Meta-ethical Reasoning: Applied to Economics and Business Principles

A bstract . Ethics and ethical thinking involve two primary and interdependent elements of analysis: the individual and the society. Economic thought dichotomized these two elements into the individual (competitive capitalism ) or the society (Marxist socialism ), with one element being the cause, and the other the effect. Views of economic reality were developed not on the basis of the interdependence of the individual and the society but their mutual antagonism.
Economic thought is based on the scientific reasoning of the seventeenth and eighteenth centuries. Its abstract definition of reality narrowed the significance of the concrete appearances of things in favor of the rules (science) that define things. Science requires both an objective causal order (independent of human definitions and beliefs) and the development of laws (independent of the human observer or participant) that explain the nature of the objective world. Ethical reasoning requires that economic causality be defined to include both the individual and the society. Ethical reasoning is needed to bring together both the scientific and the metaphysical for human meaning. The science of means must be joined to the human purposes of ends.     

Capitalism's growth imperative

A capitalist firm operating in a competitive market is subjectto a growth imperative, because uncertainty about the profitrate under a no-growth policy makes the firm's prospects highlyunattractive in finite time and bankruptcy practically certainin the long run. A no-growth policy determines consumption andinvestment so that they and capital would remain constant overtime if the latter's expected return were realised with certainty.Simulation is used to arrive at the probability of bankruptcyby the end of t periods and the expected values of capital andmoney, for relevant combinations of time and uncertainty undersuccessively more realistic models of a no-growth firm in acompetitive market. The sensitivity of the results to variationin the parameters in each of the models is evaluated. Finally,we establish that a plausible growth policy may achieve growth,but the problem of bankruptcy is not resolved.     

Determinants of Ethical Behavior: A Study of Autosalespeople

This study proposes a model that explains the ethical behavior of automobile salespeople in terms of their ethical perception, legal perception, method of compensation (commission-based or salary-based), age, and education. The model is estimated by using five scenarios that involve ethical issues commonly found in the automobile industry and responses from 184 automobile salespeople in a mid-Atlantic metropolitan area. The findings suggest that ethical perception is the most important determinant of ethical behavior. Also, method of compensation is a major determinant in four of five scenarios, and legal perception in two out of five scenarios. However, age and education are not significantly related to ethical behavior. A discussion of the results, limitations, and implications is presented for managers.     

The impact of a gasoline crisis on retail sales

The gasoline crises of the 1970s demonstrated the need for including gasoline prices and gasoline shortages in models explaining retail sales. In this article, a model is constructed that incorporates the aforementioned variables, other variables, and a lagged sales figure as independent variable. The results indicate a high degree of explanatory power in predicting retail sales for a specialty store chain with a preponderance of their stores in large regional malls that sell a product which lends itself to unplanned purchase behaviour.     

Pricing,operating efficiency,and profitability among large commercial banks

This study uses statistical cost accounting techniques to examine the relationship between bank profitability and two dimensions of operating performance — pricing and operating efficiency. The traditional statistical cost accounting model, which relates a firm's income to its asset and liability mix, is expanded to account for differences in market structure, regional demand and supply conditions, and macroeconomics factors. The study focuses on large (above $500 million in domestic deposits) banks, comparing a sample of relatively profitable banks against a matched group of much less profitable banks over the period 1970–1977. After allowing for regional supply and demand factors, the high and low-profit banks are estimated to earn equal market rates of return on individual assets and liabilities. There is virtually no evidence that differential prices are an important discriminator between the two bank groups. Some evidence is found that the high-earnings banks experience lower operating costs on some liabilities, but the opposite is true with respect to selected asset items. After taxes are taken into account, however, any such cost differentials virtually disappear. Overall, there is no compelling evidence that high-profit banks are characterized by greater operating efficiency than their low-earnings counterparts. This finding is consistent with the view that over time, and especially among relatively large banks, information flows and competitive pressures act to reduce operating efficiency differences that may appear in the short run.