NPS Distinguished Professor Awardee, 2000

Distinguished Professor Award. Recipient John P. Powers, EC

The theory of the firm and its critics: a stocktaking and assessment

Includes bibliographical references."Prepared for Jean-Michel Glachant and Eric Brousseau, eds. New Institutional Economics: A Textbook, Cambridge, Cambridge University Press.""This version: August 22, 2005."Since its emergence in the 1970s the modern economic or Coasian theory of the firm has been discussed and challenged by sociologists, heterodox economists, management scholars, and other critics. This chapter reviews and assesses these critiques, focusing on behavioral issues (bounded rationality and motivation), process (including path dependence and the selection argument), entrepreneurship, and the challenge from knowledge-based theories of the firm

Gratefully received, gratefully repaid:The role of perceived fairness in cooperative interactions

It is well documented that people would remunerate fair behaviours and penalize unfair behaviours. It is argued that individuals' reactions following the receipt of a gift depend on the perceived intentions of the donors. Fair intentions should prompt positive affect, like gratitude, triggering cooperative behaviours; while intended unfairness should trigger negative affect, like anger, fostering anti-social actions. It is, however, contended that when people lack information to infer others' intention they may use 'normative' beliefs about fairness - what a typical fair individual 'should' do in these circumstances - to guide their behaviour. In this experiment we examined this assertion. We had 122 participants play a one-shot, double-anonymous game with half playing as potential helpers (P1s) and half as recipients (P2s). Whether a participant was a P1 or P2 was chance-determined and all participants knew this. P1s decided whether to help P2s and whether to make their help unconditional (no repayment needed) or conditional (full or 'taxed' repayment). P2s decided whether to accept the offer and whatever conditions attached but were blind to the list of helping options available to P1s. We anticipated that recipients would refer to the 'injunctive norm' that 'fair people should help "for free" when it is only by chance that they are in a position to help'. Therefore, without knowing P1s' different helping options, unconditional offers should be rated by recipients as fairer than conditional offers, and this should be linked to greater gratitude with greater gratitude linked to greater reciprocation. Path analyses confirmed this serial mediation. The results showed that recipients of unconditional offers, compared to conditional ones, interpreted the helpers' motives as more helpful, experienced greater gratitude and were more eager to reciprocate. The behavioural data further revealed that, when given a latter option to default, 38% of recipients of conditional offers did so

Magic, Emotion and Practical Metabolism:Affective Praxis in Sartre and Collingwood

This article develops a new way of understanding the integration of emotions in practical life and the practical appraisal of emotions, drawing on insights from both J-P. Sartre and R. G. Collingwood. I develop a concept of ‘practical metabolism’ and show that emotions need to be understood not only as transformations from determinate to indeterminate practical intuitions, but also as transformations in the reverse direction. Firstly, I provide a new conception of the dynamic phenomenal structure of the emotions that can resolve significant tensions in the Sartre’s theory. Secondly, I develop that theory to shed light on the diverse socially mediated roles of emotions in practical life by drawing on Collingwood’s philosophy of magic. Thirdly, I deploy the notion of practical metabolism to address the appraisal of emotions, setting out a framework for understanding the various ways in which emotional expression is subject to structural breakdown

