PHL 325L Midterm

Golden Rule

"Do unto others as you would have them do unto you" -the approach to ethics would be asking oneself "how would I want to be treated in this situation? -the issue with this rule however is that it does not provide bought direction in complex ethical cases where a decision is likely to affect different people in different ways

Difference Principle

(Part of Rawls' justice as fairness principle of distributive justice) The principle allows inequalities of wealth and income, so long as these will be to everyone's advantage, and specifically to the advantage of those who will be worst off. -It requires that an economic inequality be to the greatest advantage of those who are least advantaged

Relationship Regulation Theory

(role ethics) a theory of interpersonal relationships that proposes that all human interactions can be described in four relational models: 1. Communal Sharing: these are the most basic form of relationships where some bounded group of people are conceived as equivalent. Commonalities are emphasized. -Sharing resources -EX: Spouses or siblings 2. Authority Ranking: describe asymmetric relationships where people are linearly ordered along some hierarchical social dimension. -Respect and/or nurturing -Boss and Employee relationship 3. Equality Matching: characterized by equality and reciprocity. -Equality -Coworkers 4. Market Pricing -Proportionality -Monetary transactions

Virtue Ethics

A moral theory that focuses on the development of virtuous character and asks "what kind of person should I be or become?" -it emphasizes moral education and the development of moral character rather than a strict adherence to moral principles. -a deontological view

Doctrine of Fair Contracts

1) Entry and Exit 2) Governance 3) Externalities 4) Contracting Costs 5) Principle of Agency 6) Limited immortality

Stages of Cost-Benefit Analysis

1. Identify the options 2. For each option, identify the stakeholders 3. Identify the possible outcomes and their likelihood for each stakeholder 4. Identify the expected effects of the outcomes for each stakeholder 5. Compute the costs vs benefits that might accrue form the expected effects by adding up the benefits and adding up the costs for all of the stakeholders and subtract the costs from the benefits a. Opt to pursue the option with the highest number (maximizing) or the good enough option (satisficing), where the benefits outweigh the costs according to consequentialists.

Friedman's Rules

1. Obey the law 2. Be ethical 3. Pursue self-interest (pursue profits in the case of the manager/agent which would mean pursuing the interests of the shareholders)

Lomborg's method for using cost-benefit analysis when lives are at stake

1. Think about what can be afforded/what the market can bear 2. Compare the cost of lives saved: what do they cost? how many lives? what is the cost per life? 3. With the money the market can bear, save the greatest amount of lives. -his method does not not force us to assign a dollar value to a life.

John Stuart Mill's Definition of Agency/Freedom

1. Voluntary: a person must be aware of what they are doing and not doing it accidentally 2. Uncoerced: a person must not be forced 3. Informed: a person must know what they are doing. -We need laws that prohibit coercion, fraud, and deception to ensure free actions and exchange

Three Basic Questions of Ethics

1. What to do?: Rules, principles, definitions, criteria 2. What to be?: character, identity, virtue 3. How to decide?: Methods- ends, consequences, questions of authority, effects to others

Nozick's Entitlement Theory

A historical theory of distributive justice operates by 3 subsidiary principles: 1) Principle of Justice in Acquisition - people who acquire a holding in accord with this principle are entitled to it 2) Principle of Justice in Transfer - a person who a acquires a holding from someone else entitled to the holding is entitled to that holding 3) Principle of Rectification - No one is entitled to a holding except by repeated applications of the justice in transfer and in rectification of injustice His theory would imply that a distribution is just if everyone is entitled to the holdings they possess under the distraction. However, not everyone follows these rules which is why the principle of rectification is needed. -the theory creates a strong system of private property and a free-market economy. ---The only just transaction is a voluntary one. -It contrasts sharply with the Principles of Justice in Rawls' view of justice as fairness

Principal Agent Problem

A problem that arises in the managerial theory when managers/agents pursue their own interests over the interests of the owners. -according to Friedman, to the extent that they do, the managers are violating their duty.

Freeman's argument for Stakeholder Theory

According to Freeman, managers should pursue the interests of the stakeholders. The stakeholders' interest may align with the shareholders but where they don't, the manager should pursue the greater interests, i.e. the stakeholders. 1. Stakeholders have a right not to be treated as a mere means. 2. To be part of the end, stakeholders must participate in determine the future direction of the firm in which they have a stake. 3. Stakes require action of sort, and conflicting stakes require methods of resolution. 4. The best way to resolve conflicts among stakeholders is by appeal to the Doctrine of Fair Contracts. 5. The purpose of the firm is not best described by maximization of profit for shareholders but by a normative core, i.e. maximizing stakeholder interests 6. A firm should be managed for the benefits of the stakeholders 7. Therefore, a manager's responsibility is to balance the claims of stakeholders.

