Ethics in Free Market Economy - Research Paper Example

Ethics in business Free markets allocate economic goods in the most social and beneficial way and ensure progress. This paper discusses about how free markets operate in an economy for the betterment of society. Let us take a view on social justice and how a free market tends to carry it. Social Justice Justice is fair allocation of costs and rewards in a group membership. Social justice process refers to the way a group allocates costs and benefits of membership. Social justice issues related to costs of group membership can come up in any size of a group. Benefits of group membership are also allocated through social justice mechanisms. There are certain distributive principles of social justice out of which Neo-liberal or Libertarian view will be discussed (Barusch, 2009). (Somerville & Sprigings, 2005) The distributive principle of libertarian concept says: From each according to his choice; to each according to his product (Barusch, 2009). Allocation of resources according to product is central under libertarian view of distribution. Libertarians believe in liberty over equality. They are of the opinion that inequality is acceptable and fosters social being and welfare in a society. Equal treatment in distribution ultimately leads to unequal distribution of resources. This is the price for freedom and government need not to interfere (Barusch, 2009). Libertarians focus on the benefits of free market over a system controlled by government. The reason being a free market society enjoys greater productivity among its workers and greater incentive to generate capital (Barusch, 2009). Free Market Economy Supporters of free market economy claim that individuals should be allowed to make contracts with others regarding wages and prices and profits. People should be free to compete with each other to gain maximum benefit. They believe that if markets are set free, the outcome will be just and fair distribution of gains and responsibilities in society. People who support free market economy will never support unregulated markets (Finifter, 2009). Free markets ensure efficient distribution of goods to those who grab the opportunities to obtain their desired products and services. Free markets operate on people’s demands. They produce only those products which are demanded by the consumers. Consumers set their desired price. Free markets work for people, for the betterment and welfare of the society (Boyes & Melvin, 2009). In free markets, prices are determined by both buyers and sellers in the market. They decide according to their own free will without anyone’s influence (Ertuna, 2009). A free market economy is the most efficient system because the market is the invisible hand that ensures resources are allocated productively keeping in mind the consumer choice and utility maximization. The state only plays a passive role, enforces rule, and provides protection to economic actors. State cannot dominate, influence or regulate the economic activities and decisions. The questions regarding what to produce, when to produce, how to produce is in the hands of private actors rather than the state (Guo, 2006). Harsh Reality shown in Food, Inc. Food, Inc. is a video depicting bitter truth about the food people have in their daily lives in USA. The video tells about the whole process of corporate farming, how agribusiness produces food in an unhealthy manner which is harmful for people and animals. It is shocking to know the truth about what we eat, how it is produced, who we have become as a nation and where we are going from here. The way we eat has changed more in the past 50 years than in the previous 10,000 years. Chicken is now being grown in 49 days, then why would anyone want to wait for 3 months. America is killing everyone by its sickening 47,000 products displayed in the shelves of supermarkets. The food they are delivering in the supermarkets is hazardous and environmentally harmful for people and animals. If we get to know the way they make things grow artificially, we would probably not want to have food again. Money is the only thing that comes to the minds of these producers and suppliers. Millions and billions of lives are at the hands of these producers who contaminate products by the heavy use of petroleum-based chemicals and keep them for selling. The world has become so selfish that profit comes first, and then the precious lives of people and animals (Kenner, 2009). All the vegetables and fruits have been transformed. We have bigger chickens, perfect pork chop, even tomatoes that won’t go bad. But they have lost their nutritional value and contain harmful bacteria which cause illness. Chicken has been changed to supersized chicken but have lost taste in it. This is the reason for widespread obesity and diabetes among Americans. Our nation’s food supply is in the hands of corporations who keep profit as their priority over the consumer health, safety of workers and the environment surrounding us. The only motto of the food suppliers is to make food as cheap and abundant as possible. Cheap food has hidden cost behind them. On one hand, they are saving dollars on buying cheap food and on the other; they are also giving away their dollars on medicines. The filmmaker Robert Kenner is of the opinion that it is going to be the mothers feeding their children, to bring a change in the system (Kenner, 2009). Barb writes in his article about Food, Inc. He is of the opinion that customers are getting so blind on making the choices when in supermarkets. They pick all the shiny packaged products and think they are making