What is the relationship between ethics law and economics

what is the relationship between ethics law and economics

that reconceptualizing the relationships between law, economics, and ethics re many legal and economic thinkers, ethics contributes little to the discussion. There is now a thirst for ethics. It is essential to recover the relationship between ethics and the economy. Alignments are proposed for an ethical agenda for the. Jun 22, Still the relationship between economics and ethics should not be portrayed Furthermore each of the aspects has it own modal laws that as it.

First, both theories agree upon the conceptual nature of jurisprudence. Both agree that it is important for a philosophical theory of law to define the core aspects of proper legal practice in order to fulfill the function of philosophical jurisprudence. In fact, much philosophical discussion of law assumes that such a characterization is the essential aim of jurisprudence.

Second in order to arrive at a properly analyzed concept of law, both legal positivism and law as integrity are best constructed from specific techniques of analytic and linguistic philosophy. These techniques include the investigation and clarification of the way people commonly speak about law and careful parsing of social practice that separate the legal from the non-legal. The third common assumption is that the best way to understand legal practice is to understand the necessary and sufficient qualities that make some rule or statement into a law.

Once such a set of necessary and sufficient conditions is identified or approximated it is thought that the essential aspects of particularly legal practices have been understood.

Instead of following this path, theorists within the law and economics movement have attacked the study of law from another angle. Rather than trying to identify unique conceptual aspects of law, what is advocated is an investigation of legal practices through the means of economic analysis. The conclusion offered is that legal practice is best understood through its function as a social tool promoting economic efficiency, in common with other social practices.

The conclusion offered is that legal practice is best described by its purported function as a social tool aiming at the promotion of economic efficiency - something it has in common with other social practices. Law as a Tool to Encourage Economic Efficiency So, instead of looking for the unique and defining features of law, the practitioner of law and economics looks at law as a social tool and tries to evaluate it functionally.

What is emphasized is not its uniqueness as an institution, but its place within the general and common economic structure of society. The descriptive claim most often associated with law and economics is that legal practices are best characterized as tools for encouraging economically efficient social relations.

To understand this claim it is important to examine some of the basic concepts used in models of economic reasoning. Basic Concepts in Economic Reasoning Essential to an understanding of the law and economics movement is a set of fundamental concepts.

The most central assumption in economics is that human beings are rational maximizers of their individual satisfactions, and, in turn, respond to incentives. A rational maximizer of personal satisfaction adjusts means to ends in the most efficient way possible. It is important to realize that economics, as understood here, is not restricted to analysis of monetary issues; there are nonmonetary as well as monetary satisfactions.

Every potential satisfaction is implicated in the calculus of economic satisfactions and therefore can be investigated according to economic or means-end rationality and the trade-off of costs and benefits. Normally what is aimed at through economic reasoning is the improvement of efficiency.

A more efficient allocation is one that increases the net value of resources. Efficiency in the allocation of resources is distinguished from equity, which is concerned with justice in the distribution of wealth. Because some people value specific goods higher or lower than others, economic efficiency can often be raised through voluntary transfers of goods.

The most common example of a transfer promoting efficiency is that of a freely entered into contractual relationship. Because one party to the transaction values money more than the item owned, and the other values the item owned more than the asking price, the exchange produces a net gain in economic goods. Each person ends up better off than before. Some economists have gone so far as to argue that such a contractual exchange is morally optimal because it works within both Kantian and utilitarian theories of morality.

They argue that it works with Kantian theories because a contract is thought to represent a good example of interaction between free and rational agents.

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It works with utilitarianism because the idea of wealth maximization intuitively translates into more utility. Economists have a variety of terms to describe possible outcomes of economic exchanges. For instance Pareto optimality is defined as a point where resources are allocated such that no one is willing to trade further.

what is the relationship between ethics law and economics

Pareto optimality is the eventual endpoint of a series of Pareto superior moves. A Pareto superior change makes at least one person better of without making anyone worse off.

Because no one is worse off after the trade there are no losers in Pareto improvements, although there may be many different Pareto optimal endpoints. Furthermore, economists have developed the concept of Kaldor-Hicks efficiency to compensate for obstacles to freely contracted exchanges. Kaldor-Hicks efficiency, or potential Pareto superiority, results when the overall economic gains outweigh the losses.

In other words, the gains in economic efficiency are large enough that the winners could, if they had to, compensate the losers in the new allocation of goods and still remain better off. How Law Can Encourage Economic Efficiency The law and economics movement claims that law is best understood as a tool to promote economic efficiency. But how can the institution of law help encourage efficient transactions?

The relationship between economics and ethics and the light Dooyeweerd sheds on it

In general, parents and their minor children form a natural family community, [2] which shows a typical biotic foundation and moral qualifying function.

Precisely the fact that the communal tie between parents and children is genetic and based on intersexual procreation make the biotic the foundational aspect or earliest subjection-function of the family.

Yet the leading function of the family is not biotic but moral, since the communal bond of the family is — or at least should be — love. Here love should not merely be regarded as the abstract meaning kernel of the moral aspect as if it exists independently, but as a typical bond of parental love between parents and children. On the basis of the foregoing, commercial surrogacy does not seem unethical.

