Business Ethics Midterm Review

11. Know the four key features of capitalism (S&B pp. 153-156).

1. Companies • •2. Profit motive • •3. Competition • •4. Private property

How much loyalty does an employee owe to the company?

(OPINION) "Beyond a hard day's work in exchange for a paycheck, an employee owes NOTHING to a company"

The view was given in class that the proper approach to environmental problems is some version of cost/benefit analysis, instead of any form of environmental absolutism. Do you agree? Why or why not?

(OPINION) -agree because there is many factors that must be taken into account -disagree because the environment takes precedent over all else

Who should bear the costs of environmental action and environmental clean-up?

(OPINION) -can say government -can say people -all depends on which you can make a better argument for

Should employees have civil liberties in the workplace? Why or why not?

(OPINION) -yes because it allows for a better working environment -no because it can decrease the effectiveness of a workplace

Women in the workplace: What were/are the main new or different ethical issues raised when women entered the workplace?

(OPINION?)

• Socialist, Communist, Communitarian, and Marxist Ethics

(There are important differences among those, but for our purposes now I am lumping them together because of their similarities.) Claims that values (and usually attitudes, as well as success and failure) are socially derived and/or determined. Emphasizes society and social and community action and goals. Usually favors social ownership of the means of production and social distribution of profits and rewards. Holds that what is good is what benefits the social-communal order. Concerned usually with what helps the poorer and less powerful people. Favors the use of government and governmental power, along with taxation and governmental regulation, as a means of accomplishing social-communal goals. Tends to be suspicious of individualism (calling it "selfish") and personal initiative and entrepreneurship, regarding those as leading to differences of wealth and position, and thus to be anti-social and anti-communal. Criticizes what its advocates hold to be the hugely unequal distribution of wealth in the world, and to regard this inequality as unethical. Tends to dislike corporations and corporate and financial elites, regarding them as pariahs who selfishly manipulate and steal from the poor and from the state. Usually is pro-union and pro-proletariat.Tends to be critical of the free market system, often calling it unethical. Tends to dislike globalism. There are at least two versions: a secular one (Karl Marx and his followers), and a religious one (Jewish, Roman Catholic, Protestant, Islamic, and other forms of religious socialism and/or communism and/or communitarianism). A leading communitarian is GWU professor Amitai Etzioni

• Ethics based on Nature or "Natural Law

(This is often based on a religious view, but does not need to be so.) Holds that humans are beings of nature and have a nature, that this nature can be known, and that ethics can be derived from laws or principles found in that nature. Some examples: Roman Catholic opposition to contraception as an interference with nature, and to homosexuality as "unnatural." Homosexual rights activists who claim that sexual orientation is inborn (i.e. from nature) and therefore is necessarily good or at least ethically acceptable. John Locke was an important theorist in this vein; he had a great influence on the American Founding Fathers. Thomas Jefferson's assertion in the Declaration of Independence (this is both a kind of statement of natural law as well as a statement of innate human rights): "We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are

What is required for informed consent?

(a) information (b) no coercion (c) competence to give consent.

Know about ethical issues in advertising, and know why advertising directed at children is especially ethically questionable. (S&B pp. 281-289).

-Ads that are ambiguous (can be understood in two or more ways) can be deceiving. -Aiding to ambiguity is the use of "weasel words" to evade or retreat from a direct or forthright statement. -Concealment of facts is a tactic used by advertisers to suppress information that is unflattering to their products. -Exaggeration is another tactic often used by advertisers. -In terms of children: Children, especially young children, are naive and gullible and thus particularly vulnerable to advertisers' enticements. Children lack experience and independent judgement, thus it is ethically questionable to have advertisements directed at children.

Know at least some of the pros and cons concerning government safety regulation of products.

-Argument for- They protect consumers. -Argument against- They add to the cost of products and raise the issue of legal paternalism b/c they prevent individuals from choosing to purchase a riskier but less expensive product.

Career tracks for women: The career-primary track vs. the career-and-family track (the mommy track). (Felice Schwartz) Know and describe the difference.

-Article written by Felice Schwartz that was interpreted as suggesting that companies create two career paths to accommodate women who wished to balance career and family and women whose career was their primary concern -Career-Primary: Put their career first, childless or someone else taking care of children. Advance further on career path. -Carrer-and-family: Family first, do not excel as far as type 1, not given the same opportunity. Also called the "mommy track" by the NY times. -Schwartz was criticized by women's movements as a traitor. Schwartz was just claiming a fact: women managers cost a company more then men managers. -Ethical issues: Why isn't there a daddy track? Also, if a parent must leave because of a child related duty, is it fair that others do his/her work? -Partly addressed by law: The Family and Medical Leave Act

Know the central conclusions of some important legal cases dealing with affirmative action, especially Bakke, Adarand, Grutter v. Bollinger, Graz v. Bollinger, and Parents United v. Seattle. Especially, know the positions of Justice Stevens and Justice Thomas in the Adarand v. Penya case.

