Goodwill and the Spirit of Market Capitalism

Abstract

Goodwill is more status-neutral, more an expression of Hobhouse&s;s &s;principle of mutuality&s;. &s;Opportunism&s; may be a lesser danger in Japan because of the explicit encouragement, and actual prevalence, in the Japanese economy of what one might call moralized trading relationships of mutual goodwill. In Japanese relational contracting, by contrast, it is a particular sense of diffuse obligation to the individual trading partner, not to society, which is at issue. To put the matter in Parson&s;s terms, relational contracting is to be understood in the universalism/particularism dimension, whereas the Durkheim point relates to the fifth dichotomy that Parsons later lost from sight: collective-orientation versus individual- orientation. If a firm&s;s market is declining, it is less likely to respond simply by cutting costs to keep profits up, more likely to search desperately for new product lines to keep busy the workers it is committed to employing anyway. Factory flexibility agreements take the employment contract further away from the original rate-for-the-specific-job basis.