Abstract
Companies continuously make choices about who gets hired and who does not, who gets a raise and who does not, and who gets a promotion and who does not. Those decisions have significant implications for the division of income in society—and consequently for economic inequality. That is why ethical questions about inequality and fairness are important to business ethics. In this chapter, we elaborate, explain, and compare three important ethical principles that can be used to guide decisions about hiring, remuneration, and promotion: the utilitarian, libertarian, and desertist principles.
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Notes
- 1.
A possible explanation for this particular worry is that reducing economic inequality can be viewed as instrumental to enhancing some of the latter issues (e.g. climate change, illnesses and diseases among the worst-off). Some also argue that large economic inequalities affect economic growth negatively (see Kenworthy, 1995; Marrero & Rodríguez, 2013). Others claim that economic inequalities increase the risk of financial crises (Kumhof et al., 2012, 2015).
- 2.
One example of a failure to live up to the former requirement is an information asymmetry. This occurs when one party is able to gain an unfair advantage in a negotiation by withholding relevant information to the other party. The second requirement can be violated in cases where the negotiating parties are the same party or individual. This is perhaps best exemplified by CEO duality, which is a company structure where one individual is both the CEO and the chair of the company board.
- 3.
This is an argument often made by Milton Friedman. During a lecture about equal pay for equal work, Friedman says about this: ‘The women who go around today arguing equal pay for equal work are being anti-feminist. They don’t intend to be, but that is the effect of their policy … the only weapon the less productive sex has, is to offer to work for less. And if you deny them that opportunity, you’re assuring yourself that you’re going to have all male jobs and all female jobs, and all white jobs and all black jobs.’ The remainder of the clip is certainly worth watching, and can be found here: https://www.youtube.com/watch?v=hsIpQ7YguGE&ab_channel=LibertyPen/
- 4.
It should however be noted that conditions (i), (ii), and (iii) are all examples of qualities that will most likely generate the most profit. In other words, the profit motive provides a reason for the choice of desert bases.
- 5.
This builds on Brouwer and Timmer (2019).
- 6.
Bezos earns one million per eight minutes. Teaching guidelines stipulate that students take about an hour for studying five pages of six hundred words. This chapter is about 4800 words long. This means that you will take about eight hours to study this chapter. The income of Jeff Bezos per eight minutes comes from a CBS-item about Ingrid Robeyns’ limitarianism: https://www.cbsnews.com/video/the-top-one-percent-should-wealth-have-its-limits/
- 7.
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Brouwer, H., Andersson, A. (2023). Justice at Work. In: Dubbink, W., Deijl, W.v.d. (eds) Business Ethics. Springer, Cham. https://doi.org/10.1007/978-3-031-37932-1_8
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