Textbook- CH 2

• Chapter 2 focuses on Ethics and Capitalism, describing the commonly accepted fundamentals of the economic system in Canada
• After studying this chapter, students will be able to enumerate and discuss the eight fundamentals of a capitalist business system
• One of the fundamentals discussed is the right of private property, which allows individuals and corporations to own and use economic goods like land and buildings
• Ethical implications of the right of private property include an uneven distribution of wealth among members of society, leading to demands for a more equitable distribution usually achieved by government actions or abridgements to the right of private property
• Taxation is a method of redistributing wealth, and governments can control property through zoning regulations and restrictions on foreign ownership of property
• In the modern knowledge economy, the protection of intellectual property, including patents, copyrights, trademarks, and plant breeders' rights, is becoming increasingly important
• Granting property rights on Indigenous lands has been discussed as a way to encourage economic prosperity
• Currently, Indigenous lands in Canada are owned by the federal government in trust for Indigenous Peoples living on them
• Collective ownership of Indigenous lands leads to an absence of a sense of ownership and belonging, fostering dependence on the federal and Indigenous governments
• It is proposed that full property rights be granted to individuals to buy, sell, mortgage, lease, and develop property on Indigenous lands
• Benefits of granting property rights include creating an ownership culture leading to more productive use of the land, providing collateral for mortgages, and capital for business enterprises
• Difficulties with granting individual property rights include the concept being contrary to traditional Indigenous ways of life and their attachment to land, challenges in allocating property among present band members, and concerns about the emergence of a class system based on property
• Some chiefs oppose individual property rights as it may limit their power over the bands
• A new property rights regime is under development, with tension surrounding the development of an individual property rights regime for reserve lands and treaty lands
• Equality of opportunity assumes that all individuals or groups have an even chance at responding to some condition in society
• In a capitalist system, achieving equality of opportunity is challenging and can lead to economic or income inequality
• Gender equality means that women and men have equal means and opportunities for realizing their full human rights and responsibilities
• Inequality in business:

  • Inequality has ethical implications in a capitalistic system
  • Debate on the relationship between growth and equality: Does faster growth cause greater inequality or vice versa?
  • Initiatives for fostering gender equality in business include: increasing access to education and training, ensuring non-discriminatory hiring practices, providing affordable child care, developing policies for employment maternity and paternity leave, offering equal job opportunities regardless of gender, allowing flexible work arrangements and job sharing
• Statistics Canada reports that women's income based on hourly wages is 88% of men's, annual earnings of full-time working women are 72% of men's, and women's annual earnings for both full-time and part-time workers are 69% of men's
• The McKinsey Global Institute study identified potential GDP growth if economic gender equality were achieved, with Canada's Gender Parity Score at 0.75, behind countries like Norway, Belgium, Sweden, New Zealand, and Denmark
• A Canadian Centre for Policy Alternatives study found significant pay differences between male and female corporate executives, with women making $0.68 for every dollar their male colleagues make among top executives
• Improving gender equality in business has a strong business case: it enhances economic and social conditions, boosts productivity and economic growth, increases competitiveness, improves corporate performance and profits, expands the talent pool, and stimulates product demand
• Initiatives for fostering gender equality in business include: increasing access to education and training, ensuring non-discriminatory hiring practices, providing affordable child care, developing policies for employment maternity and paternity leave, offering equal job opportunities regardless of gender, allowing flexible work arrangements and job sharing
• The Government of Canada is passing a Pay Equity Act to reduce pay inequality issues in areas of federal jurisdiction, with some provinces having similar legislation
• Competition in business:

  • Competition ensures goods and services are provided at lowest costs, reduces waste and inefficiency, holds profits to a minimum, widens consumer choice, and regulates prices
  • Ethical implications of competitive behavior: governments in developed economies attempt to influence behavior to protect various stakeholder interests
• Profits in business:

  • Profits are the excess of revenues over expenses and are closely associated with competition
  • Pursuit of profits spurs action and provides drive and desire to do things
  • Profits are not only a regulator of efficiency but also a measure of effectiveness
  • Profits can be retained in the business as a source of funds, provide an incentive to develop new products and technology, and a reward for risk-taking
• Many in society view profits with disdain, and some consider them immoral
• Earning a profit is considered appropriate, but attempting to maximize profits through reducing competition may be viewed as inappropriate
• As corporations have become larger and fewer in number in some industries, the role of profits as envisioned in classical theory has altered
• Factors impacting profits include taxation, inflation, barriers to entry, and the need for increasing size to achieve efficiency
• Competition in industries is reflected not only by the number of corporations but also by services offered, advertising, brand loyalty, and image or reputation
• Banking industry profits in 2017:

  • Royal Bank of Canada: $11.5 billion
  • Toronto-Dominion Bank: $10.3 billion
  • Bank of Nova Scotia: $8.2 billion
  • Bank of Montreal: $5.3 billion
  • Canadian Imperial Bank of Commerce: $4.7 billion
• Democracy Watch is conducting a “Bank Accountability Campaign” to make banks more socially responsible
• The work ethic is a code of values claiming that work is desirable, natural, and good in itself
• The Protestant ethic reinforced the work ethic by claiming that hard work, diligence, thrift, and “busyness” were desirable for religious reasons
• Government programs and society's expectations have influenced individuals' attitudes toward work
• Millennials are described with misconceptions about their work ethic, but they also bring positive attributes to the workplace
• Consumer sovereignty is the assumption that consumers have power over producers through their purchasing decisions
• Consumers often face challenges in exercising their sovereignty, such as lack of awareness of alternatives and technical complexities
• Boycotts are organized to support causes and can be a form of activism where consumers refuse to purchase a good or service