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Professional Ethics (GEN301/PHI200) Unit 4: THE NATURE OF CAPITALISM

Professional Ethics (GEN301/PHI200) Unit 4: THE NATURE OF CAPITALISM. Handout# 4 CLO#2 Explain the rationale behind adoption of normative theories and professional codes of conduct. CLO#3 Discuss the relation between justice, ethics and economics theories https://lms.ectmoodle.ae.

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Professional Ethics (GEN301/PHI200) Unit 4: THE NATURE OF CAPITALISM

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  1. Professional Ethics(GEN301/PHI200)Unit 4: THE NATURE OF CAPITALISM Handout# 4 CLO#2 Explain the rationale behind adoption of normative theories and professional codes of conduct. CLO#3 Discuss the relation between justice, ethics and economics theories https://lms.ectmoodle.ae

  2. LEARNING OBJECTIVES • Define Capitalism concept. • Inspect the key features of Capitalism. • Explain the moral justification of capitalism. • Explore the main criticisms. • Examine today challenges of professional ethics in Capitalism.

  3. CONCEPT Capitalismis an economic system in which the major proportion of production and distribution is in private hands. The U.S economy is the world’s leading capitalist economy. All manufacturing firms, banks, insurance companies and transportation companies are privately owned. The private ownership and market aspects of capitalism contrast with its polar opposite, socialism. Capitalism has gone through several stages :mercantile, industrial, financial, and state welfare. Many believe that we are now at a new stage, globalized capitalism.

  4. KEY FEATURES OF CAPITALISM Although capitalism will continue to evolve, it has 4 key Features: • Companies: Capitalism permits the establishment of companies or business organizations that exist separately from the people associated with them. • Profit Motive: The purpose of the company is to make profit. Reflects a critical assumption about human nature – Human beings are basically economic creatures, who recognize and are motivated by their own economic self-interests.

  5. KEY FEATURES OF CAPITALISM • Competition: makes individual pursuit of self-interest socially beneficial. • Private Property: is central to capitalism. Capitalism requires private ownership of the means of production.

  6. MORAL JUSTIFICATIONS OF CAPITALISM People tend to take for granted the desirability and moral legitimacy of the political and economic system within which they live. The Natural Right to Property: • It reflects people’s natural right to property. • We are free to own a variety of things.

  7. MORAL JUSTIFICATIONS OF CAPITALISM People have a fundamental moral right to property and that our capitalist system is simply the outcome of the natural right. Utilitarians reject the whole idea of a natural right to property as a fiction. The moral task is to find that property system, that way of organizing production and distribution, with the greatest utility.

  8. Adam Smith’s Concept of the Invisible Hand Another argument that defends capitalism as the most efficient and productive economic system. Free market system, is more efficient and more productive than any other possible system. When people are left to pursue their own interests, they will produce the greatest good for all. Each person’s individual and private pursuit of wealth results – as if guided by an ‘invisible hand’- in the most beneficial overall organization and distribution of economic resources. Smith believed that human beings are acquisitive and pursue their own self-interests.

  9. CRITICISMS OF CAPITALISM • Theoretical criticisms challenge capitalism’s fundamental values, basic assumptions or tendencies. • Operational criticisms focus more on capitalism’s alleged deficiencies in actual practice in particular on its failure to live up to its own economic ideals.

  10. Human nature and capitalism • The theory of capitalism rests on a view of human beings as rational economic creatures. • Capitalism operates on the debatable assumption that human beings find increased well-being through ever greater material consumption.

  11. The issue of Exploitation Karl Marx argued that : as the means of production become concentrated in the hands of the few, the balance of power between capitalism (bourgeoisie) and laborer (proletariat) tips further in favor of the bourgeoisie . Marx argued that under capitalism workers are alienated in several different ways.

  12. TODAY’S ECONOMIC CHALLENGES As the 20th Century begins, our capitalist socioeconomic system faces a number of challenges. These include: • The decline of American manufacturing and the related problems of job outsourcing. • Growing trade deficit: America continues to run an enormous trade deficit. • American corporations are too focused on short-term performance. • Changing attitudes towards work. • Economists disagree about whether outsourcing benefits America overall and about the risks posed by our foreign indebtedness.

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