Ethical Role Of Capitalism In America

Ethics play a role in every aspect of life. Our country has been privileged enough to learn from the past mistakes and develop a nation that gives people a way to express themselves. Capitalism was one of the biggest changes that the colonists provided to the newly founded America. Our Founding Fathers developed a new understanding of how they wanted to people to be treated in America. Capitalism played an important role in the development of our nation and in turn it led to the development of the Code of Ethics for businesses. Capitalism changed America and helped establish the new laws and government following the Revolutionary War. Adam Smith came about with the intention of using Capitalism as a way to get rid of the British monopoly
system that created harsh conditions for the less fortunate people. Smith also believed that "freedom and competition" would formulate an economic system that would grow the economy and encourage productivity (Collins). Adam Smith also made it clear that justice would need to be established to control capitalism.
Smith believed the freedom to choose how and where to enter the market would create a good ethical foundation. In turn, management would develop a sense of ethics that would push them to do the right thing. Development of laws and government must be established to prevent monopolies as well as protect laborers from injustice. Capitalism led to much economic growth in America. Increased jobs, technology, and disposable income allowed American's to expand the economy (Collins). Immigrants moved to the United States looking for a way out of British control. With the increase in population and development of technologies the United States was able to purchase or take land that stretched from coast to coast which aided the growth of new ways to deliver goods and services to wider market. The growth generated by capitalism brought about many new regulations to create a barrier against companies that were trying to monopolize their company. The Sherman Antitrust Act of 1890 was established to prevent companies from growing past a certain point (Collins). The new regulation allowed for the smaller businesses to have a chance in the market and prevent the larger companies from forcing them out of business. Other changes in the laws forced companies to become liable for damages to consumers that could be harmed by their products. These new laws held corporations accountable for their
products and changed the dynamics of ethics in companies. Labor issues generate many problems throughout the years when capitalism was introduced. People that held higher positions in business industry found it easy to take advantage of slaves and not provide employees with proper working conditions. Slavery was one of the biggest controversies that the United states had to deal with throughout its history. With the changing of time, ethics changed as well. Slaves that were now free had to deal with "ethical issues, such as just compensation, land rights, voting rights, and civil rights." (Collins) Roosevelt helped laborers when the signed the Fair Labor Act of 1938. The new laws created a minimum and living wage that companies would have to pay their employees to work. The government felt that the people should be paid fairly for their work, while businesses complained that the new laws made it harder for them to establish contracts because they had to pay workers above the free market rates (Collins). The development of the Code of Ethics in the business place is critical for business to be successful. Capitalism led to the awareness of ethics and how businesses should develop their organization around these principals. The Code of ethics can be defined as a way to pr