Ethical Issues in Business and Government Regulation

Ethical Issues in Business and Government Regulation

What do you think of this proposal and what ethical theory would support your position?

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In principle, the proposal makes sense for several reasons, primarily through the application of Rawlsian and Kantian moral concepts and definitions. More specifically, the proposal to increase taxes on gasoline is readily defensible under a broader application of the Utilitarian principle of the greatest happiness to include the greatest public benefit in conjunction with the objective perspective provided by the “original position” and “veil of ignorance” introduced by Rawls (Shaw & Barry, 2007).

Are there injustices built into such measures? Is there any practical way to avoid them?

There are rarely any policies or moral systems that are entirely free from injustice to all. Therefore, the objective is simply to design a moral system that provides the highest potential likelihood to accomplish the greatest possible benefit to the largest portion of the public and at the smallest possible expense to as few individuals harmed by real-world application of those policies as possible without the benefit of 20/20 hindsight.

The principal approach to avoiding them practically requires accurately anticipating predictable consequences and any inherent unfairness capable of resulting from envisioned policies. First, policies are selected substantially because of their high ratio of benefits to elements of injustice. The next crucial step to avoid or at least minimize potential injustice would be devising procedural and administrative methods of eliminating or minimizing specific areas of potential injustice.

These analyses would also emphasize Kantian and Rawlsian principles because they would primarily concern matters of fairness and purely objective perspective. Simple examples of this approach are statutory tax exemptions or exceptions to general rules for the specific purpose of preventing unintended injustices to certain classes of individuals subject to the rule. Neighborhood or town parking passes issued to residents would be another example of selecting a policy (i.e. no parking downtown) to achieve a greater benefit (i.e. ensuring that town residents of all towns have convenient access to town resources paid for through their taxes), and in a manner that eliminates unjust consequences (i.e. town residents and non-residents prohibited from parking equally by “no parking downtown” policy).

In the gasoline tax proposal, possible examples of potential injustice in its effect might include those who genuinely have no other possible option available to them but to travel extensively by automobile, as well as those who do not use much gasoline but who must pay more for products and services when the increased price of interstate trucking drives up the price to the consumer of products.

What about the possibility that the U.S. auto industry, encouraged by its partial owner, the U.S. government, will no longer produce large gas guzzlers (think Hummer)?

Naturally, Egoism would support the right of the individual to continue driving gas guzzlers without any legitimate need to do so beyond stylistic taste or as a means of personal expression. However, the Kantian/Rawlsian approach suggested earlier would strongly support the gas tax proposal. Utilitarians would inquire into the practical necessity of producing and driving so many gas guzzlers, as well as into the relative benefits (if any) to everybody potentially benefited and in comparison to the relative costs and negative consequences (Shaw & Barry, 2007).

Since it is well documented that the largest portion of the gas guzzler market does not have any legitimate practical need for gas guzzling vehicles, it is much more likely to be beneficial to society, on the whole, to phase out gas guzzlers. Potential injustice would also be avoided with respect to those individuals who do have a legitimate requirement for vehicles often considered “gas guzzlers.” The proposal does not suggest imposing any ban on gas guzzler production and to whatever extent a genuine market for those vehicles exists among the minority of gas guzzler owners, general economic principles would guarantee that automobile manufacturers produced enough units to maximize the profit margin from any remaining market for gas guzzlers. If the proposal deterred everybody else from purchasing gas guzzlers, that would satisfy both Utilitarian and Rawlsian principles by virtue of the greatest objective benefit to society (Shaw & Barry, 2007).

Is it ethical for the government to essentially prevent a U.S. company from producing a legal good? What ethical theory supports your position?

The government is the final arbiter of the distinction “legal” and “illegal” goods. Throughout American judicial and legislative history, new laws, regulations, and rules replace previous versions. Frequently, what is legal today could become illegal tomorrow by statute, and vice-versa. Once it has been established scientifically that continued reliance on fossil fuels and petroleum products for energy production is not in the best interests of society, the Kantian Utilitarianism/Rawlsian approach would support reasonable measures designed to address the situation in the manner most likely to benefit the greatest number (Shaw & Barry, 2007). There is no basis for ethical argument, particularly to the extent the U.S. government’s reluctant takeover of the industry comes with decision-making authority by virtue of its ownership position, and also because it involves only indirect incentives and not outright bans.

Finally, what are the possible ethical considerations of banning or restricting the developing world’s access to the same cheaper technologies (fluorocarbons, coal burning plants, etc.) that made the U.S. what it is today?

First, the U.S. has no authority to impose environmental responsibility on foreign soil or to ban energy production choices in other parts of the world. However, in principle, Utilitarian Rawlsianism would support any encouragement or political pressure to convince foreign governments to avoid making some of the same mistakes we now wish we had recognized and taken more seriously decades ago. To the extent that effort is genuinely intended to benefit the citizens of those nations and the entire world rather than just American interests, the Utilitarian/Rawlsian approach would support that effort; to the extent the effort is motivated by selfish concerns, it would not be justified (Shaw & Barry, 2007).


Shaw, W.H., and Barry, V. (2007). Moral Issues in Business (10th ed.). USA: Thomson


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