Business Ethics in a Competitive Market.

Consequentialist reasoning and neoclassical assumptions about perfectly competitive markets encourage business school faculty and students to overlook the role of ethics in a market system. In a perfectly competitive economy, self-interest suffices to bring about a desirable outcome. However, discrepancies between an economist's assumptions and the realities of a market economy establish a need for business ethics. This essay, written as a lecture for MBA students, first reviews Pareto optimality as an argument in favor of market allocations. It then uses the discrepancies between actual and hypothetical markets to derive a Rawlsian duty of civility. This neoclassical case for business ethics requires individuals to avoid exploiting the defects that are inevitable in any social structure. [ABSTRACT FROM AUTHOR]