MGT610 Business Ethics GDB 1 Solution Spring 2013

Karl Marx (1818 – 1883), a big supporter of socialism,criticized the free markets / capitalistic economies and supported socialism as a better alternative economic system. Socialism and Communism, systems based on Marx’s philosophy, could not survive for a long time and their failure further strengthened expanded free market economic system all over the world.

Now the critics of free market economy think that the business owners in free market economies mostly ignore the ethics of care and public interest. They also believe that this system allows unchecked profit making and in this urge for profit maximization, public interest is ignored at large.

Requirement

Do you think that public interest and ethics of care are ignored in the free market economy? Give at least three logical arguments in favour of your view.

Solution: 

Karl Marx is one of the most controversial figures of the twentieth century; though he lived in the 19th, his legacy has lived on as one of controversy. As a fundamental revolutionary and one of the original minds behind communism, he is renowned as a radical and somewhat dangerous political philosopher. Adam Smith is the father of economics as a science. As a member of the school of classical economic thought, Smith fused economics with moral theory regarding the way man ought to live. Smith’s explanations of market forces and the role of the state in economics have shaped our capitalist economic system today. These men have together been placed in the school of classical economics, signaling that there are similarities in their ideology. Politically, however, these men differ greatly. This essay intends to study some of their most poignant theories to discover when and why these men diverged in their political philosophy.

Karl Marx offers the most critical view of m odern private property and free market institutions. Marx claims th at free-market capitalism necessarily produces extremes of inequality. Since capitalist systems offer only two sources of income–owning the means of production and selling one’s labor–workers cannot produce anything without the owner of the productive forces. But owners do not pa y the full value of the workers’ labor; they pay workers what they need to subsist, keeping the rest for themselves and gradually becoming wealthier as a result.

The result for workers is increased alienati on. Rather than realizing their human nature  and satisfying their real human needs, they ar e separated from what is actually theirs in  four ways:

1. In capitalist societies, the products that the worker produces by his or her labor  are taken away by the capitalist employer and used for purposes that are  antagonistic to the worker’s own interests.
2. Capitalism forces people into work that they find dissatisfying, unfulfilling, and  that is controlled by someone else.
3. Capitalism alienates people from themselves by instilling in them false views of  what their real human needs and desires are.
4. Capitalist societies alienate human bei ngs from each other by separating them into antagonistic and unequal social classes that break down community and  caring relationships namely the Bourgeois and proletariat.

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