-Bakke: Allan Bakke (white male) applied for admission to the medical school at UC Davis. UC Davis set aside 16 of its entrance places for minority students. Bakke did not get in, he sued the school, contending that he was discriminated against and would have won admission if those places were not set aside. Bakke won (5-4 decision). Court said that race or ethnic background can be considered a "plus" in a particular applicant's file, yet it does not insulate the individual from comparison with all other candidates. -Adarand: Supreme Court examined a federal program that provided financial incentives for contractors to hire "socially or economically disadvantaged" subcontractors. 5-4 decision, "federal racial classification. like those of a State, must serve a compelling government interest, and must be narrowly tailored to further that interest." -Stevens on Adarand case: defended the general principle of affirmative action. "There is no moral or constitutional equivalence between a policy that is designed to perpetuate a caste system and one that seeks to eradicate racial subordination." -Thomas on Adarand case: explicitly challenged Steven's position, saying "there is a moral and constitutional equivalence between laws designed to subjugate a race and those that distribute benefits on the basis of race into order to foster some current notion of equality. Government cannot make us equal; it can only recognize, respect and protect us as equal before the law." -Grutter v. Bollinger: court upheld, by a 5-4 majority, the affirmative action program at the University of Michigan's law school. Cited testimony from various business and military leaders who urged that diversity is essential to the country's economy and security. -Graz v. Bollinger: companion case to Grutter v. Bollinger. different majority of justices ruled, 6-3, that Michigan's undergraduate affirmative action program was unconstitutionally rigid and mechanistic because it gave members of underrepresented groups an automatic 20-point bonus on the 150-point scale used to rank applicants. -Parents United v. Seattle:??

The problem of child care for working mothers. Know and describe the problem, and be able to present something about what businesses can do to alleviate the problem.

-Both mother and father care for children but there is still a greater responsibility lying on the mom's back, especially at a younger age for the child. -businesses can provide extra pay, child care facilities, etc. -problem arises though: if business provides child care for employees who have children, those employees who don't have children may feel discriminated against. -businesses that provide child care for their employees are often considered desirable places to work. -tricky question: do businesses have to provide for child care because this will be best for society as a whole?

What is a conflict of interest? What are some examples of important conflicts of interest in the employee-employer situation?

-Conflict of interest: A conflict of interest occurs when an entity (person, group, corporation or other entity) has two interests (or responsibilities) arrayed in such a way that fulfilling one of those interests makes it impossible to fulfill the other interest. -The Foster Winans case -Financial investments

What are some of the ethical issues or problems in multinational business?

-Differences in portability of capital, product and workers. -MNBs can often circumvent government regulations. -Difference between developed and underdeveloped world. -Difference in value systems (e.g. treatment of women or people of differing race or tribe) -MNBs and small indigenous cultures.

Be able to describe the glass ceiling and the notion of comparable worth. (S&B discuss comparable worth, pp. 563-564)

-Glass ceiling: many women and racial minorities claim that they are allowed to rise to a certain level and are prevented from rising higher. There is a hypothetical glass ceiling. -comparable worth: men and women should receive the same pay for the same work. -some people say the free market already covers the question of how do you measure worth of different jobs.

What is insider trading? Is it legal? Ethical? Why or why not?

-Insider trading: the illegal practice of trading on the stock exchange to one's own advantage through having access to confidential information. -It is illegal -Can be considered ethical or unethical depending on how you view it -argument that it is ethical: it is an advantage that you have, it would be remiss to not use it argument it is unethical: it is an unfair advantage that is only available to you and a select few, unethical to use it in a competitive market.

What are some of the principles or guidelines concerning dating and mating between co-workers?

-Nearly impossible to eliminate because people spend so much time at work. Workplace is often the best opportunity to meet new people. -Dating is unethical if one of the members of the pair is a boss to the other, especially if the boss uses power to coerce the other. -Companies tried to eliminate this but the court often ruled that this is a violation of privacy.

Distinguish between negative and positive affirmative action.

-Negative: does not require any outside action to take place? an innate right that is undebatable? (unsure) -Positive: the policy of favoring members of a disadvantaged group who suffer from discrimination within a culture.

Know something about issues in product pricing and labeling. (S&B pp. 274-280).

-Sometimes consumers are misled by prices that obscure a product's true cost -Higher prices do not always mean better quality goods -Hidden charges, surcharges, and other stealth fees cab boost the consumer's actual cost significantly above the announced price -Promotional pricing can be manipulative

Know the tragedy (also known as the paradox) of the commons, and its applicability to environmental ethics.