Legitimacy in the Multilevel European Polity

In order to be simultaneously effective and liberal, governments must normally be able to count on voluntary compliance – which, in turn, depends on the support of socially shared legitimacy beliefs. In Western constitutional democracies, such beliefs are derived from the distinct but coexistent traditions of “republican” and “liberal” political philosophy. When judged by these criteria, the European Union – if considered by itself – appears as a thoroughly liberal polity which, however, lacks all republican credentials. But this view (which seems to structure the debates about the “European democratic deficit”) ignores the multilevel nature of the European polity, where the compliance of citizens is requested, and needs to be legitimated by member states – whereas the Union appears as a “government of governments” which is entirely dependent on the voluntary compliance of its member states. What matters primarily, therefore, is the compliance-legitimacy relationship between the Union and its member states – which, however, is normatively constrained by the basic compliance-legitimacy relationship between member governments and their constituents. Given the high consensus requirements of European legislation, member governments could and should be able to assume political responsibility for European policies in which they had a voice, and to justify them in “communicative discourses” in the national public space. This is not necessarily true of “non-political” policy choices imposed by the European Court of Justice. By enforcing its “liberal” program of liberalization and deregulation, the ECJ may presently be undermining the “republican” bases of member-state legitimacy. Where this is the case, open non-compliance is a present danger, and political controls of judicial legislation may be called for.Um gleichzeitig effektiv und liberal sein zu können, ist staatliche Herrschaft auf freiwillige Folgebereitschaft angewiesen – die ihrerseits der Unterstützung durch sozial geteilte Legitimitätsüberzeugungen bedarf. In den demokratischen Verfassungsstaaten des Westens werden solche Überzeugungen aus den unterschiedlichen, aber komplementär zusammenwirkenden Traditionen der „republikanischen“ und der „liberalen“ politischen Philosophie hergeleitet. An diesen Kriterien gemessen erscheint die Europäische Union – wenn man sie für sich betrachtet – als eine „liberale“ politische Ordnung, der jedoch alle „republikanischen“ Legitimitätsmerkmale fehlen. Aber eine solche Sichtweise, die auch die derzeitige Diskussion über ein „europäisches Demokratiedefizit“ bestimmt, verkennt den Mehrebenencharakter des europäischen Gemeinwesens. In ihm sind es die Mitgliedstaaten, die Entscheidungen der Union gegenüber den eigenen Bürgern durchsetzen und auch legitimieren müssen, während es für die Union ihrerseits auf die freiwillige Folgebereitschaft ihrer Mitgliedstaaten ankommt. Dabei werden diese jedoch durch die normativen Grundlagen ihrer eigenen Legitimität begrenzt. Politische Entscheidungen auf europäischer Ebene setzen breiten Konsens voraus, und die Regierungen sollten sie deshalb auch gegenüber den eigenen Bürgern in „kommunikativen Diskursen“ vertreten und dafür die politische Verantwortung übernehmen können. Dies gilt jedoch nicht notwendigerweise auch für Entscheidungen der europäischen Politik, die im nichtpolitischen Modus ohne Beteiligung des Rates und des Parlaments vom Europäischen Gerichtshof bestimmt werden. Mit der gegenwärtigen Radikalisierung seines „liberalen“ Programms der Liberalisierung und Deregulierung des nationalen Rechts könnte der Gerichtshof in der Tat die „republikanischen“ Grundlagen der mitgliedstaatlichen Legitimität unterminieren. In diesem Falle könnte die Union sich nicht länger auf die Folgebereitschaft ihrer Mitgliedstaaten verlassen. Um diese Gefahr für die europäische Integration zu vermeiden, sollte eine stärkere politische Kontrolle der richterlichen Rechtsetzung erwogen werden.1 Legitimacy Republican and liberal legitimating discourses Constitutional democracies – and the EU? 2 Legitimacy in multilevel polities 3 Legitimating member state compliance Political modes of policy making Non-political policy making 4 The need for justification 5 The Court is pushing against the limits of justifiability 6 The liberal undermining of republican legitimacy 7 Needed: A political balance of community and autonomy Reference

From Harm to Robustness: A Principled Approach to Vice Regulation

John Stuart Mill’s harm principle maintains that adult behavior cannot justifiably be subject to social coercion unless the behavior involves harm or a significant risk of harm to non-consenting others. The absence of harms to others, however, is one of the distinguishing features of many manifestations of “vices” such as the consumption of alcohol, nicotine, recreational drugs, prostitution, pornography, and gambling. It is with respect to vice policy, then, that the harm principle tends to be most constraining, and some current vice controls, such as prohibitions on drug possession and prostitution, violate Mill’s precept. In the vice arena, we seem to be willing to accept social interference with what Mill termed “self-regarding” behavior. But does that willingness then imply that any social intervention into private affairs is justifiable, that the government has just as much right to outlaw Protestantism, or shag carpets, or spicy foods, as it does to outlaw drugs? In this paper I argue that advances in neuroscience and behavioral economics offer strong evidence that vices and other potentially addictive goods or activities frequently involve less-than-rational choices, and hence are exempt from the full force of the harm principle. As an alternative guide to vice policy, and following some guidance from Mill, I propose the “robustness principle”: public policy towards addictive or vicious activities engaged in by adults should be robust with respect to departures from full rationality. That is, policies should work pretty well if everyone is completely rational, and policies should work pretty well even if many people are occasionally (or frequently) irrational in their vice-related choices. The harm and robustness principles cohere in many ways, but the robustness principle offers more scope for policies that try to direct people “for their own good,” without opening the door to tyrannical inroads upon self-regarding behavior