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Business Ethics

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Alex Bernier Morality in Business
Exam #1 October 4, 2011

2. In the article, “Calculating Consequences,” the authors discuss utilitarianism and the major problems with utilitarian calculations. What is utilitarianism and what are the major problems? In the article, "Calculating Consequences," the authors discuss the major problems with utilitarian calculations. Utilitarianism is an approach to ethics first developed by Jeremy Bentham during the eighteenth and nineteenth centuries. This approach to ethics uses a straightforward manner where the decision that is made should be the one that has been deemed to have the best outcome after looking at all courses of action. Basically, utilitarianism focuses on, “The greatest good for the greatest number” (Calculating Consequences par. 5). According to the authors, there are three major problems with utilitarianism. First, utilitarian calculation “requires that we assign values to the benefits and harms resulting from our actions and compare them with the benefits and harms that might result from other actions” (Calculating Consequences par. 8). The problem lies in the fact that it may be extremely difficult or seemingly impossible to assign these benefits and harms on the outcome of our actions. The authors for example state, “How do we go about assigning a value to life or to art” (Calculating Consequences par. 8). For something that is so important to all people such as life how can there possibly be a value attached to it. The second main problem that the authors state is that utilitarianism does not take any consideration of justice into account when making decisions. The authors note that although some action may produce the best outcome for society it may be an unjust action. “During the apartheid regime in South Africa in the last century, South African whites, for example, sometimes claimed that all South Africans--including blacks--were better off under white rule” (Calculating Consequences par. 9). Just because the white South Africans thought white rule was of the most benefit for society, it was extremely unjust towards all other South Africans. The third main problem with utilitarianism is that we can not anticipate all the outcomes of a certain course of action, therefore we can never be completely sure that we will achieve the greatest good for the greatest number.

3. In the article, “The Common Good,” the authors discuss the common good and the major obstacles that prevent us from maintaining the common good. What is the common good and what are the major obstacles to maintaining it? In the article, “Common Good,” the authors discuss obstacles that prevent us from maintaining the common good. Common good is, “Certain general conditions that are...equally to everyones advantage” (Common Good par. 3). In todays society, the Common Good is more seen through social systems that benefit all people such as public health systems that are accessible and affordable, public safety systems and a just and legal political system. According to the authors there are four major obstacles that hinder us as a diverse society from achieving common good. First, “Different people have different ideas about what is worthwhile or what constitutes ‘the good life for human beings’” (Common Good par. 6). As a society it would be impossible for all of us to agree on what we all value. The problem with having a diverse society is that diversity undercuts the possibility of maintaining the Common Good. (Common Good) The second problem that is encountered in the efforts of the Common gGood is what the authors call the “Free rider problem” (Common Good par. 8). Common good effects all people and benefits them, even those that don't put forth their fair share. If too many people become free riders the common good which depends on their support risks being destroyed. A “Free Rider” is someone that has no contribution towards the Common Good, but still is able to benefit from the outcome. “Many observers believe that this is exactly what has happened to many of our common goods, such as the environment or education, where the reluctance of all person to support efforts to maintain the health of these systems has led to their virtual collapse” (Common Good par. 8). The third main problem in the approach to the common good is individualism. The authors note that, “In this individualistic culture it is difficult, perhaps impossible, to convince people that they should sacrifice some of their freedom, some of their personal goals, and some of their self-interest, for the sake of the ‘common good’”(Common Good par. 9). In our society people would rather benefit themselves than sacrifice a little in order to achieve common good. The fourth and last obstacle in achieving common good that the authors mention is that in order to achieve common good some people or groups may bear costs that are much greater than others. One great example that the authors use is, “Making the health system affordable and accessible to all may require that insurers accept lower premiums, that physicians accept lower salaries, or that those with particularly costly diseases or conditions forego the medical treatment on which their live depend” (Common Good par. 10). In our society making some people or groups take burdens that others don’t have to face can easily be seen as unjust and lead to diminishing attempts of establishing common good.

