Analysis of Capitalism, Ethical Considerations, and Social Impact

This report delves into the multifaceted nature of capitalism, defining it as an economic system driven by private ownership and profit maximization. It explores the tension between self-interest and societal well-being, highlighting the potential for financial crises and income inequality. The report examines the impact of capitalism, particularly in the context of the 2008 global financial crisis, and analyzes normative ethical theories like utilitarianism, categorical imperative, and Aristotelian virtue ethics to understand the ethical implications of capitalist practices. Recommendations are provided to mitigate risks and foster a more equitable economic environment, including the consistent application of corporate social responsibility (CSR) initiatives. The conclusion emphasizes the importance of balancing profit motives with societal needs, advocating for ethical decision-making in business practices to promote sustainable economic development and prevent future crises.

Report

Table of Contents
INTRODUCTION...........................................................................................................................4
PART 1 ...........................................................................................................................................4
PART 2............................................................................................................................................5
CONCLUSION................................................................................................................................8
PART 3............................................................................................................................................8
REFERENCES..............................................................................................................................11

Executive Summary – Capitalism is defining as economic system in which overall trade,
profits and industrial rights are controlled by private companies. The major objectives of this
procedure is to maximise profitability and individual ownership in a economy. These kinds of
practices creates difference between economic entities. Therefore, this report is going to describe
in the depth understanding of capitalism as well as a detailed classification between self-
interested and society concern organisations. Major issue in this situation is financial crises and
inequality in income level of different aspects in a society. In order to analyse situations properly
normative theory of ethics assist in providing detailed information on the influences of
capitalism and a recommendation to reduce the fear of having a repeat of 2008 global financial
crisis. Complete removal of this approach may help organisation in reaching to a whole new
level where they can develop good relations among employees and with other businesses. This is
being considered as a good step which may help them in taking initiative i.e. reduction of
chances of financial crisis. At the end of this report, reflection of personal learning describe own
perspective on ethical decision making process by implementing Kohlberg’s 3 levels and 6
stages of Moral Development to reflect development practices.

INTRODUCTION
Capitalism is define as a core concept in which a trade, profits and ownership are
controlled by an individual companies (Tawney, 2017). These kind of practices create self-
interest and inequality in economy in between organisations as well as society factors.
Capitalism is classify in two different things, first the control on the production practices and
second is maximization of income to create ownership. Meanwhile, some of the organisations in
exceptional case are avoids these practices and works for society development and welfare. As
its result, the gap between social entities as well as income of individual encountered as spread.
Therefore it is required for such organisations to make changes in their philosophy and create
social work practices. Through this, they creates positivism as well as equality and reduces the
fear of having some situation of Global financial crises in the economy.
PART 1
In current era, Capitalism is determines as a concept of financial crises in which an
individual organisation rules in the economy on the basis of their profitability and trading
practices (Williams 2014). Capitalism refers to political and economic system under which
industry and trade of country are controlled through the private owners for earn profit rather than
through state. It is an economic system that is based on the private ownership of production
means and also their operations to generate profit. On the other hand, capitalist is a person that
believe in Capitalism economic Philosophy, a system for the profit or privately owned. In
Australia, Capitalism is developed in form of Colonial settler state that depends on Torres and
Aboriginal Strait Islander nations disposal (Williams, 2014). Capitalism is an economic system
that depends on voluntary and private ownership transaction among people. In capitalism,
socialists have the better intentions and they want to make world a good place. They see injustice
and inequalities to alleviate all these things by using straightforward path possible. Their main
motive is to work towards the society long with earn money. On the other hand, some capitalist
business are work for earn the profit. Capitalism is a better system business system come up with
and combined with better commitment to the ethics, provide better opportunities to society for
the purpose of create wealth as well as lift out the people from poverty.
Australian economy is explained as the national socialist economy with underdeveloped
free market. On this, several philosopher presented their view points and opinion in which Adam
smith determines most specific framework in regards society and economy development

practices. Adam Smith has been called the father of industry revolution as well as founder of
social science. According to their view point, self-interest factor is related to the idea of
organisation' owner who wants to perform individually. These kind of practices maximise gap of
capitalism in society as well as increases financial crises in society. Self interest approaches has
negative impacts on the society as it maximise income differences in economy because profit
earning organisations retain sources of poor peoples (Adam Smith’s The Wealth of Nations - The
Natural Order is Driven by Man’s Self-interest. 2018.). These are the adverse factors of society
which reduces CSR practices. For each and every organisation, it is required to pay their
maximum attention toward social responsibilities by considering ethics and norms as well.
Sometimes, Capitalism activities encourage cross lines activities and unlawful behaviour of
organisations therefore, government needs to pay their maximum attention toward these issues to
develop a equal ground for each aspect of society.
PART 2
Capitalism is an economic system which is consist of private ownership where private
bodies own the factor of production. The factors are sub divided into four main elements which
are capital goods, natural resources, labour and entrepreneurship. The owner or the capitalist
controls the factor of production and gets their income from their ownership.
During the time of financial crises of 2008, many people considered capitalism as a
major problem. Capitalism is well known for its self interested profit earning mind set, but it
created a big influence at the society during the time of the crises. Thousand of factory collapsed
which lead to huge unemployment (Dunning, 2015). More than a billion people were surviving
on less than $1 a day. However, the main cause was not the capitalism, but the capitalists who
just concentrated on the present without thinking about the future. Hence, certain measures need
to be taken to overcome the problems that occurred in 2008 Global Financial crises. Let us now
study Normative theories of Ethics in context to self interest and equality.
Normative Theories of Ethics- Also known as moral theories are some theories which helps us
understand what actions are right or wrong. Some of the popular Normative theories are
utilitarianism, categorical imperative, Stoic virtue ethics, Aristotelian virtue ethics, and W.D
Ross's intuitionism.

