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Discusses the privatization of public goods and services in urban areas. Examines the common assumption that shifting responsibility for providing goods and services to private individuals will increase the sense of community or “social capital” that binds residents of an urban area together. Argues that privatization of goods such as public safety, education or community recreation may result in more spatially limited social capital, where individuals are less willing to cooperate for the common good. Shrinking the spatial dimensions of “community” to include only members of the same housing development or neighborhood may impose other costs to local governments that offset the expected savings from privatization.

Corporate restructuring has had a profound impact on the US economy. While the problems of restructuring have been discussed in great detail, the solutions are elusive. What can or should be done to mitigate the impacts of restructuring on workers, communities, and society at large? The stumbling‐block to finding an answer to this question is the lack of a satisfactory ethical framework for evaluating restructuring decisions. The purpose of this essay is to develop such a framework. The first part of the paper reviews the ethical guidance provided by the standard theory of the firm. The second part explores an alternative framework based on the work of Elizabeth Anderson. Her “expressive theory of rational action” offers a more promising framework for evaluating management decisions with significant costs to society.