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A social contract approach to sustainability

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  • Giuseppe Danese

    (Universidade Católica Portuguesa)

Abstract

This paper asks whether it is possible to derive a concern for future generations (“sustainability”) from an account of the firm as a social contract (SC) among its stakeholders. Two aspects of a leading SC model of the firm limit its usefulness for an analysis of sustainability. First, the stakeholders provide investments to the firm over time. Second, the relationship between contemporaries and future generations is marked by asymmetries of power and knowledge that need to be considered while reconstructing the SC today. I discuss three reformulations of the SC that are all, in principle, capable of introducing within the SC a concern for future generations. The first describes the contractors as heads of families. The second envisages a grand meeting of stakeholders of all generations. The third, which I find most defensible, views the SC as an ahistorical agreement reached behind a thick veil of ignorance. This agreement is based on John Rawls’s norm of reciprocity, whereby the stakeholders adopt today the decision they wish all previous (and future) generations had made regarding the rate of consumption of natural resources and emission of pollutants.

Suggested Citation

  • Giuseppe Danese, 2017. "A social contract approach to sustainability," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 64(4), pages 327-339, December.
    • Handle: RePEc:spr:inrvec:v:64:y:2017:i:4:d:10.1007_s12232-017-0275-6
    DOI: 10.1007/s12232-017-0275-6
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    More about this item

    Keywords

    Social contract; Sustainability; Reciprocity; Future generations; John Rawls;
    All these keywords.

    JEL classification:

    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development

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