2.1. Justifying the Existence of Productive Organizations

In discussing Donaldson’s account, Paul Hodapp objects that, “Donaldson’s social contract theory as a methodology is circular, presupposing the information which it is supposed to generate” (1990, 128). The problem, according to Hodapp, is that “we do not know how to imagine a state of nature without productive organizations without already knowing the purposes of such an organization” (1990, 128). Imagine someone who views productive organizations as having a purpose other than one specified by Donaldson or no purpose at all. According to Hodapp, there is nothing in the idea of the hypothetical social contract that would give that person reason to arrive at the conclusions advanced by Donaldson. Rather than a social contract theory, the way in which to read Donaldson’s argument is as a functionalist theory. That is, it is an account of the benefits that members of society have reason to receive by introducing productive organizations, and in specifying these benefits, there is no need to introduce the idea of a social contract.

In response to Hodapp, Donaldson distinguishes between the purpose of a specific productive organization—“to produce tractors, cigarettes, advice, nuclear bombs, space shuttles, accounting services, knowledge, children’s toys and super computers” (1990, 134-135)—and the underlying reason that members of society may have to allow for the existence of productive organizations in general. Donaldson argues that the purpose of specific organizations need not be known in order to arrive at the outcomes of the social contract. However, he does acknowledge there is a sense in which the underlying reason or “why” must be “known in advance before we begin moral analysis by way of the social contract” (1990, 134). Donaldson writes, “the idea of a social contract is not a set of normative prescriptions; it is, rather, a device or method for clarifying normative concepts, one that embodies surprising plasiticity of purpose” (1990, 134). The idea of the social contract helps to clarify the purpose of productive organizations because “rational members of society will legitimize such organizations only insofar as they stand to advance society’s aggregate interests, and hence from society’s perspective the advancement of social welfare is the ‘purpose’ of the productive organization” (1990, 135).

By clarifying the purpose of productive organizations in this manner, the device of the social contract in Donaldson’s account plays a heuristic role that is similar to the role attributed to it in other contemporary (as opposed to traditional) applications of social contract theory. For traditional social contract theorists—i.e., writers such as Thomas Hobbes, John Locke, and Jean Jacques Rousseau—the central concern is normally taken to be the problem of political obligation—that is, the justification of a duty to obey the state and its laws. The social contract enters as a way to generate such an obligation from the act of consent, on the part of members of society, to the terms of the contract. For contemporary social contract theory, the concern no longer is taken to be the problem of political obligation, but rather the justification of political and social institutions. On this approach, consent is not the salient feature of the parties’ agreement to the social contract, and agreement need not entail an obligation to obey. Instead, the parties’ endorsement of a set of political and social institutions is “a ‘test’ or a heuristic” of the reasons given for having that set of institutions (D’Agostino et al. Reference D’Agostino, Gaus, Thrasher and Zalta2014). The thought is that by asking whether parties would agree to a set of political and social institutions, we can test whether those institutions can be justified with reference to the sorts of reasons attributable to the parties.

Understood in this manner, Donaldson’s use of the social contract method need not be “circular” as Hodapp objects. In its role as a heuristic, the idea of a social contract provides a test for the reasons that members of society might give for endorsing a set of institutions—in this case, the rules governing the formation of productive organizations. On this reading of Donaldson’s account, one reason under consideration is that productive organizations serve “to advance society’s aggregate interests” (1990, 135). Insofar as we can imagine the parties in Donaldson’s account agreeing to rules permitting the formation of productive organizations for this reason, then, the role of the social contract in Donaldson’s account is to serve as something of a heuristic or test of the claim that advancing social welfare is the rationale for existence of productive organizations. On this interpretation of the role of social contract theory, stipulating the purpose of productive organizations in advance is not a problem for Donaldson’s account. The device of the social contract is to test whether the stipulated purpose can plausibly be attributed to productive organizations.

2.2. Specifying and Grounding the Responsibilities of Productive Organizations

I now turn to consider the role of the social contract in the second objective of Donaldson’s account, which is to specify and ground the responsibilities attributed to productive organizations. To do so, it will help to consider two objections raised by John Kultgen (Reference Kultgen1986) against Donaldson’s account and Donaldson’s responses to them (1986).

