Multinational corporations and the social contract

Journal of Business Ethics

Volumn 31, Issue 3, 2001, Pages 245-258

  Palmer, Eric ^a  

^a ALLEGHENY COLLEGE   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 0035373786     PISSN: 01674544     EISSN: None     Source Type: Journal    
DOI: 10.1023/A:1010737903028     Document Type: Article

References (30)

1. Organization for Economic Cooperation and Development, Declaration by the Governments of OECD Member Countries on International Investment and Multinational Enterprises. OECD Working Papers v.5, #20 (Paris: OECD, 1997), Annex I, 7, p. 9.
2. John Locke, Two Treatises on Government. Peter Laslett, ed. (Cambridge, U.K.: Cambridge, 1988). Immanuel Kant. Practical Philosophy. Mary J. Gregor, ed. (Cambridge, U.K.: Cambridge, 1999). For discussion of the place of these theories in national constitutions, see Philip Kurland and Ralph Lerner, eds. The Founders' Constitution (Chicago: University of Chicago Press, 1987). See also Eric Palmer, "Social Contracts and Multinational Corporations," Knowledge Tools for a Sustainable Civilization (Toronto: IEEE, 1996), p. 176.
3. John Locke, Two Treatises on Government. Peter Laslett, ed. (Cambridge, U.K.: Cambridge, 1988). Immanuel Kant. Practical Philosophy. Mary J. Gregor, ed. (Cambridge, U.K.: Cambridge, 1999). For discussion of the place of these theories in national constitutions, see Philip Kurland and Ralph Lerner, eds. The Founders' Constitution (Chicago: University of Chicago Press, 1987). See also Eric Palmer, "Social Contracts and Multinational Corporations," Knowledge Tools for a Sustainable Civilization (Toronto: IEEE, 1996), p. 176.
4. John Locke, Two Treatises on Government. Peter Laslett, ed. (Cambridge, U.K.: Cambridge, 1988). Immanuel Kant. Practical Philosophy. Mary J. Gregor, ed. (Cambridge, U.K.: Cambridge, 1999). For discussion of the place of these theories in national constitutions, see Philip Kurland and Ralph Lerner, eds. The Founders' Constitution (Chicago: University of Chicago Press, 1987). See also Eric Palmer, "Social Contracts and Multinational Corporations," Knowledge Tools for a Sustainable Civilization (Toronto: IEEE, 1996), p. 176.
5. John Locke, Two Treatises on Government. Peter Laslett, ed. (Cambridge, U.K.: Cambridge, 1988). Immanuel Kant. Practical Philosophy. Mary J. Gregor, ed. (Cambridge, U.K.: Cambridge, 1999). For discussion of the place of these theories in national constitutions, see Philip Kurland and Ralph Lerner, eds. The Founders' Constitution (Chicago: University of Chicago Press, 1987). See also Eric Palmer, "Social Contracts and Multinational Corporations," Knowledge Tools for a Sustainable Civilization (Toronto: IEEE, 1996), p. 176.
6. For an extended treatment of social contract issues in relation to business, as well as a review of recent work, see Thomas Donaldson and Thomas W. Dunfee, Ties that Bind (Boston: Harvard Business School Press, 1999). Donaldson and Dunfee focus less specifically than I do upon solving the conceptual problem of justification (cf. 17), and justification in relation to multinational status in particular. The discussion of this article will focus especially upon for-profit enterprise, since the assumption of self-interested action suffuses the Hobbesian framework that will be defended. Some conclusions pertaining to governance that arise toward the end of this article may be applicable to other multinational entities such as charities and other non-governmental organizations. A different framework of analysis, however, would be required to bind other sorts of multinational actors. A contractarian analysis utilizing different assumptions for these different sorts of organizations might, nonetheless, remain available: see footnote 15.
