In the world of economic life, people are constantly being faced with decisions that have moral and ethical implications. How people make these decisions and how they view the effects of these decisions on society can vary greatly from one individual to another. Some of these decisions include whether or not to purchase goods made in factories that exploit workers, how many financial resources should be allocated towards helping those in other countries, and whether or not it’s ethical to run false or misleading ads to gain business. This entry will explore why ethics in economic life matters and how it relates to the rest of the world.
What is Ethical Economics?
The term ethical economics has been applied to many schools of thought. In its broadest sense, it refers to what is commonly referred to as political economy. Political economy is concerned with how individuals and societies allocate resources to satisfy their needs and wants. It concerns production, consumption, trade, distribution and economic growth. It also addresses issues related to government policy (taxation), international trade and finance (exchange rates), poverty (welfare) and other topics.
The Benefits of Ethical Economics
There are several reasons why economic ethics matters. The most obvious is that unethical economic practices hurt society and can undermine prosperity by hurting people and damaging human relationships. But there’s another reason: ethical economics may be good for business. Companies with strong corporate social responsibility (CSR) records often outperform their competitors regarding profitability, productivity, and efficiency. That makes sense if you think about it—people are more likely to buy from a company they trust, and we tend to trust companies that act ethically. Companies that treat employees well also experience lower turnover rates, saving money on recruitment and training costs. And consumers who believe companies treat them fairly spend more money on those products than those who don’t feel respected.
Finding out if an Economic Practice is Ethical:
Before deciding if a specific economic practice is ethical, you must first understand what economics is. In simplest terms, economics describes what happens when people use limited resources to fulfil unlimited wants. The challenge for an economist is to find out how best to allocate those resources so that everyone gets as much as possible of what they want. Economists call these practices efficient and inefficient because they help us make better decisions about how we spend our money. If something is more efficient, it uses fewer resources to produce more output. If something is less efficient, it uses more resources to produce less output.
What is the Principle of Ethics in Economic Life?
The principle of ethics in economic life is an ethical framework used by individuals when making economic decisions. In an economic system based on ethical principles, it would be impossible to steal from one another or lie to each other to get ahead. It would also mean that we have a responsibility to ensure everyone has access to goods and services necessary for survival and quality of life. An economic system with ethical values at its core can better meet human needs and achieve goals such as full employment, sustainable development, and social justice. Ethics in economic life is about how people treat each other and how they respect their fellow human beings.
How Economics can Teach us About Ethics:
Economics can teach us about ethics in several ways. One example is that by studying economics, you begin to notice how people respond to incentives and how these incentives change their behaviour and decisions. A second way that economics teaches us about ethics is through historical examples. You may have heard about Adam Smith’s invisible hand or his self-interest argument. It might seem like a stretch to connect such an abstract concept with everyday life, but there are many real-world examples where we see people acting according to their own self-interest. The third way that economics teaches us about ethics is by helping us understand our choices better. Many times, we make decisions based on what seems most convenient at that moment. For instance, I might buy a soda from a vending machine because it’s faster than getting one from inside my office building. But if I thought more carefully about my decision, I would realize that buying a soda is not really worth all of those extra calories and money. In fact, buying drinks outside of work has become so expensive for me that I now carry around reusable bottles instead!
Market Forces Require Companies to consider Ethical Values:
The Market place requires companies to consider ethical values, and those are not always clear. The rules that regulate companies usually have some ethical value attached to them. Companies often face situations where they must choose between two or more courses of action, each with its ethical implications. Ethical dilemmas arise when a company is presented with choices between right and wrong or good and bad, such as choosing whether to comply with legal requirements versus operating within its core values. Companies have several options for resolving an ethical dilemma: When faced with an ethical dilemma, companies can choose from several different approaches for resolving the issue.
Some Examples of Violate The Principle of Ethics in Economic Life:
Just like in any other field, there are lots of people who violate the rules of ethics in economics. As with all professional fields, each person is expected to abide by a standard set of principles when working and engaging with others within their field. Regarding economic life, these ethical principles include honesty, fairness, transparency and accountability. Some examples of people who have violated these ethical standards would be companies such as Enron or Lehman Brothers. Both companies were found guilty of violating some of these ethical principles, which led to their dissolution. Another example would be Bernie Madoff, who was found guilty of operating an illegal Ponzi scheme and stealing billions from his clients.