Stakeholder

An individual, group, or organization who may affect, be affected by, or perceive itself to be affected by a decision, activity, or outcome of a project. -someone affected by action or policy, etc.

Aristotle's Principle of Distributive Justice

Aristotle believed that justice is getting what you deserve, meaning goods should be distributed proportionally, according to merit. -a patterned theory of distributive justice

Mean between Extremes

Aristotle believed that virtues were the means in between two extremes (vices). -Courage is a virtue in between recklessness (a vice for being excessively courageous) and cowardice (a vice for being deficient in courage)

Satisficing

Choosing an option that is acceptable, although not necessarily the best or perfect. -The option chosen is acceptable/good enough but it might not be the best one when conducting a cost-benefit analysis. -different from maximizing options which are the best available options

Negative Externalities

Costs that are suffered/incurred by a third party as a consequence of an economic transaction EX: pollution

Stakeholder Theory

Freeman's theory that states that managers should pursue the interests of the stakeholders. -The stakeholder's interests may coincide with the shareholders' interests but not necessarily, regardless, the interests of the stakeholders should be considered over the interests of just the shareholders.

Managerial theory

Friedman's theory that managers are the agents of the company and have an obligation to do best by/protect the interests of the shareholders/owners. -rule consequentialist theory because it states that as a rule, managers should purse the interests of the shareholders.

Marx's Principle of Distributive Justice

From each according to his abilities, to each according to his needs. -a patterned theory of distributive justice

Instrumental Good

Goods that are not intrinsic/valuable in themselves. They are goods as a means to something else. They are desired for the sake of something else. EX: Money

Intrinsic Good

Goods that are valuable in and of themselves and are not valuable merely as means to something else. They are desired for their own sake. EX: happiness, the truth, love, knowledge

Rousseau's Social Contract Theory

Government are legit if people would voluntarily submit to their authority. He believed that given the choice between the state of nature and the state of government, people will choose governance. They will trade everything for everything: they will give up self governance in the state of nature for a system of government that safeguards the general will. -one should commit everything to cooperation and in return will get their fair share.

Harm Principle

John Stuart Mill's principle that we should interfere with people's liberty ONLY to prevent harm to others.

Friedman's argument for the managerial theory

Managers should represent the owners' (stakeholders') interests, thus pursuing their own profits, within the constraints of morality and the law. Positive argument: Agents should promote the interests of the principle. Managers are the owners' agents. Therefore, managers should promote the owners' interests. Negative argument: If managers were to promote the interests of the community/had social responsibilities, then they would spending someone else's money (owners', employees', or customers' money) without their explicit authorization or consent. Spending money this way is wrong. Therefore, a manager's only job is to pursue profits by representing and pursuing the owner's interests.

Principle of Limited Immortality

One of six principles of the Doctrine of Fair Contracts that states that ALL stakeholders should have an obligation to not do things that will compromise or jeopardize the contract.

Principle of Governance

One of six principles of the Doctrine of Fair Contracts that states that all changes to a contract must be unanimous

Principle of Contracting Costs

One of six principles of the Doctrine of Fair Contracts that states that all parties to the contract must share in the cost of contracting so that any one stakeholder cannot get stuck.

Principle of Entry and Exit

One of six principles of the Doctrine of Fair Contracts that states that any contract must have clearly defined entry, exit, and renegotiation conditions, or at least it must have methods or processes for so defining these conditions. -each stakeholder must be able to determine when an agreement exists and has a chance of fulfillment.

Principle of Externalities

One of six principles of the Doctrine of Fair Contracts that states that if a contract between A and B imposes a cost on C, then C has the option to become a party to the contract, and the terms are renegotiated.

Formula of Universal Law

Part of Kant's conception of categorical imperatives that says to treat people as ends in themselves, never as mere means i.e. respect people, including yourself; do not exploit people. -you should have concern for what others want in their own right

Original Position

Part of Rawls' theory of justice as fairness The position from which rational persons must form the rules. In this position, all parties to the contract are behind the veil of ignorance to ensure a just distribution of resources and creation of society.

