Do the standards of morality apply to economic life? Should they? Can they? How?

The daily news is replete with economic issues, and often where both sides of a debate claim that their policy will best serve ordinary people. Should there be tax cuts aimed to stimulate growth or tax increases to pay for underfunded programs? Should electric utility companies face stiffer limits on polluting emissions from their power plants? Should the United States and the nations of Latin America sign a “free trade” agreement? Should the U.S. Congress stiffen the rules for accounting to prevent further corporate scandals like those at Enron? These and many other issues make up the landscape of contemporary economic ethics. Because these issues entail complex economic questions about what would actually be the effects of alternative policies, it might be helpful to begin with a much simpler example.

Most of us would be aghast at a neighbor's being held up at gunpoint and losing several hundred dollars to a mugger. Whether or not we would personally intervene, we would judge this economic loss as thoroughly unjust. However, if our neighbor were laid off from her job at the local manufacturing plant for several months, few would raise an eyebrow, although there might be sympathy for her hardship.

Defenders of the market system argue that the director of human resources at the plant is simply doing his job when sending out the layoff notices.