 Utilitarianism – It is a theory that works on common understanding of an individual
where the decision can be determined by cost benefit analysis. One should always
calculate the good consequences as well as the bad consequences while judging if a
certain action is right. It works beyond the self interest of an individual and prioritize
interest of others. Let us apply the above theory on two different elements in context to
capitalism, that are self interest and equality. Hence, it is the duty of private companies to
understand the needs of the society, keeping in mind to work in favour of the public as
well as for themselves to attain equality. On the other hand, deontological theory
determines that action should have to be morally correct and needs to provide satisfy
outcomes. Foe example, Interested towards society organisation requires to pay their
maximum attention toward social works without considering profits and future benefits
for their self interest.
 Categorical Imperative- This theory believe in taking a rational decision .It believes in
taking actions that would be beneficial for everyone (Klein, 2015). According to Robert
Johnson the theory is formed in four steps. According to them, motivational principle is
formulated to describe our action as interested towards society organisations requires to
identify their action plans towards society and its welfare. As well as, the action is
transformed into universal law that means these organisations needs to consider ethical
action plans for the economy. After that, it is required reconsider whether it can be
justified under universal law of nature or not. In order to analyse its results, it is necessary
to calculate if it can be rationally implement on individual of society in the same
Illustration 1: ETHICAL THEORIES IN RELATION TO BUSINESS.
2018

condition. Therefore, the decisions regarding the self interest should be rational and
should be favourable to others as well.
 Aristotelian Virtue Ethics- This Ethics states that personal happiness is the ultimate
goal that we should focus on. However, one should learn to have right habits and behave
in such order that it will lead to personal happiness. It is important to note that the action
should be for the personal happiness rather then the demand of the situation. However, if
this theory was applied on the basis of self interest of the company, than their point of
view is not wrong, which is questionable in general perspective. Therefore, self interest
should be considered keeping in mind that their should be equality amongst people and
their actions should not affect the society as a whole.
 Kantian Ethics- Unlike Mill, Kant believed that there are few actions which are
absolutely prohibited, even if they bring happiness to the pursuer for example murder,
theft, lying and many more. This theory is a classic example of deontological moral
theory which implies that rightness and the wrongness of a certain action does not depend
on the consequences of an action. Rather, the question is whether they fulfil our duties or
not. Kant believed that it was a major principle of morality. He also referred it to as The
Categorical Imperative.
 Ross's Intuitionism- This respective theory suggests that it is not possible to be
comprehensive and determine right and good in each situation (Strange, 2015). The moral
progress can be achieved on one step at a time and balancing the rest. Hence equality and
self interest needs to be balanced if can't be achieved at the same time. Furthermore,
deontological theory determines that it is important for reach organisation to accomplish
their objectives after this they needs to provides befits to society for its development.
These are considering under CSR practices which assist in improving living and income
standard of individuals.
Recommendations-
In present context, a number of recommendations that are being given are mentioned
below:
 First recommendation that is being given for capitalists is that they need to keep on
considering CSR activities after a certain period of time in a repetitive manner. With the
help of this mostly problems related to society can be reduced to zero as they are doing

business at international level. This might also help in reducing the current problems
Here, Utilitarianism theory should be used by Capitalists. In order to reduce the chances
of pulling back the financial crisis in the future (Amin, 2014).
 Another recommendation which is being taken is that there are ample number of firms
that are doing business with keeping an aim i.e. to fulfil self desires and meeting on goals
and objectives. In this context, they are utilising the Aristotelian Virtue Ethics which is
mostly not good if they wants to bring equality at workstation (Rifkin, 2014). Complete
removal of this approach may help organisation in reaching to a whole new level where
they can develop good relations among employees and with other businesses. This is
being considered as a good step which may help them in taking initiative i.e. reduction of
chances of financial crisis.
CONCLUSION
From above mentioned report, it has been concluded that capitalism might create a
number of problems for an organisation in doing business with number of ethics. Considering a
number of approaches related to Normative Theories of Ethics can help private companies in
meeting its goals and objectives at both domestic and international level. Away with this, doing
CSR activities firm time to time may lead firm to reach to a whole new level. It is the social
responsibility of private companies to realize the needs of the society, keeping in mind to work
in favour of the public as well as for themselves to attain equality. Through this they can
maximise their own as well as society standards for the economy development practices.
PART 3
Reflection
STARL format
Situation – Capitalism is not an easy topic because it considers some major issues that
has direct impact on the individual of society. It was a very hard situation in front of me to
analyse appropriate factors related to this topic for proper analysis.
Task – In this situation, it is required for me to analyse articles and books properly in
order to grabbing maximum informations easily. The associated risk in this task is to find out
authenticate information and facts as well.

