Ethics, Economic Systems & the

Environment

LESSON 4

Economic.ppt 1
 Ethics
• Branch of philosophy;
– study of good and bad, right and wrong;
– principles by which a person or society judges
right and wrong;
– elucidates criteria, standards, or rules for judging
right and wrong.

Economic.ppt 2
 Economics
• Study of how people divide or allocate
valuable goods and services
– Use of resources
– Manufacture “goods”
– Exchange of resources, goods, & services
• Setting of “value” in markets

Economic.ppt 3
 Ethics & Economics
• Questions of value
– What is valuable?
• Money, my car, my house, my computer, my clothes, my cell
phone? My boat! ?
• Family, friends, neighborhood?
• Birds, mammals, insects, flowers, trees, fish?
• Water, air, soil, ecosystem functions, ecosystem services?
– What is right?
• Keeping my stuff?
• Treating other people fairly?
• Preserving living things?
• Preserving clean water, air, soil, etc?
Economic.ppt 4
 Worldviews
• Anthropocentric
• Values money, car, house, computer, clothes, cell phone;
• Family, friends, neighborhood;
• Treating other people fairly;
• Denies or ignores “rights” of non-human entities.

• Biocentric
• Values birds, mammals, insects, flowers, trees, fish;
• Living things have a right to be

• Ecocentric
• Values clean water, air, soil, ecosystem functions and services;
• Ecosystems must be left alone.
25 May 2010 Economic.ppt 5
 Worldviews

25 May 2010 Economic.ppt 6

 Environmental Ethics & Ethicists
• Henry David Thoreau, R.W. Emerson
– Nature as manifestation of divine
• John Muir (aliran konservatif)
– Preservation ethic; natural environment should be kept in
pristine condition
• Gifford Pinchot (aliran konservasi)
– Conservation ethic; use natural resources wisely,
sustainably (dpt d’pertahankan).
• Aldo Leopold
– Land ethic; humans part of land-community
25 May 2010 Economic.ppt 7
 Economics
• Economy: system of production,
distribution, consumption of goods and
services.
• Kinds of economies
– Subsistence economy (hy utk dirinya sndr)
– Centrally planned economy (keg.ekonomi yg
direncakan di sentral/pusat)
– Capitalist market economy
– Mixed economy (spt: indonesia)
25 May 2010 Economic.ppt 8
 Three “schools” of economics
(klasifikasi ekonomi)
• Classical economics
– Resources (soil, minerals, water, food, etc.)
limited, valuable (diberi nilai).
• Neoclassical economics
– Labor, human resources have value. (tenaga kerja
terampil m’miliki nilai drpd yg tdk)
• Ecological economics
– Ecosystem services have value.

25 May 2010 Economic.ppt 9

 Economic Decisions:
• Kinds of economies • Who makes economic
– Subsistence economy decisions??
– Centrally planned – What to produce?
economy & How much?
– Capitalist market – How to produce them?
economy – How to distribute?
– Mixed economy – How to set a price?
m’ntpkn hrg
– Which goods & services
to consume (purchase
and use)?
25 May 2010 Economic.ppt 10
 Economic Decisions:
• Who makes economic decisions??
– Individuals in the marketplace
• = Pure Capitalism, Free-market system

25 May 2010 Economic.ppt 11

 Pure Capitalism
• Adam Smith, 1776,
• Inquiry into the Nature and
Causes of the Wealth of
Nations.
– “invisible hand,”
(tgn2 yg tdk terlihat),
shrsnya terlihat
– laissez faire. (dibiarkan sj)

25 May 2010 Economic.ppt 12

 Pure Capitalism
(Pasar Persaingan Murni)
• Works in small economies where information
freely available.
– No seller or buyer can control or manipulate.
– In large economies, not everyone has information.
• Possible to cheat,
• manipulate supply or demand,
• degrade resources,
• pollute.

25 May 2010 Economic.ppt 13

 Economic Decisions:
• Who makes economic decisions??
– Government
• Centrally planned economy.
• = pure command economic system,
– Former USSR,
– China 1947-present.
– Germany under Nazi Party (1933—1945)

25 May 2010 Economic.ppt 14

 Pure Command System
• Does “pure command” ever work??
– too many tractors,
– not enough toilet paper!!
– Laborers work for State, not for themselves;
• Lowers motivation
• Reduces innovation
• Leaders care little for welfare of people.

25 May 2010 Economic.ppt 15

 Economic Decisions:
• Who makes economic decisions??
– Corporations
• = Corporate capitalist economic system.
• Real system in USA?

25 May 2010 Economic.ppt 16

 Corporate Capitalist System
• Corporations attempt to control markets
(“market share”)
– Maximize profits for shareholders !!
– Produce at low cost.
• cheap foreign labor
• resist labor unions

– Sell at high price (what the market will bear).

– Withhold/conceal information.
– Degrade resources, pollute
• avoid costs of conservation, clean-up

25 May 2010 Economic.ppt 17

 Mixed economy
• Corporations & small businesses regulated
by government
– Encourage entrepreneurism
– Prevent monopolies (anti-trust laws)
– Modify economic (boom-and-bust) cycles
• “Bailout”
– Regulate business practices
• Worker safety, product safety & effectiveness
• Banking system, insurance, taxation, trade
• Pollution may be regulated
25 May 2010 Economic.ppt 18
 Mixed economy
• Corporations & small businesses regulated
by government
– Provide services not available, or affordable, in market
• National security
• Education
• Health care (esp. for poor, elderly)
• Economic “safety net”
– Social Security, unemployment insurance
• Law enforcement

25 May 2010 Economic.ppt 19