PHIL 1273 1st EditionExam # 2 Study Guide Lectures: 11 - 15Lecture 11 (February 25)Introduction to Market EthicsWhat is a market? Markets are the environments for business, or the system for exchanging goods and services, typically in exchange for money. They are the main institutions for distributing goods and services across society.In general, is market distribution just? Moral theories provide tools to articulate whether a distribution of goods is morally right or wrong. In regards to market function for many people, much of the time, for many things, distribution works well, but not always for everything. Sometimes other institutions yield morally better distributions as expressed by conflicts between markets and other moral values.How does the use of abstraction in regards to an ideal market explain market ethics? People are free to make whatever choices they wish. Reality is never quite like this due to complexities. A perfectly free market does not and has never existed. Society experiences mostly mixed systems of markets within a structure of regulation. An ideal case thus helps observers to see the moral arguments used to justify markets as well as the moral arguments used to critique them. These arguments inform policy changes about the role of markets in society.What theories relate to this unit of market ethics and what is a situation in which these could provide valid arguments? Utilitarianism and deontological ethics each offer a perspective on army conscription vs. a market system army. Utilitarian supports the market system as a more effective means of participation. In regards to a deontological justification of the market system, people can chooseto participate rather than be mandated, supporting their freedom. Alternately, Utilitarianism could maintain that society benefits as a whole from an unlimited capacity to grow army size through drafts. Furthermore, deontology preaches duty, such as to one’s society, which could support conscription.What are the basic arguments for utilitarianism and deontological ethics in market systems?Utilitarianism: markets are good at getting people what they want, thus they produce good consequences.Deontological Ethics: markets allow people to act freely, thus they respect rights.These approaches are very different and can conflict.Lecture 12 (March 2) Continuation of Basic Market Ethics and Introduction to Utilitarian Market JustificationsWhat is economic efficiency? Economic efficiency is the situation in which it is impossible to generate a larger welfare total from the available resources – some people cannot be made better off through the reallocation of goods or resources without making others worse off. This has a utilitarian tone.What is efficient exchange? Through efficient exchange, at least one person is made better off, and no one is made worse off—a concept known as “Pareto Optimum” or “Pareto Optimality.”What is the claim made based on efficient outcome? The claim regarding efficient outcomes in markets is that exchanges on a free market are efficient and lead to an efficient outcome. The distribution of goods and services produced by free markets is efficient. This is a way of saying that the distribution is just and meets the moral standard.How is the previous claim utilitarianism?In free exchange, both parties give up what they want less to gain what they want more so that both parties are satisfied. Preference satisfaction equates to the good. The consequence of free exchange is good, so the exchange is morally right, so the system of exchange, the market, is morally right, thus justifying utilitarianism.Lecture 13 (March 9)Continuation of Utilitarian Market JustificationWhat is the Hausman and McPherson critique of utilitarian policy and their example of use? The reading claims that oftentimes the only concern is welfare and its distribution, which mistakenly identifies welfare with satisfaction of preferences. They say welfare should not be the only goal. Within their discussion, they debate whether the public benefits more from cash or in-kind benefits. This is government policy, not market material, but they conclude that themoral goal is not simply to increase the good, which is applicable to markets. Markets are justified because they increase the good through preference satisfaction, but there are other moral considerations beyond increasing the good as it is defined.What is the argument for cash benefits as well as its flaws and its objections to the critique? Cash allows recipients to satisfy preferences, whereas in-kind benefits might not fulfill the recipients wants most. The utilitarian idea involves preference satisfaction as the equivalent to the good, thus the rights thing to do is to give in cash.Hausman and McPherson say that preference satisfaction does not equal the good all the time. People often want things that are bad for them and do not want things that are good for them due to addictions, psychology, and false belief. Standards of good exist independently of an individual’s preferences. If the good does not equal preference satisfaction, there is no reason to give in cash rather than in-kind.This could lead to paternalism and coercion, in which an authority knows what is best and has the right to impose this. Although coercion is wrong, however, this does not mean that letting people be free to attain their desires is actually good for them. The authority may be right even if coercion is wrong.What are two distinct objections to paternalism?Utilitarianism believes that paternalism hinders preference satisfaction, which is the good, or the goal of morality.Kantianism believes people must respect others’ autonomy, which is more important that consequences. One can perceive something as bad for someone else to desire or attain but still sustain a respect for that person’s autonomy. Paternalism removes rights, freedom, opportunity,and fairness.Lecture 14 (March 11)Review of Utilitarian Justifications and Introductions to Deontological Justifications of the MarketWhat are the basic utilitarian justifications of the market and its critiques? Preference satisfaction is good. Markets satisfy preferences, so they have good consequences, thus markets must be morally justified.However, preference satisfaction is not the only good. Just because markets satisfy preferences does not imply that they have good consequences, so it is not the case that markets are morally