Freedom trumps profit: a liberal approach to business ethics

Abstract

Liberalism is denounced by its critics as an ideology that advocates profit seeking and breeds economic crises. Even much of the CSR literature is pitched against liberalism. Liberalism, however, is about freedom much more than profits. It both legitimizes and confines contracting in markets. Specifically, contracts are legitimate if they are based on voluntary consent and thus reflect contractors’ freedom. We propose a broad understanding of freedom and derive criteria as guidance for contractors to establish voluntary consent. For illustration, we discuss the example of sweatshops. We suggest that liberalism is a potentially valuable resource in developing CSR theory.