4. In the article, “Justice and Fairness," the authors discuss the nature of justice. How do they define justice? According to Aristotle, what basic principle is required for justice to be realized? Using concrete examples, summarize the meaning of the principle’s two components. In the article, “Justice and Fairness," the authors discuss the nature of justice. They define justice as, “Giving each person what he or she deserves or, in more traditional terms, giving each person his or her due” (Justice and Fairness par. 4). Justice is often associated with rights and rightness for the individual. Their are two principals articulated in the work of Aristotle that are required for justice to be realized. First is that, "Individuals should be treated the same, unless they differ in ways that are relevant to the situation in which they are involved” (Justice and Fairness par.6). All individuals are to be treated as equals and no one person should be favored over another, which is the foundation of justice. Second is that, “there are also criteria that we believe are not justifiable grounds for giving people different treatment” (Justice and Fairness par. 8). Some situations and individuals require different or special treatment, “we generally hold that it is unjust to give individuals special treatment on the basis of age, sex, race, or their religious preferences” (Justice and Fairness par. 9).

5. In the article, “Rights,” the authors discuss the nature of rights and the different kinds of rights. According to the authors, what is a right? Summarize the two different kinds of rights. Referencing Kant’s work on respect, how are rights justified? That is to say, what legitimate reasons does Kant give to claim human beings are entitled to rights? In the article, “Rights,” the authors discuss the nature of rights and the different kinds of rights. According to the authors, a right is, “A justified claim on others” (Rights par. 2). Rights are the fundamentals of society and as society grows changes and evolves so do our rights. We have two different types of rights, negative and positive. A Negative right is, “a claim by one person that imposes a "negative" duty on all others—the duty not to interfere with a person's activities in a certain area” (Rights par. 5). For example, the right to life imposes the duty on us not to kill. Positive rights, “are positive in the sense that they claim for each person the positive assistance of others in fulfilling basic constituents of human well-being like health and education” (Rights par. 6). Positive rights provide what people need to secure their wellbeing in life, some examples include, “right to an education, the right to food, the right to medical care, the right to housing, or the right to a job” (Rights par. 7) all these right help the individual secure their well-being. According to Kant, rights are justified through maintaining our own worth and our own dignity and that it must be respected (Rights). Kant was able to express this idea in a moral principal, “humanity must always be treated as an end, not merely as a means. To treat a person as a mere means is to use a person to advance one's own interest, but to treat a person as an end is to respect that person's dignity by allowing each the freedom to choose for himself or herself” (Rights par. 6).

Adam Smith is noted for his “invisible hand argument.” Summarize the basic argument. Referencing Jerry Evensky’s article on Smith’s “Theory of Moral Sentiments,” why is self-interest an inadequate standard for a free market?

Adam Smith is noted for his “invisible hand argument.” The basic principal behind the invisible hand argument is that, “Trading in the marketplace is an instance of mutually advantageous cooperation. In a voluntary trade, both parties to the transaction believe themselves to be better off (or at least not worse off) than they were before they agreed to the trade. The assumption here is that no one willingly consents to be worse off” (MacCammon Syllabus). Buyers and sellers both enter a marketplace to peruse the greatest benefit for themselves. The each have something that the other wants. The buyer has the money that the seller is looking to make, were the seller has the product, service or information that the buyer wants. Together they can mutually agree upon the terms of the exchange to make themselves better off than they were with out one another. The transaction between buyers and sellers according to Smith is such that, “Buyers seeking to purchase needed goods and services at the lowest possible prices force sellers to compete with one another by making the most efficient use of the available resources and keeping prices at the lowest possible level” (Syllabus). The resulting benefit to society is only through self interest, not through the concern of well-being of others. “According to economic theorists, in a free market, individuals will continue to trade up to a point of equilibrium where no further mutually advantageous trades are possible. Thus, a free trade system seeks profit through means of production that result in maximum efficiency and sustainable growth.” (Syllabus) According to Jerry Evensky’s article on Smith’s “Theory of Moral Sentiments,” self-interest is an adequate standard for a free market because self-interest is what drives humankind towards the prospect of happiness. As Adam Smith states, “He will be more likely to prevail if he can interest their self-love in his favor, and show them that it is for their own advantage to do for him what he requires of them” (Syllabus). By having self-interest as a standard in a free market each person is able to make his/her own decision that will pose the greatest benefit to themselves. As stated in Smith’s The Wealth of Nations, “led by an invisible hand to promote an end which was no part of his intention… Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it” (Syllabus). This famous quote describes how through the desire to benefit ones self that overall society may benefit as well.

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