Ethics Day 5_Ethics and Political-Economic Systems
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Title: Ethics and Political-Economic Systems
Author: Gregory J. Robson, University of Notre Dame
Contact: grobson@nd.edu
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Agenda:
Social contract theory & natural law theory
Virtue ethics (to be considered for exemplar paper)
Systems of political economy in which businesses operate
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Recapitulation: Social Contract Theory
Definition: A theory of ethics and government, based on implied agreements among individuals and their collective rights and duties.
Key Questions:
What is social contract theory?
Is it correct?
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Recapitulation: Natural Law Theory (1 of 3)
Concept: Morality is akin to physics, with law-governed, opinion-independent facts.
Historical Figures: Socrates, Plato, Aristotle, Catholic social thought (especially Aquinas).
Aquinas' View: We participate in God’s goodness by following natural laws, which dictate moral behaviors across cultures and eras (e.g., prohibitions against murder and theft).
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Natural Law Theory (2 of 3)
Development: Influenced by Plato, Aristotle, Aquinas, among others.
Morality is inherent, rational, and compatible with faith and reason.
Fundamental Morals: Respect others, love family, improve life, avoid harmful actions.
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Natural Law Theory (3 of 3)
St. Thomas Aquinas: Describes human law as a reasoned ordinance for the common good.
Key Principle: Positive law must not contradict natural law; natural law reflects divine governance of the universe.
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Two Questions to Consider:
Q1: Are natural moral laws central to morality?
Q2: Why is it important for corporations to adhere to natural moral laws, and how might they implement this?
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Virtue Ethics Overview
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Critique of Enlightenment Theories
Shortcomings of:
Kantianism, utilitarianism, social contract theory:
Overlook significant moral factors such as moral character, wisdom, emotional roles, and personal relationships.
Virtue Ethics Focus: Emphasizes arete (virtue/excellence) and actualizing human potential through habits (Nicomachean Ethics by Aristotle).
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Virtues and Vices
Two Types of Virtues:
Intellectual Virtues: Linked to thought and truth (e.g., wisdom).
Moral Virtues: Associated with character traits (e.g., honesty).
Moral Virtues: Fostered through habit and practice, resulting in deep-seated character traits.
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Aristotle’s View on Happiness
Happiness arises from living a virtuous life (e.g., acts of kindness like feeding the hungry).
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Right Action & Virtue
A right action mirrors the behavior of a virtuous person in equivalent circumstances.
Virtuous traits are essential for human flourishing and true happiness.
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Vices
Definition: Character traits that inhibit flourishing or true happiness.
Virtue exists between two vices (e.g., courage between cowardice and recklessness).
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Example: The Virtue of Honesty
Study by Christian Miller: Investigated honesty patterns in dating apps versus other platforms.
Potential Explanations for Findings:
People may genuinely want to be honest.
Reputation motivation influences behavior.
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Further Exploration on Honesty
Miller's Analysis: Honest actions derive from deeper motivations rather than superficial representations.
Observations of low deception online may indicate a broader failure of virtue.
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Case for Virtue Ethics
Integral to moral decision-making due to its emphasis on developing virtues and recognizing personal relationships.
Offers practical wisdom, dismissing irresolvable moral dilemmas.
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Case Against Virtue Ethics
Divergence on what character traits are essential for flourishing.
Lacks comprehensive policy guidance and accountability for bad actions.
Conclusion: Despite flaws, virtue ethics remains a valid ethical theory.
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Reflection on Virtue Ethics
Discussion Questions:
What aspects of virtue ethics are most compelling or least compelling?
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Framing Subsequent Discussions (1 of 2)
Examines social complexity, ethical theories, and virtues before focusing on the ethics of firms.
Topics include capitalism/socialism, firms' roles in capitalism, and profit maximization.
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Framing Discussions (2 of 2)
To evaluate political-economic systems, consider characteristics of an ideal society, justice roles of the state, and moral evaluations of socialism vs. capitalism.
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Reading: "The Idea and Ideal of Capitalism" by Gerald Gaus
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Core Concepts of Capitalism
Gaus articulates pure form elements of capitalism and justifications from proponents.
Noteworthy Opponents: Karl Marx and defenders like John Stuart Mill.
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Private Property
Definition: Capitalism advocates for decentralized private ownership of means of production.
Characteristics: Bundle of rights regarding usage, transfer, exclusion, management, and modification.
Contrast with Soviet economy: State control of production vs. personal property.
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Ownership of Common-Pool Resources
Debate: Can these resources possess private ownership? Consider the incentive issues illustrated by the Tragedy of the Commons.
