Economic Sociology of Capitalist Development
Edited by Yuichi Shionoya and Tamotsu Nishizawa
Chapter 13: Marshall on Economic Chivalry and Business Ethics
Kenji Fujii 13.1 INTRODUCTION Marshall’s advocacy of economic chivalry has been conventionally evaluated as trivial decorations which have no relation to his theoretical work. Many writers have ascribed it to his predilection for ‘pious asides and prim moralisings’ typical of late Victorians.1 This chapter is an attempt to argue that the prevalent evaluation is erroneous because too naive an image is imposed on Marshall. We show a theoretical connection between economic chivalry and his theory of the ﬁrm. We start from an identiﬁcation of Marshall’s view of a ﬁrm in the next section. Utilizing the concept of context-dependent recognition, we propose to identify a ﬁrm as one of social contexts which consist of shared knowledge and values. Then, in the third section, we discuss the role of an entrepreneur in Marshall; he required an entrepreneur to lead in morality as well as in knowledge. In the fourth section, the role of economic chivalry is discussed. Although economic chivalry is often misunderstood as mere preaching, we argue that it is to be understood as a latent mechanism which helps the chivalrous ﬁrms to develop the faculties of human beings. 13.2 CONTEXT-DEPENDENCY OF A FIRM 13.2.1 Context-Dependent Recognition Economists have been accustomed to regard perfect competition as a reference point because ‘perfect rationality’ is considered one of the indispensable conditions for economics. But, instead of assuming perfect rationality, many economists nowadays are inclined to assume ‘bounded rationality’. Although there are diﬀerent meanings in ‘bounded rationality’, it has been recognized as...
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