Joseph Heath

Last updated
Joseph Heath
FRSC
Born1967 (age 56–57)
Nationality Canadian
Alma mater
Occupation Professor
Notable work
Institutions University of Toronto
Thesis Morality and Social Action (1995)
Doctoral advisor Thomas A. McCarthy
LanguageEnglish
Notable ideas
Market failures approach to business ethics

Joseph Heath FRSC (born 1967) is a Canadian philosopher. He is professor of philosophy at the University of Toronto, where he was formerly the director of the Centre for Ethics . He also teaches at the School of Public Policy and Governance. [1] Heath's webpage at the University of Toronto declares his work "is all related, in one way or another, to critical social theory in the tradition of the Frankfurt School." [2] He has published both academic and popular writings, including the bestselling The Rebel Sell, which he coauthored with Andrew Potter. His philosophical work includes papers and books in political philosophy, business ethics, rational choice theory, action theory, and critical theory. His stepmother is June Clark. [3]

Contents

He received his Bachelor of Arts from McGill University in 1990, where his teachers included Charles Taylor, and his Master of Arts and Doctor of Philosophy (1995) degrees are from Northwestern University, where he studied under Thomas A. McCarthy and Jürgen Habermas. [4]

Heath is the recipient of the Pierre Elliott Trudeau Foundation Fellowship (2012). [5] In 2013, Heath was named to the Royal Society of Canada. [6] His popular book Enlightenment 2.0 won the 2014 Shaughnessy Cohen Prize for Political Writing. [7] In 2021 Heath published an op-ed in the Globe and Mail which argued that the acronym BIPOC is problematic in the Canadian context, suggesting instead the acronym FIVM for "Francophone, Indigenous, and Visible Minority". [8]

Ideas

The central claim of The Rebel Sell is that counter-cultural movements have failed, and that they all share a common fatal error in the way they understand society; hence, counter-culture is not a threat to "the system". For example, it is suggested of Adbusters' Blackspot campaign that the shoe's existence proves that "no rational person could possibly believe that there is any tension between 'mainstream' and 'alternative' culture."

In the book Filthy Lucre , Joseph Heath criticizes the idea that tax-paying is inherently different from consumption, and argues that the idea of a tax freedom day is flawed:

It would make just as much sense to declare an annual "mortgage freedom day", in order to let mortgage owners know what day they "stop working for the bank and start working for themselves". ...But who cares? Homeowners are not really "working for the bank"; they're merely financing their own consumption. After all, they're the ones living in the house, not the bank manager. [9]

"Market failures" or "Paretian" approach to business ethics

In business ethics, Heath advances a new theory, what he calls a "market failures" or "Paretian" approach, which states that "the market is essentially a staged competition, designed to promote Pareto efficiency, and in cases where the explicit rules governing the competition are insufficient to secure the class of favoured outcomes, economic actors should respect the spirit of these rules and refrain from pursuing strategies that run contrary to the point of the competition". The approach is neither akin to the shareholder theory, the stakeholder theory or to a personal ethics framework.

Heath's market failures approach follows from his work in political economy. According to Heath, the market is not a system of natural justice. Rather, it is an imperfect but efficient institutional arrangement designed to maximize social welfare by way of an unresolved collective action problem. [10] In other words, markets are "special-purpose institutions designed to promote efficiency", that need to be "embedded within the broader context of a welfare state, which engages in both market-complementing and redistributive policies to claim to be just." [11]

Since these structured competitions are implemented "for the narrow reason" that, in a reasonably competitive market, they generate social benefits through positive externalities, "adversarial ethics" are acceptable in the circumscribed and limited role of markets. Indeed, economic actors engaged in market transaction "must be given a fairly broad exemption from the norms of equality or fairness". [11]

However, they must be held accountable to the fundamental principles required to have a competitive and efficiency promoting market. Therefore, "the central role of business ethics is […] not to bring in 'outside' moral considerations to condemn the latest outrage, but to clarify and to correct the self-understanding of participants in the market economy […]. In order to do so, it has no need to appeal to normative standards beyond those that are already implicit in the institutions of a market economy." [12]

Hence, "the overall set of profit-maximizing strategies is partitioned into three categories, separating out the immoral and the illegal strategies from the normatively acceptable ones. The efficiency standard can be used to make both cuts. The 'acceptable/unacceptable' distinction is imposed by the efficiency properties of the market system as a whole. The set of unacceptable strategies can then be subdivided into 'immoral/illegal' using a transaction cost or regulatory cost analysis." [13] In other words, the "basic thrust of 'business ethics' is […] to discourage firms from taking advantage of market imperfections, even in cases where legal regulation is not feasible." [14]

Thus, "the firm should behave as though market conditions were perfectly competitive, even though they may not in fact be. The following list of imperatives provides some examples of the restrictions that this would imply :

  1. Minimize negative externalities
  2. Compete only through price and quality
  3. Reduce information asymmetries between firm and customers
  4. Do not exploit diffusion of ownership
  5. Avoid erecting barriers to entry
  6. Do not use cross-subsidization to eliminate competitors
  7. Do not oppose regulation aimed at correcting market imperfections
  8. Do not seek tariffs or other protectionist measures
  9. Treat price levels as exogenously determined
  10. Do not engage in opportunistic behaviour toward customers or others firms" [15]

