Press 2006).
[179] Arielle John & Virgil Henry Storr, The Sociability and Morality of Market Settlements, in Handbook of Creative Cities 405, 410 (David Emanual Andersson, Åke E. Andersson & Charlotta Mellander eds., Edward Elgar Publ’g 2011).
[181] See Nathan B. Oman, The Dignity of Commerce: Markets and the Moral Foundations of Contract Law (2016).
[183] Id. (“The capacity to consider others is key to many liberal virtues. . . . But the habit inculcated by well-functioning markets will make people adept in precisely the feats of imaginative understanding that liberalism requires.”).
[185] Id. at 101 (“The problem is that many of the benefits of well-functioning markets occur in precisely those cases where people engage in commerce across tribal boundaries.”).
[188] See Arielle John & Virgil Henry Storr, supra note 179.
[189] See id.; Hayek, supra note 176.
[190] Oman, supra note 181, at 46.
[193] Alfred Marshall, Principles of Economics 1 (8th ed. 2013).
[195] Gauthier, supra note 150, at 13 (“The first conception central to our theory is therefore that of a morally free zone, a context within which the constraints of morality would have no place.”).
[196] Id. at 84 (“Morality arises from market failure.”).
[197] See Murray N. Rothbard, Man, Economy, and the State with Power and Market 1325 (Scholar’s ed., 2009).
[199] See id.; supra note 150.
[200] See Alasdair MacIntyre, After Virtue: A Study in Moral Theory (Univ. of Notre Dame Press 3d ed. 2007) (1981).
[201] David S. Bright, Bradley A. Winn & Jason Kanov, Reconsidering Virtue: Differences of Perspective in Virtue Ethics and the Positive Social Sciences, 119 J. Bus. Ethics 445, 450 (2014) (“In fact, there are now dozens of articles in social science journals that explore how virtues may be vices and that many virtue strengths demonstrate inverse U-shaped properties.”).
[202] Archie B. Carroll, Corporate Social Responsibility: Evolution of a Definitional Construct, 38 Bus. & Soc’y 268, 284 (1999).
[203] Id. at 280 (citing Dow Votaw, Genius Becomes Rare: A Comment on the Doctrine of Social Responsibility Pt. II, 15 Cal. Mgmt. Rev. 11 (1973)).
[207] See S. Prakash Sethi, Globalization and the Good Corporation: A Need for Proactive Co-Existence, 43 J. Bus. Ethics 21 (2003).
[209] See Kevin T. Jackson, Virtuosity in Business: Invisible Law Guiding the Invisible Hand (2012) (showing how much of business ethics is merely veiled self-interest and suggesting a return to spirituality in business).
[210] See Archie B. Carroll & Kareem M. Shabana, The Business Case for Corporate Social Responsibility: A Review of Concepts, Research and Practice, Int’l J. Mgmt. Revs. (Jan. 2010).
[211] See, e.g., James P. Walsh, Klaus Weber & Joshua D. Margolis, Social Issues and Management: Our Lost Cause Found, 29 J. Mgmt. 859 (2003).
[212] Ben W. Heineman, Jr., High Performance with High Integrity (2008); Ron Robins, Does Corporate Social Responsibility Increase Profits?, Bus. Ethics (May 5, 2015), https://business-ethics.com/2015/05/05/does-corporate-social-responsibility-increase-profits [https://perma.cc/62VP-XWRP].
[213] Triple Bottom Line, Economist (Nov. 17, 2009), https://www.economist.com/news/2009/11/17/triple-bottom-line [https://perma.cc/3N8Y-NFAG].
[214] See Heineman, supra note 212 (“Fusing the benefits of performance with the benefits of integrity—on quality, employee loyality [sic], productivity, customer retention, public credibility, trust in business—can create a potent business organization that earns the trust of both shareholders and other stakeholders—one that is truly a good corporate citizen.”).
[215] Herbert Gintis & Rakesh Khurana, How Neoclassical Economics Corrupted Business Schools, Corporations, and the Economy, Evonomics (July 14, 2016), https://evonomics.com/neoclassical-economics-business-school-gintis [https://perma.cc/NGT6-P9ND] (“Since the mid-1970’s neoclassical economic theory has dominated business school thinking and teaching in dealing with business ethics. Neoclassical economic theory employs an incorrect model of human behavior that treats managers as selfish maximizers of personal wealth and power.”).
[216] The basic structure of the mechanistic model is that the human person is imagined as egotistical and transactional. Consumers have choices, but for all substantial questions, managers are constrained to seek profits and objective gains. For whom they seek profits and for what time period are highly contested, but the debate between shareholder maximization, firm profits, and managerial maximization is a debate between different forms of quantitative maximization.
[217] Claus Dierksmeier, The Freedom-Responsibility Nexus in Management Philosophy and Business Ethics, 101 J. Bus. Ethics 263, 277 (2011).
[218] Melvin Aron Eisenberg, Legal Model of Management Structure in the Modern Corporation: Officers, Directors, and Accountants, 63 Cal. L. Rev. 375, 403–404 (1975) (“Although the monitoring role of the board is crucial as a theoretical matter, the available evidence admittedly suggests that in practice boards do not perform this function well. Most boards will not remove a chief executive for inefficiency unless the corporation has entered a crisis zone, and cases such as Penn Central, LTV, Ampex, and Memorex indicate that many boards will not act until the crisis has become virtually irredeemable. Indeed, outside directors will often resign rather than attempt to remove an inefficient management. One interpretation of this behavior, of course, is that the concept of the monitoring function is an illusion. An alternative interpretation, however, is that effective monitoring has been all but precluded by current corporate ideology and practice. The ideological problem is that the board is commonly conceived as an agency whose primary obligation is not to monitor management, but rather to make policy as an integral part of management.” (internal footnotes omitted)).
[219] Ethan Baron & Poets&Quants, Are MBAs to Blame for VW and Other Business Ethics Fiascos?, Fortune (Oct. 22, 2015), https://fortune.com/2015/10/22/mba-ethics-volkswagen.
[220] See, e.g., John Dobson, Applying Virtue Ethics to Business: The Agent-Based Approach, 9 J. Bus. Ethics & Org. Stud. (2004).