Freedom should matter in markets. But how can citizens participate in markets and business corporations as social coordination systems and still be free, that is, be respected as practical agents? This is the concern of Waheed Hussain in his posthumous book Living with the Invisible Hand.

Hussain’s focus on markets and freedom might appear puzzling at first. Individuals seem to experience freedom when they choose between different options when buying or selling in markets. Rather, it is command and authority in the workplace that is experienced in practice and normatively scrutinised as raising major concerns about freedom in the economic sphere.

In contrast to these mundane and academic understandings that focus on command in firms, Waheed Hussain suggests in Living with the Invisible Hand that we zoom away from daily command in the workplace to envision what is really troublesome in economic life: the invisible constraining force of the market and its filtering into corporations. Commanders themselves—managers and chief executive officers—are ultimately all subject to the impersonal constraint of the market; corporate governance is just another face of market constraint. But market constraints, Hussain points out, are not natural constraints. They are coordination mechanisms that shape the ways people seem to follow freely in markets. Worse, this is done according to values that fail to be publicly acknowledged and discussed. This is the trigger for Living with the Invisible Hand: Hussain wants to uncover the values and constraints ingrained in the economic coordination systems of advanced market economies and offer a critique of these institutions nourished by the Kantian value of freedom.

The book starts with Hussain’s institutional take on political philosophy (Chapter 1). This matters for economic institutions like markets and business corporations because even civil institutions must be structured to “answer to public values” (34), among which Hussain ranks liberal freedom, efficiency, and respect for practical agency (i.e., a Kantian account of freedom).

Advanced market economies are usually thought to attend to the value of liberal freedom, which suggests this system remains the best for someone committed to fundamental liberties. Liberal freedom as the “domain of private individuality” (203) is certainly important for Hussain, but it underdetermines the shape of economic institutions. According to this “indifference thesis,” various economic arrangements can promote liberal freedom, not only those of advanced market economies (Chapter 2). This opens up the core question of Living with the Invisible Hand: whether and how advanced market economies attend to other values. Hussain will argue that the way they pursue efficiency precludes the important value of Kantian freedom.

Chapter 3 sets out the relevant features of these economies. They are social systems that coordinate production and consumption through mutual adjustments: individuals constantly adapt to a changing context signalled by market prices and wages. Importantly, although people mutually adjust as they choose, Hussain argues they are subjected to market processes. This is because the “rules of the institution” (73) “draw them into a pattern” that “cannot be attributed simply to the sum of their private choices” (72). The public justifying rationale for these rules and the resulting pattern, Hussain emphasises, is efficiency.

Hussain pinpoints the possibly problematic feature of such social coordination mechanisms for Kantian freedom: their “bypassing” of participants’ practical judgements (Chapter 4). This bypassing happens, perhaps surprisingly, as much in coordination through mutual adjustments as in coordination via a structure of authority. The problem is that these coordination mechanisms “maintain a certain pattern of activity” without being “properly sensitive to the independent judgment of citizens” (86). For Hussain, this is authoritarian because it is “inconsistent with the Kantian ideal of mutual respect” (99), which requires respecting one’s own and others’ practical reason.

Social coordination, however, need not be authoritarian. Coordination mechanisms respect people as practical agents if they are reason-sensitive, transparent, and trustworthy (Chapter 5). When citizens cannot decide for themselves the pattern they participate in, a justified pattern is one they could have reasonably chosen (reason-sensitive), and one in which citizens can see this for themselves (transparency) or can trust it (trustworthiness). When market governance meets these criteria, it forms “an extension of citizens’ rational capacities,” thereby avoiding non-justifiable judgment bypassing.

In Chapter 6, Hussain deplores that markets in advanced economies do not fit the bill. They lack transparency, as decisions are based on prices that obscure what is achieved globally. They lack reason sensitivity, as market coordination is driven by efficiency, not the other values that citizens may endorse; they are, therefore, untrustworthy. Regulated market economies do not fare much better in accommodating other citizens’ values because market regulation fails to react in real time.

Business corporations do not fit the bill either (Chapter 7). Hussain criticises the “economic theory of the corporation” (142) for justifying authority on the grounds of efficiency while ignoring the other values that citizens endorse. Besides, corporations are no more transparent than markets as they don’t explain to employees what they do and why. And business regulation also fails to protect other citizens’ values in real time.

