ETHICS - The system of society (or group of societies)
uses to provide the goods and services it
LESSON 4: THE BUSINESS SYSTEM
needs to survive and flourish. This system
must accomplish two basic economic tasks:
PRODUCE AND DISTRIBUTE.
GLOBALIZATION
- The first task is producing goods and services,
- The way nations have become more which requires determining what will be
connected so that goods, services, capital, produced, how it will be produced, and who
knowledge, and cultural artifacts move across will produce it.
national borders at an increasing rate. - The second task is distributing these goods
- Globalization has surged forward to a degree and services among the society’s members,
that is unprecedented in our world’s history. which requires determining who will get what
- Globalization has connected nations so that and how much each will get
goods, services, capital, and knowledge now - To accomplish these two tasks, economic
flow freely among them. systems rely on three kinds of social devices:
- It shrinks time and spice and creates traditions, commands, and market.
amorphous relationships
- Is it really free trade? NO, this is because,
there is no presence of equality eh. Sana ang
gains, equal, similarly, hindi dapat iba-iba ang
- It would be undesirable to run an economy
taxes.
completely on the basis of traditions, or
commands, or markets. If an economy were to
be a pure market system, with no economic
ETHICAL RELATIVISM
interventions by government, there would be
- A theory that there are no ethical standards no constraints on the property one could own
that are true absolutely. or what one could do with it. Slavery would be
- An ethical standard is true depends on (is entirely legal, as would prostitution and all
relative to) what a particular culture of society drugs, including hard drugs.
accepts or believes.
- We do not judge a culture based on our - Today, the governments of even the most
perception; it is about who practice. market-oriented economies decree that some
- As ETHICAL RELATIVIST, you do not judge. You entities (e.g., people) may not be owned,
will respect other people’s culture and will some things (e.g., polluting) may not be done
noot base on your perception. with one’s property, some exchanges (e.g.,
- NEPOTISM – using your power for the benefit child labor) are illegal, and some exchanges
of your family, friends, etc. (e.g., taxation) are imposed.
- MERITOCRACY - government or the holding of
power by people selected on the basis of their - Such limitations on markets are the
ability impositions of a command system:
government concern for public welfare leads it
to issue commands concerning which goods
3.1.1: ECONOMIC SYSTEMS may or may not be produced or exchanged.
ECONOMICS
- The study of production, distribution,
consumption of scarce resources. 1. TRADITIONAL ECONOMY
- Subsistence (meaning survival – you are only
ECONOMIC SYSTEM
producing what you need to survive.)
economy
, - Commonly exists in small economies and - Is a system of normative beliefs shared by
underdeveloped countries (Haiti, Bhutan) members of some social group.
- Allocation of resources based on rituals,
habits, or customs.
- Roles are defined by family. 3.1.2: MARKET THEORY AND MARKET PRACTICE
- People work together for the common good.
ABBOTT LABORATORIES
- Little individual choice.
- Global free trade has been criticized not only
for the impact it has had on workers, but
2. COMMAND ECONOMY because of the impact it has had on those
- Government who live in poor nations. Many critics of free
- Central ownership of property and resource trade have argued that the international
- Centrally planned economy agreements and institutions that make free
- Lack of consumer choice. trade possible benefit global businesses but
- It is the law of the government. harm the world’s poor and powerless.
- The government decides what to produce,
what to ogive, to whom to give.
- Practices communism and socialism (North 1. JOHN LOCKE’S FREE MARKETS AND RIGHTS
Korea and Cuba) - One of the most popular cases for allowing
government to play only a very limited role in
markets derives from the idea that human
3. MARKET ECONOMY beings have certain natural rights that only a
- Private ownership of property and resource. free-market system can protect.
- CAPITALISM – the basis of wealth is HIGH - NATURAL RIGHTS: (1) Right to life; (2) Right
- PROFIT. to Liberty; (3) Right to Property.
- Production is not only enough for survival, but - Humans, in their state of nature, are
enough for generating high profit. REASONABLE.
- Business decisions are driven by the desire to - Government’s Roles: To protect these natural
earn profit. rights.
- There is a great deal of competition. - Free markets are supposed to preserve the
- Consumers have many choices. right to freedom insofar as they enable each
- UK, Canada, US individual to voluntarily exchange goods with
others free from the coercive power of
government. They are supposed to preserve
4. MIXED ECONOMY the right to private property insofar as each
- Balance of free trade and government individual is free to decide what will be done
intervention, but communism and socialism with what he or she owns without
still exist. interference from government.
- Individuals and businesses as decision makers - Locke developed the idea that human beings
for the private sector. have a natural right to liberty and a natural
- Government as decision maker for the public right to private society.
sector. - Locke argued that if there were NO
- Greater government role than in a free market GOVERNMENTS, HUMAN BEINGS WOULD
economy. FIND THEMSELVES IN A STATE OF NATURE. In
- Most common economic system today. this state of nature, each individual would be
the political equal of all others and would be
perfectly free of any constraints other than
IDEOLOGY the law of nature—that is, the moral
principles that God gave to humanity and that
uses to provide the goods and services it
LESSON 4: THE BUSINESS SYSTEM
needs to survive and flourish. This system
must accomplish two basic economic tasks:
PRODUCE AND DISTRIBUTE.
