International Business & Economics
Research Journal – March 2010 Volume 9, Number 3
Analysis
The fore going features of eBay
have been explained to increase the quantity and quality of information for
consumer problem solving according to Evans and Wurster‟s (1999) theory of
richness and reach in the economics of information. This increased problem
solving capability of consumers enabled by features in eBay show that it is
moving towards a perfectly competitive marketplace. Previous studies have
suggested that the Internet marketplace is more efficient than the traditional
marketplace (e.g. Alba et al, 1997; Bakos, 1997; Brynjolfsson & Smith,
1999). The continuous advancement of technology will inevitably improve such
market efficiencies and drive toward a perfect Internet marketplace. This
information is expected to be of importance to shoppers and merchants on eBay.
For shoppers, understanding the features of eBay will provide more efficient
shopping in terms of higher quality information and improved decision making
under conditions of minimized bounded rationality.
It is important
for businesses that are used to operating in the conditions of monopolistic
competition associated with traditional market efficiencies to strategize for
the upcoming challenges of near perfect market conditions facilitated by hyper
efficient market platforms such as eBay. Marketing strategy formulation can be
improved based on an understanding of how eBay creates „near perfect‟ market
conditions with challenging conditions in the form of lowly dispersed and
market driven prices, wide consumer choice, and diminished advertising efforts.
This would have implications mainly in the areas of differentiation and
positioning strategies by sellers to mitigate the effects of near perfect
market conditions. Further research in this area is recommended to empirically
verify the significance of eBay‟s features in consumer problem solving
imperatives, which will provide a more complete explanation of how eBay
resembles a perfectly competitive market.
The theory that can be used from microeconomic aspects and business
aspects
Market With Asymmetric Information
Asymmetric
information is quite common. Frequently, a seller of a product knows more about
its quality than the buyer does. Worker usually know their own skills and
abilities better than employers. And business managers know more about their
firms’ costs, competitive positions, and investment opportunities than do the
firms’ owners.
Quality
Uncertainty And The Market For Lemons
Suppose you
bought a new car for $20,000, drove it 100 miles, and then decided you really
didn’t want it. There was nothing wrong with the car it performed beautifully
and met all your expectations. You simply felt that you could do just as well
without it and would be better off saving the money for other things. So you
decide to sell the car. How much should you expect to get for it? Probably not
more than $16,000 even though the car is brand new, has been driven only 100
miles, and has a warranty that is transferable to a new owner. And if you were
a prospective buyer, you probably wouldn’t pay much more than $16,000 yourself.
The Market for
Used Cars
Suppose two
kinds of used cars are available—high-quality cars and low-quality cars. Also suppose
that both sellers and buyers can tell which kind of car is which. There will then
be two markets,
THE MARKET FOR
USED CARS
When sellers of
products have better information about product quality than buyers, a “lemons
problem” may arise in which low-quality goods drive out high-qualitymgoods. In
(a) the demand curve for high-qualitymcars is DH. However, as buyers
lower their expectations about the average quality of cars on the market, their
perceived demand shifts to DM. Likewise, in (b) the perceived demand
curve for low-quality cars shifts from DL to DM. As a result, the
quantity of high-quality cars sold falls from 50,000 to 25,000, and the
quantity of low-\ quality cars sold increases from 50,000 to 75,000.
Eventually, only low quality cars are sold.
Implications of
Asymmetric Information
Our used cars
example shows how asymmetric information can result in market failure. In an
ideal world of fully functioning markets, consumers would be able to choose
between low-quality and high-quality cars. While some will choosemlow-quality
cars because they cost less, others will prefer to pay more for highquality
cars. Unfortunately, consumers cannot in fact easily determine the quality of a
used car until after they purchase it. As a result, the price of used cars
falls, and high-quality cars are driven out of the market.
Market failure
arises, therefore, because there are owners of high-quality cars who value
their cars less than potential buyers of high-quality cars. Both parties could
enjoy gains from trade, but, unfortunately, buyers’ lack of information prevents
this mutually beneficial trade from occurring.
ADVERSE SELECTION
Our used car
scenario is a simplified illustration of an important problem that affects many
markets the problem of adverse selection. Adverse selection arises when products of different qualities are
sold at a single price because buyers or sellers are not sufficiently informed
to determine the true quality at the time of purchase. As a result, too much of
the low quality product and too little of the high-quality product are sold in
the marketplace. Let’s look at some other examples of asymmetric information
and adverse selection. In doing so, we will also see how the government or
private firms might respond to the problem.
THE
MARKET FOR INSURANCE
Why
do people over age 65 have difficulty buying medical insurance at almost any
price? Older people do have a much higher risk of serious illness, but why
doesn’t the price of insurance rise to reflect that higher risk? Again, the
reason is asymmetric information. People who buy insurance know much more about
their general health than any insurance company can hope to know, even if it
insists on a medical examination. As a result, adverse selection arises, much
as it does in the market for used cars. Because unhealthy people are more
likely to want insurance, the proportion of unhealthy people in the pool of
insured people increases. This forces the price of insurance to rise, so that
more healthy people, aware of their low risks, elect not to be insured. This
further increases the proportion of unhealthy people among the insured, thus
forcing the price of insurance up more. The process continues until most people
who want to buy insurance are unhealthy. At that point,
insurance
becomes very expensive, or in the extreme insurance companies stop selling the
insurance.
THE MARKET FOR CREDIT
By using a
credit card, many of us borrow money without providing any collateral. Most
credit cards allow the holder to run a debt of several thousand dollars, and
many people hold several credit cards. Credit card companies earn money by
charging interest on the debit balance. But how can a credit card company or
bank distinguish high-quality borrowers (who pay their debts) from low-quality
borrowers
(who don’t)?
Clearly, borrowers have better information—i.e., they know more about whether
they will pay than the lender does. Again, the lemons problem arises.
Low-quality borrowers are more likely than high quality borrowers to want
credit, which forces the interest rate up, which increases the number of
low-quality borrowers, which forces the interest rate up further, and so on.
In fact, credit
card companies and banks can, to some extent, use computerized credit
histories, which they often share with one another, to distinguish low quality
from high quality borrowers. Many people, however, think that computerized
credit histories invade their privacy. Should companies be allowed to keep
these credit histories and share them with other lenders? We can’t answer this
question for you, but we can point out that credit histories perform an
important function: They eliminate, or at least greatly reduce, the problem of
asymmetric information and adverse selection a problem that might otherwise
prevent credit markets from operating. Without these histories, even the
creditworthy would find it extremely costly to borrow money.