Action – For the accomplishment of this task, I prefer secondary information sources that
aid me to provide brief information regarding previous practices. Through this, I analysed
maximum data on the basis of author's view point and opinion.
Result – I found the favourable results from this research. Through this, I have gain
maximum information on financial crises as well as capitalism practices. This research assist me
to analyse different entities of a economy who are self interested and interested towards society.
Through this, I analysed that how can we reduce the gap of capitalism in society.
Learnt - Through this assignment, I have learnt several things that will helping me in
future practices. On the basis of these research, I am enhance my abilities of data collection from
different relevant sources.
The study on the topic of capitalism always creates several conflicts and issues due to
vast sources and required understanding criteria. As a Global citizen, I am always trying to
enhance my understanding of the world and for the people who loving in it. By conducting this
study, I gain maximum information for the two different aspects of the society as the
organisation who are believing in their ownership practices and aim to earn profit for their own.
On the other hand, some of the organisations who are interested towards the society and its
welfare. This assignment helps me in the development of my moral and understanding towards
social practices. For the detailed analysis Kohlberg's model determines appropriate information
as -
Level 1 – Pre-Conventional morality
 Stage 1 Obedience and Punishment Orientation – On the basis of this theory, an
individual requires to avoid to being punished. Therefore I learnt that how can I work
ethically in the terms of gathering information in regard capitalism.
 Stage 2 Individualism and Exchange – The personal development approaches regarding
these practices can create issues because I know each and every individual has their own
view point. Therefore, I maximise my developmental practices by analysing articles
properly.
Level 2 – Conventional morality
 Stage 3 Good Interpersonal Relationships – On this stage I analysed that I needs to be
more efficient in the perspectives of others.

 Stage 4 Maintaining the Social Order – In the personal development practices on the
topic of capitalism I analysed the view point of society and individual before carrying any
conclusion.
Level 3 – Post-conventional Morality
 Stage 5 Social Contract and Individual Rights – While conducting this research I
analysed that values of legislation and norms.
 Stage 6 Universal Principles – While conducting this research I analysed that sometimes
I set my own guidelines which may or may not fit with law. So that, it is hard to follow
them but it create complexity and unethical behaviour as well.
Kolb reflective model -
 Concrete experience – This is not a easy task to gather maximum information on such
complex topics as Capitalism. For me it was a great as well as adventures experience to
working on such topics.
 Reflective observations – I experience several aspects from these practices as
organisations requires to pay their maximum attention toward society welfare in order to
minimising gap that has arises due to capitalism practices.
 Abstract Conceptualisations – The conclusion of these studies is that it is requires to
create equality in a economy by income and other practices. Furthermore, organisations
requires to paid their maximum attention towards the society welfare activities properly.
 Active experimentation – In the terms of these activities, it is required to create ideas
and strategies for the building of equality on the individual level of society.

REFERENCES
Books & Journal
Amin, Samir. Capitalism in the age of globalization: The management of contemporary society.
Zed Books Ltd., 2014.
Dunning, John H. "Reappraising the eclectic paradigm in an age of alliance capitalism." In The
Eclectic Paradigm, pp. 111-142. Palgrave Macmillan, London, 2015.
Gilpin, Robert. The challenge of global capitalism: The world economy in the 21st century.
Princeton University Press, 2018.
Klein, Naomi. This changes everything: Capitalism vs. the climate. Simon and Schuster, 2015.
Rifkin, Jeremy. The zero marginal cost society: The internet of things, the collaborative
commons, and the eclipse of capitalism. St. Martin's Press, 2014.
Strange, Susan. Casino capitalism: with an introduction by Matthew Watson. Oxford University
Press, 2015.
Tawney, Richard Henry. Religion and the Rise of Capitalism. Routledge, 2017.
Williams, Eric. Capitalism and slavery. UNC Press Books, 2014.
Online
Adam Smith’s The Wealth of Nations - The Natural Order is Driven by Man’s Self-interest. 2018.
[Online]. Available through<https://www.bartleby.com/essay/Adam-Smiths-The-
Wealth-of-Nations-The-PKCVHLSZTC>
ETHICAL THEORIES IN RELATION TO BUSINESS. 2018.[Online]. Available
through<https://www.oreilly.com/library/view/business-ethics-and/9789332511255/
xhtml/c2s10.xhtml>