"Public-economic" normative model of the welfare state

Heath advocates the "public-economic" normative model of the welfare state, that is to say a normative standard of the appropriate division of labor between the public and the private sector, as superior to the "redistributive" or "Communitarianism" models. According to Heath, the "public-economic" normative model "provides both the best theoretical reconstruction of the existing configuration of welfare state services, as well as the most useful set of principles to guide any proposed expansion or modification of these services". [16]

Heath describes the three models as such : "The three normative purposes most commonly cited as providing a justification for the scope of welfare state activity are equality, community, or efficiency. These give rise to a corresponding set of models, which I refer to as the redistributive, the communitarian, and the public-economic models of the welfare state. The first sees the central function of the welfare state to be the redistribution of resources, with the goal of making the outcomes produced by the market economy less unequal. The second considers the central problem, central function of the welfare state to be that of imposing limits on the scope of the market, in order to resist the commodification of certain domains of interaction. The last model regards the welfare state as playing a role essentially complementary to that of the market. According to this view, the welfare state corrects market failure, either through regulation, subsidization and taxation, or the direct provision of goods and services." [16]

Heath further explains the "public-economic" model this way : "The “classical liberal” state creates the market economy through the institution of property rights and civil contract. The “welfare state” then emerges in those areas where liberal markets fail to produce optimal outcomes. This can take the form of regulatory agencies (in cases where the rules of marketplace competition need to be adjusted), state-owned enterprises (typically in sectors where efficient competition cannot be organized), and public services (in cases where a system of effective property rights cannot be instituted, or where the transaction costs associated with a system of voluntary exchange would be prohibitive). According to this view, the welfare state essentially does the same thing as the market – both are in the business of enabling mutually beneficial forms of cooperation to emerge – it merely organizes the transactions under somewhat different terms. [...] The economic model of the welfare state should therefore be interpreted as the view that the state should strive to resolve collective action problems in cases where it can do so more efficiently than other institutional forms." [16] Heath advances that this model has "considerable explanatory power" for these state activities : 1) control of natural monopolies, 2) control of imperfections in existing markets, 3) public provision, 4) the social safety net, 5) minority public goods and 6) governance failures.

Heath notes that "there is nothing incoherent about a hybrid “redistribution and public goods” view of the welfare state. However, the amount of actual egalitarian redistribution that goes on in a typical welfare state is often dramatically overestimated. This is because many theorists treat the social safety net, which is essentially a set of government-run insurance programs, as a system of redistribution, and hence as governed by an egalitarian logic." [16]

Publications

Academic books

Blog

Heath blogged at In Due Course from 2014 until 2019 (last post). [17] Some time after that he lost the original domain name, but the site was backed up and is accessible at the University of Toronto. [18] Despite that, he chose to switch publishing to Substack in 2023 allowing free access. [19]

Related Research Articles

Economics is a social science that studies the production, distribution, and consumption of goods and services.

In economics, specifically general equilibrium theory, a perfect market, also known as an atomistic market, is defined by several idealizing conditions, collectively called perfect competition, or atomistic competition. In theoretical models where conditions of perfect competition hold, it has been demonstrated that a market will reach an equilibrium in which the quantity supplied for every product or service, including labor, equals the quantity demanded at the current price. This equilibrium would be a Pareto optimum.

In economics, imperfect competition refers to a situation where the characteristics of an economic market do not fulfil all the necessary conditions of a perfectly competitive market. Imperfect competition causes market inefficiencies, resulting in market failure. Imperfect competition usually describes behaviour of suppliers in a market, such that the level of competition between sellers is below the level of competition in perfectly competitive market conditions.

In welfare economics, a Pareto improvement formalizes the idea of an outcome being "better in every possible way". A change is called a Pareto improvement if it leaves everyone in a society better-off. A situation is called Pareto efficient or Pareto optimal if all possible Pareto improvements have already been made; in other words, there are no longer any ways left to make one person better-off, unless we are willing to make some other person worse-off.

<span class="mw-page-title-main">Market economy</span> Type of economic system

A market economy is an economic system in which the decisions regarding investment, production and distribution to the consumers are guided by the price signals created by the forces of supply and demand. The major characteristic of a market economy is the existence of factor markets that play a dominant role in the allocation of capital and the factors of production.

<span class="mw-page-title-main">Joseph Stiglitz</span> American economist (born 1943)

Joseph Eugene Stiglitz is an American New Keynesian economist, a public policy analyst, political activist, and a full professor at Columbia University. He is a recipient of the Nobel Memorial Prize in Economic Sciences (2001) and the John Bates Clark Medal (1979). He is a former senior vice president and chief economist of the World Bank. He is also a former member and chairman of the US Council of Economic Advisers. He is known for his support for the Georgist public finance theory and for his critical view of the management of globalization, of laissez-faire economists, and of international institutions such as the International Monetary Fund and the World Bank.