GLOBALIZATION
- The first task is producing goods and services,
- The way nations have become more which requires determining what will be
connected so that goods, services, capital, produced, how it will be produced, and who
knowledge, and cultural artifacts move across will produce it.
national borders at an increasing rate. - The second task is distributing these goods
- Globalization has surged forward to a degree and services among the society’s members,
that is unprecedented in our world’s history. which requires determining who will get what
- Globalization has connected nations so that and how much each will get
goods, services, capital, and knowledge now - To accomplish these two tasks, economic
flow freely among them. systems rely on three kinds of social devices:
- It shrinks time and spice and creates traditions, commands, and market.
amorphous relationships
- Is it really free trade? NO, this is because,
there is no presence of equality eh. Sana ang
gains, equal, similarly, hindi dapat iba-iba ang
- It would be undesirable to run an economy
taxes.
completely on the basis of traditions, or
commands, or markets. If an economy were to
be a pure market system, with no economic
ETHICAL RELATIVISM
interventions by government, there would be
- A theory that there are no ethical standards no constraints on the property one could own
that are true absolutely. or what one could do with it. Slavery would be
- An ethical standard is true depends on (is entirely legal, as would prostitution and all
relative to) what a particular culture of society drugs, including hard drugs.
accepts or believes.
- We do not judge a culture based on our - Today, the governments of even the most
perception; it is about who practice. market-oriented economies decree that some
- As ETHICAL RELATIVIST, you do not judge. You entities (e.g., people) may not be owned,
will respect other people’s culture and will some things (e.g., polluting) may not be done
noot base on your perception. with one’s property, some exchanges (e.g.,
- NEPOTISM – using your power for the benefit child labor) are illegal, and some exchanges
of your family, friends, etc. (e.g., taxation) are imposed.
- MERITOCRACY - government or the holding of
power by people selected on the basis of their - Such limitations on markets are the
ability impositions of a command system:
government concern for public welfare leads it
to issue commands concerning which goods
3.1.1: ECONOMIC SYSTEMS may or may not be produced or exchanged.
ECONOMICS
- The study of production, distribution,
consumption of scarce resources. 1. TRADITIONAL ECONOMY
- Subsistence (meaning survival – you are only
ECONOMIC SYSTEM
producing what you need to survive.)
economy
, - Commonly exists in small economies and - Is a system of normative beliefs shared by
underdeveloped countries (Haiti, Bhutan) members of some social group.
- Allocation of resources based on rituals,
habits, or customs.
- Roles are defined by family. 3.1.2: MARKET THEORY AND MARKET PRACTICE
- People work together for the common good.
ABBOTT LABORATORIES
- Little individual choice.
- Global free trade has been criticized not only
for the impact it has had on workers, but
2. COMMAND ECONOMY because of the impact it has had on those
- Government who live in poor nations. Many critics of free
- Central ownership of property and resource trade have argued that the international
- Centrally planned economy agreements and institutions that make free
- Lack of consumer choice. trade possible benefit global businesses but
- It is the law of the government. harm the world’s poor and powerless.
- The government decides what to produce,
what to ogive, to whom to give.
- Practices communism and socialism (North 1. JOHN LOCKE’S FREE MARKETS AND RIGHTS
Korea and Cuba) - One of the most popular cases for allowing
government to play only a very limited role in
markets derives from the idea that human
3. MARKET ECONOMY beings have certain natural rights that only a
- Private ownership of property and resource. free-market system can protect.
- CAPITALISM – the basis of wealth is HIGH - NATURAL RIGHTS: (1) Right to life; (2) Right
- PROFIT. to Liberty; (3) Right to Property.
- Production is not only enough for survival, but - Humans, in their state of nature, are
enough for generating high profit. REASONABLE.
- Business decisions are driven by the desire to - Government’s Roles: To protect these natural
earn profit. rights.
- There is a great deal of competition. - Free markets are supposed to preserve the
- Consumers have many choices. right to freedom insofar as they enable each
- UK, Canada, US individual to voluntarily exchange goods with
others free from the coercive power of
government. They are supposed to preserve
4. MIXED ECONOMY the right to private property insofar as each
- Balance of free trade and government individual is free to decide what will be done
intervention, but communism and socialism with what he or she owns without
still exist. interference from government.
- Individuals and businesses as decision makers - Locke developed the idea that human beings
for the private sector. have a natural right to liberty and a natural
- Government as decision maker for the public right to private society.
sector. - Locke argued that if there were NO
- Greater government role than in a free market GOVERNMENTS, HUMAN BEINGS WOULD
economy. FIND THEMSELVES IN A STATE OF NATURE. In
- Most common economic system today. this state of nature, each individual would be
the political equal of all others and would be
perfectly free of any constraints other than
IDEOLOGY the law of nature—that is, the moral
principles that God gave to humanity and that