the best choices, when they are actually going for chemicals (Hughesian, 2011). It is so deceiving for the customers. A chicken dinner with vegetables can be regarded as a healthy dinner. The consumers may not know the fact that the chicken may be factory farmed, raised in inhumane conditions that facilitate the spread of disease. If one animal is contaminated, others may also get the disease. Chicken may be genetically modified as per the desires of consumers. The chicken may be modified to have more breast meat. These chickens are also given antibiotics. This is certainly not healthy for chickens who are grown in unhealthy conditions and cramped into one tiny living space (Hughesian, 2011). Socially Responsible Alternatives By going through the above example of Food, Inc. we need to incorporate the element of corporate social responsibility (CSR) in our businesses in order to achieve a successful long-term relationship with our customers. Corporate Social Responsibility Today’s corporate social responsibility is to ensure betterment and welfare of the society in which it functions . CSR is important to incorporate in today’s business environment because there would be greater acceptance of the business in the society and greater professionalism in management would be seen. Corporate social performance would entail a business to incorporate the principles of social responsibility, process of social responsiveness and policies, strategies that enhance firm’s societal relationships. Corporate social performance is not only the idea of acceptance of the concept but a proactive approach in implementing projects (Fernando, 2009). Corporate social responsibility requires companies to behave in a socially responsible manner towards their society, people and surroundings, by making sure their business which might be giving dollars to the company but might as well giving harm to the society (Bilson, 2010). In a global economy, organizations have a responsibility towards their society. Long term sustainability requires organizations to think from other perspective rather than solely from profit point of view. Organizations need to think about corporate citizenship. Today, awareness is being building up among organizations and impact of CSR is seen worldwide, from human rights and labor practices to health care and environment. Lockwood is of the opinion that HR in any organization plays an effective role in leading and educating firms regarding the importance of CSR, and simultaneously in implementing HR practices that support company’s business and CSR goals (Lockwood, 2004). Conclusion A free market economy can do better when it comes to ethics and welfare in a society, since a free market economy has the power for decision making in the hands of private actors rather than the state. A business if not implementing ethical policies will not last for long. The movie Food, Inc. has clearly explained us how the selfish corporate people can cross the limits just for the sake of money. It is considered as a general fact that customer satisfaction is one of the most important factors in a successful business policy. A company must continue to change its products and services as per the changing needs and preferences of customers, but should also keep in mind the ethical responsibilities and issues affecting the business and people surrounding it (Shaw, Barry, & Sansbury, 2009). Wal-Mart has focused only on its customers. For its customers, it has kept the prices of products very low. Today, there are issues concerning who are being affected by its low prices for its valued customers. Wal-Mart reputation has gone dropped to a great extent as mass media has reported low benefits to employees, environmental issues, and ethical issues in top management (Ferrell O., Fraedrich, & Ferrell L., 2009). References Barusch, S. A. (2009). Foundations of social policy: social justice in human perspective. CA: Cengage Learning. Bilson, J. (2010, March 20). Corporate Social Responsibility at The Body Shop: Is The Body Shop Famous for Lip Balm and Corporate Citizenship? Retrieved May 28, 2011, from http://www.suite101.com/content/corporate-social-responsibility-at-the-body-shop-a215660 Boyes, W. J., & Melvin, M. (2009). Fundamentals of Economics. Boston: Houghton Mifflin Company. Ertuna, İ. Ö. (2009). Wealth, welfare and the global free market: a social audit of capitalist economics. England: Gower Publishing Ltd. Fernando, A. C. (2009). Business Ethics: An Indian Perspective. Delhi: Dorling Kindersley Ltd. Ferrell O., C., Fraedrich, J., & Ferrell L., L. (2009). Business Ethics: Ethical Decision Making and Cases. Mason, OH: Cengage Learning. Finifter, W. A. (2009). Political Science. Delhi: V.K. Enterprises. Guo, S. (2006). The political economy of Asian transition from communism. Hampshire: Ashgate Publishing Ltd. Hughesian, B. (2011, March 4). Food, Inc. tells a shocking story about our food production industry! Caribean Agribusiness Association. Retrieved June 2, 2011, from http://www.cabaregional.org/food-and-agribusiness/food-inc-tells-a-shocking-story-about-our-food-production-industry/ Schlosser, E. (Producer), & Kenner, R. (Director). (2009). Food, Inc. [Motion Picture]. Australia. Lockwood, N. R. (2004, December). Corporate social responsibility: HR's leadership role. Retrieved June 2, 2011, from http://findarticles.com/p/articles/mi_m3495/is_12_49/ai_n8583189/ Shaw, W., Barry, G., & Sansbury. (2009). Moral issues in business. Melbourne: Cengage. Somerville, P., & Sprigings, N. (2005). Housing and social policy: contemporary themes and critical perspectives. New York: Routledge. Read More