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Gaus on Capitalist Ownership
Moderate Capitalism: Influenced by John Locke’s perspective on ownership of life and mixing labor.
Extreme Capitalism: Anarcho-capitalism rejecting state regulation of property.
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Activity: Ownership Decisions
Prompt: Create a list of items you believe should or shouldn't be owned based on intuition and rationale.
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Capitalism: Scope of Ownership
Private ownership of capital goods is permitted.
Limitations: Certain items (e.g., drugs, body parts) cannot be owned, and U.S. regulations restrict property rights.
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Justifications for Private Property (1 of 4)
Justifications:
Self-Ownership
Agency
Local Knowledge
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Self-Ownership Justification
Principle: You rightfully own yourself; others cannot exploit your body without consent.
Condition: You must leave sufficient resources for others.
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Agency Justification
Definition: Control over property is essential for autonomy and executing personal projects without governmental restrictions.
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Local Knowledge Justification
Argument: Individuals possess unique insights into local conditions and personal goals, making localized management of resources more effective than state control.
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Markets and Business (1 of 2)
Current markets include hierarchical firms with formal/informal rules influencing various roles.
Common Portrayal: Negative stereotypes of businesspeople as greedy individuals.
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Markets and Business (2 of 2)
Reality: Businesspeople are diverse, encompassing both good and bad characteristics, similar to individuals in other sectors (e.g., government, entertainment).
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Do Firms Add Value?
Concepts:
Consumer Surplus: The difference between what consumers are willing to pay and the actual price.
Producer Surplus: The difference between the minimum price sellers would accept and the actual sale price.
Collaborative Value Creation: Both consumers and producers gain from trade, indicating a win-win situation.
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Value Creation through Firms
Reflection on the dependency on firm-produced goods in everyday life and questions about the perceived consumer surplus generated.
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Understanding 'Socialism'
Clarification: The term is complex and often misapplied; many purportedly socialist states maintain capitalist economies.
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The Capitalist Firm
Function: Extracts resources, transforms them, and returns them to the economy with the intent of profit.
Internal Structure: Lacks market price signals; authority is centralized within firms.
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Profit-Based Competition (1 of 2)
Definition: Profit as the difference between total revenue and total costs.
Competitive Dynamics: Encourages excellence and promotes fairness, alongside critiques regarding power imbalances and labor alienation.
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Profit-Based Competition (2 of 2)
General Consensus: Market competition fosters wealth increase and options expansion, supported by comparative studies between capitalist and non-capitalist communities.
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Karl Marx: Background
Biography: Philosopher & economist known for his critical views on capitalism and his role in theoretical underpinnings of communism.
Major Work: Co-authored "The Communist Manifesto" in 1848.
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Marx's Stance on Capitalism
Framework: Views capitalism as a necessary precursor to communism but criticizes its moral implications.
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Class Struggle (1 of 2)
Marx's Historic View: Society's history is defined by class struggles, with economic structures influencing social power dynamics.
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Class Struggle (Cont'd)
Class Distinctions:
Proletarians: Wage laborers without production ownership.
Bourgeoisie: Capital owners employing wage workers.
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Surplus Value Extraction
Theory: Employers extract surplus value from labor, which Marx identifies as the basis of profit.
Labor produces more value than its cost (wages).
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Reserve Army of the Unemployed
Dynamic: Firms maintain low wages due to a large pool of unemployed workers, undermining workers’ bargaining power.
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Marx on Revolution
Proposition: Capitalism will eventually collapse, paving the way for communism by abolishing class antagonisms through revolution.
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Vision of a Communist Utopia
Marx's Ideals: Post-revolution, individuals would have the freedom to pursue varied activities rather than fixed roles dictated by capitalism.
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Marx's Agenda for Radical Change (1 of 3)
Focus on abolishing bourgeois property and transferring all capital to the state (proletariat).
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Marx's Agenda for Radical Change (2 of 3)
Specific Reforms:
Abolish private land ownership, implement progressive income tax, state control over credit, communication, and transportation.
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Marx's Agenda for Radical Change (3 of 3)
Advocacy for radical transformation amidst moral concerns for the oppressed, alongside challenges regarding the feasibility of such profound change.
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Questions for Reflection
Examine the relevance of rigid economic classes historically and today.
Analyze Marx's perspectives on production relations and cooperation between capital owners and laborers.
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Further Reflection Questions
Consider the determinism of economic history and the most convincing (or least) aspects of Marx's arguments.