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Ethical Issues in Economics

Evaluate Ethical Issues in Economics

GB540M1

Michelle Freeman

September 29, 2020

The characterization of a free market is the spontaneous and decentralized order through which economic decisions are made. This economic system is based on supply and demand with little or no governmental control (Free Market Definition, 2020). The free market is a way that integrates a system that enables the sellers and consumers to set the price of goods and services without any government intervention. The trade of human organs is a specific social problem which is considered a good or service, where the free markets are not allowed to function.

The trade of human organs and tissues is a form of human trafficking and it refers to its illegal removal, sale, and purchase for the sole purpose to be used by patients needing organ transplant. The shortage of legal transplants and long wait times are the main reasons this illegal trade exist. This is a global problem that mainly occurs in poorer countries where the hospitals are advanced enough to offer transplant operation. Buyers generally originate from areas such as the Middle East, Europe, and the United States.

Organs that are most trafficked are kidneys, livers, and hearts because they can be harvested easily. The prototypical victim characteristics of human organ and tissue trade is someone in poverty who sells to a middleman to get out of a difficult financial situation. Realistically, the donor is paid only a fraction of the true value of the organ and the donation is not always voluntary being harvested against the victim's will. In many cases the victim may have been kidnapped, drugged, or even killed so that their organs can be sold.

Trade of human organs and their medical services are generally regulated by governments of the respective countries. It is believed that by lifting governmental regulation to allow this trade under the free market system would subsequently aid consumers and vendors in reducing the wait time and paperwork involved. While the reduction in wait time is a good plus the risks of introducing market mechanisms like this could lead to specific ethical issues. The implementation of a free market system for this type of service could subject a society to heightened criminal activity as well as price gouging from organ sellers due to high demand. Market mechanisms is the way the prices of goods and services affect the supply and demand.

Adam Smith used the freedom to make decisions regarding buying and selling to formulate the notion of an 'invisible' hand (M, 2019).He argues that by giving everyone freedom to produce and exchange goods (free trade) would promote greater prosperity than with rigid government regulations. Smith believed that humans promote public interest through their everyday economic choices. With that assumption, you must consider how the free market could handle issues regarding the selling of human organs and some of its unethical practices.

According to Brennan, a free market for kidneys could create much lower prices than those of the black market (Brennan, 2015). The introduction of a free market will involve some risk in the business of human organs. For example, suppliers of organs can create a monopoly in the market and charge premium price to the consumers, which will create an increase in the black market and an exploitation of the poor by the rich through organ trafficking. With a controlled market the risk of monopoly and black-market channels becomes decreased for consumers which leads into the role of government when it comes to business ethics.

Business ethics is an unspoken agreement that a business will conduct itself withing proper ethical guidelines. While many businesses do operate within these guidelines there are many where the government must intervene and force the company to adhere. Business ethics are important because people do business with businesses they trust, and unethical practices can have a negative impact on a business and the bottom line. Ethics in public administration are important for good business conduct based on the needs of a country. Ethics demands accountability and ensures that the public receives what it needs in a fair manner by providing guidelines for integrity.

Generally, business ethics refer to the principles that determines the morally right and wrong things in a business atmosphere. Businesses are entrusted to have a fair conduct within the established rules. To aid in ensuring these, the government keeps businesses within the legal and ethical standards.

The government regulations create barriers which give existing companies distinctive competitive advantages over the potential competitors. For example, the US government and many states have instituted laws to ensure that there is safety and well payment of wages to the private employees. These labor laws protect these employees from the unethical treatments of harassment, excessive work hours, discrimination, unfair wages, scams, and frauds.

In addition, the government has a role of providing Marketing and privacy guidelines to protect consumers from unethical marketing practices of false advertising and misuse of personal data. This enables a fair business environment.

Furthermore, the government incentives help to drive the business behavior. In the context of compliance and ethics programs, the use of incentives has been slow to catch on. As articulated under the Federal Sentencing Guidelines, use of 'appropriate incentives' lead to an effective compliance and ethics program.

Since the ethical issues in a business are aimed at providing a common good and economic well-being of people, businesses must comply with the government in implementing appropriate business practices. This will eliminate bribery, insider trading, fiduciary responsibilities, and discrimination. In the long run, the employees will complete work in an honest way.