Teaching the Ethical Foundations of Economics

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Teaching the Ethical Foundations of Economics. Lesson 4: Do Markets Make Us More Moral?. Limitations of Markets. Competitive markets can provide incentives that work against discrimination. However, markets have sometimes contributed to discrimination. Housing discrimination - PowerPoint PPT Presentation

Text of Teaching the Ethical Foundations of Economics

Supply and Demand

Teaching the Ethical Foundations of EconomicsLesson 4: Do Markets Make Us More Moral?

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Limitations of Markets

Visual 4.5Competitive markets can provide incentives that work against discrimination. However, markets have sometimes contributed to discrimination. Housing discrimination White homeowners in many parts of the nation feared that desegregation in housing would lead to reduced home values. Recall white flight to suburban areas after the Civil Rights Acts were passed.

What Values Might Markets Encourage?Market: CooperationBy stressing self-interested behavior, markets encourage cooperation among strangers.How do those people at Costco know what I want?Non-Market CooperationNon -market systems depend on tradition or force to encourage people to work together.Joe Stalin deliberately placed manufacturing and agricultural enterprises across the Soviet Union to force people from diverse backgrounds to work together. When coercion was no longer used, it all fell apart.Foundations of Market ValuesMarket: HonestyWhile markets are susceptible to scams and schemes, most business people recognize that being honest and trustworthy with their customers will benefit their businesses over the long term.People wont buy from cheaters.Non-Market: HonestyNon-markets systems rely on tradition or force to encourage people to be honest. Tradition and force often fail. People only trust people they know - - family or friends.It is hard to maintain business relationships when customers cannot influence the behavior of the business.What Values Might Markets Encourage?Market: DisciplineBy stressing self-interested behavior, encourage individuals to discipline themselves to produce goods and services wanted by others.Serving others is rewarded.Non-Market DisciplineNon-market systems depend on tradition or force to encourage individuals to produce goods and services for each other. Failure to produce can lead to loss of respect or worse.What Values Might Markets Encourage?Market: CourtesyMarket: ToleranceMarket: ResponsibilityMarket: AccountabilityMarket: EnterpriseNon-Market: ResponsibilityNon-Market: AccountabilityNon-Market: EnterpriseNon-Market: CourtesyNon-Market: ToleranceThe Value of Enterprise