Question

In what ways do ethical considerations work against perfect operation of a market economy?

Answer 1

Although ethical considerations are meant to determine actions that are in the best interest of all, however the course of action is not easy and clear-cut. The ethical reasoning may work against perfect operation of a market economy in below mentioned ways:

--Development, implementation and maintaining an ethics compliance program within the company can be time-consuming and expensive. It requires continually updating which requires the hiring of an ethics officer and the commitment of personnel and financial resources of the company

--Business ethics declines a company’s freedom to maximize its profit. For instance, a multinational company may move its manufacturing facility to developing nations to decrease the costs. Practices acceptable in that nation, such as poor health and safety, child labour, poverty-level wages and coerced employment, will not be accepted by an ethical company which will harm the profits

--Working conditions improvements, such as a minimum health and living wage and safety standards decreases the level of cost-savings that the company generates