Volume 25, Issue 1, Spring/Summer 2005
Ethics, Law, and Economics
Legal Regulation of Corporate Responsibility
ECONOMICS AND LAW HAVE HISTORICALLY ATTENUATED THE CONTRIBUtion of ethics in their putative separation of fact and value. In this essay I argue that reconceptualizing the relationships between law, economics, and ethics reveals the shortcomings of positions that disavow ethics. In the first section I contend that thinkers must reread Adam Smith as an economist and a moral philosopher to appreciate his extended treatment of sympathy, conscience, and social justice. In the second section I appropriate the work of Amartya Sen to examine the entanglement of fact and value in deliberating economic choices, including moral motivations and social evaluations that problematize reductive images of economic actors. Finally, I interrogate legal regulation of corporate governance with respect to the Enron scandal and the 2002 Sarbanes-Oxley Act. I argue that legal regulation is a necessary but not sufficient resolution to corporate misconduct because it too enervates ethics and bifurcates fact and value.