Chapter 3

Ethical Theories
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Ethical Theories

• Descriptive Ethics: Moral system of a

group or culture
• Normative Ethics: Moral system used to
make moral decisions
• Bioethics: the application of ethics to
health care
Moral Philosophy

• Teleological: the end justifies the means

• Deontological: the means need to be

carefully weighed without primary concern
for the outcome
Utilitarianism

• Founders are Jeremy Bentham and John Stuart

Mill.
• One of the first purely secular ethical theories.
• It has deeply influenced economics and
political science.
 Utilitarianism

• Teleological theories hold that the

rightness of actions is determined by
– The amount of good consequences they
produce
• Actions are justified on teleological
theories by
– Virtue of the end they achieve

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 • Deontological theories hold that
– We have a duty to perform certain acts
because
• Of the nature of these actions of
the rules from which they follow
• Not because of the benefit to ourselves or others

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Utilitarianism

• Example:

– Suppose I am a train operator and I notice

someone on a train track who I cannot alert of the
oncoming train. If I divert the train, then many
will die but if I don’t then the one will die. Which
should I do?
 The Principle of Utility

• Classical utilitarianism states an action is

right if and only if
– It produces the greatest balance of pleasure
over pain for everyone
• The four theses of utilitarianism are:
– Consequentialism, hedonism, maximalism,
and universalism

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 Act and Rule Utilitarianism

• Act-Utilitarianism states an action is right if

and only if it
– Produces the greatest balance of pleasure
over pain for everyone
• Is a simpler theory and provides an
easily understood decision procedure.

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 Act and Rule Utilitarianism

• Rule Utilitarianism states an action is right

if and only if it
– Conforms to a set of rules
• Acceptance of which would produce the greatest
balance of pleasure over pain for everyone
• Gives firmer ground to the rules of
morality.

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 Problems With Calculating Utility

• Some actions produce more pleasure for

us than others.
• It is easy to rank actions in
order of the pleasure they give us.
• It is impossible to accurately measure how
much pleasure they give us.

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 Teleological theories have two strengths.

1. They fit with much of our ordinary moral reasoning and

thus can explain why truth-telling, promise-keeping,
respect for property, and so on, are right actions. On
the other hand, teleological theories can also explain
why lying can occasionally be the right thing to do.
2. Teleological theories provide a relatively precise and
objective method for moral decision-making in which
one need only calculate the consequences of the
available alternatives. Much of our moral reasoning is
non-teleological in nature. For example, we generally
are obliged to keep our promises, even when more
good might be achieved by breaking them.
3. It is liberal ( it appeals to no authority in resolving
differences of options)
Weakness of Utilitarianism
• There is a possibility of injustice regarding
the distribution of goods ( the rights of any
one person are not be taken into account)
• No rights have any greater weight than
others. ( certain individuals may suffer
greater harm, while others receive only
modest benefits)
• Ignores non utilitarian factors that are needed
to make moral decisions. Eg. (justice – action
should produce the greatest balance of value
for greater number of people, - unjustified
treatment for minorities)
The Concept of a Right
These must be carefully distinguished for several
reasons.
1. The concept is used in many different ways, yielding
different interpretations.
2. Rights can come into conflict with one another.
3. Because of the moral significance we attach to rights,
there is a tendency to stretch the concept of a right in
ways that dilute its meaning.
4. Rational persons can disagree about the existence of a
particular right, such as the right of all persons to receive
adequate food, clothing, and medical care.
Rights can be understood as entitlements that enable us
to act on our own and be treated by others in a certain
way, without asking permission or being dependent on
other people’s good will.
Distinctions between rights
1. Legal rights and moral rights. Legal rights are
rights that are recognized and enforced as part of a
legal system. Moral rights do not depend on a legal
system but are the rights people morally ought to
have.
2. General and Personal Rights. Rights that involve
claims on specific identifiable individuals are called in
personam rights. Other rights are general rights since
they involve claims against humanity in general.
3. Negative and positive rights. Negative rights
entail an obligation on the part of others to refrain
from acting in certain ways. Eg. Right to property.
Positive rights, such as a right to education, impose
obligations on others to provide us with some good or
service and thereby act positively on our behalf.
Natural rights theory

Natural rights or human rights, belong to

all persons solely by virtue of being
human. They are
universal - because they are possessed
by all persons,
unconditional - they do not depend on
any particular practices or social
institutions.
The idea of natural rights goes back to the ancient
Greeks,
there is a higher law that applies to all persons at all
times and places.