Locke's Argument from Property

People have a basic right to property - "no one shall harm another in his life, health, liberty or possessions" 1) In the state of nature, men were born free and equal: free to do what they wished without being required to seek permission from any other man and equal in the sense of they're being no material political authority of one man over another. 2) Labor Theory: People acquire things using their bodies. A person owns their body, nobody else has a claim to it. Therefore, people have a right to what their bodies/their labor can produce. However there are limitations to this is the state of nature: a. A person can only own what they can use b. A person cannot own so much that others are left with nothing

The Adam Smith Argument for Free Enterprise

Smith's theory of the invisible hand lays the foundation for modern economics and makes the case for the free enterprise system that operates by ethical egoism. 1. Without any observable intervention, the free market will determine an equilibrium in the supply and demand for goods (the invisible hand — a metaphor for the unseen forces that move the free market economy) 2. By following self-interests, consumers and firms create an efficient allocation of resources for the whole of society/welfare of society Issues with this theory and the free enterprise system: -His argument describes an ideal system of free enterprise in which there is no fraud or coercion, etc. to get the upper hand in society. -Theoretically, Smith's argument seems correct but in practice, there are factors like deception, fraud, lack of information, non-rational actors, etc. that would lead people not to contribute to the good of the community.

Teleological Suspension of the Ethical

Sometimes it is necessary to go against ethics for a higher purpose according to Kierkegaard -ethical norms are completely suspended -faith involved the suspension of the ethical as it allows one to believe that an unethical action will result in a better end in some cases.

Role Ethics

States that virtues, obligations, and values depend on social roles. It is not individualistic -Morality is derived from a person's relationship with their community. EX: The Relationship regulation Theory and Confucianism

Patterned Theory

Theories of distributive justice the match some natural pattern. They attempt to find an ethical notion to base distribution off of. the general pattern: "From each according to X, to each according to Y." EX: Aristotle's distribution in accord with merit and Marx's in accord with abilities and needs

End-Result Theory

Theories that look at the shape/structure of the distribution curve based on the end result of a policy of distribution. EX: Rousseau's and Rawls' theories of distribution

Dunning-Kruger Effect

There is a cognitive bias in which people assess their cognitive ability as greater than it is. -it is a limitation and danger of cost/benefit analysis

Arrow-Debreu Theorem

Under certain conditions/constraints, free enterprise/free markets tend towards an equilibrium that is Pareto-optimal (some are better off at the expense of others). States maximize welfare, you can't benefit anyone further without hurting someone else. conditions: 1. Each person has some useful contributions to make 2. Each has perfect information 3. Preferences are convex (there is diminishing marginal utility) 4. There are no transaction costs

Dangers of Cost-Benefit Analysis

When conducting cost/benefit analyses: • We limit the search for stakeholders. • We tend to ignore low-probability events. • When we attend to low-probability events, we overemphasize them. • We ignore the possibility that people will find out. • We discount the future. • We undervalue collective outcomes. • We deny uncertainty. • We underestimate the importance of chance, overestimate our own ability to control events. • We are bad at perceiving and reasoning about risks. • We find it hard to assign causes, and responsibilities, when many people are involved. • We tend to focus on people rather than on systems. • We tend to explain different events and confuse the issues. • We ignore sins of omission. • We, generally, are bad at assessing ourselves. • Black Swans • Dunning-Kruger Effect -All of these things can lead us to exclude people from the analysis or lead us to choose actions that we thought would have the best outcome but had negative unforeseen outcomes.

Rule Utilitarianism

a branch of consequentialism and utilitarianism that states that one should always act on/follow the rule that produces the most utility overall. It is immoral to break the rule that produces the most utility. -Act and Rule come to a head when there is a good rule, but more could be done for society by breaking it.

Invisible Hand

a concept first introduced by Adam Smith. A metaphor for the unseen forces that move the free market economy. -without any observable intervention, free market will determine an equilibrium in the supply and demand for goods -by following self-interests, consumers and firms create an efficient allocation of resources for the whole of society

Utilitarianism

a form of consequentialism that says to do the best action (act utilitarianism) or the best rule (rule utilitarianism) that promotes the most utility. -Utility can be defined in different ways according to different kinds of utilitarians. --Mill and Bentham believed that actions should promote the most happiness/pleasure (hedonistic act utilitarianism).

Cost/Benefit Analysis

a kind of "moral calculus" often used in business to analyze decisions. Costs of an action are subtracted from benefits in order to choose either the maximizing or satisfying course of action. Five steps 1. Identify all options 2. For each option, identify all stakeholders 3. Identify the possible outcomes and their likelihood 4. Identify the expected effects of the outcomes for each stakeholder 5. Compute the costs vs benefits that accrue from the expected effects by adding up the benefits and adding up the costs for all of the stakeholders and subtract the costs from the benefits.

