Business, Morality, and Capitalism - A Critical Dialogue on the Issues [HU HA3P]
ISUP Course 2013 - Copenhagen Business School
Department: ISUP
Course level: Undergraduate_X_
Graduate___
Study board: (ISUP will enter the appropriate study board for proposal review)
Course Main Category:
24. Economic and Organizational Sociology
Course Secondary Categories:
25. Philosophy and Philosophy of Science
5. Innovation and Entrepreneurship
Credits: 7.5 ECTS
Instructor: Bradley K Hobbs, Ph.D.
E-mail address: bhobbs@fgcu.edu; bradleykhobbs@gmail.com
Course coordinator: Patricia Plackett
Course prerequisites and restrictions:
There are no academic prerequisites for this course.
Course content, structure, and teaching:
This course explores the junctures between economics, business, and philosophy. The driving
impetus for the development of this course arouse from diverse experiences with all levels of
students and my observation that they often struggled with the ethics of business. This applied not
only to traditional "business ethics" issues at the micro-level but also to the ethics of capitalism
itself. Students preparing themselves for a career in business within a commercial society often
voice deep moral ambiguity, even disdain, towards their chosen career. Given that we are likely to
spend a significant portion of our lives at work, it is important that we understand the positive
aspects that capitalism engenders as well as its negative aspects. If students of business are to be
fulfilled, self-actualizing, happy human beings they need some basis on which to defend their
choice of career on an ethical basis. They ought to learn to explore and acknowledge not only the
costs of capitalism but also its benefits.
That markets are inherently immoral seems to be widely-shared perception: often, as an a priori
assumption. Yet market exchange makes available, to most of the people engaged in it, an
availability, range, and depth of goods and services that they can never achieve under economic
autarky. While many business schools have developed courses covering business ethics at the
firm and individual level, few have developed courses addressing the fundamental issue of the
ethics of capitalism itself. Thus, I developed this course in the grand tradition of political economy
as an exploration into the morality of capitalism.
A broad range of issues and questions might be addressed including: Why is commercial activity
viewed as ethically suspect? Is this assessment fair or unfair? Can a market system produce
results that are fundamentally just? Is justice possible without voluntary exchange? How is
freedom in the economic sphere linked to freedom in other spheres of human endeavours,
including politics? How do we, or should we, balance individual rights with a well-functioning
society? What role do a priori assumptions play? Why do these assumptions exist? What role
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does power play? What is consistent about human behaviours that cross all human action:
Commercial or Political? What role does trust play in commercial exchange? Who benefits under
anti-capitalist regimes? Who benefits under capitalist regimes?
Readings include both classic and modern works addressing the causes, consequences, and
morality of capitalism. Major critics of capitalism including Karl Marx, Frederich Engels and
Georges Bataille on commercialism and materialism are covered. The defence of capitalism is
formed in the readings of John Locke, Thomas Hobbes, Adam Smith, Frederic Bastiat, Ludwig von
Mises, F.A. Hayek, and Milton Friedman. We will also look at the predicted collapse of capitalism
through the analyses of Karl Marx and Joseph Schumpeter.
Preliminary Assignment:
There are two books required for this course and you should come to Copenhagen with both of
them. Please order these exact editions so that when we refer to the books in class we have
the same pagination.
Prior to our first class meeting students need to watch a set of video's (listed below) and read this
book: A Conflict of Visions: Ideological Origins of Political Struggles.
Watch the following five videos. The first four videos are about 10 minutes each. The last video is
about two hours long.
1. Michael Strong - The Habit of Thought Chapter One: On Socratic Seminar
at this You Tube link: Chapter 1 - http://www.youtube.com/watch?v=_aaS90pfbo4
2. Michael Strong - The Habit of Thought Chapter Two: On Socratic Seminar
at this You Tube link: Chapter 2 - http://www.youtube.com/watch?v=eu_L-HuQDes
3. Michael Strong - The Habit of Thought Chapter Three: On Socratic Seminar
at this You Tube link: Chapter 3 - http://www.youtube.com/watch?v=Taz4u4oDL60
4. Michael Strong - The Habit of Thought Chapter Four: On Socratic Seminar
at this You Tube link: Chapter 4 - http://www.youtube.com/watch?v=vO9TVPs78PU
5. The Commanding Heights - Episode One: The Battle of Ideas NOTE: Episode One is the
first of three in a series produced by the Boston Public Television station WGBU. This is a
You Tube version – there is also a version at www.wgbu.org that is discontinuous.
In the first class meeting and part of the second we will discuss your answers to the questions
found in this file: Study Guide for A Conflict of Visions: Ideological Origins of Political Struggles.
Author: Thomas Sowell
Publisher: Basic Books
Publication Date: February 19, 2002
ISBN-13: 978-0-46508-142-4
The book is available on Amazon at: http://www.amazon.com/Conflict-VisionsIdeological-PoliticalStruggles/dp/0465081428/ref=sr_1_1?ie=UTF8&qid=1353721864&sr=81&keywords=a+conflic+t+of+visions
The second book to order and bring to Copenhagen is: Liberalism: The Classical Tradition by
Ludwig von Mises. You need not read it as a preliminary assignment - we will read and use this
book towards the end of the course.