<span class="mw-page-title-main">Market failure</span> Concept in public goods economics

In neoclassical economics, market failure is a situation in which the allocation of goods and services by a free market is not Pareto efficient, often leading to a net loss of economic value. The first known use of the term by economists was in 1958, but the concept has been traced back to the Victorian philosopher Henry Sidgwick. Market failures are often associated with public goods, time-inconsistent preferences, information asymmetries, non-competitive markets, principal–agent problems, or externalities.

New Keynesian economics is a school of macroeconomics that strives to provide microeconomic foundations for Keynesian economics. It developed partly as a response to criticisms of Keynesian macroeconomics by adherents of new classical macroeconomics.

This aims to be a complete article list of economics topics:

In microeconomics, economic efficiency, depending on the context, is usually one of the following two related concepts:

Welfare economics is a field of economics that applies microeconomic techniques to evaluate the overall well-being (welfare) of a society. This evaluation is typically done at the economy-wide level, and attempts to assess the distribution of resources and opportunities among members of society.

Ordoliberalism is the German variant of economic liberalism that emphasizes the need for government to ensure that the free market produces results close to its theoretical potential but does not advocate for a welfare state and did not advocate against one either.

<span class="mw-page-title-main">William Baumol</span> American economist (1922–2017)

William Jack Baumol was an American economist. He was a professor of economics at New York University, Academic Director of the Berkley Center for Entrepreneurship and Innovation, and Professor Emeritus at Princeton University. He was a prolific author of more than eighty books and several hundred journal articles. He is the namesake of the Baumol effect.

In welfare economics, the theory of the second best concerns the situation when one or more optimality conditions cannot be satisfied. The economists Richard Lipsey and Kelvin Lancaster showed in 1956, that if one optimality condition in an economic model cannot be satisfied, it is possible that the next-best solution involves changing other variables away from the values that would otherwise be optimal. Politically, the theory implies that if it is infeasible to remove a particular market distortion, introducing one or more additional market distortions in an interdependent market may partially counteract the first, and lead to a more efficient outcome.

Government failure, in the context of public economics, is an economic inefficiency caused by a government intervention, if the inefficiency would not exist in a true free market. The costs of the government intervention are greater than the benefits provided. It can be viewed in contrast to a market failure, which is an economic inefficiency that results from the free market itself, and can potentially be corrected through government regulation. However, Government failure often arises from an attempt to solve market failure. The idea of government failure is associated with the policy argument that, even if particular markets may not meet the standard conditions of perfect competition required to ensure social optimality, government intervention may make matters worse rather than better.

In economics, the freshwater school comprises US-based macroeconomists who, in the early 1970s, challenged the prevailing consensus in macroeconomics research. A key element of their approach was the argument that macroeconomics had to be dynamic and based on how individuals and institutions interact in markets and make decisions under uncertainty.

Public economics(or economics of the public sector) is the study of government policy through the lens of economic efficiency and equity. Public economics builds on the theory of welfare economics and is ultimately used as a tool to improve social welfare. Welfare can be defined in terms of well-being, prosperity, and overall state of being.

Serge-Christophe Kolm is a French economist. His work in economics and related social science includes his analyses, concepts and results in Public Economics and Normative Economics focusing on equality, distributive justice, and efficiency of economic measures, and in other fields and problems often applying them.

This glossary of economics is a list of definitions of terms and concepts used in economics, its sub-disciplines, and related fields.

Economic ethics is the combination of economics and ethics that uses judgements from both disciplines to predict, analyze, and model economic phenomena.

References

  1. ↑ University of Toronto School of Public Policy and Governance Archived December 24, 2013, at the Wayback Machine
  2. ↑ "Joseph Heath Home Page".
  3. ↑ Heath, Joseph (2024-02-24). "Americans need to find some way to debate Black nationalism". In Due Course. Retrieved 2024-02-24.
  4. ↑ Biography - Trudeau Fondation, www.trudeaufoundation.ca
  5. ↑ Media release - Trudeau Foundation
  6. ↑ RSC 2013 New Fellows
  7. ↑ "Writers' Trust of Canada". March 16, 2015.
  8. ↑ Heath, Joseph (28 May 2021). "Opinion: The term 'BIPOC' is a bad fit for the Canadian discourse on race". The Globe and Mail.
  9. ↑ Heath, Joseph (2009), Filthy Lucre: Economics for People who Hate Capitalism, HarperCollins, p. 90, ISBN   978-1-55468-395-6
  10. ↑ Heath, 2014, p. 98
  11. 1 2 Heath, 2014, p. 10
  12. ↑ Heath, 2014, p. 19
  13. ↑ Heath, 2014, p. 35
  14. ↑ Heath, 2014, p. 6
  15. ↑ Heath, 2014, p. 37
  16. 1 2 3 4 Heath (2011). Three Normative Models of the Welfare State, Public Reason 3 (2): 13-43
  17. ↑ "In Due Course | Building the Republic of Letters, one keystroke at a time". 2021-06-25. Archived from the original on 2021-06-25. Retrieved 2023-05-29.
  18. ↑ "In Due Course | Building the Republic of Letters, one keystroke at a time". 2023-12-29.
  19. ↑ "In Due Course". 2023-12-29.

Sources

This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.