The Business System:

Free Market & Morality

Locke & Smith
 Economic Systems
• Traditions, commands and markets
• A business ideology determines the business decisions
made
• Free markets and rights: John Locke
– Natural rights: right to freedom and private property
– State of nature
– Law of nature
• Locke’s theory was used to argue for free markets
• Private property rights are established by nature and
are prior to government
• When a person expends labour and effort to create or
improve a thing, that person acquires property rights
over that thing
 Criticism of Lockean Rights
• No arguments to establish that human beings
have natural rights
– Particularly clear in natural right to property
• Natural right to liberty and property does not
override all other rights
• Free market creates unjust inequalities
• Individualistic assumptions are false
 Free Markets and Utility: Adam Smith
• Free market coupled with private property
ensures that the economy is producing what
consumers want, prices are at the lowest levels,
and resources are efficiently used
• The invisible hand
• A system of competitive markets allocates
resources efficiently among the various industries
of a society
• Hayek bolstered Smith’s argument
– Impossible for government to allocate resources with
the same level of efficiency
 Criticism of Adam Smith
• Unrealistic assumptions
– Monopolies
– All the resources used to produce a product will
be paid for by the manufacturer, who will reduce
these costs to maximize profits
– Every human being is not motivated by a “natural”
and self-interested desire for profit
 Markets and Morals
• The case for free markets
– Freedom
– Utility

• The Ear of Market Triumphalism

– End of cold war and prestige of free market thinking
– Market values started to play a greater role in social life

• Fairness and freedom

• For those with limited alternatives, the free market is not all that
free
 Market Triumphalism
• A prison cell upgrade
• Surrogate motherhood
• The right to immigrate
• The right to shoot an endangered black rhino
• The cell phone number of your doctor
• Rent out space on your forehead
• Serve as a human guinea pig
• Fight in Afghanistan
• Buying life insurance policy of strangerzx
 Doubting Free Markets
• Today free markets are doubted
– Some say the moral failing is greed
• Expansion of markets in all spheres of life

• Two problems with a society with free market

– Inequality
– Corruption
 Outsourcing Pregnancy
• The debate over surrogate motherhood
• Steep prices have led prospective parents to
seek less expensive alternatives
• From a utilitarian point of view, it’s hard to
argue against the rise of paid pregnancy as a
global industry
• The case of poor woman brings into relief the
sense that surrogacy degrades women
 Outsourcing Pregnancy…
• The case of bearing children for others asks
– How free are the choices we make in the free
market?
– Are there certain virtues and higher goods that
markets do not honour and money cannot buy?