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Download Week 3 Lecture Capitalism and Corporations
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Capitalism • 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 Systems • 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 Capitalism • 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 conduct…” 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 society.” • 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 others”. 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 services. • Companies can become more powerful than countries. Critiques of Capitalism • It leads to poverty and inequality. • It prioritizes material goods over less tangible ones (e.g. ethical and spiritual goods). • If unchecked, it leads to monopolies. • If unchecked, it leads to environmental degradation. • Workers are alienated and economically insecure. Corporations • 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 limits. • B corporations – Managers are required to take actions that are good for society. Are corporations persons? • Moral agency versus moral personhood. – 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 persons?