Market Signaling
We have seen that asymmetric information can sometimes lead to a lemons problem :
Because sellers know more about the quality of a good than buyers do, buyers may assume that quality is low, causing price to fall and only low quality goods to be sold. We also saw how government intervention (in the market for health insurance, for example) or the development of a reputation (in service industries, for example) can alleviate this problem. Now we will examine another important mechanism through which sellers and buyers deal with the problem of asymmetric information: market signaling. The concept of market signaling was first developed by Michael Spence, who showed that in some markets, sellers send buyers signals that convey information about a product’s quality.
Guarantees and
Warranties
We have stressed
the role of signaling in labor markets, but it can also play an important role
in many other markets in which there is asymmetric information. Consider the
markets for such durable goods as televisions, stereos, cameras, and
refrigerators. Many firms produce these items, but some brands are more dependable
than others. If consumers could not tell which brands tend to be more
dependable, the better brands could not be sold for higher prices. Firms that
produce a higher-quality, more dependable product must therefore make consumers
aware of this difference. But how can they do it in a convincing way? The
answer is guarantees and warranties.
Guarantees and warranties effectively signal
product quality because an extensive warranty is more costly for the producer
of a low-quality item than for the producer of a high quality item. The
low-quality item is more likely to require servicing under the warranty, for
which the producer will have to pay. In their own self-interest, therefore, producers of
low-quality items will not offer extensive warranties. Thus consumers can
correctly view extensive warranties as signals of high quality and will pay
more for products that offer them.
Moral Hazard
When one party
is fully insured and cannot be accurately monitored by an insurance company
with limited information, the insured party may take an action that increases
the likelihood that an accident or an injury will occur. For example, if my
home is fully insured against theft, I may be less diligent about locking doors
when I leave, and I may choose not to install an alarm system. The possibility
that an individual’s behavior may change because she has insurance is an
example of a problem known as moral hazard.
The concept of
moral hazard applies not only to problems of insurance, but also to problems of
workers who perform below their capabilities when employers cannot monitor
their behavior (“job shirking”). In general, moral hazardoccurs when a party whose actions are
unobserved affects the probability or magnitude of a payment. For example, if I
have complete medical insurance coverage, I may visit the doctor more often
than I would if my coverage were limited. If the insurance provider can monitor
its insurees’ behavior, it can charge higher fees for those who make more
claims. But if the company cannot monitor behavior, it may find its payments to
be larger than expected. Under conditions of moral hazard, insurance companies
may be forced to increase premiums for everyone or even to refuse to sell
insurance at all.
THE EFFECTS OF
MORAL HAZARD
Moral hazard
alters the ability of markets to allocate resources efficiently. D gives
the demand for automobile driving. With no moral hazard, the marginal cost of
transportation MC is $1.50 per mile ; the driver drives 100 miles, which is the
efficient amount. With moral hazard, the driver perceives the cost per mile to
be MC = $1.00 and drives 140 miles.
The Principal Agent Problem
If monitoring
the productivity of workers were costless, the owners of a business
would ensure
that their managers and workers were working effectively. In most firms,
however, owners can’t monitor everything that employees doemployees are better
informed than owners. This information asymmetry creates a principal–agent problem.
Managerial Incentives In Integrated Firm
Information about
demand, cost, and other variables. We’ve also seen how owners can design reward
structures to encourage managers to make appropriate efforts. Now we focus our
attention on firms that are integrated—that consist of several divisions,
each with its own managers. Some firms are horizontally integrated : Several plants produce the same or
related products. Others are also vertically
integrated: Upstream divisions produce materials, parts, and components
that downstream divisions use to
produce final products. Integration creates organizational problems.
INCENTIVE DESIGN
IN AN INTEGRATED FIRM
A bonus scheme
can be designed that gives a manager the incentive to estimate accurately the
size of the plant. If the manager reports a feasible capacity of 20,000 units per
year, equal to the actual capacity, then the bonus will be maximized (at
$6000).
Asymmetric
Information in Labor Markets : Efficiency Wage Theory
When the labor
market is competitive, all who wish to work will find jobs for wages equal to
their marginal products. Yet most countries have substantial unemployment even
though many people are aggressively seeking work. Many of the unemployed would
presumably work for an even lower wage rate than that being received by
employed people. Why don’t we see firms cutting wage rates, increasing employment
levels, and thereby increasing profit? Can our models of competitive
equilibrium explain persistent unemployment?
In this section, we show how the efficiency wage theory can explain the
presence of unemployment and wage discrimination. We have thus far determined
labor productivity according to workers’ abilities and firms’ investment in
capital. Efficiency wage models recognize that labor productivity also depends
on the wage rate. There are
various explanations for this relationship. Economists have suggested that the
productivity of workers in developing countries depends on the wage rate for
nutritional reasons: Better paid workers can afford to buy more and better food
and are therefore healthier and can work more productively.
UNEMPLOYMENT IN
A SHIRKING MODEL
Unemployment can
arise in otherwise competitive labor markets when employers cannot accurately
monitor workers. Here, the “no shirking constraint” (NSC) gives the wage
necessary to keep workers from shirking. The firm hires Le workers (at
an efficiency wage we higher than the market-clearing wage w*),
creating L* Le of unemployment.
Reference
Pindyck, S. Robert & Rubinfeld,
L. Daniel (2013). Microeconomics. Pearson
Education, Inc. New Jersey 07458.
Prentice Hall.
This essay defends a form of ethical naturalism in whichethicalknowledgeisexplainedbyhumannature.Humannature,here,isnottheessenceofthespeciesbutits
natural history as socially and historically determined.The
argument does not lead to social relativism, but it doesplacelimitsonthescopeofethicalcritique.Associety
becomes“total”,critiquecanonlybeimmanent;tothis
extent, AdornoandtheFrankfurt School areright.
