Business and

Economics
Ethics

Session 5

Prof. Marek Hudon

Academic Year 2016-2017

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 Kerviel

http://www.youtube.com/watch?v=Vf06zZi
Kvc0 Until 310
 Virtue Ethics

Pp 126-127: Example of Boesky

Virtue Principle: The morally correct action is the
one that displays good moral virtues (rather than
rules/ rights or consequences), and that does
not display bad moral vices.
Example of lies:
Depends on the outcome for utilitarianism
Always wrong for deontologist
Virtues: What does lying tells about character?
(related to intentions)
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Greed is healthy
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 What it is not

Not the rules, the consequences or the social

context that matter!
Focus more on identity of the actor
Objective of eudaimonia (happiness): the proper
human life, well-being, resulting from achieving
excellence in the fulfillment
Debate: how to define a virtue?
Community, period of time

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Roots of virtues: Artistotle

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 Virtue Ethics

Examples of virtues: compassion,

conscientiousness, cooperativeness, courage,
fairness, generosity, honesty, industriousness,
loyalty, moderation, self-control, self-reliance,
tolerance
But debate on those virtues!
Examples of vices: cowardice (weakness),
treachery, dishonesty, laziness, neglect,
selfishness

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 At work vs. at home

Should I behave similarly at work and at

home? Virtues at home vs. at work?

Strengths at home could be seen as

weakness at work

Differences between role (behave differently

when prof. vs. husband) and virtues
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What must be done on any particular occasion by
a virtuous agent depends on the circumstances,
and these vary so much from one occasion to
another that there is no possibility of stating a
series of rules, however complicated, that
collectively solve every practical problem.
(Kraut, 2010)

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 Rights, care and virtues

Rights: Care:
Individuals entitlement Special relationship
Legal, moral; positive, Question impartiality
negative
Reversability, Virtues:
universability Historical context
Conflicts of right Good virtues, vices
Eudaimonia

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Comparison

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From theoretical frameworks to..

philosophies or religions

On example: Buddhism

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Short introduction to buddhism
 Buddhist Belief and Living Ethics: Challenging
Business Ethics
by Case & Bhrom (2012), in readings

Buddhist ethics entails following a code of virtuous

conduct that settles the mind by eliminating guilty
dreads and preparing it for the subtle task of
meditation.

Suffering due to individuality (e.g. pleasure,

power), alleviated through virtue &meditation

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 Ethics & Buddhism

What, then, does it mean to live ethically according

to Buddhist principles? it depends.

No single course of action (right or wrong) but

being skilful or unskilful!

No rules or commandments, but principles of

training, which are undertaken freely and need to
be put into practice with intelligence and
sensitivity.
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Those undertaking full time training as a
monk or nun are required to observe the
many rules (227 for a monk) from
serious misconduct minor regulations
that govern times of eating, robe length
and so on

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Lay Buddhists, by contrast, agree to abide by five
precepts. These are rules of training to refrain
from: killing or harming living beings, stealing or
taking that which is not given; harmful speech;
sexual misconduct; indulgence in intoxicating drink
or drugs which confuse the mind.
Ethical conduct
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 Right action is not related to a moral absolute but
depends on the circumstance. It promotes non-harming
and compassion.

wrong
speech' would
include lying
(if intention to
deceive,
deception
etc.),
slandering,
Eightfold path harsh speech
and 'frivolous'
talk or gossip
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 From virtue ethics to Buddist ethics

Focus on person with a certain complex mindset

Not related to an action
The resultant of an action (related to notion of
Karma) depends on the intention more than the
action itself.
Buddhist ethics is also humanistic and
personalist.
But Buddhism favors humble character over
Aristotle's "great soul, pride or elitism

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 Buddhist ethics & business

Utilitarianism, deontology or virtue ethics are too

self-centered

Recognition of the interdependence between the

environment and the identities we embody and
express
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Standard Goal to reach
Self interest

Right way to argue

Formal (rigor)
Sincere,
procedural
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Source: Fisher and Lovell, p. 100
 Five Moral Principles

1. Utilitarianism
2. Rights
3. Ethics of Care
4. Virtue Ethics

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Financial crisis: Winners and losers..
 26
VRT
 5. Distributive Justice

Distributive Justice Principle: The morally correct

action is the one that produces a fair distribution
of benefits and costs, good and harm.

Principle: People who are similar in relevant

respects should be treated similarly

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 How to distribute wealth
or burden?

Which criteria should we use?