One objection Kultgen raises is that “an imaginary agreement is not an actual one and qua agreement binds no one, however, it may disclose obligations based on some other ground” (Kultgen Reference Kultgen1986, 31). Donaldson interprets Kultgen’s objection to be that “the social contract may serve as a clue in discovering such rights and obligations, but can boast itself of no genuine existential status,” and as such cannot ground the responsibilities assigned to it (Donaldson Reference Donaldson1986, 42). In response, Donaldson asks about the existential status of rights and obligations in general. Suppose, he asks, there were no law to protect rights of freedom and tolerance. He continues, “would it be an objection to say that since it does not exist it can be nothing but a ‘merely heuristic device,’ of use in tracking down what the real rights or real obligations … are?” For Donaldson, this would be “nonsense” because “fundamental rights, obligations, duties, … and a host of other fundamentally prescriptive concepts are not descriptive of existing states of affairs at all” (Donaldson Reference Donaldson1986, 42-43). Donaldson’s response to Kultgen is that the social contract is no less real than other normative concepts, and as such, it need not be merely a heuristic device for identifying the real rights or responsibilities.

If the social contract is to serve as more than a heuristic device, what role might it play? A natural candidate, in the light of Donaldson’s aims for his account, is to help generate responsibilities on the part of productive organizations toward workers and consumers. The difficulty, however, is that Kultgen’s criticism seems to be independent of the existential status of the social contract. That is, even if the social contract is no less real than other normative concepts, such as rights and obligations, the point is that because consent to the contract is hypothetical, it cannot generate these obligations. This is a point frequently raised about the social contract tradition in political theory. Hypothetical consent, as it is pointed out, is to be distinguished from actual consent. Whereas the latter, under the right conditions, is grounds for an obligation, the former is not, at least in the way normally associated with consent (Holton Reference Holton1992). The emphasis in contemporary applications of social contract theory on justifying institutional arrangements rather than on the problem of political obligation is consistent with this view. Accordingly, there is reason to doubt that the idea of the social contract plays a role in generating the responsibilities assigned to productive organizations in Donaldson’s account.

A second objection raised by Kultgen would appear to deny that the social contract plays even a heuristic role with respect to identifying these responsibilities. To be clear, the way in which the social contract serves as a heuristic device in this case is somewhat different than the role attributed to it in justifying the existence of productive organizations. In section 2.1, the social contract was said to serve as a heuristic or test for evaluating the rationale stipulated for the existence of productive organizations. The device of the social contract—that is, the agreement to move from a state of individual production to one that involves productive organizations—is a way to represent the reasoning of the parties. In this case, the sense in which the social contract is meant to be a heuristic device seems more general. As described by Donaldson in his reply to Kultgen, “the point of the method is to engage persons in a thought-experiment, one which will utilize their powers of reason and moral intuitions in a manner calculated to achieve moral truth” (1986, 45). If the social contract is to be understood as a heuristic device, its role, it seems, is to help identify the responsibilities of productive organizations.

Kultgen’s second objection is that the device of the social contract fails to play such a heuristic role. Kultgen writes, “corporations are artifacts, so they have only the nature that is bestowed on them by their designers. … The question is precisely what do the obligations of these natural person become when they assume their roles in the corporation. … Their role responsibilities are precisely those assigned by those who have designed the corporation and now support it, including the public insofar as its representative have chartered it and its members deal with it” (Kultgen Reference Kultgen1986, 31). Kultgen concludes there are no responsibilities that attach to corporations or their managers apart from those that are already specified by those who designed them in the first place.^{Footnote 10}

In response to Kultgen’s second objection, Donaldson writes, “guns, hydroelectric dams, prisons, monarchies, nuclear weapons, neighborhood associations—at least those that are human organizations—have specific role responsibilities as part of their design. But it would be ludicrous to say that those organizations have no general obligations deriving from the kind of organization they are; no obligations, in other words, apart from the role responsibilities designers happened to institute. The leaders of the Nazi government had responsibilities qua leaders of government, regardless of the role responsibilities designed into the Nazi regime” (1986, 44-45). Donaldson’s point seems to be that the role responsibilities that are in fact attributed to productive organizations are not exhaustive of the moral responsibilities that attach to the organizations or their managers.