-The tragedy of the commons is a term, originally used by Garrett Hardin, to denote a situation where individuals acting independently and rationally according to each's self-interest behave contrary to the best interests of the whole group by depleting some common resource. -What is ethically reasonable and beneficial to an individual may be detrimental if given to everyone in a society. -Example of a village with town center. Reasonable for an individual to allow his/her cow to graze in town center, however if everyone allowed their cows to graze in the town center then there would be no grass left.

What is whistle blowing, and what are the conditions necessary for it to occur properly? (S&B, pp. 502-506) (S&B give five conditions. A sixth - get legal help/advice before the whistleblowing - was given in class.)

-Whistle Blowing: An employee's informing the public about the illegal or immoral behavior of an employer or an organization. Can only be done by a past or present member of an organization. -In order to occur properly: 1) It is done from an appropriate moral motive. Must be motivated by a desire to expose unnecessary harm, illegal or immoral action, or conduct country to the public good or the defined purpose of the organization. 2) The whistle-blower, except in special circumstances, has exhausted all internal channels for dissent before going public. 3) The whistle-blower has compelling evidence that wrongful actions have been ordered or have occurred. 4) The whistle-blower has acted after careful analysis of the danger: How serious is the moral violation? How immediate is the problem? Can the whistle-blower point to specific misconduct? 5) The whistle-blowing has some likelihood of success. 6) Get legal help/advice before whistle-blowing (given in class).

Be able to explain, at least briefly, the concepts of Wise Use, Sustainability, and Stewardship and apply them to environmental issues and concerns.

-Wise Use:a loose-knit coalition of groups promoting the expansion of private property rights and reduction of government regulation of publicly held property. Wise use proponents describes human use of the environment as "stewardship of the land, the water and the air" for the benefit of human beings. -Sustainability: the ability to continue a defined behavior indefinitely. Environmental sustainability is the rates of renewable resource harvest, pollution creation, and non-renewable resource depletion that can be continued indefinitely. If they cannot be continued indefinitely then they are not sustainable. -Stewardship: the management or care of something, particularly the kind that works. Environmental stewardship refers to responsible use and protection of the natural environment through conservation and sustainable practices. Aldo Leopold (1887-1948) championed environmental stewardship based on a land ethic "dealing with man's relation to land and to the animals and plants which grow upon it."

Do we have an ethical obligation to future (i.e. not yet born) people? Why or why not? How does this question figure in environmental concerns and ethics?

-Yes. Treat others as you wish to be treated. -It makes us environmentally aware because our actions will effect future generations.

Why does anyone hire you - what expectation do they have?

-You are hired because the employer expects you to be an aid to the employer's business and/or project(s). If you are not, the employer should dismiss you.

What kind of information can an employee not take from one employer to another?

-confidential or proprietary information to which their new employer can take unfair advantage of. often difficult to decide cases of proprietary data.

Conflict between efficacy and safety for many things, including pesticides and fungicides. (Explain this if asked to do so.)

-efficacy-the ability to produce a desired or intended result -conflict: want a product to produce the best possible result, however also want it to be the safest possible product for humans. must find a balance

What is sexual harassment, and what can businesses do to prevent it?

-harassment in a workplace, or other professional or social situation, involving the making of unwanted sexual advances or obscene remarks. -occurs much more in multi-sex workplace. -to help prevent it, top management at businesses need to make clear that sexual harassment will not be tolerated and prosecute whoever commits acts of sexual harassment.

Know about the necessity for accurate, unbiased, and not politically influenced information for good environmental thinking and action.

-if these criteria are not met then decisions cannot be made with the environments best interests in mind. the wrong decisions might be made simply for political gain or because of wrong information.

How far can a business/employer go in inquiring into and investigating the behavior of employees? What about monitoring employees on the job? (S&B, p. 436) Drug testing? (S&B, pp. 437-438) Polygraph and personality tests? (S&B, pp. 433-436)

