This paper clarifies the status of the firm vis-à-vis the Rawlsian basic structure of society. This status is ambiguous due to uncertainties in Rawls’s conception of the firm and his definition of the basic structure. The paper identifies two perspectives regarding the firm in Rawls: an inclusivist perspective defines the firm as an entity ontologically distinct from the basic structure; while a constitutivist perspective views the firm as an institution that possibly forms part of the basic structure. The paper then reviews several interpretations of the basic structure before offering a more inclusive version, which notably includes some informal structures. Linked to the institutionalist conception of the firm, this expanded definition of the basic structure results in an extended constitutivist perspective regarding the firm. It thus provides liberal egalitarianism with firmer ground for critically assessing businesses.
Tag: firm
Power relations in companies – a methodological and conceptual analysis
Economics has always been reluctant towards the concept of power, which cannot be operationalized in microeconomic models but can justify ex post rationalizations. Yet power is a vector of social institutionalization that economists must integrate to make the firm a political entity and accomplish real explanatory progress. Therefore, the article aspires to propose a renewed methodological analysis of power, which implies a collective structure while relying on individuals as actors. On the basis of this conceptual clarification, an essay for defining power in the firm is proposed: power is the latent capacity (which may or may not be exercised) of an entity A to constrain and draw the choices of an entity B so that the behavior and actions of B are oriented in a direction favorable to A, by mechanisms intrinsic to the socio-economic relationship that may be formal or informal. Such a definition of power makes it possible to reconsider transformative agency in the firm and to link power with the relational dispositions of the organizations of capitalism.