BUSINESS ETHICS CASE ASSIGNMENT

The GM Bailout

Imanda Mulia Rahman 361168

1. How would Locke, Smith, and Marx evaluate the various events in this
case?
Locke believes in the idea that human beings have a natural right to liberty and
a natural right to private property. He said that if there were no governments,
human beings would find themselves in state of nature, meaning that each
individual would be politically equal and would be perfectly free of any constraints
other than the law of nature. He thought that the government should only have
limited relines.
Smith is the originator of utilitarian argument. He thought that GM was best to stay
a free market with the government assistance. He would think thank the failure
was not due to his theory, but due to poor management and vision.
Marx might think that the failure was due to privatization and capitalism because
the government stepped in and owned partially the companies. There, it is best
that privatization is eliminated, instead, owned by public.

2. Explain the ideologies implied by the statements of: the letter to the U.S
Congress signed by 100 leading economist, Joseph Stieglitz, Bob Corker,
the Republican resolution on the bailouts, Robert Higgs, and Michael
Winther?
U.S. Treasury created the new General Motors Company whose share owned by
the Government for 61%. Thus, the government held a major control over the
company. The purpose might be changed from making the better welfare for the
people in the country to maximizing profit. It can be concluded that the ideology
they implied was socialism.

3. In your view should the GM bailout have been done? Explain why or why
not. Was the bailout ethical in terms of utilitarianism, justice, right, and
caring?
From utilitarian perspective, which all about costs and benefits. GM bailout has
more benefits pr advantage, for as stated before, created jobs that save economic
from harm, utilize human resource. The cost or disadvantage is losing bailout
money. Compared to not implement the bailout strategy, it indeed saves taxpayer
from paying more and the money can be used in another sector but there would be
employment more and the tax revenue of the government would be reduced.
Which also could lead to social problems. Therefore, according to this view, GM
bailout should have been done.
From justice perspective, it is actually not ethical to bailout GM because the other
company also need to get bailout since justice means all of them deserve to be
treated in the same way, which is difficult to implement. It is impossible to bailout
the other companies in the same industry because they have different problem as
GM thus it cannot be generalized. Therefore, according to this view, GM bailout
should not have been done.
From right perspective, the company has the right to ask for financial help from
other parties that have potential to help the overcome the problem. Thus, bailout
is ethical.
From caring perspective, bailout is ethical because it prevents GM from bankruptcy.
All parties that are related to GM get benefit from it. Such as more job fields, which
society is benefitted from it, and the government where tax is increased from the
employees salary.
4. In your judgment, was it good or bad for the government to take
ownership of 61% of GM? Explain why or why not in terms of theories of
Locke, Smith, and Marx.
I think it is wise to say that it is better for the government to take 61% of GM,
which make the government take the most control over the company. Because
with the government intervention, it could avoid free market monopoly which
means the government holds highly as regulator of the market. The government is
also help the company financially and since it was the government the finance
could be more stable rather than being held by a certain company or public.