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Capitalism and Ethics in Business

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What are several salient business ethics issues in precapitalist America?

How did Adam Smith justify the ethics of capitalism?

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Solution Summary

The article looks at the progress of ethics in business from the pre-capitalist to the post capitalist era in America. It also analyses the views of Adam Smith towards capitalism.

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In the pre capitalist era, the American ethos emphasized the application of ethical values to business (Calvo, 2011). These ethical principles originated from Christian altruism and republicanism that valued patriotism. The economy of 17th and 18th century was of localized type. Social equity, communalism and justice were emphasized (Tawhney, 2000). The economy at this time could be termed to be 'moral', because it urged fair dealing and banned the charging of interest, terming it as sacrilege (Innes, 1995). Commercialism was criticized as being anti social. Religious beliefs were considered essential to determine economic activities.

It has been said about Adam Smith that "While some men are born small and some achieve smallness, it is clear that Adam Smith has had much smallness thrust upon him"-Amartya Sen (Wells, 2012). Therefore the beliefs of Adam smith have always been considered very pro capitalist and anti - ethics in business.
Adam Smith felt that government interference was a deterrent in the production and distribution of wealth (Welch, 2006). According to him, non interference by the government results in more efficient business ...

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