The last chapter—largely edited using non-published articles—gestures at economic coordination mechanisms that would respect Kantian freedom. The point is to allow the integration into corporate and market coordination of values other than efficiency that citizens endorse. Legal “full independence” (189) may enable corporations to pursue diverse ends and attend to various values through corporate social responsibility (CSR), provided investors are informed. Customers’ information matters, too. Regarding market regulation, Hussain proposes an “intermediated capitalism” allowing associations to deliberate the rule of competition by sector or industry.

Living with the Invisible Hand is an original and important book. While much work has been devoted to the wrongs of authority in the workplace, including domination, lack of relational equality, and more, Living with the Invisible Hand focuses on the subject matter of an economy, that is, organising for “produc[ing] things and consuming things” (203). Hussain’s approach also differs from those who, like Elisabeth Anderson, take the resemblance of coercion in state and firms as a starting point for enquiring about firms. On the contrary, Hussain focuses on the intrinsic moral issue of the economic sphere, coordination. Coordination necessarily happens above individual judgments, even free market coordination, which cannot but raise a problem for Kantians. The traditional focus on the evils of authority in firms overlooks that what is really at stake is unquestioned coordination and that the threat it poses to practical agency is just as present in the market despite the absence of such authority relationships.

Beyond the critique, Hussain hints at a possible model: an “intermediated market arrangement” presented as a version of the German codetermination model. Codetermination is a system representing both shareholders and employees on boards or supervisory boards. It could be argued that this Kantian critique of economic coordination may not necessarily lead to pure codetermination but to a more expansive form of stakeholder governance. The main concern is establishing mechanisms of economic coordination that respect citizens’ freedom, that is, do not draw them into production and consumption patterns in their roles as employees, consumers, investors, and entrepreneurs without considering their values. The obvious institutional solution is legislation, but Hussain emphasises various limits of the legislative process, including its slower pace than the economy. Thus, Hussain calls for intermediated capitalism, including industry-wide deliberation among associations representing “major segments of the population” (194) and employee representation on boards. While Hussain mentions mainly employee representation on boards, the Kantian justification he offers—citizens’ freedom and legislation limits—does not seem to prioritise employees and instead appears to call for broader citizen or stakeholder representation in firms, just as is argued at the industry level.

Perhaps some other Kantian argument might offer employees (relative) priority over broader citizen participation on boards, for instance, in considering that the ideal of freedom as “guiding one’s actions in light of one’s own practical judgements” does not only bear on the context of social coordination that is of concern to all citizens (e.g., environmental or social implications), but also bears on work and its significance for employees. The Kantian ideal of respect for practical agency may require that employees (and them only, not consumers) get involved or have priority in deciding the purpose of their work activities and the ways of organising work. No doubt Living with Invisible Hand offers food for thought and will encourage those interested in respect for practical agency to continue their reflection.

Upon closing the book, some readers may wonder how much of the ills of contemporary liberal market capitalism can be captured in a critique from Kantian idealism. Hussain argues forcefully that liberal market economies fail to respect practical agency. He also makes clear that his critique is valid in ideal theory, assuming citizens broadly agree with the public values underlying the view and the institutions that follow. Hussain thus offers a helpful perspective on the division of moral labour between institutions in ideal theory: some work is left to industry sectors and corporations. However, one cannot help but notice that codetermination has not progressed significantly worldwide. Whether this and other shortcomings of advanced market economies are due to the lack of Kantian lights and sociological acumen that Living with the Invisible Hand so powerfully addresses or to less-than-ideal world conditions invites further reflection.

Living with the Invisible Hand is a bold book that embraces and achieves much. Its comprehensive perspective is no doubt an asset to Hussain’s intellectual enquiry. By uncovering one common root for moral concerns in the economic sphere, Hussain offers a global critical perspective that encompasses both markets and firms, avoiding the myopia that can come with too close observation or narrowly compartmentalised enquiries. Yet, although a comprehensive project, Living with the Invisible Hand successfully integrates many focused issues into its critique and proposal, including market regulation, corporate governance, CSR as self-regulation, environmental, social and governance (ESG) investing, accountability and reporting, labelling schemes, consumer ethics, and more. As such, it is a thought-provoking book that will prove invaluable to business ethics scholars. Beyond the critique of corporate capitalism, its normative approach will also appeal to those interested in the governance of various other economic organisations, such as partnerships or purpose-driven corporations.

It is sad to no longer be able to continue the conversation with Waheed. We can only be grateful for his contribution to economic ethics and express gratitude to Arthur Ripstein and Nicholas Vrousalis for their editorial work on the book. We can be sure that his thought will live on, for Living with the Invisible Hand makes an important contribution to economic thought and will undoubtedly leave a mark on how we think about economic institutions.