Ethics of Economics

Economic systems are often a blend of social and political ideologies that form a framework of principles to guide economic production, distribution of goods and consumption. That framework is essentially a system of ethics that is being applied to a group in a specific subject area.

In primitive economic systems, which are generally smaller, production is largely self-regulating based on local demand which is easily known. Distribution is simple exchange and consumption takes place mostly by “exchange as a gift” and eventually, barter in the exchange process. As the economic environment grows in size and complexity, the need arises for a money system to allow credits to be used in exchange for goods, and the self-regulating factors become more abstracted from the actual goods, producers, exhangers and consumers. At first, the money usually represents some amount of a valuable commodity product, but eventually it tends to become standardized and turns into “fiat money” which is issued by a national government and has a valued assigned to it.

Eventually, most economic systems evolve to a level of complexity that seems to require some form of standardization and regulation. Most modern economic systems are based on free market capitalism and socialism and many hybrid variations of both.

Free market capitalism encourages private property ownership and depends upon individual decisions motivated by profit to establish a free market ethic that searches out and establishes the most efficient pathway to production, distribution and consumption.

Socialism abolishes private property ownership and depends upon co-operative management to establish the ethics of resource utilization, production, distribution and consumption.

The competitive spirit of free market capitalism seems to produce more innovation and advancement than any other system but also tends to lead toward accumulation of wealth in the hands of the more successful and the establishment of large business corporations that have the ability to engage in unethical practices without obvious consequence.

The cooperative spirit of socialism seems to offer a highly efficient and widely beneficial system, but in real life it often stifles innovation and advancement and if the management decisions are not made with scrupulous ethics, it usually devolves into fascism and tyranny.

SEE ALSO:
Ethics vs Morals
Ethics of Confucius
Ethics of Stoicism

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