Summary Book philosophy 1 – 5
Chapter 1
List of study items that students should know
Descriptive statement
- Attempts to describe or explain the economy without reaching conclusions about what ought
to be done, ethics is a normative study that attempts to reach normative conclusions about
what things are good or bad.
Economic freedom
- Individuals are free to use, exchange or give their property to another as long as their
actions do not violate property rights of others.
- Implies low taxes (hence small size of government); protection of individual property rights;
absence of restrictions on free trade; no government interference in credit, labor and
product markets.
Economics: neoclassical definition
- The science which studies human behavior as a relationship between ends and scare means
which have alternative uses. Core element of this definition is scarcity: if a person would
have ample time and ample means, all ends can be realized and the agent does not have to
economize.
- Economics exists in all aspects of human behavior in circumstances of scarcity. Any human
act has an economic aspect insofar as persons must make a choice between scarce material
and/or non-material means
Ethics:
The study of morality.
Applied ethics
o The application or further specification of moral action guides to a certain field is
commonly referred to as applied ethics. (as a addition on general normative ethics).
o Examples: medical ethics, engineering ethics and journalistic ethics.
Definition of ethics
o Ethics is the study of morality. Morality concerns the standards that an individual or
a group has about what is right and wrong.’ (Velasquez, 1998: 8) Moral standards are
imperative in nature and may imply moral duties. They do not refer primarily to what
people actually do or how the world is, but rather what people ought to do, how the
world should be.
Economic ethics
o Reflect on the moral standards that apply to economic phenomena.
o Has the same domain as economics, but the perspective from which economic
phenomena are studied differs: whereas economics explains the relationship
between economic phenomena, economic ethics evaluates them from a moral point
of view.
General normative ethics
o Is the philosophical attempt to formulate and defend basic moral principles:
utilitarianism, duty ethics, rights ethics, justice ethics, virtue ethics and care ethics.
Individual ethics
o individual ethics that studies the individuals as the subject of ethical considerations
and actions, often in direct relations with other individuals.
,Macroeconomic ethics
o Considers the morality of economic structures.
Microeconomic ethics
o Encompasses both individuals and individual households and businesses and
evaluates the actions of these individuals entities given the economic structure or
institutions.
o How should the individual economic agent behave on the market?
Social ethics
o The morality of the societal relationships and structures. It studies the collective
decisions of groups (families, action groups, states) and the structural relations
(social systems) that connect these groups.
Extrinsic value
Extrinsic values are values that are merely good as a means to something else. Money, for example,
is for most people only extrinsically valuable: it is usually valued not for the sake of having stacks of
money, but because the money can be used to purchase goods and services that have intrinsic value
(Beauchamp, 1982). Extrinsic values are therefore also called instrumental values.
Institutions
- definition: systems of established and prevalent social rules that structure social interactions”
- Regulative
Include rules, sanctions and regulations which tend to codify socially accepted behavior and promote
certain types of behavior and restrict others, such as government regulations.
The regulative institutions that shape the free market system can be characterized by the concept of
economic freedom.
- Normative
are values, social norms, beliefs and assumptions about human nature and human behavior that are
socially shared.
- Cognitive
include cognitive structures and social knowledge shared by people in a given country that shape
inferential sets that people use when selecting and interpreting information.
Intrinsic value
One intrinsically values something when one values it in itself, that is, apart from valuing anything
else
Invisible hand’
Adam Smith uses the invisible hand as a metaphor for the idea that if people interact freely, the
pursuit of their self-interest is not incompatible with serving the common good
Locke, John
- Based the market system on a theory of moral rights
- Two rights that free markets are supposed to respect are the right to freedom and the right
to private property. Derived from a state of nature, where there is no government.
-
- In this state each man would be equal to all others and perfectly free of any constraints other
than the moral principles that God gave to humanity.
- Reason teaches that that these moral principles hold that no one ought to harm another in
his life, health, liberty or possessions. Each has a right to liberty and a right of ownership over
, his own body, his own labor and the products of his labor. Since the citizens only consent to
government with an intention to preserve himself, his liberty and his property, the power of
the government may never extend beyond what is needed to preserve these rights.
