An Excusability Principle for Firms Under the Market Failures Approach

Endörfer and Larue (2022) argue that Joseph Heath’s Market Failures Approach to business ethics (MFA) implies a demandingness dilemma: under conditions of imperfect competition, they argue, the MFA is either too demanding, if requiring that firms should seek to generate Pareto efficiency or “social optima”, or not demanding enough, if it gives up on social optima and focus instead on incremental Pareto improvements. I argue the MFA can be combined with an excusability principle to overcome the problem of over-demandingness. Since this means the MFA can hold on to the obligation to promote social optima, the under- demandingness problem too is avoided, and the dilemma is solved.