John Locke supported the idea of natural rights by

describing a state of nature, which is the condition of
human beings in the absence of any government.
He held that humans have rights even in the state of
nature and that the main reason for forming a
government is to preserve these rights.
The idea of natural rights goes back to the ancient
Greeks,
there is a higher law that applies to all persons at all
times and places.

John Locke supported the idea of natural rights by

describing a state of nature, which is the condition of
human beings in the absence of any government.
He held that humans have rights even in the state of
nature and that the main reason for forming a
government is to preserve these rights.
Justice

• Used to evaluate actions of individuals,

social, legal, political and economic
practices and institutions.
• Just - right - good - closer to “ fair”
• Justice is concerned with righting of
wrongs
Aristotle’s Analysis of Justice

Justice

Universal particular
Justice justice

distributive compensatory retributive

justice justice justice.
Distributive justice deals with the
distribution of benefits and burdens,
mostly in the evaluation of social, political,
and economic institutions.
Compensatory justice concerns the
compensation of persons for wrongs done
to them in voluntary relations such as
contract breaches.
Retributive justice involves the
punishment of wrongdoers who have
participated in involuntary relations such
as criminal acts.
Distinction between just procedures
and just outcomes
John Rawls defines procedural justice as
Perfect procedural justice always
produces a just outcome;
imperfect procedural justice produces a
just outcome only to a certain extent;
pure procedural justice is whatever
results from following a given procedure.
because there is no independent criterion
for a just outcome.
Cost-Benefit Analysis
• Monetary units are used to express the benefits
and drawbacks of various alternatives in a
decision-making process.
• The chief advantage of cost-benefit analysis is
that the prices of many goods are set by the
market, which eliminates the need to have
knowledge of people’s pleasures or preference
rankings.
• Because of its narrow focus on economic
efficiency in the allocation of resources, cost-
benefit analysis is not commonly used as a basis
for personal morality.
• It cannot determine such moral questions as the
rights of consumers in matters of product safety or
environmental protection but can be used only to
determine appropriate levels.
The problems of assigning monetary values.
1. Not all costs and benefits have an easily determined
monetary value; eg. enjoyment of family and friends,
peace and quiet, police protection, and freedom from
the risk of injury and death.
2. The market price of a good does not always
correspond to its opportunity cost. Eg. the fact that a
yacht costs more than a college education does not
mean that consumers value yachts more highly than
education

One can attempt to overcome these problems

through shadow pricing. This approach enables a
value to be placed on goods that reflects people’s
market and non-market behavior. eg. by comparing
the prices of houses near airports with the prices of
similar houses elsewhere,
Should all things be assigned a monetary
value?
Some argue that placing a dollar value on
certain goods actually lessens their perceived
value, since they are valued precisely
because they cannot be bought or sold.
Friendship, love, and life itself are examples
of such goods.
Such arguments are beside the point,
because cost-benefit analysis requires that a
value be placed on goods only for the
purposes of calculation.
Other Approaches
Best Ratio Approach
• The best-ratio approach is a pragmatic approach
based on the belief that people are basically
good, that under the right circumstances they
will behave ethically and that under certain
conditions they can be driven to ethical
behavior. Managers should do everything
possible to create conditions that promote ethical
behavior and try to maintain the best possible
ratio of good choices to bad and ethical
behavior to unethical behavior. When hard
decisions must be made, managers should make
the choice that will do the most good for the most
people.
Black-and-White Approach
• Right is right, wrong is wrong, and
conditions are irrelevant.
• The manager’s job is to make ethical
decisions and carry them out, also to help
employees behave ethically regardless of
circumstances.
• When difficult decisions must be made,
managers should make fair and impartial
choices regardless of the outcome and
do the right thing without concern for
short-term circumstances.
Full-Potential
• Decisions are made based on how they
will affect the ability of those involved
to achieve their full potential.
• People are responsible for realizing their
full potential within the confines of
morality.
• Choices that can achieve this goal without
infringing on the rights of others are
considered ethical.
 
• Immanuel Kant (1724-1804)

• According to Kant there should be

no attention paid to consequences

[Link] Categorical
Imperative
[Link]
[Link] for Persons
[Link]’s concept of
Rationality
Kantian Theory
The Categorical Imperative
• The fundamental principle of morality in
Kantian ethics is the categorical imperative,
which is: Act only according to that maxim
by which you can at the same time will,
that it should become a universal law.
• moral and non-moral uses of the word ought.
• hypothetical imperatives that takes the form
“if you want x, then do y.”
• categorical imperatives
“Do y,” without any reference to empirical
conditions, such as desires.
 The Universalizability Principle

• Principle of Universalizability
– If act is right/wrong for one
person then
• It is right/wrong for all other relevantly
similar persons in similar circumstances
• As a matter of logic, we must be
consistent in the judgments we make.