All of this seems correct. The question that arises is whether the idea of the social contract is helpful in identifying these additional moral responsibilities. Consider the example of the leaders of the Nazi government. The point seems to be that no matter what their role responsibilities, there are general duties about what we owe to others that apply to them and that make their actions wrong. If so, these duties are not the sort of duties for which a social contract is needed as a heuristic device to help identify them. Rather, they are the sorts of duties that attach to natural persons and are sufficiently general to stand independently of any social contract. Otherwise, it is difficult to imagine that they could be identified independently of a given set of role responsibilities. The question then is, what sorts of moral responsibilities are independent of role responsibilities but are insufficiently universal such that they cannot be identified without the aid of the device of the social contract.

One response is that the responsibilities relating to workers in Donaldson’s account are examples of such responsibilities. With regard to workers, recall that the responsibilities of productive organizations are to minimize 1) the alienation that may arise from greater separation between workers and their final product, 2) the “lack of worker control over work conditions,” and 3) the “monotony and dehumanization” frequently associated with highly specialized and automated work (1982, 52). These responsibilities, it may be said, are distinct from other responsibilities Donaldson attributes to productive organizations—e.g., minimizing pollution or not misusing political power. In the case of minimizing pollution or not misusing political power, for example, there is reason to hold the corresponding responsibilities apply just as much to economic actors in the state of individual production. Accordingly, there is no need for the social contract to serve as a heuristic device in identifying them. However, it may be said that responsibilities regarding workers are different, because the conditions that make them relevant arise precisely because workers leave the state of individual production. That is, they are responsibilities that are distinctive to a society with productive organizations. In the case of these responsibilities, the social contract serves a heuristic role according to this response.

Other parts of Donaldson’s account, however, call into question the extent to which such a response establishes a heuristic role for the social contract in identifying the responsibilities of productive organizations toward workers. In describing the responsibilities enumerated in the social contract, Donaldson raises the possibility that “the inhabitants might believe that, on balance, people as workers stand to lose from the introduction of productive organizations, and that potential alienation, loss of control, and other drawbacks make the overall conditions of the worker worse than before.” He continues, “But if the benefits to people as consumers fully overshadowed those drawbacks, we should still expect the contract to be enacted” (1982, 53).^{Footnote 11} Later in Corporations and Morality, Donaldson details an extensive set of employee rights (1982, 129-157). In defending these rights, however, Donaldson writes that, “unfortunately, the language of the social contract is too imprecise (at least as formulated) to bring the issue of employee rights into relief (1982, 137). Instead, he turns to other bases for grounding such rights, including perfect duties, basic needs and interests, the right to equal freedom, and the right to behave responsibly (1982, 139). All of this gives us reason to doubt the extent to which the social contract serves as a heuristic device in identifying the responsibilities of productive organizations.

At this point, I turn to consider the possibility that the social contract serves as a heuristic device in the sense attributed to it in section 2.1—that is, as a test or heuristic of the reasons given for justifying a specific institutional arrangement. On this interpretation of the role of the social contract device, the idea would be to take the responsibilities assigned to productive organizations as part of the rules governing the formation and operation of productive organizations and ask whether the parties would agree to these rules on the basis of the reasons given for them. As in the case of testing the reasons given for the existence of productive organizations, the idea here would be to test the reasons given for the specific responsibilities assigned to productive organizations.

In specifying the responsibilities of productive organizations with respect to customers and workers, Donaldson asks, “If people in the state of individual production must agree upon the terms of the social contract, and if these terms directly relate to the task of enhancing society’s welfare, then why stop with maximizing prima facie benefits? Why not also minimize prima facie drawbacks?” (1982, 49). As in the case of justifying the existence of productive organizations, the reason stipulated for the responsibilities of productive organizations toward customers and workers is the consideration of social welfare. Consider, for example, the obligation not to misuse political power. “Such power,” Donaldson writes, “sometimes is used to secure favors from government which damage both consumer interest and the interests of the general public” (1982, 50). Another example is the obligation to minimize worker alienation on grounds that workers in productive organizations “are typically removed from the product … in a way that may block their very capacity for self-expression” (1982, 51). In the light of these drawbacks, Donaldson writes, “in order maximally to enhance welfare, productive organizations should both pursue positive goals and minimize negative ones” (1982, 51). The role of the social contract as a heuristic device is to test whether maximizing social welfare serves as the reason or justification for assigning these sorts of responsibilities to productive organizations.