-many major employers routinely monitor the performance of their employees through the computers and telephones they use. -Electronic Communications Privacy Act restricts the government or unauthorized parties from eavesdropping, but it allows for exceptions when consent of employees has been obtained, when the organization owns/maintains the system, or when there is a legitimate business purpose for the surveillance. -monitoring of employees often gathers personal information without informed consent. -drug testing: 1) the issue of drug testing by corporations and other organizations arises because one needs good information and reliable statistics to properly discuss the problem yet these are all hard to come by. 2) drugs differ, so it must be carefully considered both what drugs are being tested for and why. To be defensible, drug testing must be pertinent to employee performance and there must be a lot at stake. 3) Drug abuse by an individual is a serious problem, generally calling for medical and psychological assistance rather than punitive action. The moral assessment of any program of drug testing must rest in part on the potential consequences for those taking the test... Will they face immediate dismissal and potential criminal proceedings, or therapy and a chance to retain their positions? 4) Any drug testing program, assuming it is warranted, must be careful to respect the dignity and rights of the persons to be tested. -Polygraph: often used in lie-detecting tests. -Businesses cite several reasons for using polygraph tests: it is fast/economical way to verify info, it allows employers to identify dishonest employees, and the use of polygraphs actually increases workers' freedom. -Argument against polygraphs: They are not always accurate. They do not always correctly tell if a person is lying or being truthful. They give a lot of false positives. -Personality Tests: used to determine whether prospective employees are emotionally mature, get along well with others, have a good work ethic, etc. -Can help screen applicants for jobs and current employees for particular assignments by indicating areas of adequacy and inadequacy. -Often very invasive and intrude on many areas considered private.

Know what nepotism is, as well as reasons for and against it.

-nepotism: the practice among those with power or influence of favoring relatives or friends, especially by giving them jobs. -for: keeps like-minded people together. also potentially gives jobs to those who are well qualified -against: unfair advantage. potentially gives jobs to those that are not qualified.

Know the reasons for labor unions, their primary methods or tactics (collective bargaining, strikes), and libertarian criticisms of them.

-reasons for labor unions: protect the rights of workers, stops employers from overreaching their bounds. -primary methods/tactics: collective bargaining, strikes, boycotts -libertarian criticism: unions do not allow for individual rights, but rather for many people working together? (not entirely sure)

Steps in the hiring process: Job announcement, screening, testing, interviewing. Know things that can go wrong, ethically speaking, at each of those stages, as well as how they should be done. Know about validity and reliability of tests.

-things that can go wrong (ethically): racism, sexism -Validity refers to the degree in which our test or other measuring device is truly measuring what we intended it to measure. -Reliability is synonymous with the consistency of a test, survey, observation, or other measuring device.

• Ethical Egoism

. Identifies what is ethically right with the agent's self-interest. Claims that something is ethically right if and only if it promotes the agent's (long-term) self-interest. There are at least two versions of this: (1) Descriptive ethical egoism. This claims that, in fact, people usually or always do what they perceive to be in their self-interest, and then go on to claim or say that what they did/are doing is ethical. (2) Normative ethical egoism. This holds that people should do or ought to do what is in their (long term) self-interest. Ayn Rand (and others) held/hold this view. Often, people who hold some version of this view also hold that it is unethical to require people to sacrifice their self-interest because this saps their freedom and their initiative. Many people object to ethical egoism, saying this is not really an ethical theory at all, but is instead an expression of selfishness, whereas a true ethical theory should promote something beyond self-interest or selfishness. Note that this objection depends on equating following one's self-interest with being selfish, and that this equation is highly questionable

• Nozicks Three Princples

1)A person who acquires a holding in accordance with the principle of justice in acquisition is entitled to that holding o(2)A person who acquires a holding in accordance with the principle of justice in transfer, from someone else entitled to the holding, is entitled to the holding. o(3)No one is entitled to a holding except by (repeated) applications of 1 and 2. in short, distribution of good in a society is just if and only if all are entitled to the holdings they posses.

Know the six points given by Shaw and Barry (S&B pp. 269-271) that they say would, if followed, go a long way in helping business behave ethically with respect to consumer safety.

1. Business should give safety the priority warranted by the product. 2. Business should abandon the misconception that accidents occur exclusively as a result of product issue and that it is thereby absolved of all responsibility. 3. Business must monitor the manufacturing process itself. 4. When a product is ready to be marketed, companies should have their product safety staff review their market strategy and advertising for potential safety problems. 5. When a product reaches the marketplace, firms should make available to consumers written info about the product's performance. 6. Companies should investigate consumer complaints and do so quickly.

three ethical criticisms of capitalism

1. Capitalism leads to inequality (i.e. it's unfair) o •2. Today's marketplace and business situation are far more complex than Smith's model of getting the stuff for your dinner. o •3. Capitalism assumes human beings are materialist/consumerists o •4. Corporate welfare programs protect business o •5. Competition is not good o 6. The Marxist notions of exploitation and alienation (but this fits socialist systems as much as it does capitalist ones

4. Know and be able to describe briefly at least five criteria for a good or adequate normative ethical theory: Universality, consistency, culpability, importance, fairness

1. Universality. Unless I can show that the circumstances of a given case are significantly different, an ethical judgment should apply to me as well as others, and to all others. 2. Consistency. Ethical judgments should not conflict with one another. 3. Culpability. Ethical judgments usually imply that some form of punishment or sanction is justified for offenders. 4. Importance. Ethical judgments usually have priority over other kinds of considerations, although it is unclear and debatable whether they override other considerations in all circumstances. (See, for example, the remarks about the centrality of economic considerations, given above.) 5. Fairness. Ethical judgments or pronouncements should be fair. (Fairness is - or at least seems to be -- closely related to proportionality and to everyone getting their just deserts.)

