MGMT 341 Lecture Notes - Lecture 1: Tim Worstall, Price Gouging, Moral Skepticism
What’s usiess ethis?
• It is a class that is going to teach us about moral and ethics in the business world from different
perspectives and theories like Utilitarianism
• Profits/other values
• Beliefs held by businesses (plural)
• Emotional intelligence- caring on behalf of $$
• Business through moral paradigm
• Epirial approah: epirial lais, epirial aord the opa did’t sig the aord
• Normative approach: (the company should have signed the accord)Main focus of class
• Strategic approach: there is a good way of doing things for people and there will be good results
for your company
Price gouging
Both want same things, but they disagree on how
Memo reading (Hiltzik): Intervention on behalf of poor-Equality
• Morality
• economics as abstraction
• rationing most-money-best-served, rich have more access
• Worstall and Perry showed no sensitivity with this major catastrophe
• We o eed soe ethod of ratioig that liited ad sare suppl. ... Ratioig prie is
always the efficient way of doing this. — Economist Tim Worstall
• Morally wrong because of the situation
find more resources at oneclass.com
find more resources at oneclass.com
Not hurricanes(Milsap): Market freedom-Efficiency
• Traged of Coos
• Proper Price will make people consume water
• Keep goods available
• Too expensive
• Search Costs
• The economics of price gougig has ee eplaied a ties ut it’s orth repeatig. High
prices incentivize consumers to purchase only what they need to satisfy their highest-valued
wants, and leave the rest for others.
• Meanwhile, high prices incentivize producers to increase supply. During times of emergency this
often means bringing in supplies from less-affected areas, often at a high cost and great
persoal risk. “oe people do doate their tie ad resoures to irease suppl here it’s
eeded, ut a others do’t hae the financial means to do so. People in the latter group
ho at to help should’t e deoized for raisig pries to reoup their higher osts
Normative
• Value Monism
o sensitive to context
o rigid thinking
o reasonable pluralism
Moral skepticism
• denies that ethics has to do with business at all
• inherently greedy
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find more resources at oneclass.com
• win/loss
• tends to be incoherent
• empirically false
Role of Morality: morality is not a general thing, is the different perspectives about the world that are
based in moral decision. Role of morality is about justification
• Implied principles of justice
o Liberal: individual rights inviolability, private property, religious toleration, the rule of
law
o Identity of interest: people wanting deer meat
o Conflict of interests according to Rawls (who gets more deer meat than the other based
on what they do to get it)
o Cooperative surplus:
o Principle of efficiency (Production)
o Principle of fairness/equality (Distribution)
Principle of efficiency:
• efficiency is a normative claim
• Efficiency in the reading: cost-benefit analysis in an external and internal criteria
o External: comparative, standard criteria, relative, evidence
o External criteria
▪ Utilitarianism: maximizing happiness and minimizing pain (utility). (challenges
convention) Full theory about equality and fairness
• Impartial/a contextual (some sort of idea of equality)
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Both want same things, but they disagree on how. Ratio(cid:374)i(cid:374)g (cid:271)(cid:455) pri(cid:272)e is always the efficient way of doing this. (cid:863) economist tim worstall: morally wrong because of the situation. During times of emergency this often means bringing in supplies from less-affected areas, often at a high cost and great perso(cid:374)al risk. O(cid:373)e people do do(cid:374)ate their ti(cid:373)e a(cid:374)d resour(cid:272)es to i(cid:374)(cid:272)rease suppl(cid:455) (cid:449)here it"s (cid:374)eeded, (cid:271)ut (cid:373)a(cid:374)(cid:455) others do(cid:374)"t ha(cid:448)e the financial means to do so. People in the latter group (cid:449)ho (cid:449)a(cid:374)t to help should(cid:374)"t (cid:271)e de(cid:373)o(cid:374)ized for raisi(cid:374)g pri(cid:272)es to re(cid:272)oup their higher (cid:272)osts. Normative: value monism, sensitive to context rigid thinking reasonable pluralism. Moral skepticism: denies that ethics has to do with business at all inherently greedy, win/loss tends to be incoherent, empirically false. Role of morality: morality is not a general thing, is the different perspectives about the world that are based in moral decision.
