PHI 214 Final

What is exploitation? What conditions make working conditions a matter or exploitation? Do you think the video on Fast Foods workers, along with the video on the Exploitation of Labor by American corporations, makes a convincing case that this is exploitation? Why or why not? If workers in Latin America are not being physically forced to work under such conditions is there anything morally wrong with an employer not paying more or making working conditions less harsh? According to Ciulla, why is such treatment of workers immoral? Explain your view of the morality taking advantage of poor economic conditions to minimize the costs of manufacturing; use some general moral principle to justify your view.

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Why does Von Hayek think that attempts of force people to abide by conceptions held by certain groups in society violates the principles of a free society? What kind of society does von Hayek seem to believe makes a modern "Great Society"? Explain why he believes that the pursuit of self interest by groups does serve the general welfare, although he believes that the pursuit of self interest by individuals does so. Based on the video we watched with Milton Friedman, and class discussion, do you believe that different professional groups, such as doctors, have used the law to primarily benefit themselves? Explain your answer.

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According to Adam Smith, what are the causes of the desire of people for an open market economy? What the advantages of such an economy? Why is liberty so important to a society's economic welfare according to this view? Why does such an economic system need to presuppose the existence of generally moral behavior? Do you find that Smith's reasoning makes sense? Do you think a free market economy would be beneficial to society even if ethical values were often ignored? Explain your answer?

According to Adam Smith a free market economy develops from people's natural desire to barter and from the natural diversity of talents that allows each person to develop skills that are useful to others. Having a free market allows for people to choose the talents they want to develop and then to use those talents to help others. Liberty is important because without liberty people would not be able to choose what talents they wish to develop which would then throw off the whole idea of a free market economy. This kind of economic system needs to presuppose the existence of generally moral behavior because without moral behavior overall well being for society would not be possible. I find that Smith's reasoning does make sense; however, his view about human nature is naive. He expects that people are driven by the want to help others, but people are more driven by the want to hop themselves. Which is why ethical values cannot be ignored in order for a free market economy to survive. A free market economy allows for people to choose the talents they want to develop and then to help people with those talents. However, people in today's society chose to maximize their own well being over society's. Which is why ethical values are necessary so that people think about others and not just their own well being.

According to Boatright, what makes trading practices unfair, especially concerning the possession of, and access to, different amounts of information in financial markets? What potential problems in financial contracting and management are the ethical concepts of agency and fiduciary supposed to help solve, both in terms of ethical expectations and law. What is the different between stockholders and stakeholders in a business? Explain whose interests you believe a financial manager, or board of directors, SHOULD have a FIDUCIARY duty to protect, and why.

According to Boatright information asymmetry makes trading practices unfair. Information asymmetry happens when a person has more information than another person. This can occur from the training and/or job that the first person has that the second does not. Fiduciary is entrusting something of value to another. Agency is relying on the specialized knowledge of another. These two ethical concepts are supposed to help solve problems with ethical expectations because they level the playing field for people who do not have the knowledge or the access to information. These concepts help solve problems related to law because they keep the people who do have the knowledge or access from cheating the system by lying. A stockholder is a stakeholder, but a stakeholder is not a stockholder. Stockholders have ownership in the company or business; whereas, the stakeholders are people who are affected by the company either directly (ie employees) or indirectly (ie people living near a factory). A financial manager or board of directors should have a fiduciary duty to protect the stockholders. While protecting stakeholders is important, the financial managers should protect the money that has been entrusted to them-same with a board of directors. The stockholders put their money in the company and so the financial managers should protect that money therefore, protect the people behind the money.

According to Glaucon in Plato's "Ring of Gyges" story, what really motivated people to say they want a society ruled by principles of justice? Briefly summarize the story of Gyges. According to Glaucon, how would a just person behave if he had such a ring? What is this supposed to show about human nature and our desire for justice? Based on class lectures, what was Plato's suggestion in "The Laws" about what the economic distributions of a just society look like? Why did Plato think this was necessary?

