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BUSINESS ETHICS
Business ethics are principles that a business should follow while doing business, and

they determine how a business is carried out. Amartya Sen uses Adam Smith's theory, The

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Wealth of Nations and The Theory of Moral Sentiments to illustrate the importance of business

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ethics in business and economic activity. Business ethics guide the business in carrying out its

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activities; thus, they are necessary for business activities.
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In his journal, Amartya Sen argues that business ethics are an important part of businesses

and economic activity. In businesses, individuals and corporations mainly focus on their
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interests. However, Sen said exchange, the institution of production and distribution need to be
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considered in a business. The author considers Adam smith's butcher, brewer, and baker in the

subject matter. Sen wants to show the connection between the market ethic in the context of the
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business. In this case, the butcher, brewer, and baker want to make money by selling their

products, and the people want these products, and the exchange benefits both parties (Sen 46). It
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would seem as if business ethics is not necessary to better each party. However, Adam Smith
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claimed that in pursuit of self-interest would motivate the exchange of commodities. Self-interest

does provide the need to exchange, but more is needed to facilitate trade such as trust in order for
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the merchant to accept other means of payment such as credit card, there has to trust in between,

and this is Sen's point

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Although butcher-brewer-backer is all about exchange motivation, Amartya Sen argues

that Adam Smith should have also considered production and distribution. Looking at the

behavior patterns that could increase profitable exchanges is also necessary to understand how it

works. In production and distribution, the need for business ethics becomes more transparent.

However, it is forgotten that Adam Smith had published The Theory of Moral Sentiments long

before writing the Wealth of Nations (Sen 47). Ethics was very important in general and

business. He goes beyond maximizing profit and points out that "humanity. Justice, generosity

and public spirit, are the quantities most useful to others".

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On the argument about the Wealth of Nations by Adam Smith, Amartya Sen challenges

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the fact that the author did not give much concern on business ethics in the Wealth of Nations

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despite him being the father of classical economics. The main objection that Sen has to the
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wealth of nations is that of excluding production and distribution. This objection shows that

Sen's argument is unpersuasive. Sen has pointed out that business ethics can be interpreted to
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mean nothing more than the business's success by achievements of profits and business rewards
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and concerns and distribution can only be judged on how they affect the profits. In his theory of

The Wealth of Nations, this shows that Adam Smith did include business ethics as people strived
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to better themselves increased the merchants' profits (Sen 47). Sen can respond to the objection

by studying more than just distribution and production in Adam Smith's theory. This argument
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can be unsuccessful in defending the argument because Sen has already stated that business
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rewards and profits can define ethics.

In brief, ethics are very important in business, as pointed out by Amartya Sen. Sen, who
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argues that Adam Smith, in his theory about Wealth of Nation, only shows how self-interest

provides the need for exchange. This theory does not involve ethics despite him being a father of

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classical economics. However, Adam Smith had published The Theory of Moral in which ethics

was very important in business.

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WORK CITED

Sen, Amartya. "Does Business Ethics Make Economic Sense?" Business Ethics Quarterly, vol. 3,

no. 1, 1993, pp. 45–54. JSTOR, www.jstor.org/stable/3857381. Accessed 2 Oct. 2020.

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