3 - Capitalism and Its Ethical Implications

Summary

This chapter identifies the factors likely to influence employees, managers, and firms given that businesses operate within the context of capitalism. Several common presuppositions about capitalism are discussed – consumers know best, industry and innovation will be rewarded, growth should be encouraged, no centralized distribution, and individual self-interest always leads to mutual benefit. The term “market morality” is introduced as a background for factors such as spending on nonrecyclable goods or a focus on price rather than employee conditions where the goods are made, providing a means to identify consumer hypocrisy and corporate greenwashing. The implications of market failures such as oligopolies are noted, and questions about proper use of government regulation are raised. Moral concerns about the globalization of supply chains and varying normative standards around the world are also discussed, as well as the balance between World Trade Organization standards and national sovereignty. The fact that currencies and credit rely on the moral principle of trust is considered. The final case deals with the ethical concerns that are raised when international companies promote GMO crops to poorer countries.