Business Ethics

Lecture 07 & 08:

Chapter Three: Justice & Economic

Distribution

Source: Velasquez
Learning Objectives:

a. Why does the question of Fairness / Justice come?

b. The subtle difference between justice and fairness.

c. Comparison between Justice & Utilitarian

benefits, and Justice & Moral rights.

d. Three major viewpoints of justice, their application

and criticisms.
 Justice & Fairness
(A case to start the proceeding)
Black Lung Brown Lung

From coal mine working From Cotton mill working

Applicable for the direct labor Applicable for the direct labor

Cause severe disability & Cause severe disability &

premature death premature death

Federal government has law that Federal government has no such

provide these labor with law for these same sort of disease
disability compensation causing from the same reason.
Justice & Fairness
(A case to start the proceeding)
The people who are affected by “Black Lung” are getting
disable compensation, but the people who are suffering
from “Brown Lung” are not getting a single penny!!

Here the second group can argue that, “Just” treatment is

not upon us. Expectation gap arising from such certain
perception and real phenomena can lead to the stimuli of
deprivation. Here comes the question of Justice / Fairness.
Justice & Fairness

It doesn’t matter how much a society is affluent in

resources, there would always be scarcity; and for this
scarcity there would always be dispute or conflict of
interests among people.

Then people keep complaining referring to their (so

called) disputes and conflicts.
Justice & Fairness

This is the case, for example when one person

accuses another of unjustly discriminating against
him or her, showing unjust favoritism towards
someone else, or not taking up a fair share of the
burdens involved in some cooperative venture.

To resolve this sort of disputes, we should compare

and weigh the conflicting claims of each other and
strike a balance between them.
Justice & Fairness

Justice and fairness are concerned with the

comparative treatment given to the members of a
group when benefits and burdens are distributed.

The terms justice and fairness are used almost

interchangeably, we tend to reserve the word justice
for matters that are especially serious, although
some authors say that the concept of fairness is
more fundamental.
Justice Vs Utilitarian benefits

If a society is unjust to some of its members, then

we normally condemn that society, even if the
injustices secure more utilitarian benefits for
everyone.

Ex: Slavery system

Greater benefits for some can’t justify injustices for

others.
Justice Vs Utilitarian benefits

The other side of the coin is, if the social gains are
sufficiently large, a certain level of injustice may
legitimately be tolerated.

In some countries of extreme deprivation and

poverty, some degree of inequality may be traded off
for major economic gains.
Justice Vs Moral rights

Standards of justice do not generally override the

moral rights of individual ; because to some extent,
justice is based on individual moral rights.

The moral rights of some individuals can’t be

sacrificed merely in order to secure a somewhat
better distribution of benefits for others. However,
correcting extreme injustice may justify restricting
some individual rights.
 Justice &
Fairness

Distributive Retributive Compensatory

Egalitarianism

Justice (3 Viewpoints) Capitalist

Justice

Socialism
Justice

Libertarianism

Rawl’s Justice
Justice (3 Viewpoints)

Distributive: Concerned with the fair distribution

of society’s benefits & burden.

Retributive: Concerned with the just imposition of

punishments and penalties on those who do wrong.

Compensatory: The just way of compensating

people for what they lost when they were wronged
by others.
Justice (Distributive)

Individuals who are similar in all respects relevant

to the kind of treatment in question should be
given similar benefits and burdens, even if they are
dissimilar in other irrelevant respects; and
individuals who are dissimilar in a relevant respect
ought to be treated dissimilarly, in proportion to
their dissimilarity.
Justice (Distributive) Example:
We need a security Guard:

Relevant Respects:
a) Tall & Healthy
b) Can use Rifle
c) Able to work long hour.

X has a+b+c and Y has a+c, but he has more

education than X; then according to relevant respect
we should go for X, not for Y.
Justice (Distributive) (a problem / criticism)

It hypothesizes that we must be consistent when

we treat similar entity or situation. To be
consistent, sometimes we put forth some principle in
front of us by which we treat the similar situation
in similar (consistent) manner.

EX: First come first served for a scarce resource

distribution or Seniority systems.
 Justice &
Fairness

Distributive Retributive Compensatory

Egalitarianism

Justice (3 Viewpoints)
Capitalist
Justice

Socialism
Justice

Libertarianism

Rawl’s Justice
Justice (Egalitarianism)

There are no relevant differences in people that can

justify unequal treatment. All human beings are equal
in some fundamental respect and that, in virtue of this
equality, each person has an equal claim to society’s
good.