The question that arises is whether the agreement of parties provides support for the maximization of social welfare as the reason to justify inclusion of these obligations among the rules governing the formation and conduct of productive organizations. At one level, given the way in which Donaldson models the reasoning of the parties, their agreement supports taking social welfare as a reason for assigning these obligations to productive organizations. The parties, in Donaldson’s account, are imagined to have “‘economic interests,’ i.e., as people for whom it is desirable to have some things or services produced by human labor” and the sorts of benefits they derive from permitting the existence of productive organizations are basically economic in nature: e.g., products of greater quality at lower price, more stable output, or greater income potential (Donaldson Reference Donaldson1982, 45-49). In turn, the drawbacks associated with introducing productive organizations can be characterized as drawbacks in that they are welfare-reducing.

At the same time, there is reason to doubt that the agreement of the parties counts in favor of social welfare as the rationale for assigning responsibilities to productive organizations, at least in the same way that social welfare is the rationale for the existence of productive organizations. While it is the case that the drawbacks from introducing productive organizations can be framed in terms of their negative impact on the economic interests of members of society, recall that Donaldson models the parties as also deciding for reasons of justice. He writes that, “at a minimum, … the application of the concept of justice to productive organizations appears to imply that productive organizations avoid deception or fraud, that they show respect for their workers as human beings, and that they avoid any practice that systematically worsens the situation of a given group in society” (1982, 53).^{Footnote 12} Given that the parties also introduce obligations for productive organizations on grounds of justice, the question may be asked why the obligations grounded in considerations of social welfare are not better understood as grounded in other considerations, such as justice. Consider again the obligation not to abuse political power. Although the abuse of political power can reduce welfare and harm consumer interests, one may ask why considerations of welfare count against the abuse of political power rather than considerations of justice, or even more directly, the wrong in abusing political power. Similarly, consider the obligation to minimize worker alienation. If the contract requires that productive organizations respect workers as human beings as a matter of justice, and the obligation against worker alienation is to avoid workers being blocked “in their very capacity for self-expression,” it seems reasonable to ask why the agreement of the parties to such an obligation is not grounded in considerations of justice rather than welfare.

At this point, it may be objected that considerations of social welfare also need not be taken as the reason for the existence of productive organizations. For example, it may be objected that the benefits of greater income associated with the existence of productive organizations need not be understood as a consideration of social welfare, but rather as a consideration about personal autonomy or the ability to fulfill one’s life plans. In one sense, this is correct. The rationale for greater income may be understood in terms of autonomy or the ability to fulfill one’s life plans. At the same time, there is reason to hold that the existence of productive organizations can be justified with respect to considerations of social welfare without such considerations also serving as the rationale for the responsibilities attributed to productive organizations. In Donaldson’s account, the parties are modeled as acting on economic interests in the state of individual production. The benefits associated with productive organizations count as benefits for the same reason as engaging in individual production. In contrast, although the responsibilities attributed to productive organizations are meant to counteract the drawbacks that arise from their existence, what makes them drawbacks need not be the same as the considerations for introducing productive organizations. Put another way, just because these drawbacks arise from the introduction of productive organizations, they need not count as drawbacks in terms of the reasons for introducing them.

This is not to deny there may be good reasons to reject framing the benefit of productive organizations in terms of social welfare.^{Footnote 13} Rather, the point is that we can accept Donaldson’s justification for the existence of productive organizations in terms of social welfare without accepting that social welfare is the rationale for assigning responsibilities to productive organizations. In turn, we can reject the idea that social contract generates the responsibilities of productive organizations or serves as a heuristic device in specifying those responsibilities or their grounds, without having to reject the more limited claim that the social contract serves as a heuristic device in understanding the rationale for productive organizations.

3.1. Invoking Rawls

Gillian Brock (Reference Brock1998) makes a similar observation to Conry and offers an amendment to address the problem of indeterminacy. According to Brock, whether or not members of society find it rational to allow for productive organizations requires further specification about the resulting state of affairs and the background institutions in place. For example, in the case of a minimal “night watchman” state, Brock writes, “we all might want powerful productive organizations to act as welfare providers of some kind” (1998, 708). A further challenge Brock raises is that Donaldson assumes a shared sense of fairness for how to resolve trade-offs among competing interests (1998, 709). As a way to resolve these challenges, Brock argues for adopting an approach that follows the work of John Rawls. Adapting Rawls’s idea of the “veil of ignorance,” Brock asks what rational, self-interested parties would agree to from behind a veil of ignorance regarding their place under the new economic arrangements. The advantage of the Rawlsian approach, according to Brock, is that it allows us to imagine better what individuals would agree to under limited information and it makes explicit the choice of background institutions. Brock argues for a three-way conditional contract according to which members of society agree to allow productive organizations under the assumption that the state provide various protections and guarantees, including protecting civil rights, providing unemployment benefits, and access to educational benefits (1998, 716).

