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Business Ethics- Exporting

By Edited Sep 28, 2015 0 0

There are different views on whether or not constraints should be placed on companies to export capital for production abroad. Initially, there isn’t any moral dilemma for a company to look for options to increase its profits. However, it can become a problem when the additional profits are concentrated to a few high level people and investors and in the long run, society and lower-level employees get hurt. Much has to do with the definition used for “profit.” Proponents of the narrow-view believe that a company exists for profit only, meaning their only purpose is to generate money. The broader-view proponents believe corporations have additional responsibilities because of their great power. These additional responsibilities could be used to give a broader definition of profit. In other words, profit is not “only” generating money, but also better lifestyles for employees, society, and the environment. In order to determine how much profit a company generates, you would have to look at all those factors, not just money.

I take the broader view with the expanded definition of profit. With this view, there is nothing wrong with exporting capital abroad unless it detracts from the “total profit.” If funds are used for startups in other countries which will eventually take away all jobs, social, and environmental benefits from this country, then there is a problem and constraints should be put into place. We have already seen the fruits of too much production going abroad with the Levi situation. Eventually the market trend literally forces the company to close domestic plants and move abroad. The company will stay economically profitable, which only benefits those with its stock and the higher-level executives. It doesn’t take a genius to know that paying people less will result in higher profits; however, if profit motive were the ultimate end, then slavery would and should be legal. Obviously, that would be wrong, and so is increasing profit by progressively going for cheaper wages, even if those cheaper wages are legal wages in other countries. You don’t need theories to figure this out, just look at the results.

Production abroad can also be immoral not only because of what it does domestically, but because it can add to the immoral situations that face employees in other countries. It’s obvious that the lower wages paid in other countries (mainly third world) are not suitable. Pope Leo XII in his encyclical “Rerum Novarum” writes: “We are told that free consent fixes the amount of a wage; that therefore the employer, after paying the wage agreed to would seem to have discharged his obligation and not to owe anything more…An impartial judge would not assent readily or without reservation to this reasoning…” He goes on to say that work is truly “personal” and “necessary.” “If labor should be considered only under the aspect that it is personal, there is no doubt that it would be entirely in the worker’s power to set the amount of the agreed wage too low…” He goes on to say that because it is reality that labor is a “necessity to preserve life” than that labor must be adequate enough to provide the means.(1) It would be immoral for a company to hold production where employees are being exploited; by doing this they would be promoted the exploitation.

2. Should there be constraints to export commodities that have been banned for sale in the United States? This is a difficult question to answer since there can be many variables. The main question would be “why is it banned for sale in the U.S.?” If it is banned because of a universal evil or because its use can be detrimental, then yes, there should be constraints on selling it elsewhere, even if it’s legal. If it’s banned because of a certain situations peculiar to the US, or for a non-detrimental reason, then it may be fine to sell it abroad. For example, if local laws say you can’t sell a digital marquee that fits on the back of a car because it’s “distracting,” the company should be able to sell it in another country that may not see it as distracting or may have less volume of cars. The law itself may not be just (in the U.S) since it’s legal to have hug billboards for advertising that can be more distracting. Kant’s theory pertaining to Universal Acceptability applies here. He says that “if a moral law is valid for you, it must be valid for all other rational beings.” If the law that prevents the sale of the product in the U.S does not pass this universal test, then the company should be able to sell its product abroad with no moral consequences.

1     Leo XII, “Rerum Novarum (On the Condition of the Working Classes)”. Par. 61-63.



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