Download Week 3 Lecture Capitalism and Corporations

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• Political and economic system
– Ownership of means of
production in private hands
• Individual or companies
– Goods and services exchanged via
market economy
• Persons assumed to be primarily
– Self-interested and acquisitive
Other Political/Economic
• Socialism
– State: ownership of means of
production in state hands.
– Worker: workers own the means
of production.
• State capitalism
– State owns some or all of the
means of production.
– State influences production and
distribution, e.g. state investment.
Arguments for
• Defended in terms of
– Efficiency: better able to satisfy
human needs and desires than
other systems.
– Rights:
• Liberty: to do what I want as long as
I don’t harm others.
• Property: to own things that I create
with my labor or fairly exchange
with others.
Core Values
• Liberty
• Right to property
• Trust
– Honesty
– Informed consent
Adam Smith
• Core values:
– “(upon) the duties of justice, of
truth, of chastity, of
fidelity…depends the very
existence of human society, which
would crumble into nothing if
mankind were not generally
impressed with a reverence for
those important rules of
Moral Constraints:
Adam Smith
• Concern for others:
– “The wise and virtuous man is at
all times willing that his own
private interest should be
sacrificed to the public interest of
his own particular order or
• Trust:
– “Humanity does not desire to be
great, but to be beloved. It is not
in being rich that truth and justice
would rejoice, but in being trusted
and believed…”
Adam Smith
• Morality trumps self-interest:
– “reason, principle, conscience…It
is he who, whenever we are about
to act so as to affect the happiness
of others, calls to us…that we are
but one of the multitude, in no
respect better than any other in it;
and that when we prefer ourselves
so shamefully and so blindly to
others, we become the proper
objects of resentment, abhorrence,
and execration.”
Limits on right to
property: John Locke
• Lockean proviso: As long as
“enough and as good is left for
Limits of Capitalism
• It cannot provide public goods.
• Temptation to think that profit
is the only goal or most
important goal for humans.
• It is indifferent to the justice of
the distribution of goods and
• Companies can become more
powerful than countries.
Critiques of Capitalism
• It leads to poverty and
• It prioritizes material goods
over less tangible ones (e.g.
ethical and spiritual goods).
• If unchecked, it leads to
• If unchecked, it leads to
environmental degradation.
• Workers are alienated and
economically insecure.
• Limited liability and long life
• Publically held versus private
• For-profit versus non profit
– For-profit-- management has a
fiduciary obligation to prioritize
profit, within limits.
– Non-profit--general obligation to
further corporate goals within
• B corporations
– Managers are required to take
actions that are good for society.
Are corporations
• Moral agency versus moral
– Agency implies responsibility.
– Personhood implies a duty of
respect and/or care.
• What are human persons
entitled to?
• Are corporate persons entitled
to the same things as human