7. Hugo Grotius, The Rights of War and Peace. A. C. Campbell, trans. (Washington, M. Arthur Dunne, 1901). Kant, "Toward Perpetual Peace," in Kant, op. cit. The term "trans-national" is used here to indicate universal relations that apply either across all nations of the globe, or to all nations of direct relevance to the operation of a multinational entity. "International" is used to indicate relations among specific independent national governments. For example, the OECD is constituted by international agreement among governments of member nations, whereas human rights are held by some to be a trans-national relation, and a universal one.
8. Hugo Grotius, The Rights of War and Peace. A. C. Campbell, trans. (Washington, M. Arthur Dunne, 1901). Kant, "Toward Perpetual Peace," in Kant, op. cit. The term "trans-national" is used here to indicate universal relations that apply either across all nations of the globe, or to all nations of direct relevance to the operation of a multinational entity. "International" is used to indicate relations among specific independent national governments. For example, the OECD is constituted by international agreement among governments of member nations, whereas human rights are held by some to be a trans-national relation, and a universal one.
9. Comparison of Fortune Magazine's 1999 "Global 500" Gross Corporate Revenues to 1998 Gross Domestic Products as listed by World Bank. A comparison with GNP produces similar results: corporations rank thirteen of the top fifty, and forty-seven of the top one hundred. Fortune Magazine: Global 500, http://www.fortune.com/fortune/global500. World Bank: World Development Indicators 2000, http://www.worldbank.org/data/databytopic/GDP.pdf, http://www.worldbank.org/data/databytopic/GNP.pdf, June 12, 2000.
10. For a case study, see Manuel Velasquez, "International Business Ethics: The aluminum companies in Jamaica," Business Ethics Quarterly 5, 1995, Pp. 865-870.
11. Thomas Hobbes, Leviathan (1651). Quotations from Leviathan are taken from edition of E. Curley. (Indianapolis: Hackett, 1994). The presentation of this article will focus sharply upon the reasoning leading to the establishment of the natural social contract. Hobbes' argument also involves dimensions of natural law and theology that will be bypassed for the sake of brevity. A less schematic, but nonetheless brief presentation may be found in Edwin Curley's introduction to the above volume.
12. In contemporary game-theoretic terminology, this case is one of parasitism (in which a rider on the contract gains her benefits and injures others, at no cost to herself), rather than free riding (in which a rider gains the benefit without cost to others or herself, as a free rider does on a less than full subway). See David Gauthier. Morals By Agreement (Oxford: Oxford, 1986), pp. 96-97.
13. John Rawls, Political Liberalism (Cambridge, MA: Harvard University Press, 1995). Jürgen Habermas. Between Facts and Norms: Contributions to a Discourse Theory of Law and Democracy, trans. William Rehg. (Cambridge, MA: MIT Press, 1996). Habermas, "Remarks on Legitimation through Human Rights," The Modern Schoolman 75 (1998), pp. 87-100; and reprinted in Philosophy and Social Criticism 24 (1998), pp. 157-171. See Habermas' accounting of the contractarian legacy in Habermas (1996), pp. 449ff.
14. John Rawls, Political Liberalism (Cambridge, MA: Harvard University Press, 1995). Jürgen Habermas. Between Facts and Norms: Contributions to a Discourse Theory of Law and Democracy, trans. William Rehg. (Cambridge, MA: MIT Press, 1996). Habermas, "Remarks on Legitimation through Human Rights," The Modern Schoolman 75 (1998), pp. 87-100; and reprinted in Philosophy and Social Criticism 24 (1998), pp. 157-171. See Habermas' accounting of the contractarian legacy in Habermas (1996), pp. 449ff.
