Utilitarian Approach to Trade Policy - Essay Example

Question McGee is against the utilitarian approach to trade policy .Utilitarian Ethics considers an ethical if it is more efficient than any other alternative. Therefore, if a policy result in the inappropriate allocation of resources it is considered unethical since it reduces efficiency. McGee (1999) explains the problems associated with utilitarian approach to ethical issues. First is that utilitarian approach overlooks the contract and property rights. Second is that with this approach it is not possible to accurately determine the gains and losses. If the objective is to achieve the greatest good for the greatest number, one must work with estimates. (97) McGee explains that the most important principle that all ethical organizations in all cultures should consider is not to breach or contribute in any way to the breaching of individual contract rights. Rosenthal (2013) says “Ethics in international business is a very complex issue since ethical standards differ among different countries. Some issues which organizations should establish an ethical standpoint include corporate governance, social responsibility, targeted marketing and corruption.” When trading in international markets, participants should be aware of different ethical standards and business standpoints of various groups around the world. A trader should always ensure that high ethical standards are observed and also be prepared to accept the different standards and expectations of others as well as the reasons for them. Bibliography Frankel, Paul, McGee, Robert, and Tibor, Machan. Business Ethics in the Global Market. Hoover institution Pr.1999.print Rosenthal, Joel. “Ethics and International affairs: A primer”. Journal of Ethics and International affairs.2013.web.10 Dec.2013 Question#2 Insider trading refers to a situation where one obtains information from sources that are non public for example, colleagues, private acquaintances and friends and using it to advance ones financial gain. Insider trading is a concern in business ethics discussions due to the fact that the information on which trade is based is not known to others within the interested trading community apart from the insider. Insider trading is when traders deal with the help of what is not public knowledge and therefore giving them an advantage over the rest of the market participants who are on the outside (Machan and Chester, 131) The Pros of insider trading includes: it increase the overall efficiency of transactions in the market. McGee (2009) argues that “those trading from the inside send signals to others whose reactions then help propel the market to its new level of efficiency” (67).Another pro for insider trading according to McGee is that it allows the executives to use inside information to cut the company costs through saving on payroll costs. It is an alternative form of compensation that makes it possible for the organization to pay a lower salary (McGee, 67).The cons of insider trading include; it is morally not right for some individuals to gain from inside information by making huge profits with such little effort. Also business is like level playing field where all individuals should benefit from informational equally and not where others enjoy informational advantages over others. Insider trading is economically beneficial since stocks can trade at prices that reflect more information. Those who are against insider trading base their arguments on emotional appeals and not sound economic analysis. Bibliography Machan,Tibor & Chesher,James. A Primer on Business Ethics.Rowman & Little field. 2003.print McGee, Robert. “Analyzing Insider Trading from the Perspectives of Utilitarian Ethics and Rights Theory”. Journal of Business Ethics Springer.2009.DOI 10.1007/s10551-009-0068-2 Question#3. Capitalism is the political economic system in which the institution of the right to private property is fully protected. It is an economic arrangement of an organized human community. It is a type of legal order governed by the rule of law in which the principle of private property plays a central role and is usually grounded on classical liberal ideals in political thinking. (Machan and Chester, 47).The central element of laissez-faire is that individuals have the right to decide what they want to do with their property and the government cannot interfere. The basic elements of free market capitalism are; monetary system, market exchange and private enterprise production of commodities. For an enterprise production and market exchange to exist there must be a feasible monetary system. The exchange of goods in markets is based on competition between buyers and sellers who create the demand and supply. This competition produces a price which is acceptable for exchange. Private enterprises are organizations separate from the state which produce commodities for exchange in the market. The critics of capitalism argue that the fact that capitalism allows for and even promotes inequality is objectionable. In a free market system some people will become rich while others remain poor. They also argue that capitalism has negative effects on the environment since entrepreneurs are free to produce whatever they want and the government does not interfere. Marx criticizes how the free market operates. He argues that leissez faire is unstable and uncontrollable mechanism. He also argues that it leads to periodic crises in which important means of production are destroyed many people thrown out of work and useful means of production are destroyed. This show that the capitalist system is not capable of managing the forces of production which it created Bibliography Machan,Tibor & Chester,James. A Primer on Business Ethics.Rowman & Little field. 