My project is to sketch, in a fairly abstract way,
the appeal of Aristotelian ethical naturalism—in particular, for theepistemologyofethicalknowledge—toraiseaproblemaboutthehistoricityofhumannature,andtoexplorewhatfollowsforthelimitsofcritiqueanditsentanglementwithsocialtheory.WewilltraceapathfromAristotle,via Marx,totheFrankfurtSchool.
criticism
of a given society is confined to resources accessible within it. Is this
commitment a function of theaudience—whatitmakessensetosayifoneaimsattheemancipationofthosewhoinhabitasociety?Isitamatterof
hermeneutic isolation—the need to understand a society in terms of its own
concepts? Does it depend on relativ-ism
or on doubts about the objectivity of ethics? I argue that the answer in each
case should be no. Instead, I offer aqualified
argument for immanent critique from Aristotelian naturalism and the historical
contingency of humannature.IendbyrelatingthisargumenttoAdorno'spessimism.
1| BRINGINGARISTOTLEBACKTOLIFE
AccordingtotheformofAristoteliannaturalismthatinterestsme,ethicsisnotgroundlessbutdeterminedbyournature,
where the conception of our nature at work is richer than the mere capacity to
act for reasons. It is specifi-callyhumannature.
ThisisanopenaccessarticleunderthetermsoftheCreativeCommonsAttribution-NonCommercial-NoDerivsLicense,whichpermits useand distribution in any medium, providedthe originalwork is
properlycited, the useis non-commercial and nomodificationsoradaptationsaremade.
ButtherearepassagesintheNicomacheanEthicsthatsuggestotherwise.Atonepoint,Aristotleseemstoconjuretheexistenceofrationalfish:“Nowifwhatishealthyorgoodisdifferentformenandforfishes,butwhatiswhiteor
straight is always the same, anyone would say that what is wise is the same but
what is practically wise is differ-ent”.1Practicalwisdomhereislife-form-relative,itsnaturedifferingaccordingtothedifferingnatureofhuman
expressed
by sentences such as “The F is/does G"
and “Fs are/do G"
(Thompson, 2008,
pp. 64–5). As it might be:“Theskylarkbreedsinthespring"or“Humanbeingshave32teeth”.2Ontheintendedreading,thesearegeneraliza- tions
about individual Fs. (Contrast, for instance, “Human beings evolved 150,000 years ago” or “The dodo wentextinctinthe17thcentury”,whichpredicatesomethingofthespecies.)Linguistscalltherelevantgeneralizations“characterizinggenerics”:theysaysomethingaboutthenatureofthekindofthingtheycharacterize.
Natural-historical judgements
are evidently not universal generalizations. Not every human being has 32
teeth.Less obviously, they are not
statistical generalizations—perhaps not even a plurality of human beings have
32 teeth—nor can they be helpfully
explained in terms of normal or normative conditions. So, at least, Thompson
argues, and Iproposetofollowhim.3Thompsongoeson,however,tomakeradicalclaimsaboutthelogicofnaturalhis-tory.4Thus:
“The volcano erupts when plates collide, and one plate is pressed under the
other. The plate melts, forming magma,andasthepressurebuilds,themagmaisforcedintocracksintherock,andeventuallyuptothesurface.Herethemelted
rock blasts out of the ground”. The
generalizations here are characterizing generics; they are not universal orstatisticalgeneralizationsand
areno easierto explainwithout
circularityin termsof normal or normativeconditions.
Forallthat,volcanoesarenotalive.Onedifferenceliesintheabsenceoffunctionorteleology.Theplatesdonotcol-lide
in order to cause a volcanic eruption, where the plant may lean towards the sun
in order to get more light. Butthepossibilityoffinalcausationdoesnotturnontheapplicationofalogicallydistinctiveformofgeneralization.
Thompson may not be convinced
by this—but the issue will not matter here.5What we need are not contentioustheseslike(1)–(3)butthetruthofnatural-historicaljudgementsaboutlivingthingslikeus.Thetruthsinquestionneed not
be irreducible. For our purposes, they may even be subjective or
anthropocentric—a construction of humanthought—solongastheirtruthisnotsociallyorculturallyrelative.6
If we apply this principle to patterns of practical
thought, given the natural history of human beings, we may be ableto extract a theory of good, that is,
non-defective, practical thought, which provides an account of reasons and thusofhowweshouldlive.8Humannaturewouldbethefoundationofethics.
stood by appealing to the sorts of evolutionary
facts that have played a central role in theories of function in the phi-losophyofbiology.10
There are several problems
here. First, it is not plausible that the concept of function that appears in
the naturedocumentary—the one we
natively employ in doing “natural history”—is distinct from the concept invoked by philos-ophersofbiology.It'snotasthoughtheyoungnaturalist,fascinatedbythefunctionofpetals,isthesubjectofa
bait-and-switch when she gets a PhD in evolutionary
biology. If the account of function given by Foot diverges fromaccountsinthephilosophyofbiology,thatisarealconflict,notaverbaldispute.
Second, it follows from
Foot's account, as it does from Thompson's that human beings by nature engage
in non-defective, that is, good,
practical reasoning.11In other words, as a matter of
natural history, human beings are fullyrational.
Insisting that this is a natural-historical truth, not a universal or
statistical generalization, does not removethe
air of paradox. It is one thing to say that human beings by nature have 32
teeth and fully functioning organs, andanother
to say that they are by nature practically wise. There is a related difficulty,
not specific to human virtue: thepossibilitythatagivenFwilldeviatefromthewaysinwhichFscharacteristicallygoon—beingordoingsomethingotherthanGwhentheFis/doesG—inawaythatisadvantageousforitandperhapsforotherFs,too.Thisturtlehas an
uncharacteristically hard but lightweight shell; this bird has better eyesight
than members of its species natu-rally
do.If wecanmake senseofpossibilities
likethese,we mustrejectboth DefectandDefect andFunction.12
calthought.Tospeakofthehumangoodistospeakofthelifeweshouldwanttolive;“should”istobeunderstoodintermsoftheweightofreasons;andreasonsareexplainedintermsofpracticalrationalityas“goodnessofthewill”. For Foot, this is a form of natural goodness, or non-defectiveness, that
falls under Defect and Function: goodpracticalthoughthasafunctioninthe life of humanbeings,whichisto
say that humanbeings reasonincertainchar-
acteristic ways, where this is a fact about human
life on which the good of human beings depends. But then we havecome full circle, back to the human good
as the basis of functions that explain good practical thought, and thus thestandardsofpracticalreasonthatfixhowweshouldwanttolive.Ifthecircleisvicious,asitappearstobe,thenFoot'saccountmustfail.
