Justice
Fairness treatment of members of groups of people.
Distributive justice
Proper distribution of social benefits and burdens.
Worker participation
Increased in industrial life and more equal distribution of income.
Declining marginal utility of money
Successive additions to one's income produce, on average, less happiness of welfare than did earlier additions.
Libertarianism
Identify justice with an ideal of liberty; the prime value, and justice consists in permitting each person to live as he or she pleases, free from the interference of others. Refuse to restrict individual liberty even if doing so would increase overall ha
Entitlement theory
People are entitled to their holdings (goods, money, and property) as long as they have acquired them fairly. Nozick
State of nature
Property rights were limited not only by the requirement that one not waste what one claimed, but also by the restriction that "enough and as good" be left for others.
Free market
Libertarians commitment reflects the priority of liberty over other values.
Property rights
What you have legitimately acquired is yours to do with as you will.
Original position
Each individual chooses the set of principles for governing society that will be best for himself or herself. Guarantee of certain familiar and fundamental liberties to each person. Social and economic inequalities are justified only if those inequalities
Veil of ignorance
People in the original position know nothing about themselves personally or about what their individual situation will be once the rules are chosen and the veil is lifted. Don't know their race, gender, or personal talents. Eliminates bias and makes it a
Primary social goods
Income and wealth, rights, liberties, opportunities, status, and self-respect.
Maximin rule
Should select the alternative under which the worst that could happen to you is better than the worst that could happen to you under any other alternative-try to maximize the minimum that you will receive.
Different principle
Inequalities are justified only if they work to the benefit of the least-advantaged members of society.
Basic structure
Social justice concerns the basic structure of society, not transactions between individuals.
Capitalism
Economic system that operates on the basis of profit and market exchange and in which the major means of production and distribution are in private hands. Existence of companies, profit motive, competition, and private property.
Socialism
Economic system characterized by public ownership of property and a planned economy. A society's productive equipment is owned not by individuals but by public bodies.
Worker Control Socialism
A hybrid market-oriented economic system advocated by some socialists. Individual firms respond to a market when acquiring the necessary factors of production and when deciding what to produce.
Mercantile capitalism
Capitalism that is based on mutual dependence between state and commercial interests. Belief that the economic health of a nation is determined by the bullion (precious metals, gold, and silver) it possesses and that therefore government should regulate p
Industrial capitalism
Large scale industry became a dominant power in a capitalist economy. Sound financial base, the technology for mass production, expanding markets for cheaply manufactured goods, and a large and willing labor force-produced industrial expansion. Importance
Financial capitalism
Characterized by pools, trusts, holding companies, and the interpenetration of banking, insurance, and industrial interests.
State welfare capitalism
Government plays an active role in the economy, attempting to smooth out the boom-and-bust pattern of the business cycle through its fiscal and monetary policies. Social security and unemployment insurance seek to enhance the welfare of the workforce.
Globalized capitalism
International trade with computer, the Internet, satellites, cell phones, and other technological advances, the economies of most countries are becoming more and more integrated. Investment capital is more mobile than ever, and the currencies, stock excha
Profit motive
Human beings are basically economic creatures, who recognize and are motivated by their own economic interests.
Competition
Makes individual pursuit of self-interest socially beneficial. Regulates individual economic activity.
Lassez faire
To let people do as they choose, we are all free to pursue our own interests.
Capital
Closely related to private property. Money that is invested for the purpose of making more money.
Natural right to property
One argument for capitalism is that it reflects people's natural right to property. Second argument is that it is the most efficient and productive economic system. A utilitarian consideration.
Invisible hand
When people are left to pursue their own interests, they will, without intending it, produce the greatest good for all. Each individual and private pursuit of wealth results in the most beneficial overall organization and distribution of economic resource
Criticisms of Capitalism
Critics argue that poverty and inequality challenge the fairness of capitalism and its claim to advance the interests of all. Capitalism reinforces materialism and offers no higher sense of human purpose. Challenge the belief that competition is desirable
Theoretical criticisms
Challenge capitalism's fundamental values, basic assumptions, or inherent economic tendencies.
Operational criticisms
Capitalism's alleged deficiencies in actual practice (as opposed to theory)- on its failure to live up to its own economic ideals.
