Corporations as the Outgroup?

Murphy Ryan H. ()
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Murphy Ryan H.: Southern Methodist University, Dallas, TX75205, USA

Man and the Economy, 2020, vol. 7, issue 1, 8

Abstract: Because the evolutionary competitive process found in the market selects firms whose practices most closely maximize profits, as in Alchian (1950), members of society correctly perceive that firms will defect when it aligns with their long-run profitability. This holds regardless of the intentions of those running the firm. But in terms of moral psychology, members of society subsequently consider firms to be members of the outgroup, deserving of ostracism. However, because conventional economic analysis already assumes that firms maximize profits, the observation that firms only act “ethically” when it is in their rational self-interest to do so does not have policy implications that are not already contained in neoclassical economics.

Keywords: ingroups; outgroups; corporate social responsibility; business ethics; psychopathy; ethics & economics; Armen Alchian (search for similar items in EconPapers)
JEL-codes: G30 M14 Z10 (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1515/me-2019-0008

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