15. John Rawls, Political Liberalism (Cambridge, MA: Harvard University Press, 1995). Jürgen Habermas. Between Facts and Norms: Contributions to a Discourse Theory of Law and Democracy, trans. William Rehg. (Cambridge, MA: MIT Press, 1996). Habermas, "Remarks on Legitimation through Human Rights," The Modern Schoolman 75 (1998), pp. 87-100; and reprinted in Philosophy and Social Criticism 24 (1998), pp. 157-171. See Habermas' accounting of the contractarian legacy in Habermas (1996), pp. 449ff.
16. John Rawls, Political Liberalism (Cambridge, MA: Harvard University Press, 1995). Jürgen Habermas. Between Facts and Norms: Contributions to a Discourse Theory of Law and Democracy, trans. William Rehg. (Cambridge, MA: MIT Press, 1996). Habermas, "Remarks on Legitimation through Human Rights," The Modern Schoolman 75 (1998), pp. 87-100; and reprinted in Philosophy and Social Criticism 24 (1998), pp. 157-171. See Habermas' accounting of the contractarian legacy in Habermas (1996), pp. 449ff.
17. John Rawls, Political Liberalism (Cambridge, MA: Harvard University Press, 1995). Jürgen Habermas. Between Facts and Norms: Contributions to a Discourse Theory of Law and Democracy, trans. William Rehg. (Cambridge, MA: MIT Press, 1996). Habermas, "Remarks on Legitimation through Human Rights," The Modern Schoolman 75 (1998), pp. 87-100; and reprinted in Philosophy and Social Criticism 24 (1998), pp. 157-171. See Habermas' accounting of the contractarian legacy in Habermas (1996), pp. 449ff.
18. Milton Friedman, Capitalism and Freedom. (Chicago: University of Chicago, 1962).
19. Velasquez, op. cit.
20. OECD (1997), "Taxation," 2, p. 12.
21. Quoted in Fritjof Capra, The Turning Point (New York: Simon & Schuster, 1982), p. 228.
22. Immanuel Kant, Groundwork of the Metaphysics of Morals, in Kant, op. cit. (Standard edition pagination: IV:400).
23. Eric Palmer, "Corporate bodies and categorical imperatives," Proceedings of the Ninth International Kant Congress (2000) (Berlin de Gruyter, Forthcoming).
24. For a detailed introduction to this conception of the agency of things, see Bruno Latour, "On Technical Mediation," Common Knowledge 3 #2 (1996), pp. 29-64.
25. Peter French, "The Corporation as a Moral Person," American Philosophical Quarterly 16 (1979), p. 210.
26. See "Consolidation snubs Shareholders," St. Petersburg Times, Sept. 29, 1997. (http: //www.times.spb.ru/archive/rimes/300-301/consolidation.html); Stroh v. Millers Cove Resources Inc. (1995), 55 A.C.W.S. (3d) 87 (Ontario Gen. Div.) (http://www.mccarthy.ca/cc7-corp.html), December 5, 1998.
27. See "Consolidation snubs Shareholders," St. Petersburg Times, Sept. 29, 1997. (http: //www.times.spb.ru/archive/rimes/300-301/consolidation.html); Stroh v. Millers Cove Resources Inc. (1995), 55 A.C.W.S. (3d) 87 (Ontario Gen. Div.) (http://www.mccarthy.ca/cc7-corp.html), December 5, 1998.
28. Joe DesJardins, "Corporate Environmental Responsibility," Journal of Business Ethics 17 (1998), pp. 825-838.
29. For example, DesJardins maintains, "given that human preferences can include those that are both silly and immoral, we cannot assume that the maximum satisfaction of preferences is an ethical goal" (827). Desjardins also offers a conceptual analysis of sustainability that invokes "the values underlying economic markets" in his article. That analysis and the utilitarian and liberal treatments that follow it are not contractarian, however, for they invoke liberal ideals beyond Hobbes' assumptions (835-836) and presuppose "constraints upon managerial prerogative" that appear unjustifiable from practical reason (834).
30. See footnote 4 for an explanation of these terms. Placing decisions in national courts seems a conceptually superior strategy to international court, in fact. There appears to be no rationale, from the multinational perspective, for judging multinational entities in the courts of a consortium of nations. By contrast, reason for prosecution at the national level seems quite clear, and should command respect by the multinational: see the final paragraph of section 4 for that reasoning.