A second contractarian alternative to Donaldson’s account is put forward by John Bishop (Reference Bishop2008). Like Brock, Bishop aims to bring his account in line with John Rawls’s approach. Bishop does so by specifying that the social contract to be imagined is not between society and productive organizations, but rather among members of society with respect to the rules governing the formation and conduct of corporations (2008, 195-196). These rules, on Bishop’s account, are to be determined in a manner consistent with the principles of justice from behind the veil of ignorance. Consider for example, the first principle of justice, which states that, “each person is to have an equal right to the most extensive total system of equal basic liberties compatible with a similar system of liberty for all” (Bishop Reference Bishop2008, 195, quoting Rawls Reference Rawls1971).^{Footnote 16} Bishop argues that because allowing for the creation of corporations represents an expansion of liberty, recognizing such a freedom would be consistent with the first principle so long as corporate actions did not interfere with the liberty of others (2008, 199). Proceeding in this manner with respect to other dimensions of justice, Bishop concludes that, “for-profit corporations can, and indeed should, exist in just societies” (2008, 205).

By appealing to Rawls’s account of justice, a difficulty arises for Brock and Bishop in their accounts. The problem roughly is this. On Rawls’s account, the principles of justice, which are to be specified from behind the veil of ignorance, apply only to the basic structure. Rawls defines the basic structure as “the way in which the main political and social institutions of a society fit together into one system of social cooperation, and the way they assign basic rights and duties and regulate the division of advantages that arise from social cooperation over time.” He continues, “the political constitution within an independent judiciary, the legally recognized forms of property, and the structure of the economy (for example, as a system of competitive markets with private property in the means of production), as well as the family in some form, all belong to the basic structure” (Rawls Reference Rawls and Kelly2001, 10). Productive organizations, and other associations, such as religious organizations, are not part of the basic structure. Instead, the rules governing productive organizations are to be determined at the legislative stage, which is subsequent to the process of specifying the principles of justice from behind the veil of ignorance (Rawls Reference Rawls and Kelly2001, 114).^{Footnote 17} At the legislative stage, the principles of justice are “to be applied directly by legislators and regulators as they make decisions about the rules that govern the many complicated institutions within which economic production, trade, and consumption take place” (Freeman Reference Freeman2007, 100). While the requirements of justice will inform the formulation of the rules governing the formation and conduct of productive organizations, the point is that the rules themselves are not the object of the social contract.

At this point, it may be objected that even though Rawls does not include the rules governing productive organizations within the basic structure, there is nothing to preclude Donaldson from adapting Rawls’s theory to his own purposes in order to respond to Conry’s objection of indeterminacy.^{Footnote 18} Conry objects that because Donaldson’s characterization of the state of individual production lacks specificity, parties will find it rational to agree to any one of a number of alternative economic arrangements. Following Brock and Bishop, Donaldson might try to avoid this problem by adapting Rawls’s account of the original position to include, among the principles to be chosen from behind the veil of ignorance, the rules governing the formation and conduct of productive organizations. In his account, Rawls goes to great lengths to specify the conditions under which parties in the original position are to choose the principles governing the basic structure of society, and some scholars argue that even on Rawls’s own terms, rules governing the formation and conduct of productive organizations ought to be included within the basic structure.^{Footnote 19} In what follows, I examine the extent to which adapting Rawls’s account in this manner provides a way for Donaldson to respond to the objection of indeterminacy.

