MoriartyDo CEOs Get Paid Too Much?
What makes executive pay just or unjust?
3 views, and their implications:
The Agreement View: A price (including a pay rate) is just if it is agreed upon by
an informed buyer and an informed seller. (Shareholders buy the
Current status in the U.S.:
Employment At Will: Employees without contracts that say otherwise are
employed at will, meaning they can be dismissed for any reason, for no reason,
or even for immoral reasons.
Standing exceptions to EAW codified
The Purpose of the Corporation
The point of a corporation is to somehow make things better. But for whom?
Whose interests should they be serving?
Shareholder theory (e.g. Friedman): Managers should be serving the
interests of shareholders.
Argument: Its t
StoutBad and Not-so-Bad Arguments for Shareholder Primacy
Bad argument #1Shareholders own the corporation
Problems with this argument: Legally speaking, the shareholders own stock,
not the company per se.
Shareholders have very limited rights to make deci
Why Be Ethical?
If people are ethical, they can avoid coordination problems.
Coordination problems are situations in which everyone is better off if no one acts
selfishly than they would be it everyone acts selfishly; but each individual stand
Basic idea: the best thing to do is whatever has the best consequences.
What makes consequences good? The best outcome is that which maximizes
whatever is intrinsically valuable.
What is intrinsically valuable? Some candidates:
The Tragedy of the Commons
And What It Has to Do with Private Property
The Tragedy of the Commons:
Picture a pasture open to allthe town common.
Each herdsman will want to keep as many cattle as possible on the
After all, as a rational being, eac