Descriptive Account and Ethics

A descriptive account or assessment of something (also known as an observational account) merely describes or observes or says what that thing is, or what people hold it to be, without saying whether it is actually right or wrong, good or bad. Ethics can be either descriptive or normative. Descriptive ethics looks at a person, group, or society and says what that person, group, or society thinks or says is good or bad, right or wrong, or what it thinks ought or ought not to be, ethically speaking. In other words, descriptive ethics only describes what that person, group, or society thinks is right or wrong, without commenting on whether it actually is right or wrong, good or bad. Descriptive ethics does not solve the problem of what is actually right or wrong, good or bad.

Normative Account and Ethics

A normative account or assessment of something attempts to say—usually on the basis of some universal normative ethical theory or belief--whether that thing is actually good or bad, right or wrong. Normative ethics attempts to say, or at least find theories that enable us to say, what is actually right or wrong, good or bad. Normative ethics deals with what actually ought to be or what should be, not just what people think is so, and it attempts (usually, anyway) to make this universal, applying to all people, across differing beliefs and cultures.

Response against "Business can't handle it" arguement

Corporations lack expertise. and Corporations will impose values on us.

Is it permissible, ethically, to discriminate sometimes on the basis of sex or gender? The answer given in class was yes, sometimes. Do you agree? Why or why not?

Entirely Opinion

• Contractarian

Ethics is based on an (imagined or hypothetical) contract or agreement among the members of a society. Most important recent example is A Theory of Justice (1971) by the late Harvard professor John Rawls (1921- 2002). Rawls used a "veil of ignorance" and the notion of an "original position" as starting assumptions of his work. Rawls also held that "Each person possesses an inviolability founded on justice that even the welfare of society as a whole cannot override. Therefore, in a just society the rights secured by justice are not subject to political bargaining or to the calculus of social interests." (I.e. Rawls was anti-utilitarian.) In addition, Rawls claimed that justice is fairness.

• Ethics based on or emphasizing Human Rights

Examples: Bill of Rights in the U.S. Constitution. (First 10 amendments.) Human rights "basket" in the Helsinki Accords. See the website of the UN Commission on Human Rights and others on this approach.

Know the arguments for and against positive race-based affirmative action, and responses to them. (S&B, pp. 560-563).

FOR: 1) Compensatory justice demands affirmative action programs. -Point: Women and minorities as a group have historically been discriminated against. Thus we have an obligation to do something to help repair the wrongs of the past. -Counterpoint: We cannot be responsible for what our fathers did. 2) Affirmative action is necessary to permit fair competition. -Point: Growing up in families that have suffered discrimination puts many blacks at a disadvantage. -Counterpoint: There are a lot of disadvantaged whites. 3) Affirmative action needs to break the cycle of women and minorities locked in low-paying, low-prestige jobs. -Point: Adopting affirmative action pushes more African-Americans into middle- and upper-class jobs. -Counterpoint: Affirmative action raises the frustration among races and genders. AGAINST: 1) Affirmative action injures white men and infringes on their rights. -Point: Even moderate affirmative action programs injure the white men who are made to bear their brunt. -Counterpoint: Racial and sexual considerations are often relevant to employment decisions. Jobs are scarce resources, thus society may distribute these in a way that furthers its legitimate ends-like breaking the cycle of poverty for minorities. 2) Affirmative Action itself violates the principle of equality. -Point: You cannot enhance racial and sexual equality by treating people unequally, which is what affirmative action does. -Counterpoint: The unfortunate reality is that in the real world racial and sexual factors go a long way toward determining what life prospects an individual has. 3) Nondiscrimination will achieve our social goals; stronger affirmative action is unnecessary -Point: Stronger affirmative action measure are unnecessary. They only bring undesirable results. -Counterpoint: Without affirmative action, progress often stops.

5. An argument in ethics (morality) usually has at least three parts: A factual premise, a premise stating an ethical principle or theory, and a conclusion that brings those two together.

For example (a simple one that can usually be generalized because complex arguments usually can be or reduced to iterations of this simple example): 1. (Premise 1; Factual component) Mary stole money from her employer. 2. (Premise 2; Ethical principle) Stealing is (ethically) wrong. 3. Thus (conclusion) Mary did wrong (committed an unethical action) in stealing from her employer.