Morality
- Morality concerns the standards that an individual or a group has about what is right and
wrong
Moral standards
- Are imperative in nature and may imply moral duties. They refer to what people ought to do,
how the world should be.
- Moral standards should overrule others, non-moral standards, even if in our person
interest to cheat, moral standards tells us we should not do so.
- Moral standards should be impartial: moral standards are evaluated from a point of view
that goes beyond the interest of a particular individual or group to a universal standpoint in
which everyone’s interests are impartially counted.
- Include the values (or ideals) we place on the kinds of objects we believe are morally right or
wrong, as well as the norms we have about the kinds of actions we believe are morally right
or wrong
- Are prescriptive statements.
- Norms
- Norms are the rules or conventions that should be followed up in order to realize moral values.
They relate to values as means related to ends.
- If norms do not serve any value, they are meaningless, on the other hand without norms, values
remain unattainable.
- Norms give an answer to the question, what should we do?
- Values motives persons, norms regulate the behavior, they are often structured as Thou shall, thou
shall not.
- Also behavior can be regulated by social or legal norms.
- Moral norms judge behavior as good and evil
- Legal norms as legal or illegal
- Social norms as proper and improper behavior.
- Mostly the three types of norms overlap
- Values
- Values concern ends or ideals that persons pursue and give content to how they define the good
life. Can be both intrinsic and extrinsic in nature.
- One intrinsically values something when one values it in itself, that is, apart from valuing anything
else.
- Extrinsic values (instrumental values) are values that are merely goods as means to something else.
- Examples: freedom, respect for other people and justice
- Rather global in nature and hold in most situations, moral norms are often independent on the
context of the situation.
- Virtues
Virtue ethics views the cultivation of certain traits of character as one of morality’s primary functions,
because these virtues enable people to live a good life.
, - Characteristics
Chapter two describes three characteristics of utilitarianism: consequentialism, welfarism and sum
ranking.
Moral dilemma
-Can be seen as a conflict between different moral standards, including values, ideals and duties.
-Definition: a dilemma arising between two moral standards.
- Motivational dilemma
-Definition: A dilemma that arises from a conflict between a moral standard and a practical standard.
This dilemma confronts an individual with the problem of moral motivation: what motivates people
to act in accordance with their moral standards
- Practical dilemma
-Definition: A dilemma that results from a conflict between two practical standards.
-A wide range of practical dilemmas are conceivable: from the dilemma of deciding on the color of
the new company vehicles to the dilemma of deciding what amount of money should be invested in
the next year.
- Examples: profitability, self-interest and pride
Normative statement
- Ethics is a normative study that attempts to reach normative conclusions about what things
are good or bad.
- Is concerned with values and says what ought to be (value statement)
- General normative ethics is the philosophical attempt to formulate and defend basic moral
principles.
- Normative elements are values, social norms, beliefs and assumptions about human nature
and human behavior that are socially shared.
Positive statements
- Positive statement: application of economic policy instrument y will improve the realization
of goal x
- About what ought to be done and how any given goal can be attained
Practical dilemma
- See above practical dilemma
Prescriptive statement
- First, as already noted above, moral standards are prescriptive statements. They are action-
guiding imperatives that do not describe states of affairs but what people ought to do
Robbins, Lionnel
- Economics is the study of the economy. The neoclassical definition of economics is
often based on the definition offered by Robbins (1935) in his famous book Essays on the Nature and
Significance of Economic Science. He defines economics as ‘the science which studies human
behavior as a relationship between ends and scarce means which have alternative uses’ (Robbins
1935: 16). The core element of this definition is scarcity: if a person would have ample time and
ample means, all ends can be realized and the agent does not have to economize. Robbins argues
that economics is not only concerned with material production and consumption. The domain of
economics exists of all aspects of human behavior in circumstances of scarcity. Any human act has an