(5 minutes with your neighbour)

Saturday, October 12, 2013
AFP International Monetary Fund strongly suggests countries tax the rich
to fix deficit

Tax the rich and better target the multinationals: The IMF has set off shockwaves
this week in Washington by suggesting countries fight budget deficits by raising
taxes. Tucked inside a report on public debt, the new tack was mostly eclipsed by
worries about the US budget crisis, but did not escape the notice of experts and
nongovernmental organizations (NGOs). ()
Guardian of financial orthodoxy, the International Monetary Fund, which is holding
its annual meetings with the World Bank this week in the US capital, typically calls
for nations in difficulty to slash public spending to reduce their deficits.
But in its Fiscal Monitor report, subtitled Taxing Times, the Fund advanced the
idea of taxing the highest-income people and their assets to reinforce the
legitimacy of spending cuts and fight against growing income inequalities....
The IMFs Copernican revolution is still in the twilight stage. In its report, the IMF
continued to push for a wider scope for value-added tax (VAT), a tax consumption
tax that some say is inherently unfair, and on reductions in public spending. 29
 Case study: Caltex (3): What else?
Shareholders Managers
resolution
* Activities help
* Break relations Black workers
with SA (income increase, other
government or benefits)

* Leave the country * Withdraw would

endanger them

Who benefits??
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 5. Distributive Justice

Distributive Justice Principle: The morally correct

action is the one that produces a fair distribution
of benefits and costs, good and harm.

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 Distributive Justice (Fairness)

General Fairness Principles:

People who are similar in relevant respects should be
treated similarly
People who differ in relevant respects should be
treated differently

But what characteristics are relevant in deciding

if people are similar? In Caltex: All people from
same region? All workers?

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 How Define Justice (Fairness)?

Two sources: Velasquez and Lamont and Favor (2009)

Theories vary in:
Nature of what is subject to distribution
(income, wealth etc.)
Nature of the subjects of distribution
(individual, group of individuals, reference
classes)
On which basis the distribution should be done
(equality, free transaction etc.)

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 How to Define Justice (Fairness)?

1. (Strict) Egalitarianism:
Standard: people need same level of respect
equal benefits and burdens; same level of
material goods and services
Elaborations: political equality or economic
equality

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 Criticisms:
Moral: Needs, ability differ; unequal in
many respects;
 Technical : Timing (when); Index
problem (how to measure) Solution:
bundle of goods or money

Welfare: May not be the best for very poor

Difference principles
 How to Define Justice (Fairness)?

2. Welfare:

Premise: Final welfare (output) is central.

Welfare functions to maximize (Utilitarian is

derivative)
 Resource, welfare and desert-based

3. Resources (Dworkin):

Premise: Responsible for

outcome of our act
Distribution principle:
Same level of resources

No pattern of outcome (only input)

Why subsidizing less efficiency with same
resource?
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4. Desert: Emphasis on responsibility, creativity:
Historically related to Locke

Contribution (capitalism by
Velasquez) to social product

Effort

Compensation: cost they

incurred
 5. Libertarianism:
Standards:

Free choice ;

All constraints imposed by

others are evil

Just when seperate just actions

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 Libertarian: Nozick

Justice in (1) acquisition and (2)

transfer (fair contracts)

Entitlement theory:
Object taxation (or any
imposed redistribution)
(1)
(2)
Voluntary

Not Leave enough and

previously as god or nobody
own worse-off/ (Lockean From each as they
provisio) choose, each as they are
chosen
 6. Rawls two principles

US Professor at Harvard University (MIT, Cornell)

World War 2: Lost his faith
Stood against Vietnam war (1960s).
Wanted to understand failure of US political
system, why it was an unjust war
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 Rawls Theory of Justice (1971):
Most influential essay on (social) justice:
1. Each person has an equal claim to a fully adequate
scheme of equal basic rights and liberties, (those liberties,
are to be guaranteed their fair value)

liberty of conscience

freedom of association,

freedom of speech and liberty of the person,

the rights to vote, to hold public office, to be

treated in accordance with the rule of law etc.
2. Social and economic inequalities are to satisfy
two conditions:
(a) They are to be attached to positions and offices
open to all under conditions of fair equality of
opportunity; and
(b), they are to be to the greatest benefit of the
least advantaged members of society
Distributive principle

Rawls is still very influential today, See De Gucht

speech in VU (mandatory reading)
 The case for equality

http://www.youtube.com/watch?v=cZ7LzE3u7Bw
 Criticism or questions to Rawls

Which level of inequality will be accepted?

Rawls is not interested in relative position but
absolute value

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 GENERAL WELFARE
Utilitarianism
JUSTICE
Will the act lead to a
fair distribution of Who benefits from
benefits and burdens? the act? Who are
If it will cause burdened? Does the
inequality, will it act maximize the
improve the situation total net benefit to
of the least advantaged everyone concerned
persons? (stakeholders)?
RIGHTS

Does the act respect the CARE

moral rights of everyone
concerned? Does it treat
everyone as persons and Does the act show
not merely as things? proper care to people
we have special
relationships with?
VIRTUE Will the act help me Will it earn the trust of
develop my character? people we value?
Will it make me a better
person?
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Business Ethics by Manuel Velasquez
 Velasquez: Apply All 5 Moral Principles

If all 5 principles reach the same conclusion,

then thats the moral judgment
But if there appears to be conflict among the
principles:
Examine the nature of the apparent conflict: can you
think of a different course of action that would satisfy
all 5 principles?
If not, set priorities among the principles.
Example: the ends never justify the means

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