• Moral Sense Theory and Ethical Intuitionism.

Holds that humans have a moral sense (analogous to the physical senses) or intuition - a faculty or perception-device - by which we can and do distinguish between right and wrong. Important proponents: 18th century: Third Earl of Shaftesbury, Francis Hutchenson, David Hume. 20th century: W.D. Ross's (1877-1971) theory of prima facie duties. More recently: James Q. Wilson, The Moral Sense (1993). (Ethical naturalism - the claim that humans naturally know right from wrong - is closely related to this.)

3 arguments in favor of narrow view

Invisible hand, the let government do it argument and business can't handle it argument. Invisible hand argument: o •"Every individual is continually exerting himself to find the most advantageous employment for whatever capital he can command. It is his own advantage, indeed, and not that of the society, which he has in view.... [But] by directing that industry in such a manner as its produce may be of the greatest value, he [is]...led by an invisible hand to promote an end that is no part of his intention.... By pursuing his own interest he frequently promote that of society more effectually than when he really intends to promote it." Basically that if we act in our own economic interest, we are led by an invisible hand that will promote the general good. This argument is economically unrealistically. Also corporations today acknowledge values other than just profit. Let government do it argument: Believe that government can bring corporations to heel. Critics say this is blueprint for an intrusive government. Also argue that government can't control everything and would promote corporations to act in shady ways to hide things. Business can't handle it: Corporations are wrong group to be entrusted with broad responsibility for promoting well being of society. They are not up to it because they lack necessary expertise and they are addressing non economic matters.

distinguish between ethics and law.

Laws are the regulations established, and usually written, by a governing power. Ethics are the morals of a culture, and often times, they inform the laws that are made. The distinction is that, while you may obey the law, you might not always act ethically. It would be a rare case for something to be ethical, but against the law. An important point to keep in mind is that ethics do not have any associated punishments when broken. A law, however, specifically sets the types of repercussions that should occur should it be broken.

Libertarian theory and Free Exchange

Libertarianism identifies justice with liberty. Liberty is the prime value, and justice consists in permitting to live as he or she pleases, free from the interference of others. • •Rejects utilitarianism's concern for total social well-being. • •Liberty takes precedence over other social concerns. Libertarians refuse to restrict individual liberty if even doing so would increase overall happiness. Free exchange is a totally free market. It is not about morality. If Jack scores big on the market the libertarian approach is not that Jack deserves that money but that Jack is entitled to his holdings and if he has acquired them in accordance with principles of justice.

• Libertarian Ethics

More-or-less directly opposite to the socialist/communist/communitarian view. Holds that the best political, social, and/or governmental system is the one that governs least, that provides for the greatest individual liberty, initiative, entrepreneurship, etc. (Most libertarianism is not anarchist because it does believe in some minimal government - a view sometimes called the night-watchman theory of the state.) Advocates minimizing social and governmental power, action, control, regulation, and taxation, and maximizing individual liberty and freedom. Suspicious of the ability of government and bureaucrats to make good (or ethical), wise, informed, and beneficial ethical, social, or economic choices for people. Believes instead that people should be left to judge and choose for themselves and to be masters of their own self-interest and benefit, and that they usually make the best choices when they choose freely for themselves. Tends to regard societal and governmental norms and activity as coercive and totalitarian and as leading to serfdom. Most important recent work: Anarchy, State, and Utopia (1974) by the late Harvard professor Robert Nozick (1938-2002). Some other major figures or works: Austrian economist Ludwig von Mises (1881-1973); F.A.Hayek's The Road to Serfdom (1944; Hayek received the Nobel Prize in economics in 1975); The Wealth of Nations (1776) by Scottish economist Adam Smith (1723-1790) and other forms of lassiez faire economics. The Cato Institute in Washington, DC is

• Virtue Ethics

Most important ancient source: the Nichomachean Ethics of Aristotle (384-322 B.C.) Virtue ethics focuses not on ethical rules or consequences, but on the moral status of the person or agent. The purpose of ethics is to develop the individual's moral/ethical character, or virtues. There are numerous present-day proponents of this. Important 20th Century text: After Virtue, by Alasdair MacIntyre. (1st Ed, 1981, 3rd Ed, 2007).