Author: Ludwig von Mises, Edited by Bettina Bien Graves
Publisher: Liberty Fund
Publication Date: 2005
ISBN-13: 978-0-86597-586-6
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The book is available from The Liberty Fund at:
https://catalog.libertyfund.org/home.html?page=shop.product_details&product_id=11
82&flypage=flypage.tpl&pop=0
Mid-term Assignment:
You will be required to write a 2-3 page paper which analyzes some current conflict concerning the
economy, law, or justice within the constrained and the unconstrained frameworks set forth in
Thomas Sowell’s book A Conflict of Visions: Ideological Origins of Political Struggle.
The course’s development of personal competences:
Personal and Interpersonal Competences
 Self-motivation
 Ability to understand the sources of differing views and perspectives
 Ability to understand sources, purposes, and origins of conflict
 Ability to work in business with a broader understanding of commercial society
Better understand and deal with ambiguity
 Build confidence in knowledge of the philosophical underpinnings of a capitalist economy
Build confidence in knowledge of the philosophical underpinnings of a capitalism's critics
 Recognize a priori assumptions and their effects on articulated position
 Ability to explain/articulate the "big picture"
 Ability to meet deadlines
 Ability to work effectively with stake holders, peers, and subordinates (particularly those
with different perspectives)
Teaching methods:
Each class will involve lecture and Socratic discussion. The lectures are designed to frame and
introduce the readings for the day and then to clarify materials once we start into them. Answering
Socratic questions inevitably requires us to refer directly to the readings. Therefore, students need
to bring all of each day's readings for each class meeting. Paper or electronic formats are fine - if
a book is being covered please bring that book. In addition to my questions, I will call upon
students to ask questions, so form your own questions as you read and be prepared if called upon
to ask them. Student participation and engagement is key. I do not expect you to be an expert
and to know every detail. The Socratic Method is about structured exploration so I do expect you to
read carefully and to prepare questions.
Required course readings and literature:
Course Outline
Class Meeting 1 - A Conflict of Visions: Ideological Origins of Political Struggles
Discussion of Preliminary Assignment which includes the video's on the Socratic method, The
Commanding Heights, and A Conflict of Visions: Ideological Origins of Political Struggles
* Here is a Study Guide for A Conflict of Visions Ideological Origins of Political Struggles.
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Class Meeting 2 - A Conflict of Visions: Ideological Origins of Political Struggles and What
is Capitalism? Opposing Perspectives
1.)
2.)
3.)
4.)
5.)
6.)
7.)
Continued discussion of A Conflict of Visions: Ideological Origins of Political Struggles
What is Capitalism? The World Socialist Movement Website
Robert Hessen, The Concise Encyclopedia of Economics, Capitalism
Robert Heilbroner, The Concise Encyclopedia of Economics, Socialism
David L. Prychitkop, The Concise Encyclopedia of Economics, Marxism
Bryan Caplan, The Concise Encyclopedia of Economics, Communism
Ayn Rand, Capitalism: The Unknown Ideal, Chapter 1 – “What is Capitalism?”
Source: Signet Books * Here is a Study Guide for this reading.
Class Meeting 3 - Hobbes and Locke
1.) Hobbes, Thomas. The Leviathan, 1660.
Chapter XI - Of the Difference of Manners
Chapter XIII - Of the Natural Condition of Mankind as Concerning their Felicity and
Misery
2.) Locke, John. Of Civil Government - Second Treatise, 1662.
Ch. IV - On Slavery
Ch. V - On Property
Class Meeting 4 – Adam Smith
1.) Adam Smith, Book 1, Chapters 1-3 An Inquiry into the Nature and Causes of The Wealth of
Nations found at http://www.econlib.org/library/Smith/smWN.html
* Here is a Study Guide for this section.
Book I - Of the Causes of Improvement in the productive Powers of Labour, and of the Order
according to which its Produce is naturally distributed among the different Ranks of the People
Chapter I - Of the Division of Labor
Chapter II - Of the Principle which gives Occasion to the Division of Labour
Chapter III - That the Division of Labour is Limited by the Extent of the Market
STOP - DO NOT READ Chapter IV - Of the Origin and Use of Money
2.) Plus this selection from The Wealth of Nations (approximately 3 pages of selected short
passages)
* There is no Study Guide for this section. Read and summarize the major point(s).
3.) Adam Smith, Part IV Chapters 1 and 2 of The Theory of Moral Sentiments found at:
http://www.econlib.org/library/Smith/smMS4.html
* Here is a Study Guide for this section.