One issue concerns the degree of specificity about economic arrangements that can be realized by the choice of parties in the original position. Although the basic structure, as defined by Rawls, does not include the rules governing the formation and conduct of productive organizations, it does include the “structure of the economy (for example, as a system of competitive markets with private property in the means of production)” (Rawls Reference Rawls and Kelly2001, 10). In his writings, Rawls is clear that not all economic regimes with private property in the means of production meet the requirements of justice. To make this point, Rawls distinguishes between “welfare-state capitalism,” which “permits a small class to have a near monopoly of the means of production,” and a “property-owning democracy” that aims to ensure “widespread ownership of productive assets and human capital (that is, education and trained skills) at the beginning of each period, all this against a background of fair equality of opportunity.” Of these two regimes, only the latter meets the requirements of justice (Rawls Reference Rawls and Kelly2001, 139).^{Footnote 20} On the choice between these two regimes, the device of the social contract allows for specificity. At the same time, Rawls writes that economic regimes with public ownership of the means of production (i.e., “liberal socialism”) also meet the requirements of justice (2001, 138). On the choice between public and private ownership of the means of the production, Rawls’s account is indeterminate.

If such a fundamental choice regarding economic arrangements is left unspecified in the original position, there is reason to doubt that questions about the rules governing productive organizations will result in much more specificity. To be certain, as discussed above, there is reason to hold that an economic regime that allows for the formation of productive organizations can be consistent with the requirements of justice. In this respect, corporations need not be incompatible with the requirements of justice. However, an account that gives us no prima facie reason to rule out corporations is not the same as an account that provides a positive account for why parties will choose an economic regime that permits the formation of corporations.

A second question is whether having the rules governing productive organizations chosen from behind the veil of ignorance risks undermining key features that are thought to make Rawls’s account of justice attractive in the first place. A defining feature of Rawls’s account is that it is a liberal account “in that it protects and gives priority to certain equal basic liberties, which enable individuals to freely exercise their consciences, decide their values, and live their chosen way of life” (Freeman Reference Freeman2007, 44).^{Footnote 21} This is captured in the priority accorded to basic liberties over considerations of social or economic welfare in Rawls’s account. For example, Rawls makes clear that the basic liberties include civil and political liberties, but not rights regarding the ownership or control of the means of production (2001, 114), and that the claims of liberty are to be satisfied before other social needs (Freeman Reference Freeman2007, 64).^{Footnote 22} If the case for permitting corporations is that doing so enhances the basic liberties, as Bishop (Reference Bishop2008) argues, then such an argument risks undermining a defining feature of Rawls’s account. Another key feature of Rawls’s account is that the parties “put aside reliance on knowledge of all particular facts about themselves and their social and historical circumstances, including their particular conceptions of the good, and even including their comprehensive religious, philosophical and moral convictions” (Freeman Reference Freeman2007, 154). They do not have information about economic interests and contingencies. What information the parties do have is a concern for “primary social goods” which are “essential to individual’s freedom and self-respect: rights and liberties, powers and opportunities, income and wealth, and the bases of self-respect” (Freeman Reference Freeman2007, 63). All of these restrictions are to preserve the impartiality associated with the original position. If the case for an economic regime that permits the formation of corporations is that such a regime will further the economic interests of consumers and workers, then making such a decision from behind the veil of ignorance will require changing the nature of the information available to the parties and the relevant standards for impartiality.

None of this is to deny that parties behind the veil of ignorance will acknowledge the need to introduce requirements for economic activity that will apply to productive organizations, should they exist. For example, to ensure the enjoyment of the basic political liberties, parties from behind the veil of ignorance may acknowledge the need for restrictions on corporate political activity should corporations be allowed to exist and operate. In this sense, some rules governing the formation and conduct of productive organizations may be said to be part of the rules and institutional arrangements to be chosen in the original position. This is not, however, because questions about the formation and conduct of productive organizations are to be addressed in the original position. Instead, it is because answers to questions about the political liberties, which are the proper subject for deliberation from behind the veil of ignorance, have implications for the formation and conduct of productive organizations.^{Footnote 23}

3.2. A Rawlsian Amendment

The accounts discussed above aim to address the problem of indeterminacy by incorporating the contract about productive organizations into the contract made by parties from behind the veil of ignorance in Rawls’s account of justice. As discussed above, doing so involves significant challenges given the way in which questions about the purpose and responsibilities of productive organizations are addressed within Rawls’s account. These challenges, however, need not rule out reference to Rawls’s framework altogether. In Rawls’s framework, members of society do address questions about the purpose and responsibilities of productive organizations, but only at a later stage—namely, the legislative stage. One way in which to draw upon Rawls’s framework then is to frame the questions Donaldson raises about the existence of for-profit corporations and their responsibilities as questions addressed to legislators in Rawls’s account.^{Footnote 24}

There is something to be said for amending Donaldson’s account along these lines. The legislators in Rawls’s account occupy a similar situation to economic agents described in Donaldson’s account. Both groups are considering what sorts of rules to put into place regarding the formation and conduct of productive organizations, including the possibility of permitting corporations. Both groups also have in the background a conception of justice that places constraints on what sorts of organizational forms and conduct are permissible. Despite these similarities, however, there is reason to doubt that amending Donaldson’s account along these lines adequately addresses the problem of indeterminacy.