According to Glaucon in Plato's "Ring of Gyges" story people are motivated by the fear of being treated unjustly to say they want a society ruled by principles of justice. In the story of Gyges, a just man and an unjust man are given rings that allow them to be invisible. In the story the unjust and just man both act unjustly when wearing the ring. According to Glaucon, a just person would behave unjustly if they had such a ring, like the just man in the story. This story shows that it is human nature to act just when in public, but to act unjustly when in secret. Which shows that our desire for justice is really just a desire to not be cheated. Based on our lectures, Plato's suggestion in the "The Laws" was to have a 4:1 ratio of economic distribution. So that the richest was only 4 times more rich than the poorest. Plato thought this was necessary because he wanted people to keep the mentality of being one or as a public unity. Which he believed would only be achieved through government.

According to Kristol, what is wrong with the claims of those who criticize capitalism on the grounds of "social justice"? Explain Kristol's claim that Adam Smith thought capitalism would result in some benefit for everyone. According to Kristol, what happened to capitalist theory that undercut Smith's optimistic claims for capitalism? Are there other reasons why capitalism today does not seem to operate in the way Smith envisioned? According to Kristol, what is the method used by supporters of social justice to change what they see as the evils of capitalism, and why is this contrary to traditional political liberalism?

According to Kristol the claims of those who criticize capitalism on the grounds of "social justice" created the term simply to not be compatible with capitalism. He says that capitalism has an idea of justice so critics invented the term to argue a different concept of society. Kristol claims that Adam Smith thought capitalism would result some benefit for everyone because it offers equal opportunity for all. Also Smith believed that humans are social beings and so they will help those who are less fortunate around them. However today ideas like Social Darwinism which is basically the idea that the richest will survive but the poorest will not. According to Kristol, the methods used by supporters of social justice use the government as a way to change the evils they see in capitalism. This is contrary to traditional political liberalism because government control leads to less prosperity and liberalism wants increase prosperity.

According to Loomis, and the videos we watched, what is the fundamental problem for ethical accounting practices with the contemporary "earnings-management" culture? Why does this problem arise? Use examples from the videos we watched about Enron, Worldcom, Arthur Anderson, and Auditing Ethics, in addition to Loomis, to summarize any two of the causes of so many problems with financial accounting practices. Explain why you either agree or disagree with Loomis that these practices violate serious duties in business accounting.

According to Loomis the fundamental problem for ethical accounting practices with the contemporary "earnings-management" culture is that it can lead to decisions that keep a company's investors in the dark about the health of that company. This problem arises because of the "cult of consistent earnings." This means that a company's executives will find different ways to make their company seem more healthy by earning a consistent amount of money or increasing the amount they are earning over time. In the video we watched about Arthur Anderson we saw learned how the company decided to value profits over being honesty. They omitted important financial information when auditing the Enron Corporation. The omission of financial data from Enron is an example of abuse of materiality. However, Worldcom used revenue recognition to lie to their investors. Worldcom chose to report expenses as capital which made their company seem more healthy than it actually was. These two causes of ethical accounting problems are mentioned in a list by Loomis. This list includes "cookie jar" reserves (putting revenue away for another day), "big bath" reconstruction (hiding regular expenses in a big one time expense), and acquisition accounting (hiding regular expenses in expenses that come with acquiring something). I agree with Loomis that these practices violate serious duties in business accounting because lying about what your company is worth hurts investors since they are putting their money in your company. Hurting investors hurts our economy because the investors help create a strong economy.

Case 4.4 "The Auditor's Dilemma": Briefly summarize the facts of this case. What are the moral principles or duties that seem to be in conflict here that make this a dilemma for the auditor? Granted the specific facts presented in the case, do you believe that the department heads are doing anything seriously wrong or not, and why? Explain what moral principles or duties you believe should be considered by the auditor, and what you believe she ought to do.

In this case the internal auditor discovers that one division of the company (at least one of the divisions) was not stating expenses when in the period they were spent because the bonuses for meeting quotas were a large part of the overall compensation for department heads. On the other hand, if they don't meet quota it is basically a career ender. Plus the department heads did not want to exceed their quotas because then they would be given an even higher quota. This is a dilemma for the auditor because according to the group that she belongs to she should not be apart of improper activity. I think the department heads are doing something seriously wrong because the heads are finding ways to cheat the system. I think that the auditor should tell the heads that she knows what they are up to and that they should not be cheating the system that way. Mainly because if a serious issue does happen and the company does begin to go under, they will not know until it's too late to actually save the company. If the heads don't listen then she should consider reporting it to the company leaders.

