2074 Final Notes
Amartya Sen-Does Business Ethics Make Sense?
Adam Smith: we are motivated by self interest, and through the invisible hand comes free market competition. This naturally to social utility. / Butcher-brewer-baker quote demonstrates that the exchange of goods if for the benefit of both parties, without no ethics involved in the exchange. / Though competition, comes social harmony and utility. The market is a self correcting mechanism because it forces us to be truthful and honest, we should not scam people because this is not beneficial to us in the future.
Sen-Trust: Smith’s point is not entirely true. / Trust is what ultimately makes exchange works, if we do not trust others, nothing would ever het done. We may be self interested, but we should also advocate trust because that’s what it takes to make money. / In butcher-brewer-baker case, if trust cannot be established, neither party will feel good about producing products for others unless they can trust them to pay. / Prisons Dilemma - Two men have the option of ratting each other or remaining silent. Prisoners would naturally want to improve their own condition, the best case is for both to remain silent, they will both only receive a minor sentence. However, if there is no trust, both will likely betray each other. / In third world countries, there is a lack of confidence in the morality of business behaviour. For example, the best way to prevent famine relief is to create additional income for the people, and letting them purchase more goods with this money. By distributing relief to the government, it is much slower, more wasteful, etc. Giving the role of providing for a population suffering from famine to grain traders is problematic, because this raises issue of trustworthiness. It is likely the traders will manipulate prices to raise profit. Even using government intervention may not be effective, because this will depend on the grain reserves that the government has.
Pareto: Pareto Criterion - A state
Adam Smith: we are motivated by self interest, and through the invisible hand comes free market competition. This naturally to social utility. / Butcher-brewer-baker quote demonstrates that the exchange of goods if for the benefit of both parties, without no ethics involved in the exchange. / Though competition, comes social harmony and utility. The market is a self correcting mechanism because it forces us to be truthful and honest, we should not scam people because this is not beneficial to us in the future.
Sen-Trust: Smith’s point is not entirely true. / Trust is what ultimately makes exchange works, if we do not trust others, nothing would ever het done. We may be self interested, but we should also advocate trust because that’s what it takes to make money. / In butcher-brewer-baker case, if trust cannot be established, neither party will feel good about producing products for others unless they can trust them to pay. / Prisons Dilemma - Two men have the option of ratting each other or remaining silent. Prisoners would naturally want to improve their own condition, the best case is for both to remain silent, they will both only receive a minor sentence. However, if there is no trust, both will likely betray each other. / In third world countries, there is a lack of confidence in the morality of business behaviour. For example, the best way to prevent famine relief is to create additional income for the people, and letting them purchase more goods with this money. By distributing relief to the government, it is much slower, more wasteful, etc. Giving the role of providing for a population suffering from famine to grain traders is problematic, because this raises issue of trustworthiness. It is likely the traders will manipulate prices to raise profit. Even using government intervention may not be effective, because this will depend on the grain reserves that the government has.
Pareto: Pareto Criterion - A state