It says equality creates just and prosperous system and

society.
JAPAN Vs USA (Collectivists Vs Individualists)
Justice (Egalitarianism)
Criticism
1. There is no quality that all human beings possess in
precisely the same degree. Human beings differ in
their:
a) abilities,
b) intelligence,
c) virtues,
d) needs,
e) desires,
f) and all other physical and mental characteristics.
Justice (Egalitarianism)
Criticism

2. The egalitarian ignores some characteristics that

should be taken into account in distributing goods
both in society and in smaller groups. Like;

Need (Sound Vs Sick),

Ability (Able Vs Handicapped )
Effort (Hard worker Vs Idle)
Justice (Egalitarianism)
Criticism

If everyone is given the same thing, then_

a) Lazy person will get as much as the industrious

one, (lazy don’t deserve this) (effort)
b) The sick person would get only as the healthy
one, (Sick need more) (need)
c) The handicapped would have to do as much as
the able person. (handicapped is not that able)
(ability)
Justice (Capitalist) (Based on Contribution)

A society’s benefits should be distributed in

proportion to what each individual contributes to
a society and / or to a group. The more a person
contributes to a society’s pool of economic good,
the more that person is entitled to take from that
pool.

The more a worker contributes to a business project,

the more that worker should be paid.
Justice (Capitalist) (Based on Contribution)

When capitalist justice is put into action in a business

place, the workers are more likely to put their best
effort in any particular project.

Interestingly , at the same time there might raise

uncooperative atmosphere (because, if one outperforms
another he would get more benefit) in any particular
group; which might bring unexpected negative overall
result for the business.
Justice (Capitalist)

The main problem here is how we can measure the

amount of contribution by a certain individual.
Two measures can be used:

a) work effort
b) productivity
Justice (Capitalist)

Work effort: Here one is rewarded according to the

amount of effort one puts into a certain assignment.
This philosophy flows from “Puritan Ethics”. It
also resembles the American thought of “Work
Ethics”; which places a high value on individual
effort and which assumes that, whereas hard work
does and should lead to success, loafing is and
should be punished.
Justice (Capitalist)
Criticism of Work Ethics

1. If we just consider the amount of effort and not

consider the productivity from those efforts, then
sometimes we might reward incompetence and
inefficiency.
2. If we reward people solely for their efforts and
ignore the ability and relative productivity of highly
talented people, than society would be deprived of
the innovative and welfare based product / concept.
Justice (Capitalist)

Productivity: The greater the quantity of a person’s

contributed product, the more that person should
receive. (Products include services rendered, capital
invested, commodities manufactured, any type of
literary, scientific or aesthetic works produced).
Justice (Capitalist)
Criticism of productivity

1. If we reward people according to their

productivity, then we are ignoring the basic human
rights of handicapped, ill, untrained, and immature
persons.
2. It is difficult to place any objective measure on the
value of person’s product, especially in the fields
such as the sciences, arts, entertainment, athletics,
education, theology and health care.
Justice (Socialism) Based on needs and ability

Work burden should be distributed according to

people’s abilities, and benefits should be distributed
according to people’s needs.

Here the ability of a particular person is judged

first, then according to his ability the workload is
distributed. Likewise, people’s basic biological and
health needs are met and then surplus is used to fill
up the non-basic needs.
Justice (Socialism) Based on needs and ability

Perhaps most fundamental to the socialists view is

that we can imagine the total society as a single
family. In a single family, the able members care
about the unable members and share the benefit of
their work with them. The socialists say that we
should do the same for the community and should
burden more the able person and benefit more the
needy person.
Justice (Socialism)
Implementation in the workplace
(Ability)
Managers sometimes invoke the principle when they
pass out the more difficult jobs among the members
of a workgroup to those who are stronger and more
able, but they often retreat when these workers
complain that they are given larger burdens without
higher compensations.
Justice (Socialism)
Implementation in the workplace
(Need)
Managers also sometimes invoke the principle when
they make special allowances for workers who seem
to have special needs. However, they rarely do so
and often are criticized for showing favoritism
when they do this.
Justice (Socialism)
Criticism

1. There would be no relation between the amount

of effort and the amount of remuneration.
Workers would have no incentive to put forth
any work efforts at all knowing that they will
receive the same regardless of whether they work
hard or not.
Justice (Socialism)
Criticism

2. If the socialists’ justice prevail, it would violate

individual freedom. In this case, a man desires to be
a chef though he has the ability to be an engineer.
Since he has the ability, according to this theory he
should sacrifice his freedom of choice and go for
engineer. The socialist principle substitutes
paternalism for freedom.
Justice (Libertarianism) (Based on freedom)

No particular way of distributing goods can be said

to be just or unjust apart from the free choices
individual make.