Defenders of Capitalism
Deny that it is responsible for poverty and inequality. Say government interference with the market causes these problems. Benefits of the system outweigh this weak point. Inequality is not so important if living standards are rising.
Oligopolies
A concentration of property and resources, and thus economic power, in the hands of a few. High costs, complex and expensive machinery, intense competition, and the advantages of large-scale production all work against the survival of small firms.
Corporate welfare
Assists business and protects it from competition through subsidies for farmers and tariffs on steel, sugar, and ethanol.
Exploitation
Capitalists are able to make a profit and increase their capital. Because workers have nothing to sell but their labor, the bourgeoisie is able to plot them by paying them less than the true value created by their labor.
Alienation
Separation of individuals from the objects they create, which in turn results in one's separation from other people, from oneself, and ultimately from one's human nature.
Outsource
Buying parts of whole products from other producers, both at home and abroad.
Hollow corporations
Companies that in years past were identified with making goods of all sorts now are likely to produce only the package and label.
Comparative advantage
The goods that it can produce at a lower opportunity cost than other countries can (that it can produce more cheaply relative to other goods than is the case in other countries).
Short term focus
Tends to make U.S. corporations unimaginative, inflexible, and ultimately uncompetitive. Short-term performance can lead to fraudulent behavior.
Work ethic
Values work for its own sake, seeing it as something necessary for every person. Emphasizes the belief that had work pays off in the end and is thus part of parcel of the American Dream.
Corporation
Legal entities with legal rights and responsibilities. Publicly registered or officially acknowledged by the law. The shareholder in a corporation is entitled to a dividend from the company's profits only when it has been "declared.
Limited liability
Key feature of the modern cooperation. Members of the corporation are financially liable for the debts of the organization only up to the extent of their investments.
Privately held company
A small group of investors may own all the outstanding shares of a privately owned, profit-making corporation.
Publicly held company
Stock may be traded among the general public.
Corporate internal decision (CID) structures
Established procedures for accomplishing specific goals. Collects data about the impact of its actions. It monitors work conditions, employee efficiency and productivity, and environmental impacts. Lays out lines of authority and stipulates under what con
Corporate moral agency
Only the individuals within a corporation can act morally or immorally; only they can be held responsible for what it does. Speak of corporate moral responsibility as it does to speak of individual moral responsibility. Moral agent if moral reasons enter
Corporate punishment
Whether or not corporations are moral actors, the law can fine them, monitor and regulate their activities, and require the people who run them to do one thing or another.
Diffusion of responsibility
No particular person or persons can be held morally responsible.
Narrow view of corporate responsibility
Business has no social responsibilities other than to maximize profits. Diverting corporations from the pursuit of profit makes or economic system less efficient. Milton Friedman.
Broader view of corporate responsibility
Corporations have other responsibilities as well- to consumers, to employees, to suppliers and contractors, to the surrounding community, and to society at large. Responsibilities that go beyond making money because of their great social and economic powe
Social entity model or stakeholder model
Broader view maintains that a corporation has obligations not only to its stockholders but also to other constituencies that affect or are affected by its behavior- that is, to all parties that have a legitimate interest in what the corporation does or do
Externalities
The unintended negative (or in some cases positive) consequences that an economic transaction between two parties can have on some third party. ex: industrial pollution
Fiduciary responsibility
Maximize shareholder wealth outweighs any other obligation. Narrow view
Invisible hand argument
If businesses are permitted to seek self-interest, their activities will inevitably field the greatest good for society as a whole.
Let-government-do-it argument
The strong hand of government, through a system of laws and incentives, can and should bring corporations to heel.
Business-can't-handle-it argument
Corporations are the wrong group to be entrusted with broad responsibility for promoting the well-being of society. They are not up to the job for two reasons: 1) they lack the necessary expertise and 2) in addressing noneconomic matters, they inevitably
Corporate moral code
Set reasonable goals and subgoals, with an eye on blunting unethical pressures on subordinates.
Corporate culture
Multiple and overlapping cultures within an organization because employees have different backgrounds, work in different divisions of the organization and even in different countries, and may be subject to different systems of rewards and sanctions. Deter