In defense of a regulated market economy

Abstract

The dominant understanding of political corporate social responsibility (CSR) suggests new, broader political roles for businesses in the globalized economy, challenging the classical liberal social order (where business firms’ task is to focus on economic issues and the government's role is to take care of political responsibilities). In this paper, we show how the major framing of the political CSR discussion not only challenges the classical liberal social order but also goes against the more general political economic perspective of the regulated market economy (where strict and [in most cases] strong boundaries exist between business and politics). We argue that this latter tendency of the political CSR discussion is its main weakness. We introduce a Rawlsian reframing of political CSR that is in line with the idea of a global-regulated market economy and compatible with some of the basic global ethical aims of the political CSR movement.

Keywords:

• globalization
• classical liberalism
• corporate social responsibility
• political corporate social responsibility
• regulated market economy
• division of moral labor

Acknowledgements

The authors are indebted to Guest Editor Professor Matti Häyry for his insightful comments.

Funding

The authors gratefully acknowledge the financial support of the Liikesivistysrahasto – The Foundation for Economic Education, Jenny and Antti Wihuri Foundation, The Finnish Cultural Foundation, and Helsinki School of Economics Foundation.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes on contributors

Jukka Mäkinen, Ph.D., is Adjunct Professor (Docent) of Business Ethics at the Department of Management Studies, Aalto University School of Business. He approaches the political and socio-economic roles of businesses in a society from the perspective of the contemporary theories of social justice. His research has appeared in journals such as Business Ethics Quarterly, Journal of Business Ethics, and Utilitas.

Eero Kasanen is a Professor of Finance at Aalto University and a Visiting Professor at ESADE. His current research interests include banking crises, financial ethics, and university management. His research has been published in Journal of Business Ethics, Accounting, Organizations and Society, and Journal of Accounting and Economics. He has served as Rector of Helsinki School of Economics and on several company boards.