Business Ethics 1-4

Ethics

Greek word meaning moral philosophy.

Moral

Latin word meaning customs or manners.

Moralistic

Judging others by one standard while exempting oneself

Etiquette

Norms of proper conduct in society

Law and Ethics

Law often plays catch-up to ethics

Types of Law

Statutory, Regulatory, Common, and Constitutional law.

Common Law

Based on legal precedents (past court rulings).

Religion and Ethics

Religion is a common source of ethics.

Judeo-Christian View

Humans are flawed but can transcend flaws through love.

Religion (Etymology)

From Latin re-ligare “to connect again,” implying a prior disconnection (Adam & Eve).

Ethical Relativism

Morality depends on cultural or societal context.

Consequentialism

If the outcome is good, the act is right.

Deontology

Right and wrong are based on duty and principles beyond consequences.

Egoism

Acting in one’s own self-interest.

Utilitarianism

Acting for the greatest good for the greatest number.

Founders of Utilitarianism

Jeremy Bentham and John Stuart Mill.

Utilitarianism Context

Used to criticize prisons and women’s disenfranchisement during the Industrial Revolution.

Categorical Imperative

Kant’s principle that right is right and wrong is wrong.

Supererogatory Action

Good actions that are not morally required but admirable (above duty).

Income Tax

Created in 1913 in the United States.

Distribution Principles

Fair distribution of social benefits and burdens.

Distribution Approaches

“Everyone gets what they need” and “Personal merit.”

Liberalism

Individuals make their own decisions and bear responsibility.

Progressive Taxation

Higher earners pay higher tax rates.

Rawls’s Theory of Justice

Includes the Original Position and Veil of Ignorance to ensure fairness.

Veil of Ignorance

A concept by John Rawls where individuals make decisions about society without knowing their social status, wealth, or position, ensuring fairness and equality.

Original Position

A hypothetical starting point in Rawls’s theory where individuals decide on principles of justice without personal bias or privilege.

Capitalism

Economic system with private ownership for profit.

Socialism

Economic system with community ownership or regulation of production and distribution.

Hybrid Economy

Most countries combine capitalist and socialist elements.

Guilds

Pre-Renaissance trade associations ensuring quality standards.

Feudalism

Self-sustaining system based on land and protection hierarchies.

Birth of Capitalism

Individuals bear risk and profit from ventures.

Mercantile Capitalism

1600–1800s mutual dependence between state and business.

Industrial Capitalism

Late 1800s–early 1900s mass production and heavy industry.

Financial Capitalism

Early 1900s trusts, banking, and industrial finance dominate.

State-Welfare Capitalism

1920s–FDR era

Globalized Economy

Markets and production integrated across nations.

Company

Artificial entity separate from owners

Profit Motive

Purpose of business is to generate profit.

Private Property

Individuals own their own property.

Competition

Drives quality and lower prices

Natural Right to Property

All people have the right to own property, limited by externalities.

Invisible Hand

Self-interest indirectly benefits society through market forces.

Practical Critiques

Inequality, oligarchies, and corporate welfare.

Inequality

Unequal distribution of wealth and opportunities resulting from capitalism

Oligarchies

Concentration of property and power in the hands of a few

Corporate Welfare

When governments provide tax breaks, bailouts, or subsidies to large corporations to prevent failure or maintain influence.

Theoretical Critiques

Exploitation and alienation of workers (Karl Marx).

Exploitation

Taking unfair advantage of workers by paying less than the value of their labor

Alienation

Separation from product, process, coworkers, and human potential.

Marx on Competition

Hurts small producers and creates inequality.

Human Nature in Capitalism

People seen as self-interested

Statutes

Written laws formally enacted by legislative bodies, such as Congress or state legislatures, and codified in legal codes.

Regulations

Rules created and enforced by government agencies to carry out laws and manage specific areas of governance.

Constitutional Law

The body of law that interprets and applies the Constitution, defining the limits and powers of government