Giventhesechallenges—alongwithothersIhavenotdiscussed—whatistheappealoftheAristotelianview?Iwillfocus
on its epistemological power. It's only if ethical facts are determined by our
nature that the truth of our beliefscan
be more than accidental, and it's only by appealing to specifically human
nature that we can allow for the scopeandpersistenceofethicaldisagreement.13
The argument turns on a
certain way of spelling out the view that knowledge involves non-accidental
truth. Thisideaissometimesexpressedintermsof“modalsafety”:whenSknowsp,Scouldnoteasilyhavebeenwrong,inthat
there
is no close possible world in which S falsely believes p. But this condition is vacuous for necessary truths,includingthoseinethics,sincethereisnopossibleworldinwhichtherelevantpropositionisfalse.Hence,theturntoanexplanatoryratherthanmodalinterpretationof“accident”.
beliefs,
narrow or otherwise, on which it is no accident that our method is reliable. In
the limiting case of basicbeliefs,whichdonotrestonevidence,themethodcouldsimplybe:believingp.
Wecanbeequallyliberalaboutexplanations,efficient,final,orformal—appealingtocausation,function,orcon-stitutiveconnection—solongasweinsistthatmodalsafetyisnotenough.It'snotjustthatyourmethodcouldnoteasilyhavemadeyouunreliable.Wheneverpisanecessarytruth,themethodofbelievingpcouldnoteasilyleadone astray, even if the fact that one believes p has nothing to do with the fact that p. In that case, the truth of one'sbeliefisaccidental,despitebeingsafe.AccordingtoK,theremustbeanexplanationthatrunsfromthefactthatmisreliable to the fact that you use it, or vice versa, or a common
explanation that connects the two. If you know p bymethodm,itcannotbeamerecoincidencethatthesefacts—thereliabilityofmandthefactthatyouuseit—bothobtain.
The question is how ethical
beliefs could count as knowledge, given K. If ethical facts are causally inert
and con-stitutivelyindependentofus,thereisnoroomforanexplanatorylinkbetweenthemethodsbywhichweformourethicalbeliefsandthefactthatthosemethodsarereliable.Ethicalknowledgeisimpossible.14Youmightthinkthesolutionistogoreductionist:foranyethicalconcept,E,therearenon-ethicalconcepts,N,withwhichwecansay what
it is to have the property picked out by E. If we can give causal explanations
that appeal to N, ethical facts willnotbecausallyinert.Butdespiteappearances,thismanoeuvrewillnothelp.ItremainstruethatthefactthatbeingEisbeingNiscausallyinert,sowehavenoaccountofhowsuchtruthscouldeverbeknown.15
thenatureofethicalfacts.Constructivismmayappeartoosimplistictotakeseriously,buttherearemoresubtleviews that share its spirit, such as
Sharon Street's “Humean Constructivism”, on which the facts about what there isreasontodo,areafunctionofourjudgementsaboutreasons,correctedforcoherence(Street,2008).
One need not think the facts
are a function of our beliefs in order to explain how ethical knowledge is
possible.Theconstitutivelinkcouldruntheotherway:ourbeliefsmaybeafunctionofthefacts,asinexternalistviewsofcontent.16Accordingtothesimplest,suchview:
Again, if this is true, it is no accident
that we form beliefs about virtue by a reliable method since our reliability
fol-lowsfromthenatureofthosebeliefs.
In their simplest forms,
Constructivism and Externalism predict that everyone is reliable in ethics.
More sophisti-cated views allow for individuals whose beliefs are wildly off the
mark. To focus on externalism, we might tieconcept-possessionnottoindividualreliabilitybuttoone'slinguisticorconceptualcommunity:
If the community uses method m and I use m because the community does, it is again no accident that my method
isreliable,assumingSocialExternalism.ThereisanexplanationofwhyIuseitthatentailsasmuch.
society, inspired by
Callicles' “great speech” in Plato's Gorgias to believe
that what we call “justice” is not a virtue atall and that
the condition of “natural justice” is one in which the powerful dominate the weak, who acquiesce in thejusticeoftheirsubordination.TheCallicleansocietymaybestableenoughinitsbrutalhierarchy,buttheethicalbeliefsofthiscommunity—andthemethodsbywhichtheycharacteristicallyformthosebeliefs—arewildlyoffthe
mark. What Callicles calls “natural justice” is not a manifestation of virtue but of
vice, and we may suppose that thisformspartofawholesystemofvirtues,endorsedbytheCallicleans,withwhichweradicallydisagree.
TheCallicleansarenotreliableaboutwhatwecall“virtue”.IfSocialExternalismholds,andtheirwordsmakesense at all, they must mean something
different by them. We are thus led from Social Externalism to a form ofSocial
Relativism in which we are talking past the Callicleans when we say “Justice is a virtue”, not disagreeing withtheirbeliefs.Likemany,however,Ifindthisimplicationincredible:wedonottalkpasttheCallicleansbutrejecttheir
views, as Socrates and Plato did. Ethics is
objective, at least to that extent. If this is right, Social Externalism cannotbe an adequate account of ethical
concepts. It misinterprets the Calliclean society, and so it misinterprets us.
SocialExternalismisnottrueandwecannotmakesenseofethicalknowledgeinitsterms.
Thisiswherenaturalhistorycomesin.Fornatural-historicalfactsaresuitedtoexplainthereliabilityofourbeliefswithoutSocialRelativism,preservingourdisagreementwiththeCallicleans.Theconnectionbetweenvirtueandnaturalhistory might take various forms. The most obvious
adapts Foot's Defect and Function to the traits that count asvirtues:
Aswellasthedubiousimplicationthathumanbeingsarebynaturefullyvirtuous,however,thisviewdoesnotrelatetheethicalfactstoourbeliefsaboutthem,buttoourbehaviour.Asitstands,NaturalVirtuecannotexplainhowknowledgeofvirtuemeetsconditionK.Itmattersherethatwedonotmerelyactinaccordancewithtraitsofcharacter but that we are beings who have a
conception of ourselves as the kind of creature we are, where how weshouldlivedependsupontheanswertothatquestion.Inthisrespect,wedifferfromotheranimals.CompareMarx
and theoretically he makes both his own and other
species into his objects, but also … he relates to himself as to thepresent, living species, in that he
relates to himself as to a universal and therefore free being" (Marx,
1844, p. 89).Wehavebeliefsaboutournatureandhowweshouldliveinlightofit.