Part IV - Of the Effect of Utility upon the Sentiment of Approbation
Chapter 1 - Of the beauty which the appearance of Utility bestows upon all the
productions of art, and of the extensive influence of this species of Beauty
Chapter 2 - Of the beauty which the appearance of Utility bestows upon the
characters and actions of men; and how far the perception if this beauty may be
regarded as one of the original principles of approbation
4.) Plus this selection from The Theory of Moral Sentiments ( Chap. II - Of the order in which
Societies are by nature recommended to our Beneficence)
* Here is a Study Guide for this section
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Class Meeting 5 - Frederic Bastiat
1.) Bastiat, Frederic, Economic Sophisms. A Petition The Foundation for Economic Education, Inc.
1996. Trans. and ed. Arthur Goddard. Library of Economics and Liberty. 1 August 2007.
<http://www.econlib.org/library/Bastiat/basSoph3.html>.
2.) Bastiat, Frederic, Selected Essays on Political Economy. What is Seen and What is Not Seen
The Foundation for Economic Education, Inc. 1995. Trans. Seymour Cain. Ed. George B. de
Huszar. Library of Economics and Liberty. 1 August 2007.
<http://www.econlib.org/library/Bastiat/basEss1.html>.
3.) Bastiat, Frederic, The Law Pages 1-32 stopping at "Rousseau and Social Democracy"
Class Meeting 6 - Frederic Bastiat, Milton Friedman, and Bryan Caplan
1.) Bastiat, Frederic, The Law Pages 32-58 stopping at the end of "Let Us Now Try Liberty!"
2.) Friedman,Milton. (2002). Capitalism and Freedom. Chapter 1- "The Relation Between
Economic Freedom and Political Freedom". Chicago: University of Chicago Press, 1962, pp. 717
Here is a study guide for Capitalism and Freedom- Chapter 1
3.) Caplan, Bryan. 2007. The Myth of the Rational Voter: Why Democracies Choose Bad Policies,
Princeton, New Jersey: Princeton University Press. Pages 23-49.
Class Meeting 7 – Schumpeter on Creative Destruction and the Fall of Capitalism, Hayek’s
“Use of Knowledge in Society”
1.) Capitalism: Its Nature and Demise (Abridged version of the full reading below.) 12 pages
2.) McKinsey Report on Creative Destruction 18 pages
3.) Listen to ECONTALK with Russ Roberts and Thomas McGraw on Schumpeter, Innovation, and
Creative Destruction
4.) Hayek, F. A., "The Use of Knowledge in Society". American Economic Review . XXXV, No. 4;
pp. 519-30. September, 1945. Library of Economics and Liberty. 1 August 2007.
<http://www.econlib.org/library/Essays/hykKnw1.html>.
Class Meeting 8 – Engels, Pope Leo XIII, Bataille, Tugwell - Critiquing Capitalism
1.) Engels, Frederick. “The Principles of Communism,” 1847
2.) Pope Leo XIII, “De Rerum Novarum,” May 15, 1891, paras. 1-15, 19-20 34-38, 43-53
3.) George Bataille. “The Notion of Expenditure”
4.) Rexford G. Tugwell "The Principle of Planning and the Institution of Laissez Faire"
Class Meeting 9 - Mises - Liberalism: The Classical Tradition
Mises, Ludwig von. Liberalism: The Classical Tradition.
Chapters Introduction, 1,2,3 through pg. 81 (Part 3 - The Political Foundations of Peace)
Class Meeting 10 - Mises - Liberalism: The Classical Tradition
Mises, Ludwig von. Liberalism: The Classical Tradition.
Remainder of the book.
Class Meeting 11 - Course Review
Read: Buchanan, James M. (2005) Afraid to be free: Dependency as desideratum. Public Choice,
(124): 19-31.
We will use this article as a framework to review the themes of this course. We will construct that
framework in about 20 minutes and then link it to the review materials. The review will be
comprehensive with respect to the materials covered. All students would bring at least two
questions that represent their introspection on this course and be ready to ask these questions of
the class.
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Learning objectives:
At the end of the course the student should be able to:
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Articulate the constrained and unconstrained visions laid out in Thomas Sowell’s book A
Conflict of Visions: Ideological Origins of Political Struggles
Explain John Locke’s argument for the origins of private property
Explain why Thomas Hobbes supported a strong state
Address Adam Smith’s ambiguity towards business and ambition
Explain Adam Smith’s recognition of and advocacy for the division of labor
Articulate the themes Frederic Bastiat explores in “What is Seen and What is Not Seen”
Explain the major themes in “The Law” by Frederic Bastiat.
Articulate the differences between law and legislation as delineated by Bastiat.
Explain Schumpeter’s creative destruction
Explain the inevitable fall of capitalism as posited by Karl Marx
Explain the inevitable fall of capitalism as posited Joseph Schumpeter
Explain the criticisms of capitalism forwarded by Marx and Engels
Explain the criticisms of capitalism by Pope Leo XIII
Explain materialism and the criticism of it by Bastille and in The Story of Stuff
Develop the nature and effects of the fundamental tenants of classical liberalism laid out in
Liberalism: The Classical Tradition by von Mises
Exam format:
The examination will be an individually written, open-book, take-home examination of
approximately ten pages in length. All responses are to be typed and double-spaced.
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