- List of Figures
- List of Tables
- Notes on Contributors
- Adam Smith and the Study of Ethics in a Commercial Society
- Virtue and Economics, Horse and Cart
- With All Due Respect: A Kantian Approach to Economics
- Ethical Pluralism in Economics
- Economic Ethics and the Capability Approach
- Evolution and Moral Motivation in Economics
- Morality as a Complex Adaptive System: Rethinking Hayek’s Social Ethics
- On the Evolution of Ethics, Rationality, and Economic Behavior
- Human Ethicality: Evidence and Insights from Behavioral Economics
- Ethics <i>and</i> Economics: A Complex Systems Approach
- Economics and Ethics within the Austrian School of Economics
- Feminist Economics and Ethics
- Economy and Culture: The Importance of Sense-Making
- Humane Markets: The Classical Tradition of Political Economy
- Capitalism and Democracy: Allies, Rivals, or Strangers?
- The Moral Status of Profit
- The Ethics of Money and Finance
- Ethics <i>and, in</i>, and <i>for</i> Labor Markets
- Cost-Benefit Analysis and Social Welfare Functions
- The Normative Economics of Social Risk
- The Ethics of Making Risky Decisions for Others
- The Tragedy of Economics: On the Nature of Economic Harm and the Responsibilities of Economists
- Economics, Ethics, and Health Insurance
- Deontological Morality and Economic Analysis of Law
- The Ethics and Economics of Ecological Justice
- Civil Rights, Employment, and Race
- Lessons from Economics
Abstract and Keywords
There is a common fallacy, among critics of capitalism, that because firms are licensed to pursue profits, the purpose of the economic system as a whole must be to facilitate the realization of such profits. This is manifestly not the case, because the design of markets, including the insistence on competition between firms, is intended to bid profits down to zero. The lure of profit is what leads firms to compete with one another, which creates an institutionally enforced collective action problem that drives prices toward the level that allows for a more efficient allocation of labor, resources, goods, and services. The achievement of these “market clearing” prices is the actual purpose of the system. This explains why many people find the profit orientation of firms to be morally counterintuitive. Most of everyday morality is aimed at getting people to act more cooperatively, whereas profit-maximization is essentially a free-rider strategy.
Joseph Heath is Professor in the Department of Philosophy and the School of Public Policy and Governance at the University of Toronto. A fellow of the Royal Society of Canada and the Trudeau Foundation.
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