Question

In Section 1.4, you read about deontological and consequential approaches to ethics. Using those approaches, evaluate how well free market systems versus government intervention in markets address poverty and income inequality. Include in your discussion an explanation of how people in a free market economy, acting in their own self-interest, can better those around them.

Answer 1

Deontological theory of ethics generally means the normative theoretical statement in which the actions should be based on right or wrong. So, from the ethical point of view it is very important to understand the do's and don'ts because if you work on a particular thing, then it is very important to perform all the ethical values and the things in such a manner so that it is efficiently applicable in the economy.

Consequential approach to ethics is based on the research and the work that happens after the estimation of sequential things. Therefore it is important that to work according to the ethical result oriented values and it should be on the basis of some results oriented things too.

The free market systems versus the government intervention in markets address poverty and income inequality in such a way that the system of free market and the intervention of government in the free market system always create a problem. It is so because a free market situation is a system where all the things are automatically adjusted with the help of demand and supply forces. But when there is an intervention of the government in this type of system then definitely it will work as for the welfare concept but the free market concept is totally based on the profit concept so there is a clash of profit and welfare.

The people in the free market situation or in the free market economy work basically for their self interest and not for the betterment of the people who are under them. It simply happens because the free market situation is totally based on the demand and supply forces, so people are demanding only the things which are beneficial for their interest. They are not supposed to think about the social welfare and that's why there is always the people think about their self interest, especially in this situation, when we talk about the free market and the government intervention as per the profits and welfare concept.