There is an attractive elegance in linking the methods of business ethics with an understanding of the market and its institutional purpose. Recent scholarship at the intersection of political philosophy and management captures this elegance by arguing for variations on a position that grounds standards of corporate conduct upon the normative presuppositions of markets. Thusly construed, there are two basic categories of responsibilities that corporations and their managers possess: to refrain from actions that would undermine the basic conditions of free and fair contracting; and to refrain from profit seeking that results from the exploitation of failures in the market, such as information asymmetries, negative externalities and imperfect competition.
This paper critically examines the aspirations of this literature by embracing its basic method but questioning how well it understands the institutional aims of the market. It is undoubtedly the case that markets are endorsed for their tendency to improve welfare through the efficient allocation of goods and services. Markets, however, also reflect a mode of design as to how particular goods and services are produced and distributed. Allocation through the market, in other words, is a governance choice about which goods and services are to be produced and distributed according to the norm of competitive, self-interested exchange. In this respect, the market is not only an institution with the general aim of improving welfare but also an institution that expresses decisions about what goods are—and to what extent—effectively realized through the market’s internal norms of competitive, self-interested exchange. It is argued that this governance aim of markets give rise to special responsibilities for certain firms in certain industries based on the social goods provisioned within certain markets. This implication is explored through an examination of the moral problems faced by the pharmaceutical industry and the responsibilities that pharmaceutical firm managers possess with regard to biomedical research, pricing and public health.