2003.print Mackey,John & Sisodia,Rajendra.Conscios Capitalism: Liberating The Heroic Spirit of Business.Havard Business Review Press.2013.print Question #4. Socialism is based on the benefit of the society as a whole. Socialists’ charactize a just society as where there is cooperation as opposed to competition in all sectors of life whether, scientific, political or economic. In the economic realm, socialism proposes collective of the administration of all production and distribution of wealth. The idea is that when people manage their economic lives collectively, they will be able to realize themselves as fully emancipated and realizing their true human nature. The reason is that naturally human beings are conscious producers and because production is essentially a social phenomenon, people will experience their true nature if they participate in the social organization of production. (Machan and Chester, 213). The problems with socialism include: Reduced prosperity; countries where their production are socialized are less prosperous than those whose means of production are privately controlled.  Socialism advocate for equal income distribution through state intervention and this causes a reduction in national income and average income. Another problem associated with socialism is distorted price signals. The pricing systems in socialist economies are unreliable because the government owns the means of production. There are no prices for capital goods  simply because in a socialist system goods are transferred internally and are not considered to be objects of exchange. This system makes it difficult to allocate the available since the goods are not priced. Last but not least problem of socialism is corrupt leadership. Critics of socialism have argued that, in a socialist state, the leaders will most likely become corrupt thereby preventing the main objective of socialism from being achieved. Bibliography Machan,Tibor & James,Chester. A Primer on Business Ethics.Rowman & Little field. 2003.print Szalai,Erzebet.Socialism:An analysis of its past and future.Central European University Press.2005.print  Question#5 The basic feature of fascism is that it works for the rich capitalists. This system is a great threat to the working class. Fascism gives the leader to push down workers salaries and also lower their living standards. If fascism is to be finished, the system that brings it must be removed by workers forming successful revolutions. The current society is lead by capitalism whereby all the wealth produced is held by few individuals who run own the largest businesses and industries. The capitalists run industries in order to make profit and all of these wealth is produced by working class. For the capitalists to make huge profits they make the workers work for longer hours and also at a faster rate for lower wages. The workers have organizations that fight for their rights to fair wages, good working environments and shorter working hours. This can lead to economic crisis and the capitalists will fight back to restore the workers gain since they cannot give up their wealth to the workers. But when they feel threatened by the workers revolutions they aim to deny them their rights by destroying their organizations. This is where fascism comes in. It aims at creating a movement by bringing into action those classes between working class and the capitalists. The unorganized workers and middle class are also affected by the capitalist system crisis and are in need for the radical solutions to their problems. If the working class cannot find a revolutionary way out of the crisis, they will be forced listen to the radical solutions of the fascist. Bibliography Paxton, Robert.The Anatomy of Facism.Vintage.2005.print Flynn,John. “Good Facists and Bad Facists”.Ludwig Von Mises Institute.August,2012.web.10 Dec.2013. Work cited Frankel, Paul, McGee, Robert, and Tibor, Machan. Business Ethics in the Global Market. Hoover institution Pr.1999.print Rosenthal, Joel. “Ethics and International affairs: A primer”. Journal of Ethics and International affairs.2013.web.10 Dec.2013 Machan, Tibor and James, Jester. A Primer on Business Ethics. Rowman & Little field. 2003. Print Mackey, John and Sisodia, Rajendra.Conscios Capitalism: Liberating the Heroic Spirit of Business. Harvard Business Review Press.2011.print McGee, Robert. “Analyzing Insider Trading from the Perspectives of Utilitarian Ethics and Rights Theory”. Journal of Business Ethics Springer.2009.DOI 10.1007/s10551-009-0068-2 Paxton, Robert. The Anatomy of Facism.Vintage.2005.print Flynn, John. “Good Fascists and Bad Facists”.Ludwig Von Mises Institute.August,2012.web.10 Dec.2013. Read More