ETHICS CHAP 7A JUSTICE & MARKET SYSTEM

Explain CHARACTERISTIC of The Free Market system? (capitalist)

A system where all economic decisions are taken by individual households and firms and with no government intervention (Sloman,2000).

❑ Recognizes the rights of individuals to accumulate wealth and maximize their potential. Competition encouraged.

❑ Major decisions about when producing;

-what?

-how?

-for whom to produce?

❑ Decisions in a market are made based on prices, largely determined from supply and demand.

List 4 Rights of individuals under the free market system

❑ To own private property.

❑ To own a business and to keep all its profits after taxes.

❑ Freedom to compete in wealth accumulation and consumption of goods and services.

❑ Freedom of choice based on the ability to pay

Explain the term JUSTICE in this chapter

• important moral concept with wide range of applications

• this concept is used to evaluate the actions of individual and also the society as a whole

What is JUSTICE in this chapter?

justice is fairness

-the good ones must be recognize and rewarded

-the bad one must be punished

What justice is according to Roget’s Thesaurus?

Justice is associated with probity (i.e. complete uprightness, honesty/integrity) and virtue, legality and the exercise of processes serving the administration of rights, rewards and punishments

Why justice is a social process?

1. The quality of being morally just or righteousness, fairness and equity in just conduct and dealing with others. Self - interest is balanced with altruistic (i.e. concern for needs and feelings of others above one’s own ) regard, respecting rights of others.

2. Maintenance of ‘right’ via an exercise of authority or power so that the right can be vindicated (i.e. clear of blame or suspicion) with distribution of equitable reward / punishment.

3. The process constraints action - by rules, processes and procedures as well as it defines duties - imperatives to act.

Define the concept of justice in business ethics.

❖The concept of justice is relevant to business ethics primarily in the distribution of benefits and burdens (costs).

❖A moral right to be treated as a free and equal person; also benefits and burdens should be distributed equally.

❖Justice is also an important concept in evaluating various forms of social organization, we can also ask about the justice of the economic system in which business activity takes place.

What is justice according to Aristotle?

Aristotle divide justice in 2;

1) Universal justice - a just or morally upright person is one who always does what is morally right and obeys law.

2) Particular justice - concerned with virtue in specific situations, consists of taking only a proper share of some good.

Forms of Justice according to Aristotle

1) Procedural (Universal) Justice - in administering justice, fair, impartial rules and procedures should be applied.

2) Particular Justice -

2.1 Corrective or compensatory - a matter of compensating persons for wrongs done to them.

2.2 Retributive - the extent of punishment should fit the offence.

2.3 Distributive - deals with distribution of benefits and burden.

What Aristotle’s Compensatory and Retributive Justice resembles of?

Retributive Justice resembles “Qisas” principle of the Al Quran.

“Oh you who believe ( those with Iman), the law of equality ( Qisas) is prescribed to you. In cases of murder; the free for the free, the slave for the slave, the woman for the woman. But if any remission is made by the brother (or relatives), of the slain, then grant any reasonable demand, and compensate him with handsome gratitude. This is a concession and the mercy from your Lord. After this, whoever exceeds the limits shall be in grave penalty”. (178:baqarah)

Explain Justice and Competitiveness

In a competitive society where members compete to pursue self-interest with some self-referential altruism , problems of distributive justice obviously arise especially the issue of inequality of distribution (e.g. wealth , power, income, etc).

Aristotle’s principles, however, contains much value that lies in its insistence that different treatment be justified by citing relevant differences and that difference in treatment be in proportion to these differences.

*simple way to understand- In other words, differences in how people are treated should be based on real differences in what they’ve done or how they’ve acted, and the rewards or treatment should be balanced to be fair.

Explain what Rawls theory (John Rawls) relate to and their assumptions.

Rawl’s theory is related to distributive justice – the distribution of societie’s benefits and burdens while applying the free market system.

Assumption of the theory – conflicts should be settled by devising a fair method of choosing the principles by which conflicts are resolved. E.g. by having a contract between parties involved in the business.

What John Rawls use for The Egalitarian Theory?

The Notion of contract

What are the TWO basic principles to be applied to select a fair or just method of making choices/decisions to resolve social conflicts that rawls proposes?

1. Principle 1- Principle of Equal Liberty

2. Principle 2 – divided into two parts:

a) Difference Principle

b) Principle of Fair Equality of Opportunity

Explain Rawls’s 1st Principle of Justice (Principle of Equal Liberty)

Principle of Equal Liberty-

Each person is to have an equal right to most extensive total system of basic liberties (i.e. freedom) compatible with a similar system of liberty for all.

- Everyone has basic rights. Equal share of whatever goods are available is the most that any person may reasonably expect, given the requirement of unanimous agreement

Explain Rawls’s 2nd Principle of Justice

Social and economic inequalities are to be arranged so that they are both:

a) to the greatest benefit of the least advantaged; (this is Difference Principle)

b) attached to the offices and positions open to all under conditions of fair equality of opportunity. ( this is Principle of Fair Equality of Opportunity)

However, there are conditions under which rational, selfinterest persons would make exception to the first principle and accept less than an equal share of some primary goods.

explain Principle of Equal Liberty (Principle of Rawls)

the claim that each citizen’s liberties must be protected from invasion by others and must be equal to those of others.

explain Difference principle (Principles of Rawls)

The claim that a productive society will incorporate inequalities but takes steps to improve the position of the neediest members of the society.

Explain Principle of Fair Equality of Opportunity (Principles of Rawls)

The claim that everyone should be given an equal opportunity to qualify for the more privileged positions in society’s institutions.

What is the purposes of the theories?

Aristotle’s and Rawl's theories are primarily to provide a means for evaluating existing and proposed institutional arrangements.

❑Insofar as the market system promotes utility and protects rights, it is doubly- justified.

extra- Virtue of Justice and Honesty as in AlQuran

Oh, you who believe( those with Iman). Stand out firmly , For God, as witnesses to fair dealing , and let not the hatred of others to you make you swerve to wrong and depart from Justice. Be just: that is next to piety (taqwa): and fear God. For God is well- acquainted with all that you do.

❑ Allah has promised those who believe (in the Oneness of Allah-Islamic Monotheism) and do deeds of righteousness, that for them there is forgiveness and a great reward (i.e. Paradise)

verse 8 & 9 Al-Maidah