Any distribution of benefits and burdens is just if

it is the result of individual freely choosing to
exchange with each other the goods each person
already owns.
Justice (Libertarianism) (Based on freedom)

Nozick’s principle is that every person has a right to

freedom from coercion that takes priority over all other
rights and values. The only distribution that is just is
one that results from free individual choice.
To be more precise, if we make a particular good or
service or get it by the virtue of charity from other
individual (or by other sources), it depends on my sole
discretion whether I exchange or give away my
belongings.
Justice (Libertarianism) (Based on freedom)
Criticism

1. Libertarian talks about a certain value-

“freedom from the coercion of others”. It
sacrifices all other rights and values to it
without giving any persuasive reason, why this
should be done. But, the other forms of freedom
must also be secured, such as freedom from
“Ignorance” & freedom from “Hunger”.
Justice (Libertarianism) (Based on freedom)
Criticism

Ex: In many cases, these other forms of freedom

override freedom from coercion. If a man is
starving, his right to be free from the constraints
imposed by hunger is more important than the right
of a satisfied man to be free of the constraint of
being forced to share his surplus food.
Justice (Libertarianism) (Based on freedom)
Criticism

2. Libertarianism holds that, a person’s share of

goods depends on what he /she produces or what he
/ she gets by the virtue of charity (or other form).
But, there could be some persons who might be
incapable of accessing both the said sources; like ill,
handicapped, who suffers from the scarcity of tools
or lands, too old or too young. So, Libertarianism
creates unjust treatment for the disadvantaged.
Retributive Justice:

It refers to fairly blaming or punishing persons for

doing wrong. It addresses the question of the
conditions under which it is just to punish a person
for doing wrong.

The conditions are stated in the next slides….

Retributive Justice:
Conditions:
1. If people do not know or freely choose what they
are doing, they can’t justly be punished or blamed
for it. Ignorance and inability should not be
punished.

Ex: if the cotton mill owners did not know from the
beginning that the workers could be affected by
“brown lung”; then they should not be held
responsible for the labor’s diseases (Ignorance).
Retributive Justice:
Conditions:
2. It should be made sure that the person who is
being punished has actually performed the
wrongdoing.

Ex: we should not punish an employee just by

hearing from another employee that he has done
wrong. We should verify and collect evidence
referring to that particular allegation and then
punish the employee thereby.
Retributive Justice:
Conditions:
3. The punishment must be consistent and
proportionate to the wrong.

Punishment is consistent only when everyone is

given same penalty for same wrongdoing.

Punishment is proportionate to the wrong when the

penalty is no greater in magnitude than the harm
that particular wrongdoing inflicted.
Retributive Justice:
Conditions:

Ex: A manager is flexible towards favorites, but

harsh to his other employees. (Inconsistent
punishment)

A manager fires an employee just for losing a mere

transaction voucher !! (Inappropriate treatment)
Compensatory Justice:

It refers to fairly restoring to a person what the

person lost when he or she was wronged by someone
else. The wrongdoer has a moral duty to provide
some form of compensation to the person wronged.

There is no hard and fast rule about how much a

wrongdoer should compensate, but the amount
should be equal to the loss the wrongdoer
knowingly inflicted on the victim.
Compensatory Justice:

However, some losses are__

a) Impossible to measure: Reputation
b) Can’t be restored at all: Loss of life

When full restoration is not possible we hold that,

the wrongdoers should at least pay for the material
damages the loss inflicts on the injured person and
the immediate family.
Compensatory Justice:

A person has a moral obligation to compensate an

injured party only if three conditions are there:

1. The action that inflicted the injury was wrong

or negligent.

Ex: Defeating competitor (Not guilty)

Outwitting employer for money (Guilty)
Compensatory Justice:

2. The person’s action was the real cause of the

injury.

Ex: Banker gives a person loan and he uses it

immorally (Not guilty)
Bankers defraud a customer (Guilty)
Compensatory Justice:

3. The person inflicted the injury voluntarily.

Ex: Accident and non-negligent injury (Not

Guilty)

Voluntary injury to someone (Guilty)