Although they abstract from
the substance of our self-conceptions, forms of constructivism and externalism
thatappealtonaturalhistoryareconsonantbothwithourspecies-beingandwiththedemandsofethicalknowledge.Thuswemayconsidertwoschematicviews:
NATURALCONSTRUCTIVISM: For a trait to be an ethical virtue is for creatures
of one's life form to believe thatitisavirtue.
Like other forms of constructivism, the
idea that facts about virtue are fixed by what human beings take to be virtu-ous is explicitly circular. It identifies
the facts about F with facts about beliefs about F. I doubt that true identifica-tionstakethisform.17NaturalExternalismismoreplausible.Itisnotcircularanditspartialaccountoftheconceptofvirtuewouldexplainhowethicalknowledgeispossible.IfNaturalExternalismistrue,andhumanbeingsusemtoclassifytraitsasvirtues,itfollowsthatmissufficientlyreliable;andifIusembecausehumansusem,itisnoaccidentthatmymethodisreliable.ConditionKismet.
the remainder of the story
might advert to David Hume. For Hume, we apply the concept of virtue to traits
that winapproval by the operation of
human sympathy from the “common point of view”: we abstract from personal connec-tions and focus on the typical effects of the trait on the agent's “narrow circle” (Hume, 1739-1740,
Book Three).UpdatingHume,wemightsayinsteadthattheconceptofvirtueisappliedtotraitsofwhichhumanbeingsapprove
in conditions of non-ethical knowledge, and that
this concept regulates social life, guiding our interaction with otherpeople.Thesefactsaboutitsusedetermineitsreference,vindicatingNaturalExternalism.
This is all, at best, approximate.
As Aristotle said, we should not expect more precision than the subject matteradmits.Thisgoesnotonlyforthetheoryofethicalconceptsbutalsoforthefactsthemselves.Whathumanbeingsapproveinconditionsofnon-ethicalknowledgemaybevagueorindeterminate:thefactsaboutvirtuemayleavemuchtobesettledbysocialconvention.Fairnesscouldbeobjectivelyavirtue,say,butsubjecttosocialspecificationin multiple ways. The details are opaque. But even at this
abstract level, we can see how this approach—combiningHume'ssentimentalismwithAristotle'snaturalism—wouldexplainthepossibilityofethicalknowledgewhilesavingourdisagreementwiththeCallicleans.ItdoessowithoutencounteringanyoftheproblemsthatconfrontedFoot'sview.Thus,theappealofAristoteliannaturalismfortheepistemologyofethics.
3| THEPROBLEMOFHUMANHISTORY
There are many problems with the sort of
view I've sketched, but one is especially deep. Can human nature really dothe work it's called
upon to do in Natural Externalism? Not if we think of it as the essence of the
human species,fixedbytheveryexistenceofhumanbeings.
There are disputes about the
nature of species in the philosophy of biology. But whatever we say about them,
itis
consistent with the existence of Homo
sapiens that our evolution might have been quite different. Adapting athought
experiment due to Philip Kitcher, we can imagine that, soon after the
speciation of Homo sapiens, an envi-ronmental toxin kills off all but
congenital psychopaths (Kitcher, 1999, p. 72). The psychopathic humans may live on,perhapsformanygenerations,buttheirnaturalhistorywillberadicallydifferentfromours,inwaysthatmatterto
theanthropologistwhocameacrossourpsychopathicdescendantswouldbeforcedtotellaverydifferenttale.Ifthey
have beliefs about virtue at all, the psychopaths do not reliably track the
virtues we recognize as such. Still, thehumanspeciesandeverythingessentialtoithavebeenpreserved.TheessenceofHomosapiensistoominimalabasisforthehumannaturethatAristoteliansneed.
More mundanely, what a Martian anthropologist should say
has shifted over time, from our hunter-gathererpastthroughagriculturalsettlementandfeudalsocietiestotheadvancedcapitalistpresent.(Accordingtosomeanthropologists, there was an even more
radical shift, from the early Homo
sapiens of ~150,000 years
ago tohumans having language and
symbolic thought, for which we have evidence dating back ~70,000 years. But the evidenceanditsinterpretationare controversial.)We findhere an echoofMarx,inthesixththesisonFeuerbach:
Aristotelian. The contemporary philosopher Rahel
Jaeggi represents this view as a default: “Ever since Althusser criti-cizedMarx's‘humanism’anditsidealofthesubject'sself-transparencyandself-directedpowers…thecritiqueofessentialismhasbecomepartofphilosophical‘commonsense’”(Jaeggi,2014,p.28).
including essential human needs, and there is the
subject matter of Martian anthropology, or natural history, whosetruthsarehistoricallycontingentandvariable.Wechangethemovertime.21
support the list of basic needs above. But however we
interpret Marx, we should distinguish senses of “humannature” on which it must be invariant from the shifting natural history of how we
live. The former is ill-suited for aleadingroleinAristoteliannaturalismsinceweshareitwithcongenitalpsychopaths.Thenaturalhistorythatfigures
in the likes of Natural Virtue and Natural
Externalism is the one that varies, contingently, over time. It is “no abstrac-tioninherentineachsingleindividual[but]theensembleofsocialrelations”.
And now we face the problem I
promised before. Once we concede the social and historical construction of nat-ural history, as these figure in our
revived Aristotelianism, aren't we forced back into the Social Relativism we
turnedtohumannaturetoavoid?
There have been influential
answers to this question, attributed to Marx and Hegel, that purport to find
directionin the course of human
history. This direction, or teleology, points towards a fully realized form of
human life whosenaturalhistoryisourgoal.Thisnarrativegivesnon-arbitrarygroundsforregardingaparticularpossiblephaseofhuman
history as that which matters to the foundations of ethics. But it is
implausible that the Martian anthropolo-gist
should thinkofhumanhistory
inthisway,itscourseprojectedinadvance.As Jaeggiwriteswithonlyslightexag-
A more modest and more
realistic point is that, since natural-historical judgements are not
statistical generaliza-tions,theideathathumanbeingsapproveofjusticedoesnotimplythattheCallicleansocietycannotexistorlongsurvive.