Consequentialism

a moral theory that says to do the action (act consequentialism) or follow the rule (rule consequentialism) that has the best/produces the best consequences overall. -the value of an action or rule stems only from the value of its consequences. -utilitarianism and egoism are some of the many branches

Equal Opportunity Principle

a principle that asserts that all people should have the right to work and advance in the basis of merit and ability, regardless of race, sex, color, cream disability, age, etc.

The Tragedy of the Commons

a situation in a shared-resource system where individual users, acting independently according to their own self-interest, behave contrary to the common good of all users by depleting or spoiling the shared resource through their collective action. EX: If a few shepherds allow their sheep to graze in a common pasture, there is no harm and the shepherds benefit from this. However, when every Sheppard in the city uses the common pasture for grazing, it quickly becomes over grazed and useless to everyone in the community.

Free Enterprise

a system permitting people to engage in economic activity freely. -a system that establishes the framework for buying, selling, working, employing, contracting, etc. -it requires a legal system and a set of legal institutions: a body of law, the rule of law, and ways of enforcing the law, property rights, contracts, etc.

Trolley Problem

a thought-experiments that seems to pose a problem from utilitarianism. In the experiment, a train is running on a track and is going to kill five people tied to the track, there is a lever that will switch the track so the train is diverted from the five people but will kill one person tied down to this track. Most people say that the train should be diverted to kill the one person over the five, this coincides with utilitarianism. However, when the trolley problem is slightly altered such that the train will hit the five people on the track unless you push a fat man in front of the train, effectively stopping the train but killing the fat man, more people say they would let the fiver people die rather than kill the one. -A problem for utilitarianism because in the second case, most people do not think it is okay to push a man off a bridge to save five lives.

Act Utilitarianism

a utilitarian theory of ethics which states that a person's action is morally right if and only if it produces the best possible results/most utility in that specific situation. -it is a branch of consequentialism and as such only considers the value of the consequences of an action -utility is defined in different ways by different utilitarians -EX: Mill and Bentham

Categorical Imperative

a way of evaluating motivations for actions and is used to sort maxims into those that are morally acceptable and those that are not, in the deontological moral philosophy of Immanuel Kant, that derives strictly from humans reason (NOT desire) and applies to all rational agents. It denotes an absolute, unconditional requirement that must be obeyed in all circumstance and is justified as an end in itself. -they are applicable to and binding upon all rational agents simply in virtue of their rationality

Hypothetical Imperative

according to Kant is a way of evaluating actions that references the agent's desire. If you desire X, do Y. -depends on human sense experience (desire) and is neither universal nor necessary

Good Will

according to Kant is acting with the best intentions, not out of self-interests but from duty and treating people as people not mere means. -acting on the basis of universal considerations

Capitalism

an institution that arose during the renaissance as a way of accumulating money/currency -encompasses the free enterprise system and institutions that allow for large accumulations of money, like banks, insurance companies, stock markets, etc.

practical wisdom

an intellectual virtue, is a true and reasoned state of capacity to act with regard to the things that are good or bad. It is the ability to draw the right distinctions and tell right from wrong. -cannot be acquired solely by learning general rules. -it is aimed at the truth, but truth in the service of action.

Black Swann

an unpredictable event that is beyond what is normally expected of a situation and had potentially severe/important consequences but seems predictable in retrospect/after-the-fact. -extremely rare and usually unaccounted for in cost-benefit analyses

W.D. Ross' Common Sense Principles

are seven prima facie duties which play a role in determining what a person ought to do: 1. Keep promises 2. Make amends 3. Be grateful 4. Be fair 5. Improve yourself 6. Help people 7. Don't hurt people

Positive Externalities

benefits that are enjoyed by a third party as a result of an action or transaction. EX: education, planting a tree, donation

Moral Hazard

cases or instances where you transfer risks onto others. -People will increase their exposure to a risk when they are insure because they feel that why can take more risks because someone else will bear the cost of those risks.

Perfect Obligation

complete duties that specify how one ought to fulfill the duty. They generate rights. EX: Do NOT do X. You have a perfect duty not to harm others without reasons. People have a right not to be harmed for no reason/for fun.

