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Is an economic system in which the major portion of the production and distribution is in private hands, operating under a profit or market system.
Existence of Companies
Legal fiction of a company's 'personhood'.
Has prescribed rights and legal obligations (may enter into contracts and be sued).
Limited liability - company owners are at risk only to the extent of their investment.
The life-blood of a capitalist society.
Assumes that humans are by nature acquisitive and, if left to their own devices, will instinctively pursue profit.
The invisible hand ensures that optimum prices are achieved.
Capitalism as a socioeconomic system is a specific form of private property.
Requires private ownership of the major means of production and distribution.
Private hands hold the basic economic assets (productive resources and the major economic decisions are made by individuals or groups acting on their own in pursuit of profit).
Key Features of Capitalism
Existence of Companies.
Criticisms of Capitalism
Inequality (A minority control the vast majority of a country's productive assets).
Capitalism breeds oligopolies (Economies have become dominated by a relatively small number of enormous companies - that can potentially conspire to set prices, eliminate competition and monopolise industries).
Competition is not a good (competition is neither desirable or beneficial of itself).
Potential for exploitation and alienation (capitalists make profit through exploiting labourers).
Is a Corporation Morally Responsible?
Yes - Corporations enjoy the same rights as a person so should bear the same responsibilities.
Yes - Abrogating responsibility could lead to corporations doing whatever they want.
No - A corporation is not a person and cannot be held accountable in the same way that a person can.
Narrow - Profit Maximisation
By allowing the market to operate with only the minimal restrictions necessary to prevent fraud and force, society will maximise its overall economic well-being.
Business have no social responsibilities other than to maximise profits (Friedman).
To maximise profits, anything goes, as long as it's legal.
The Invisible Hand - Narrow
For - In a free market, forces of supply and demand would facilitate optimum prices. Smith called these forces ‘the invisible hand’ since it appeared as if an unseen force was moving supply and prices to a level that was beneficial for all.
Against - The business of today is very different to that of Smith's time.
Against - Corporations today yield a vast amount of power, and that power renders any exchanges between the corporation and its consumers unequal.
Let Government Do It - Narrow
The invisible hand argument relies on everyone striving for his/her own self-interest.
The let government do it argument recognises that not all interests may be enhanced in a world where people are naturally selfish and acquisitive.
For - Government intervention (laws, incentives) is needed to ensure that business does not abuse its power.
Against - The government may not be effective stewards of our best interests.
Corporations Lack Ethics Expertise - Narrow
For - Managers are not experienced in matters of morality; to expect them to be socially responsible is unreasonable and unrealistic.
Against - Individuals are expected to live according to moral conventions and if ordinary people are expected to act morally outside of their normal area of expertise, then business leaders should do the same.
Against - Corporations have the resources to tackle ethical problems that others cannot.
Against - As more universities incorporate ethics subjects into their curricula, business professionals will become more knowledgeable about ethical decision making.
Corporations Will Impose Their Values on Society - Narrow
For - If corporations were responsible for matters other than profit maximisation, they would be in a position to influence us in a manner which may lead to the materialisation of society .
Against - Corporations already impose their values on us by means of such tools as advertising.
Business and markets must not be left to run unregulated by government but must meet some moral minimum.
Social responsibility must be consistent with the earning of a satisfactory level of profit.
Corporations as Humans in Law - Broad
For - Since corporations are given many of the rights afforded to humans, and the legal fiction of ‘personhood’, they should bear the commensurate responsibilities.
Against - Corporations are not the same as people and cannot be held to account in the same way.
Corporations Yield Power - Broad
For - Their operations affect stakeholders both negatively and beneficially, so they have a responsibility to ensure that stakeholders are not harmed by business operations.
Against - The only obligation business has it to its stakeholders.
Social Views - Broad
For - Since society allows businesses to operate, and to use ‘free’ resources such as clean air and water, business has a responsibility not to harm society.
For - Corporations are human creations that are meant to serve human needs.
Against - The only obligation business has is to its stakeholders.
Rival Principles of Economic Distribution
To each an equal share.
To each according to individual need.
To each according to personal effort.
To each according to social contribution.
To each according to merit.
Libertarianism (Nozick's Entitlement Theory)
1 - Individuals are entitled to their assets providing they acquired them fairly.
2 - Individuals who acquire assets via a legitimate transfer, are entitled to those assets.
3 - No-one is entitled to any assets except by (repeated) applications of these rules.
Providing that individuals acquire their goods via 'fair' means, they have no obligation to assist others.
There is no consideration of consequences, nor deserts, and no regard paid to what the distribution of goods looks like.
Just Society - Rawls
We all have equal right to the most extensive total system of equal basic liberties compatible with a similar system of liberty for all.
- Social and economic inequalities are justifiable only when they are
- - attached to positions and offices open to all.
- - to be of the greatest expected benefit to those who are the least advantaged.