BUSINESS ORGANIZATIONS OPERATING IN COMPETITIVE MARKETS

In this chapter I apply my individualist, teleological theory of social institutions to business corporations operating in competitive markets and, specifically, to media corporations and financial service providers. In doing so, I identify a process of corrosion, if not corruption, that is taking place in relation to the media as an institution. I also identify processes of corrosion and corruption in relation to financial service providers. Indeed, in the case of the latter, arguably, there is a more fundamental problem, namely, the absence of an agreed on institutional purpose (collective good) in terms of which corrosion and corruption can be determined.

Business organizations operating in competitive markets are producers and on-sellers of goods and services, some of which are needed by consumers, many of which are only desired. Thus agri-businesses produce food for the market, and food is a basic human need. On the other hand, ice creams, celebrity-focused magazines, and the like do not meet basic human needs, but only consumer desires.

Market-based organizations and public institutions are usually distinguished from one another, albeit the distinction is in some cases difficult to make. Sometimes public institutions are distinguished in terms of the type of goods that they provide, namely, goods that have the economic properties of nonrivalness and nonexcludability. Although the definition, and even existence, of these properties is contested, there is a certain intuitive sense to them.