• Narrow view

Narrow view, espoused by Milton Friedman. Profit maximization. The sole social responsibility of a corporation and corporate managers and officials is to "make as much money for their stockholders as possible" so long as the corporation stays within the rules of the game (i.e. it can't do illegal or unethical things to make that profit). • Profit maximization is that business have no social responsibilities other than to maximize profit. o •What is a fiduciary relationship? • To look after the interest of shareholders. Violated if taken advantage of like when corporate executives enrich themselves with extravagant bonuses and stock options. Narrow view holds that it is managements responsibility to maximize shareholder wealth and this outweighs any other obligation. • •The fiduciary responsibility of corporate officials and managers. o Companies operating under the narrow view can spend money on small towns by helping their schools parks and roads, if it in the self interest of the company. If in the long run helping these people allows the company to profit, Friedman has no issue with it. It should not be a social obligation or responsibility of the company to do these things

• Ethics Based on Religion

Often called the Divine Command Theory of Ethics) For many people, their ethics is based on their religion. In this view, right and wrong, good and evil, just and unjust are determined not (primarily or even at all, depending on the particular view) by human wish, desire, or reason, but by the will or decree(s) of a transcendent deity (God) or deities. This fact, as well as the content of the deity(ies) will and command(s), are known through revelation, sacred scriptures, the rites and rituals of the religion, the pronouncements of the religion's prophets and/or teachers and/or priests, or some combination of those. Examples: The 10 Commandments; religious versions of the Golden Rule; Jewish, Christian, and Islamic notions of ethics based on those religion

• Pragmatic ethics

Pragmatism as a philosophical view or stance rejects unchanging or transcendent principles and views and norms, holding instead that principles and views and norms both are and need to be bent or changed in light of actual events or discoveries or situations. Pragmatic ethics stresses changing situations and knowledge, and holds that ethics should/must change to fit those changes. What has sometimes been called "situation ethics" can be understood as being a form of pragmatic ethics.

9. Know, at least minimally, the contractualist-egalitarian theory of John Rawls, including Rawls's two principles. (S&B pp. 119-127, esp. p. 122)

Rawls theory of justice lies within the social contract tradition . Ask us to image people meeting in original position and what they choose as basic principls that are to govern their society. Although chosen on self interest, they are being a vail of ingnorance with no personal information about themselves. People under these circumstances would endorse two principles of justice. The two principles of justice: o(1)Each person is to have an equal right to the most extensive total system of equal basic liberties compatible with a similar system of liberty for all. o(2)Social and economic inequalities are to satisfy two conditions. First, they are to be attached to positions and offices open to all under conditions of fair equality of opportunity; and second, they are to be to the greatest expected benefit of the least-advantaged members of society. They are principles of justice because they would be agreed to in an initial situation of justice and equality

• Kantian Ethics

and other forms of Deontological Ethics (nonconsequentialist theories). Ethics is based on or primarily concerned with ethical rules. Instead of being based on consequences, these rules are derived from logic, from reasoning, or from the nature of human being as such. An important example or proponent was the German philosopher Immanuel Kant (1724-1804), who introduced the notion of the categorical imperative: 1st version: Always act so that you can consistently will that the maxim of your action become a universal law. 2nd version (1st reformulation): An action is right only if the agent would be willing to be so treated if the position of the parties were reversed. 3rd version (2nd reformulation): One must always act so as to treat other people as ends in themselves, and not just means.

Observational or cultural or descriptive ethical relativism is...?

is a statement (or observation) of the fact that different people, groups, societies, or (especially) cultures do, in fact, have different ethical views, relative to that person, group, or society

. Normative ethical relativism is....?

is the theory that people ought to or should accept the ethical views that their culture actually holds. It is sometimes put, "What they think is right for them, is right for them." It also (usually) claims that no universal ethical standards or norms can or do exist beyond the ethical standards or norms that people (individuals, groups, societies, cultures) actually hold. In other words, normative ethical relativism is a denial of the claim or view that there are or can be universal ethical norms or standards, applying to all people everywhere. (This view can be summarized in the slogans, "What the Romans think is right for them is right for them," or "When in Rome you should do as the Romans do.") Normative ethical relativism is false, however, because we can always ask a question of this form: "X (a person, society, or culture) believes that Y (some ethical view) is good, but is Y really good?"

• Broad view,

o Espoused by most commentators on business ethics. Because of its social power, social role, and social "footprint," in addition to making a profit for its shareholders, a corporation has a larger social responsibility o Companies have other obligations than just profit. Companies have responsibilities to consumers, products, employees, supplies, contractors, etc. o Companies have obligations to not only its stockholders but also to other constituencies that are affected or affect its behavior - that is all parties of interest. o Since companies have great social and economic power they have other responsibilities than just profit. They need to operate in a way that benefits society and thus must take responsibility for the unintended side effects of their business.