As long as empirical research does not point out that parental love and partner love in both families are systematically disordered by commercial surrogacy, there is no immediate reason to reject it from an ethical point of view.

what is the relationship between ethics law and economics

It can even be argued that commercial surrogacy discloses a possibility for parental love to a child that otherwise had not been there. This does not alter the fact that there still may be personal values that hinder an economist or ethicist to accept moral surrogacy. This after all may be the consequence of a disclosure of the economic or the ethical towards the pistic aspect. There is moreover another ethical problem that reveals itself in the economic aspect of the family.

The economically qualified household is a non-natural society structure that is founded in the historical aspect. This means that it is a historical and cultural phenomenon and does not have a direct relation to the biotic aspect of procreation.

Nevertheless, it can be a question whether households behave economical if they spend their money on commercial surrogacy or earn money from it. Even if such families themselves behave economical with respect to frugality, available surrogate mothers may be scarce such that prices rise and other families will no longer be able to contract a surrogate mother. Although this economic inequality is not necessarily uneconomical, it might in certain circumstances be unacceptable for economists who involve the ethical principle of neighbour love in their analyses.

Culturally developed societies disclose their economic activity in an ethical direction so that the norms of love are not violated.

Corporate social responsibility The second case concerns corporate social responsibility CSR. Although the definitions and themes of CSR are countless Carrollit apparently concerns the responsibility of corporations, business and firms for social ends. Social responsibility could both involve the promotion of desirable social ends, for instance improving the quality of life of employees and customers and contribution to sustainable economic development, and prevention of undesirable social ends, such as eliminating discrimination and avoiding pollution.

The main question in the debate on CSR e. Bowen and Friedman is whether corporations, in particular in a capitalist free-enterprise and private property economy, have social responsibilities and if so which ones. But more general; is Milton Friedman right with respect to the first question that the only social responsibility of business is to increase its profit? Following Dooyeweerd again, the relevant individuality structures should be distinguished first.

Although there may be many parties involved, it is sufficient to focus on an enterprise, its entrepreneur, its employees, its customers and society as a whole. After all, the enterprise is founded in the historical aspect and has an economic qualifying function.

Though profits are necessary for enterprises in order to survive, the making of profit is not an end in itself. The first objective of an entrepreneur is rather to make his enterprise grand and successful. The social aspect plays a role in this case as well, since enterprises are not isolated but embedded in society.

Above all the enterprise depends on a social environment. This not only follows from the fact that an enterprise needs employees and customers, but also that economy itself requires social interaction and norms. It is for this reason that the enterprise as a structure has a social aspect. That is to say enterprises have a cultural duty as well.

what is the relationship between ethics law and economics

In sum, enterprises have a typical economic destination that commits them to a sparing or frugal attitude. However, the economic behaviour of entrepreneurs not only consists of profit making, but should also take into account the societal context in which the enterprise is embedded. Only in this way the sustainability of the enterprise and the society as a whole is not threatened.

Economic optimization problems after all can never be separated from social questions. Profits for example are in the end always related to the income of employees or prices for consumers. Yet at any rate the economic function of an enterprise cannot be subordinated to its social or ethical aspect; the enterprise is economically qualified and has an economic destination. The way he understands social responsibility on the other hand is rather ethical.

It is true, Dooyeweerd defines the meaning kernel of the social aspect narrowly as interaction, but the social and economic aspects of the enterprise ideally disclose themselves in an ethical direction.

An enterprise in a developed society has ethical responsibilities, for example to provide sufficient incomes for its employees and their families. It appeared that he understands them as two aspects of reality, which are respectively studied by economics and ethics. The former aspect has a meaning kernel of frugality, whereas the latter is characterized by love.

In it the evaluation criterion of efficiency resounds, which is dominant in neoclassical economics. Efficiency is then understood as the quest for an allocation of resources that helps to achieve the most ends.

It may lead to controversial cost-benefit analysis Frank But there are another three points where ethics enters into economics; the meaning kernel of economics is normative itself, economic behaviour is shaped by among others ethical values and economists cannot put aside their ethical convictions. Although I could not go into depth — there is much more to say about these cases and important questions are still open — this exercise made clear that Dooyeweerd has to offer something new to the field.

Before discussing economic-ethical dilemmas from a plurality of positions, the debates can be clarified by departing from elementary facts and aspects of general experience. Instead of being based on public opinion or taste, Dooyeweerd believes the various aspects and, related, meaning, norms and values express themselves in the observable reality.

This leads to an answer to the main question of this article: I think they are the following: Which societal structures are at stake, what are their founding and leading functions and what roles do the economic and ethical aspect play?

What is the economic and ethical side aspect of the dilemma, what are their principles meaning kernel and where do they conflict? Does in the end the economic or ethical component prevail and how can the other be respected as well? As said, the structures of society and reality have a certain origin, meaning and destination, which are intrinsic to reality and can be traced by means of an aspectual analysis.

Here I am going to share some thoughts of mine on how ethics and laws are related, as well as the differences between these two. Ethics, also described as moral philosophy, is a system of moral principles which is concerned with what is good for individuals and society.

In general, laws are made based on moral values of a particular society.

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They describe the basic behavior of human beings. In another word, laws represent the minimum standards of human behaviors, that is, ethical behavior.

They both provide people guidelines of what may do or what may not do in certain situations. In a word, they exist in a purpose of making people benefit from being members of a well-regulated society.