It's not a claim about how things usually go but about how they go by nature.
Even if the Callicleans endure,we
need not conclude that human beings live like them or that they are not
radically mistaken. The same pointapplies to more mundane realities: the persistence
and pervasiveness of sexism and racism do not imply, all by them-selves,thathumanbeingsarebynaturesexistorracist.22Inconditionsofdeprivation,orwheretheenvironmentisinhospitable, natural history and statistics can
dramatically diverge. When we study the Callicleans, or ourselves, wemayresemblebotanistsstudyingspecimensinparchedsoil.23Deprivedofwater,liliesdonotlookorgrowtheway
artificial thing”, wrote John Stuart Mill, “the result of forced repression in some
directions, unnatural stimulation inothers”(Mill,1869,p.22).Thesamethinggoesforthenatureofmen.
Still,therearelimitstothisstrategy,howeverhardtotrace.Thefactsofnaturalhistorycannotfloatentirelyfreeof how things tend to go. Suppose that the Callicleans are able to
survive and reproduce; they are not hungry orthirsty,unhousedorunclothed.Supposethat,forwhateverreason,therestofusdieout:onlytheCallicleanssurvive.
ronment is inhospitable or
their needs unmet—evidence available from her detached perspective, not our ethicallyinflected one—she must admit that human
beings approve of “natural justice”, the tendency of the powerful to dom-inatetheweakandoftheweaktoaccepttheirdomination.Thisiswhattheycall“virtue”,partofawholesystemof
virtuesradicallyunlikeours.Assumingthattheyhavenotmisappliedtheirmethodforidentifyingtraitsasvirtues,the
Callicleans are reliable. They are not, however, reliable about what we call “virtue”. If their words make sense atall,theCallicleansmeansomethingdifferentbythem.AndthisistruenotonlyonSocialbutonNaturalExternalism.
Once human beings are Calliclean, we cannot anchor
their ethical concepts in ours, as we could when they were nomore than a renegade society. If their
method for identifying traits as virtues, properly applied, yields verdicts
thatareradicallydifferentfromours,wecannotsaveourdisagreementwiththem.Instead,wetalkpastthem—aswemight talk past the Martian anthropologist who
guides her life by ethical concepts alien to us, ones adapted to howMartians live, not being social animals,
perhaps, reproducing without sex, surviving for centuries, regrowing limbs.TheCallicleanshavebecomeanalienformoflife.
Ofcourse,wecanstillsaythatjustice—asweunderstandit—isavirtue.TheprospectofourCallicleanfuture,even in its most dystopian version, does not mean
that is not true. But it's apt to be disturbing all the same. For theAristotelian ethical naturalist, the
historicity of human nature tempers ethical objectivity, leading to a form of
Natu-ral, not Social Relativism,
where the nature in question is not the essence of the human species but the
natural his-toryofhowhumanbeingslive.Ifournaturalhistorychangestothepointthatourmethodforidentifyingtraitsasvirtues renders wildly different verdicts, even properly applied, then our
ethical concepts will have changed. We willbetalkingaboutsomethingelse.ThisCallicleanprospectmaybefanciful,butasI'llargue,itshedslightonthenatureandlimitsofsocialcritique.
4| THELIMITSOFCRITIQUE
In “Cultural Criticism and Society”,
Adorno contrasts three forms of critique directed at collective social
structures.“Internal critique” of society appeals to “the norms which it itself has crystallized” (Adorno, 1951b, p. 31). It appeals,thatis,tosociety'sownethical
beliefs, showinghowitfailstoliveupto
them,orhowthosebeliefs contradictthem-
tices, and the critical tensions exposed may involve
a wider understanding of irrationality or dysfunction than contra-dictionorhypocrisy.24Finally,“externalcritique”appealstonormsnotevenimplicitinasociety—asitmightbe,
criticism, sees itself obliged to fall back upon the
idea of ‘naturalness’, which itself forms a central element of bour-geoisideology”(Adorno,1951b,p.31).
Like other members of the
Frankfurt School, Adorno insists on immanent critique, finding internal
critique inade-quate and external
critique illicit. It's not hard to see why one might hope to go beyond internal
critique. The ques-tion is why one should confine oneself to immanent critique. What
exactly is illicit in the criticism of society bynormsexternaltoit?CanwenotcriticizetheCallicleans—atleastintheirlocalformation—asprofoundlyunjust,regardlessofwhetherourstandardsofvirtueareinanywayimplicitintheirsociety?
Why immanent critique? I'll
reject three answers before offering my own. The first answer appeals to
self-deter-mination.25If we hope to emancipate a society
through social critique—not just evaluate its practices or change it bycoercion—we need to convince the members
of that society that our critique is valid. We can do this only if our argu-mentsappealtonormsatleastimplicitinthesociety,onesexpressedorcontainedinitspracticesifnotinovertbelief.Sinceweshouldaimatemancipation,notmerecommentaryorforcedchange,thereisamoralcaseforimma-nentcritique.
AsSanfordDiehlobserves,however,thislineofreasoningfallsshortofmotivatingimmanenceasaconstrainton the theorizing of the
social critic (Diehl, 2022, pp. 681–2). It gives us reason to refrain from
external critique whenweaddressthemembersofagivensociety,perhaps.Butit doesnotinvalidateexternalcritiqueonitsownterms.
determination that finds some common ground with it (Diehl, 2022, p. 686). Diehl's argument turns on distinguishingthequestion,“HowshouldIrelatetomysocialworld”?askedbythemembersofagivensocietyfromthequestion“Whatiswrongwiththissociety”?askedbysomeoneoutsideofit.ForDiehl,onlyconsiderationsthatcanbe
brought to bear on a question by those who ask it
can be relevant to the answer. Thus, while external critique is finefor the second question, the first must be
answered by considerations available within the society involved. It is aptonlyforimmanentcritique.Thisisnotamatterofhowweshouldaddressthemembersofthegivensocietyifweaimattheiremancipation,butofthequestion,weintendourtheorytoanswer.Immanenceisaconstraintonthesocialcritic'stheorizinginsofarassheintendstoanswerthequestionposedbythosewhoask,withinthesociety,
the question “How should I relate to my social world?” asked by N herself must be congruent with the answer to thecritic'squestion“HowshouldNrelatetohersocialworld?”considerationsunavailabletoNmayberelevanttoherquestion,afterall.