: Caveat emptor, caveat venditor, strict product liability. Know why there has been a movement away from caveat emptor to strict product liability.

o •(1) Caveat emptor: Let the buyer beware. Era of patent medicines and outrageously false product claims. Consumer was supposed to be knowledgeable about product but this ended after McPherson vs. Buick Motor case. Basically because unrealistic assumptions about consumer knowledge, competence and behavioral o •(2) Caveat venditor (not discussed in S&B): Let the seller beware. Counter to emptor and suggest seller can also be deceived in a market transaction. Forces seller to o •(3) Strict product liability: The manufacture of a product has legal responsibilities to compensate the user of that product for injures suffered because the product defective condition made it unreasonably dangerous, even though the manufacture has not been negligent in permitting defect to occur. Product must be defective. When to this perspective after Greenman v. Yuba Power Products.

• 6 possible schems or principles for distributing rewards

o •. To each an equal share o •2. To each according to individual need o •3. To each according to personal effort o •4. To each according to social contribution o •5. To each according to merit o •6. Winner take all

7. In consideration of economic (or distributive justice), you should be able to give criteria or accounts of what justice has been held to be: Some proposals or generally held accounts are or include: fairness (John Rawls), equality, rights, and deserts. Know six possible schemes or principles for distributing the rewards of an enterprise, as well as a situation in which each one seems appropriate. (Given and discussed in class, not in Shaw and Barry.)

• 6 possible schems or principles for distributing rewards o •. To each an equal share o •2. To each according to individual need o •3. To each according to personal effort o •4. To each according to social contribution o •5. To each according to merit o •6. Winner take all • What is justice o Justice is fairness o Justice as equality o Getting what one deserves - justice as deserts o Justice and moral/ethical rights • John Rawls Theory of Justice o •An alternative to utilitarianism. "each person possesses an inviolability founded on justice that even the welfare of society as a whole cannot override." [Thus] "the rights secured by justice are not subject to political bargaining or to the calculus of social interests." o •Uses social contract theory, game theory, some Kantian theory, and others. o •Justice as fairness o •The original position: choosing on the basis of self-interest o •The veil of ignorance o •The primary subject of justice is not transactions between individuals, but "the basic structure, the fundamental social institutions and their arrangement into one scheme." Because "the accumulated results of many separate and ostensibly fair agreements ...are likely in the course of time to alter citizens' relationships and opportunities so that the conditions for free and fair agreements no longer hold." o •"Role of institutions that belong to the basic structure is to secure just background conditions...." o •"Unless this structure is appropriately regulated and adjusted, an initially just social process will eventually cease to be just, however free and fair particular transactions may look when viewed by themselves." o Choosing the Principles. Maximizing the minimum

three ethical justifications of capitalism

• Justifications • 1. The natural right to property • 2. Religious justification(s) of private property (e.g. The Ten Commandments) • •3. Adam Smith's concept of the invisible hand o •"Every individual is continually exerting himself to find the most advantageous employment for whatever capital he can command. It is his own advantage, indeed, and not that of the society, which he has in view.... [But] by directing that industry in such a manner as its produce may be of the greatest value, he [is]...led by an invisible hand to promote an end that is no part of his intention.... By pursuing his own interest he frequently promote that of society more effectually than when he really intends to promote it." • •4. Capitalism rewards work, success, making products that please customers, saving and investment, and entrepreneurship. But socialist systems punish all those (through taxation and regulation) and reward and incentivize sloth and failure (i.e. socialism and socialist systems destroy people's incentives and desire to work, produce, please customers, and save and invest

Utilitarianism

• Utilitarianism (a consequentialist theory). Holds that what is good is what produces the greatest happiness (or pleasure or benefit) for the greatest number of people. British legal reformer Jeremy Bentham (1748-1832) was a great proponent of this view. Classic text: Utilitarianism (1863) by John Stuart Mill (1806-1873). Two versions of utilitarianism exist: act utilitarianism and rule utilitarianism. A cost-benefit analysis or procedure is usually some form of utilitarianism in that it involves a calculation of costs and benefits.

the definition of a corporation (S&B p. 200) as well as the main reasons for their formation.

• •"A corporation is a thing that [1] can endure beyond the natural lives of its members and that [2] has incorporators who may sue and be sued as a unit and [3] who are able to consign part of their property to the corporation for [4] ventures of limited liability." (Shaw & Barry, p. 200) Corporations are legal entities with legal rights and responsibilities similar but not identical to those enjoyed by the individual.

10. Know the definition of capitalism (S&B p. 150).

• •According to Shaw & Barry, "Capitalism can be defined ideally as (1) an economic system in which (2) the major portion of production and distribution is in private hands, operating under (3) what is termed a 'profit' or 'market' system." • •Capitalism can be distinguished from socialism, which is (1) "...an economic system characterized by (2) public [social/governmental] ownership of property and (3) a planned economy."