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 Respect for Persons
• The second formulation of the categorical
imperative is: Act so that you treat humanity,
whether in your own person or in that of
another, always as an end and never as a
means only.
• Virtually all ethical systems involve a
respect for persons
• To respect person is to respect them as
rational creatures.
Kant’s concept of Rationality
• Rationality gives persons greater moral value than
any thing else.
• Autonomy – acting on self devised rules
• Autonomy - Greek – “self” and “law”
• To be autonomous is to be lawgiver to oneself

• To respect other person is to respect their

capacity for acting freely, (respecting their
autonomy)
Kant: Pro & Con
Pro:
• It is admirable to act from duty
• Morality should be evenhanded
• The importance of respect for other
persons
Con:
• Maintains the split between duty and
inclination
• Ignores the role of the emotions in
morality
• Ignores the place for consequences in
morality
The Egalitarian Theory of John Rawls

• Rawls-theory of Justice

“ assume that if individuals in same hypothetical

pre-contract situation would unanimously accept
certain terms for governing their relations then
those terms are just and all people have an
obligation to abide by them”
The principles of justice

Rawls acknowledges three principles of

justice

1. The principle of equal liberty

2. The difference principle

3. The principle of equal opportunity

1. The principle of equal liberty
• Holds that each person has an equal
right to the most extensive set of basic
liberties that are compatible with the
system of liberty for all.
• Example

Person who cuts the cake will get the

last piece
2. The difference principle
1. Allows exception to the principle of equal liberty if
some unequal arrangement benefits the least well
off person.
2. Which means all unequal allocation is considered
just if the worst off person is better off with the
new distribution than the worst off person under
any other distribution.
3. Social and economic inequalities are to be arranged
so they are both to the greatest benefit and have a
fair equality of opportunity
3. The principle of equal opportunity
1. Provides that all public offices and employment
positions be made available to everyone.
2. Society should strive to offer all of its members
an equal opportunity to fill positions through the
elimination of differences caused by accidents of
birth or social condition
3. Natural differences should be used for benefit of
all.
 Libertarianism
Friedrich Von Hayek
Spontaneous order
Information processing

Robert Nozick
Entitlement theory
Hayek and Classical Liberalism

Spontaneous order – is a system in which

individuals with in certain general rules, make
decisions that result in a spontaneous order.
• Hayek called spontaneous order “catallaxy.”
Advantages
[Link] and expands the basic rights to
liberty and property
[Link] complex (contribution of every one)
Information Processing
Collecting , storing and processing information
to make efficient economic decisions.
Nozick’s entitlement theory
• Robert Nozick - The entitlement theory
“ A distribution is just, if every one is entitled to
the holdings they possess”
The entitlement theory comprises of 3 main
principles:
- Principle of just transfer (has a liberty to
transfer)
- Principle of just original acquisition
- Principle of rectification ( to correct injustice
by restoring holdings to the rightful owners .
Objections to Nozick’s theory

• rights such as a right to a minimal level of

welfare, some consider to be at least as
important as rights of property owner.
• Nozick overlook the point that not all restrictions
of liberty are due to interference by the state.
• Justice in transfers and original acquisition
depends on conditions that are scarcely ever
satisfied in the actual world.
Virtue Ethics
• virtue ethics is the idea that
morality is not performing certain
right actions but possessing a
certain character.
• Instead of asking,
“What actions are right?”
virtue ethics asks,
“What kind of persons should we be?”
What are virtues?
• Virtue – acquired traits , something that we
actually practice.
- Some thing we admire in a person.
- A state of character
- Excellence of some kind that is worth
having for its own sake.
Aristotle called it – practical wisdom (whole
of what a person needs to live well)
Virtue Ethics
• Virtues have three features:

– They are a relatively fixed trait of character or mind.

– They typically involve a disposition to think, act, or feel in certain
ways in certain circumstances.
– They are the primary basis for judging the overall moral goodness or
worth of a person.

• The virtues are character traits that are cultivated – they are not
something that one is born with. We learn what is good or bad, right
or wrong in virtue of (no pun intended) observing virtuous
individuals act, feel, and behave.
Strengths and weaknesses of virtue ethics

A strength of virtue ethics is that it fits with

our everyday moral experience.

A weakness of virtue ethics is its

incompleteness and conflicting interests.
 Virtue in Business

• Virtue ethics could be applied to business

directly by holding that
– The virtues of a good businessperson are
the same as those of a good person

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