begs the question.26External critique assumes that norms N does not
accept, even implicitly, can be relevant to thequestion“HowshouldNrelatetohersocialworld?”bydeterminingwhatshehasreasontodo.
understand a given society
except in terms of its own ethical categories, and to use those categories is
to share theethical standpoint they
encode. It follows that social critique that is based on genuine understanding
must adopt theethical outlookof the societybeing criticized.As
RobinCelikatesputs itina recentessay:“Onthehermeneuticview,
But the premise of the
hermeneutic argument is dubious. One can internalize an ethical standpoint well
enoughto understand the categories
that constitute it without coming to share that standpoint. As the
anthropologist, JamesLaidlawcontendsinTheSubjectofVirtue,thisisthepreconditionofmuchethnographicwork:
One can gain an imaginative understanding
of a form of life, and expand one's moral horizon by learn-ingtothinkwithitsconceptsandappreciatetheforceofitsvalues,withouthavingtomakethoseconceptsorvaluesone'sown,let aloneadoptitspractices.Justthisdetachmentisintrinsictotheeth-nographicstance.(Laidlaw,2014,p.224).27
Afinal
flawed argument for immanence turnson
SocialRelativism.If weare
talkingpast the Callicleanswhen we
claimthatjusticeisavirtueandtheirsocietyunjust,astheSocialRelativistcontends,thenourcritiquefallsflat.Theconcept
that regulates their social life—the one expressed by their word “virtue”—is not the concept that regulatesours.Inthatrespect,thetruthofwhatwesaywhenwetalkabout“virtue”isirrelevanttothem.Externalcritique
fails to address the questions they are prone to ask
about their own society not because it is asked by someone out-sideit,butbecauseitchangesthesubjectfromwhattheymeanby“virtue”towhatwedo.Ifwewanttoaddresstheirquestions, wemustusetheethicalconceptsthattheCallicleans use,andifSocialRelativism
isunderwrittenby
SocialConstructivismorSocialExternalism,theconceptswillbeoneswithwhichtheyarereliable.Ouronlyhopeisto find norms at least implicit in their
practice that conflict with their approval of “natural justice”. Despite appear-ances, the truedescriptionoftheir
methodforidentifying traits as virtues, properly applied, mustbe one on which it
agreeswithours.Hence,theneedforimmanentcritique.
The objection to this
argument goes back to section 2: even if the Callicleans apply their own method
correctly,they do not mean something
different by “virtue” than we do; and we do not talk past them. It was in order to avoidthatimplicationthatweturnedfromsocialtonaturalhistory, insistingthatparticularsocieties,liketheoneinspired
None of the arguments for
immanence so far—the argument from self-determination, the argument from herme-neutic isolation, or the argument from
social relativity—is sound. But these arguments point towards a circumscribedcaseforimmanentcritique,whichrestsonthehistoricityofhumannature.RecalltheCallicleansattheendof
our own. Imagine a heretic who aims to criticize the
Calliclean form of life, having learned of ours from some forgot-ten history book. She can point to
frustrated needs or an inhospitable environment, arguing that Calliclean life
doesnotreflectthenaturalhistoryofhumanbeings:theCallicleansarelikeplantsgrowinginparchedsoil.Orshecanargue that they have misapplied their method for
identifying traits as virtues, perhaps because they lack non-ethicalknowledge,usingtheirownideasagainstthem.Butifbothargumentsfail,shemustconcedethattheyarereliable
social life. What the Social Externalist says about
the Calliclean society, the Natural Externalist must conclude aboutourCallicleanfuture.Theheretic'scritiquefallsflat.
If she wants to take our side
against the Callicleans, the heretic must argue that they share our ethical
concepts.Shemustholdthat,whilethesystemofvirtuestheyprofessisradicallydifferentfromours,humanbeingsdonotby
justice”.
Despite appearances, the true description of their method for identifying
traits as virtues, properly applied,isonewhichagreeswithours.Inotherwords,shemustengageinimmanentcritique.Inthehistoricalcul-de-sacof
total Callicleanism, external critique is beside the
point: a change of subject or the mere expression of dissent. Thisdoesnotmeanit'sboundtobeineffectual,butitseffectsarethoseofrhetoricalconversion,notcognitiveengage-mentwithCallicleanbeliefs.
Theupshotis aqualifiedargumentforimmanentcritique:qualified,sinceitallowsforanexternalcritiqueoftheCalliclean society in its local
formation; but disturbing nonetheless.28It's one thing to refrain from the ethical critiqueof our distant ancestors, refusing to
say, for instance, that the honour codes of feudal society were simply mistakensince they belonged to a different ethical
world. It's another to admit that, barring the success of immanent critique,thefutureCallicleansmightberight.Iftheyaremistaken,thatmustbebecausetheydonotliveashumanbeingslive—natural history and statistics
come apart—or because they have misapplied the method by which they form eth-icalbeliefs.
its
ideology. Human beings will believe that avarice is a virtue that social arrangements
that pit us against oneanother are ethically acceptable, and that
exploitation is not unjust.29And barring the success of immanent
critique,these beliefs will have
come true. If we are mistaken, in the circumstance of total capitalism, that is
because we donot live as human
beings live—natural history and statistics come apart—or because we have
misapplied the methodby which we
form ethical beliefs. Unless there are norms implicit in our way of life that
conflict with the ideology ofcapitalism,ethicalcritiquefallsflat.
5| ADORNO'S PESSIMISM
Inclosing,Iexplore,inslightlygreaterdepth,therelationshipbetweentheargumentaboveandtheworkofaspecificFrankfurtSchoolphilosopher:Adorno.TheideathatCriticalTheoryhasAristotelianroots,conjoinedwithacondi-tionally pessimistic outlook on the powers of critique, brings us close
to Fabian Freyenhagen's fruitful reading ofAdornoasa“negativeAristotelian”(Freyenhagen,2013).Myhopeisthatanadmittedlypartialengagementwiththis
Freyenhagen sees Adorno as an
Aristotelian naturalist, like Foot, who draws on a conception of human nature
asthe basis for critique. “According to Adorno”, he writes, “the gap between human beings as they are now—damaged,reduced to
appendages of the machine, lacking real autonomy—and their potential—their
humanity yet to berealized—provides the normative resources for a
radical critique of our social world” (Freyenhagen, 2013, p. 11). Butthecritiqueiscircumscribedbyignoranceofthehumangood.Whatmakesitpossibleisknowledgeofwhatisbadforus,asinthefrustrationofhumanneedswhosestandingassuchisnotethicallycontentious.Hence,the“nega-
tive” in“negativeAristotelianism”.