Why does Jennifer Moore reject fairness and harm as adequate justifications for the conclusion that ALL insider trading is unethical and this is correctly punish by law? What concept does she believe explains the reasonableness of such a strict ban on all insider trading? What does this concept protect? Explain why you believe her evaluation makes sense or not. Who do you believe should rightly be considered an "insider" and thus subject to such restrictions on their ability to use information to their own advantage?

Moore rejects fairness and harm as adequate justifications because she says that it is not realistic. She says that there will always be unequal information due to some people being able to have information because of their job or the training they've had. As for harm she says that insider trading can help investors to sell their stocks if they stock orders before everyone else sells their stocks. This would keep the market from completely crashing at once. Fiduciary is the concept that she believes explains such a strict ban on all cases of insider trading. She believes this because it is a relationship that requires trust and dependence. A fiduciary relationship is supposed to protect the client. I believe her evaluation is makes sense except for when she talks about harm. I think that insider trading can protect the investors not within the company because it can force information to get to the market faster to help investors make decisions. I believe that the people who work for a company and who know what they're company is doing should be subject to restrictions on how they use their information. I think this because if they have information they can use, they should report it immediately and those investors who are paying attention can then use that information to make smart decisions.

What are the "original position" and the "veil of ignorance" in Rawls description of economic justice? What do we know behind this veil, and what do we not know? What is the "maximin rule" that Rawls believes would guide people's choices of an economic system and why does Rawls say this would be a rational principle to accept in the original position? In your own words, explain the content of the two principles Rawls thinks we would choose in the original position. What values does each principle stress? Do you find Rawls' claims about the values of a just economy convincing or not? Explain your answer.

The "original position" corresponds to the state of nature in the social contract theory. Which means that people are motivated by self interest, have concern for basic political rights, and do not know their own economic or social position in a new society. The "veil of ignorance is an extension of the original position since it is about individuals not knowing their personal social position, talents, interests, if any other information about that person's personal situation in the new society. However, the individual does know about economic history and general human psychology. The "maximin rule" is about maximizing the minimum in this new society. Rawls says this would be rational to accept in the new society because even though distribution of wealth is unequal, to be able to hold a position that makes more money is equal.

What are the basic principles for just ownership in Nozick's "entitlement theory" of justice? What methods of obtaining property does each of the first two principles cover? What does his third principle reveal about any claims about the right of poor people to goods now held by others as a matter of justice? Describe the Wilt Chamber lain story used by Nozick to illustrate libertarian justice. What kind of liberty do libertarians stress? How does Nozick explain why we need limits on the principles of acquisition and transfer. Explain why you find Nozick's arguments convincing or not regarding the definition of a just economic system.

The basic principles for just ownership in Nozick's "entitlement theory" are: acquisition and transfer. The principle of acquisition involved gaining rights to property on one's own. The principle of transfer is voluntary transferring property either for something you want it because someone gives you property. Nozick's third principle eliminated the poor's claim to property. Nozick shows how liberty upsets any present pattern of economic distribution through the use of a Wilt Chamberlain story. In the story, Nozick talks about if Chamberlain get a certain amount of each ticket price then people are paying to see him and are willingly paying to see him play. The people are willing to pay to watch him rather than pay to watch a movie or pay for food or something else. Therefore, Chamberlain is showing how transactions conducted by free choice can lead to a just dispersion of wealth. Libertarians stress the negative liberty, or the idea of freedom from, not freedom for. Nozick explains that we need limits on the principles of acquisition and transfer because people are only entitled to property, they do not deserve property. Since people can only be entitled to property, rather than deserve, there is a limit on the acquisition of natural resources and a limit on the amount of goods that can be transferred. I find Nozick's arguments regarding the definition of a just economic system not convincing because putting the focus on individual rights is just opening the door to people ignoring the needs of those less fortunate. Since he says that the only thee ways to property is to essentially invent property, be given, or trade for property he ignores those who don't know how to create property, will never be given, or can't afford property.