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5
Winter 2015
ch 4 cases
pick 1• The Downsizing of America
• Hucksters in the Classroom
• Licensing & Laissez Faire
• An Internet Parasite
• One Nation Under Wal-Mart
• A New Work Ethic?
• Casino Gambling on Wall Street
ch 4 articles
pick 1• Buddhist Economics
• Markets and the Role of Ethics in Capitalism
• The Great Non-Debate over International Sweatshops
a.k.a.: In Defense of Internaional Sweatshops
• Globalization and Its Discontents
Cases
groups decide today meet this week pick case from either ch 4, ch 5 or ch 6
• 1st choice
• 2nd choice
Cases
ch 5 Exxon asbestos infant formula Levi Strauss Nike – Free Speech or
False Advertising? Charity to Scouts? Yahoo in China Drug Dilemmas
ch 6 Burger Beefs Breast Implants Hot Coffee at McDonalds Sniffing Glue Could Snuff Profits Closing the Deal The Rise and Fall of Four Loko AIDS in workplace web porn at work malt liquor 2nd hand smoke union discrimination
ch 4 text
your thoughts?
ch 4 text
the nature of capitalism not modern corporations
next week
• capitalism can exist w/o modern corporations (OK, well, sort-of)
Capitalism
definition
“the major portion of production and distribution is in private hands”
“a profit or market system”
owners decide
assets accrue• surpluses dispersed to owners
Capitalism
key features companies profit motive competition private property
• use
• investing money
• disposal
assumptions
Capitalism
Haslet’s key features what’s produced market price production “enticed”
people’s “dollar votes”
“to each according to their productivity”
Capitalism
major historical stages pre
• guilds
• breakdown
capitalisms• mercantile
• industrial
• financial
• welfare
• consumer
• debt
• ?
Capitalism
moral justifications1. the right to property
2. the “invisible hand”
people tend to assume their society is
• natural
• effective
• fair
Capitalism
moral justifications1. the right to property
not a utilitarian argument
Locke “when people mix their labour with the natural
world, they are entitled to the results”
Capitalism
moral justifications1. the right to property
• misunderstood
• complex
• constructed
Capitalism
moral justifications1. the right to property
2. the “invisible hand”
“Every individual is continually exerting himself to find the most advantageous employment for whatever capital he can command.”
Smith
Capitalism
moral justifications1. the right to property
2. the “invisible hand”
“By pursuing his own interest he frequently promotes that of society more effectually than when he intends to promote it.”
Smith
“the law of unintended consequences”
Capitalism
moral justifications1. the right to property
2. the “invisible hand”
3. lifts billions of people out of poverty
2000 Years of GDP per Capita$6,000
$5,000
$4,000
$3,000
$2,000
$1,000
$0
source: Angus Maddison, 1990 dollars0 500 1000 1500 2000
world
India
China
Japan
Nigeria
Canada
$0
1820
1840
1860
1880
1900
1920
1940
1960
1980
2000
$2,000
$4,000
$6,000
$8,000
% living on less than $2/day
World Bank World Development Indicators http://data.worldbank.org/data-catalog/world-development-indicators
0%
25%
50%
75%
100%
1980 1990 2000
India
China
Nigeria
BrazilMexico
% li
ving
on
less
than
$2/
day
“Wealth” and “Happiness”
Criticisms of Capitalism
persistence of • inequality
• poverty
rise of oligopolies implicit view of human
nature shortcomings of
competition
employee’s• alienation
• exploitation
productivity short term focus manufacturing decline attitudes towards work
ch 5 articles
Cassidy The Greed Cycle
Orlando Ethics of Corporate Downsizing
De George Ethical Dilemmas for Multinational Enterprise
Camenish Business Ethics: On Getting to the Heart of the Matter
The Greed Cycle
interesting Adam Smith quote “Negligence and profusion, therefore, must
always prevail, more or less, in the management of the affairs of such a company [in which the owners aren’t also the managers].”
The Greed Cycle
a pretty good blow-by-blow repeat of the 1920’s cycle “corporate raiders” became +
• as if pirates became the navy
rewards & punishment• truth, lies & spin
The Greed Cycle
role of politics & accounting options accounting dodges
• recording dubious revenue
• not recording liabilities
• shifting revenues or expenses through time between capital and operating
The Greed Cycle
the focus on shareholder value no discussion of what “value” is
• becomes = to current stock price
The Greed Cycle
“impersonal” forces supposedly driven to actions
• focus on motives = exoneration
Corporate Downsizing
? moral primacy of shareholder risk $ vs. time
Corporate Downsizing
fiduciary duties not same in all situations not absolute “unstated contracts”
• who decides what they are?
• which has primacy?
• how are they changed?
• what if parties unequal?
Corporate Downsizing
ownership ?=? investment investors expect ethical behaviour?
Corporate Downsizing
utilitarian does it really benefit company? should this be the only consideration?
Corporate Downsizing
legitimate? survival of firm if uncontrollable, result can’t be fair actual situations owner’s risk
Corporate Downsizing
investors expect ethical behaviour is this expectation voluntary? obligations of agents
• responsibilities of principles
agentprinciple
Business Ethics: On Getting to the Heart of the Matter
Heart of the Matter
not specific to business constraints “charitable” responsibilities
Heart of the Matter
what does business actually do? provision goods & services profit
Camenisch asserts: moral of provision > moral profits
• Are they really goods?
• Are they really services?
Heart of the Matter
business as custodian natural resources
Heart of the Matter
business as dominator culture freedom creativity individuality
Heart of the Matter
Camenisch limits business only to
• provision of goods & services
• creation of profits
Heart of the Matter
Camenisch ignores
• work
• communal activity
• creativity
• passing on to children
• saving/borrowing
• generator of social wealth
• potential of support for the poor
• brake against war
Heart of the Matter
Camenisch ignores
• debt