To begin, there are a few key differences in the approach to be taken by each group. In the case of Donaldson’s account, the parties are motivated, it seems, by economic interests (Donaldson Reference Donaldson1982, 42, 45). In the case of Rawls’s account, the legislators are to make decisions based upon what justice requires and permits (Rawls Reference Rawls and Kelly2001, 48). This does not mean that legislators are to ignore the impact of legislation on the ability of citizens to satisfy their economic interests. Rather, the impact of legislation on economic interests is to be considered in ways that relate to considerations of justice—namely, “maximizing the long-term expectations of the least advantaged under conditions of fair equality of opportunity” (Rawls Reference Rawls1999, 174-175). Such considerations may very well give rise to legislation that permits the formation and operation of corporations. However, the case for such legislation is not, as in Donaldson’s account, that economic interests are better satisfied. Instead, legislators look to how the least advantaged fare across a variety of economic regimes, some of which are likely to allow for the formation and operation of corporations. Although the satisfaction of economic interests is likely to be relevant (e.g., the long-term expectations of employees are likely to depend on their wages), it is not the primary rationale for their existence. It is an indirect consideration, and in a more general sense, it may not matter at all. That is, individuals may have any one of a number of reasons to form corporations. What matters is how they fare under an economic regime that allows their existence.^{Footnote 25}

Furthermore, even if one were to imagine that the parties in Donaldson’s account were similarly motivated to the legislators in Rawls’s account, there is reason to doubt they would arrive at the same set of responsibilities enumerated by Donaldson. Recall that for Donaldson, productive organizations should minimize 1) the alienation that may arise from greater separation between workers and their final product, 2) the “lack of worker control over work conditions,” and 3) the “monotony and dehumanization” frequently associated with highly specialized and automated work (1982, 52). Work that is structured to meet these responsibilities is often termed “meaningful work”—i.e., “work that is interesting, that calls for intelligence and initiative, and that is attached to a job that gives the worker considerable freedom to decide how the work is to be done and a democratic say over the character of the work process and the policies pursued by the employing enterprise” (Arneson Reference Arneson1987, 522). It is a matter of considerable debate, however, whether Rawls’s account of justice—or a liberal egalitarian account of justice more generally—would require institutional guarantees for meaningful work. One of the central objections to requiring such guarantees is that the value of meaningful work is grounded in a specific conception of human good, and liberal egalitarian accounts of justice, including Rawls’s theory, must not rely upon a specific conception of the good life in determining policies and institutional arrangements.^{Footnote 26}

This is not to deny there may be other ways to amend Donaldson’s account so that the device of the social contract serves as more than a heuristic device to test the rationale for productive organizations. Recall that in section 2.2, two additional roles for the device of the social contract were considered. The first was as a heuristic device to help identify responsibilities that would not be recognized without the device of the social contract. The second was to serve as a heuristic or test for the rationale given for these responsibilities, which on Donaldson’s account, is social welfare. The above discussion concerning the responsibilities regarding workers suggests one way to amend Donaldson’s account so that the device of the social contract serves these roles. This would be to introduce a much more specific conception of welfare, one that incorporated the idea of meaningful work and that grounded these responsibilities—along with the additional responsibilities toward workers enumerated in Corporations and Morality (1982, 129-157) and discussed in section 2.2—without reference to considerations such as justice or equal freedom.

At the same time, the above discussion points to a difficulty in adopting such an approach, which is that it involves a potentially controversial conception of welfare. Insofar as Donaldson intends for his account to have broad appeal and applicability, it remains a question whether such an approach is compatible with his account. Furthermore, as discussed in section 2.2, Donaldson himself invokes considerations other than welfare to specify and defend the rights of workers within productive organizations. In the end, there is reason to doubt that amending Donaldson’s account represents a plausible way to address the problem of indeterminacy and ensure that the social contract plays a heuristic role in identifying the responsibilities of productive organizations or the reasoning for them.