The most influential ethical theories developed by philosophers over the centuries are utilitarianism, deontological and virtue ethics. Utilitarianism, which emerged within the consequentialist philosophical framework, claims that actions can only be deemed morally right or wrong based on the effects they cause. Utilitarianism posits that people should choose actions that maximize the overall utility, which distinguishes it from egoism that emphasizes individual benefits. This moral theory exists in multiple versions and forms. The classical utilitarian philosophers Jeremy Bentham and John Stuart Mill advocated the hedonistic form of utilitarianism, which identifies utility as pleasure or well-being of the parties involved. Other philosophers suggested that the definition of the good could encompass many different values, with their main focus being on the satisfaction of human preferences. The utilitarian theory has been criticized for its numerous shortcomings: thus, by attaching central importance to the principle of overall happiness, it totally neglects the spiritual dimension of human life and justifies the violation of individual human rights (Cleveland, 2002).The deontological theory is based on duties and obligations that people are required to follow. In contrast to utilitarianism, it posits that actions can be intrinsically right or wrong, regardless of their effects. Within deontology, moral problem is considered a rational problem that requires finding the right rule by applying reason (Van Staveren, 2007). The deontological theory is rooted in the philosophy of Immanuel Kant who believed that the moral worth of an action was determined by the human will, i.e. the motivation behind it. In his view, the good will is the only thing that can be considered good without qualification, even though it may eventually lead to negative consequences. As opposed to utilitarianism, deontology does not attach large significance to seeking pleasure because it can often be intrinsically wrong. One important implication of the deontological theory is the emphasis of human dignity and respectful attitude towards others, as it argues that people should be regarded as an end in itself, not as means. The major limitations of the deontological ethics are the possibility of conflicting rules and the fact that many complex problems cannot be solved by simply following universal rules.
Virtue ethics, first proposed by Aristotle, focuses on the imminent characteristics of a person, rather than actions and their consequences. It states that, to live a morally good life, people should strive for eliminating their vices and developing positive character traits (virtues) in their daily interactions with others. In contrast to deontological theory, which implies the existence of universal moral rules, virtue ethics recognizes the importance of situational context in making right or wrong decisions (Van Staveren, 2007). According to this theory, the ultimate goal of humans should be achieving the virtuous state of the soul, which is treated as the highest good. Similarly to the deontological theory, but unlike utilitarianism, virtue ethics requires personal introspection and constant improvement in learning to act in the right way. One important objection to the virtue ethics is that it is self-centered and overlooks the effects that human actions have upon others.
The approach that can provide the largest benefits when applied in economy is virtue ethics, which is currently experiencing revival in many domains of the society. Utilitarianism, which was the most common approach in the last century, has discredited itself as a valid ethical theory in the fields of economy and politics as it has often been used to justify large-scale violations of human rights for the sake of building a perfect society (Cleveland, 2002). Deontological perspective is also inefficient as the complexity of modern economic problems precludes successful application of universal rules and norms. Moreover, this perspective requires external constraints to establish and monitor the conformity with these rules. In contrast to it, the virtue ethics makes morality inherent to the agents’ motivation and thus does not require any external authority for the enforcement of norms (Van Staveren, 2007). Externalities in the market competition and fraudulent behavior of the market agents are mostly driven with their motivation to maximize their profit. If the virtue ethics becomes dominant, though, the ultimate goal of the agents will be self-improvement rather than self-enrichment, so that they will be intrinsically driven to act in the moral way. Therefore, virtue ethics, which is inseparable from the human spiritual dimension, can be the most efficient to promote economical development, with the minimal intervention of the government into the market processes.

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    References
  • Cleveland, P. (2002). The failure of utilitarian ethics in political economy. Journal of Private Enterprise 18, 16-28.
  • Van Staveren, I. (2007). Beyond utilitarianism and deontology: Ethics in economics. Review of Political Economy 19(1), 21-35.