Deontological Theory

ethical theories that do not hold that all value stems from consequences. Instead of looking at the consequences of an action, deontological theories are concerned with the state of character or intent of the actor when choosing an action. -EX: Kantianism and Virtue Ethics

Intuitionism

family of views on moral sense theory: 1. Pluralism: There are different sources and kinds of value; goods differ in kind 2. Conflict: goods sometimes conflict, thus there are trade-offs 3. Complexity: there are no universal rules for resolving all the conflicts

Prima Facie Duty

impose ethical obligations that can be avoided only in order to perform superior ethical duties. -they are a kind of compromise between Kant's strict imperatives and Mill's utilitarianism

Imperfect Obligation

incomplete duties that allow for a lot of choice on how to fulfill the obligation. -general and there are not corresponding rights attacked to them EX: an imperfect duty to give to charity. No one has a right to your charity, but you have some duty to be charitable. How you choose the be charitable is up to you.

Formula of the Kingdom of Ends

part of Kant's conception of categorical imperatives that says to act as a legislating member of a kingdom of ends, a kingdom where everyone is treating everyone as ends in themselves.

Formula of Humanity

part of Kant's conception of categorical imperatives that says to act as if everyone were to act on that principle i.e. act on principle; do not make exceptions of and for yourself

Principle of Justice in Transfer

part of Nozick's entitlement theory of distributive justice that explains how one person can acquire holdings from another, including voluntary exchange and gifts. -a historical theory of distributive justice

Veil of Ignorance

part of Rawls' original position, hides all facts about the person that can tempt people to rig the system in their favor, e.g. race, gender, sexual orientation, religion, disability status, etc. It also hides facts about what one's beliefs, values, and talents will be. The idea is that those in the original position will behind the veil and create/design a fair and just society.

Law of Unintended Consequences

posits that actions of people, especially the government, always have effects that are unanticipated or unintended unanticipated > anticipated -danger and limitation of cost-benefit analysis

Distributive Justice

refers to the distribution of goods, services, responsibilities of society. It is a question of how to distribute the goods and responsibilities that come from society.

Ethical Shift

takes place in a context (in business, games like poker, or elsewhere) when our usual ethical norms change in that situation. In negotiations, for example, we aren't expected to be entirely honest (for example, about what we're willing to pay) though we're still expected to tell the truth about the terms of the contract we're negotiating. -This contrasts with a teleological suspension of the ethical in a context, where ethical norms are suspended completely.

State of Nature

the hypothetical life of humans before societies came into existence i.e. before government, the law, social contracts, etc. have been introduced.

Moral Foundations Theory

the theory proposes that several innate psychological systems are the foundations of "intuitive ethics." The five foundations: 1. Care/harm (Care for people; don't harm them) 2. Fairness/reciprocity (Be fair) 3. Loyalty/Betrayal (Be loyal) 4. Authority/Insubordination (Respect proper authority) 5. Purity/Degradation (Be virtuous/Respect dignity)

Historical Theory

the theory that a just distribution is based on how resources and responsibilities were acquired. These theories look at three components of distribution 1) acquisition (things acquired from nature) 2) transfer (how to acquire something justly from someone else who obtained it justly) and 3) rectification (how to fix past injustices) -EX: Nozick's Entitlement theory and Locke's labor theory

Social Contract Theory

the view that persons' moral and or political obligations are dependent upon a contract or agreement among them to form the society in which they live. -governments are legit IF people would voluntarily submit to their authority. given the hypothetical choice between the state of nature and the state of government, people will choose governance but they will have to make trade offs. -Social contracts can be explicit, such as laws, or implicit, such as raising one's hand in class to speak. EX: The Constitution is cited as an explicit example of America's social contract.

Prospect Theory

theory that people set a reference point and then judge options as better or worse than the reference point. They then choose the best. • it describes how individuals assess in an asymmetric manner their loss and gain perspectives. For example, for some individuals, the pain from losing $1,000 could only be compensated by the pleasure of earning $2,000. • The theory aims to describe the actual behavior of people. • Loss aversion- losses hurt more than gains feel good: people's tendency to prefer avoiding losses to acquiring equivalent gains. ---It is better to not lose $5 than to find $5. ---One who loses $100 will lose more satisfaction than another person will gain satisfaction from a $10

Good without Qualification

things that are good no matter what. They are necessarily good, unlike thinks that are good in qualified way meaning they are good only under certain conditions like money or power.

Advantages of Cost-Benefit Analysis

• Objectivity: cost benefit analysis forces the person to see things from different points of views/the views of all stakeholders not just their view. • Depth: it forces a person to think through various possible outcomes, including indirect, secondary, and long-term consequences. • Externalities: forces people to think about the effects their actions have on others. • Reliability: reliability of the analysis tend to yield correct answers to practical questions