Adorno thinks that we can know the bad
(or, at least, the inhuman), even without knowing the good.Ascribing an
Aristotelian conception of normativity to Adorno means we can elucidate how
suchasymmetrical knowledge is possible. To gain knowledge of the bad in this
conception, we need to findout what
is bad for us qua animal beings and
what obstacles there are to the realisation of our poten-tial as human beings. To find this
out, it is not always necessary to know what the realisation ofhumanity(andtherebythegood)substantiallyconsistsin.(Freyenhagen,2013,p.240.)
Wemaynotknowwhatabsolutegoodisortheabsolutenorm,wemaynotevenknowwhatmanisorthehumanorhumanity—butwhattheinhumanisweknowverywellindeed.Iwouldsaythattheplace of moral philosophy today lies more in the
concrete denunciation of the inhuman, than in vagueandabstractattemptstosituatemaninhisexistence.(Adorno,2000,p.175).
What the philosophers once knew as life has become the sphere of
private existence and now ofmereconsumption,draggedalongasanappendageoftheprocessofmaterialproduction,withoutautonomyorsubstanceofitsown.…Ourperspectiveoflifehaspassedintoanideologywhichcon-cealsthefactthatthereislifenolonger.(Adorno,1951a,Dedication).
nature of social reality. “The more total society becomes”, he
writes, “the greater the reification of the mind
and themore
paradoxical its effort to escape reification on its own” (Adorno, 1951b,
p. 34). But so long as reification isincomplete,realitycanineffablyshowthrough.Someauthorsseeintheineffableaformofethicalthoughtthat
departsfrom
themere factsof human life—a rejection of Natural aswell asSocialRelativism.31
Idonotknowhowtoresolvetheinterpretivedispute:IamnotsurewhatAdornothinks.ButtheviewI'vepro-posed confines itself to natural history. For
Natural Externalists, the threat of our Calliclean future—or of the hege-mony of global capitalism, with its
pernicious ideology—is metaphysical, not just epistemic. It is a threat to thecogencyofanythingbutimmanentcritique,andifthatfails,athreattotheverymeaningofethicalclaims.
Analytic philosophers have not much concerned themselves
with social history. But there are exceptions.Though she does not take a position in
moral epistemology, by my lights—she does not articulate anything like condi-tionKorhowitcouldbemet—ElizabethAnderson'saccountoftheBritishabolitionmovement,ofhowwecametoknow that slavery is unjust, would meet the criteria
I have sketched (Anderson, 2014). Yet the case is far from typi-cal: we rarely possess a
social-epistemological narrative of this kind. Adorno may therefore be right in
urging mod-estyinwhatweclaimtoknow—whenwegobeyondthecoarsestdemands.32
7 Thompson (2008, p. 80); but see Foot (2001, p. 30)
on the blue tit, which has a blue patch on its head, though an individ-ualbluetitisnotdefectiveifitlacksthatcolouring.
9 Foot (2001, pp. 30–35). It is not clear
whether Foot believes in a distinctive kind of generalization, “The F is/does G" thatentailsthatbeingordoingGhasafunctioninthelifeoftheF,orwhethershethinksoftheattributionoffunctionassomethingbeyondmerenatural-historicalfact.SeeFoot(2001, pp. 30,31, 33);alsoThompson(2008, p. 77n.12).
12
Perhaps we can improve upon these formulations, drawing from natural history
standards for an F to function well—better than Fs characteristically do—with respect to
being or doing G. But we still face a puzzle. Is human virtue a matterof how human beings behave when
their capacity for intention and desire functions well? Or of behaving in ways
ofwhich
human beings approve when their capacity for approval of character functions
well? Against Foot and Thompson, Iadoptthelatterview,onwhichtherelationshipofhumanvirtuetohumanfunctioningislessdirect.
21 Does the natural history of human
life also vary geographically, that is, from place to place at a given time?
Not exactly.Whenhumanbeingsliveindifferentsocialformations,theMartiananthropologist'snaturalhistorymustacknowledgethis.Butsinceitfindsexpressioninnaturalhistoricaljudgements—generalizationsabouthumanbeings,assuch—itwilldo
28HereIdisagreewithJaeggi,forwhomcritiquemustbeimmanentevenwhendirectedatlocalformsoflifethatpurportto solve particular social problems;
see Jaeggi (2018, pp. 40–41) on forms of life versus culture as a “comprehensive andself-contained
totality”. Likewise, the immanent critique of Jaeggi's Alienation draws on a “formal conception of psycho-logicalhealth"(Jaeggi,2014,p.33)notonasubstantiveaccountofhumanlife.Still,someofherremarksaremoreconge-nial;see,forinstanceJaeggi(2018,pp.135–6)on“thehumanformoflife”
30 A further complication: Adorno's
divergent use of “natural history” in criticizing the representation of what is merely his-toricalasnaturaloressential;seeWhyman(2016)forhelpfuldiscussion.
32 Special thanks to Sandy Diehl for
prompting me to write about this topic through his eye-opening work, and for
generouswrittencommentsonanearlierdraft;thanksalsotoaudiencesatIndianaUniversityinBloomington,theBritishSociety
Adorno, T. (1951a). Minima Moralia: Reflections from damaged
life. Trans. E. F. N. Jephcott. London: Verso Books 1974.Adorno,T.(1951b).Culturalcriticismandsociety.Trans.S.WeberandS.Weber.InPrisms(pp.19–34).London:Spearman1967. Adorno,T.(2000).Problemsofmoralphilosophy.Trans.R.Livingstone.Stanford:StanfordUniversityPress.
Street, S. (2008). Constructivism
about reasons. Oxford Studies in
Metaethics, 3, 207–245.Thompson,M.(2008).
Lifeand
action.Cambridge,MA:HarvardUniversityPress.