Minimizing unfair advantage through legislation

Our capitalist economy is based on the right of consumers to freely choose what they purchase and from whom. Ethics questions arise when large companies dominate the market because they develop an unfair advantage over their competitors.

The result of this situation can be an inability for new merchants to enter the market, resulting in a loss of choice to consumers, and a potentially inflated cost of goods in the market.

Antitrust legislation

Antitrust legislation requires that companies should not monopolize competition (a violation of consumers’ right to choose in a free enterprise market). Antitrust legislation was first introduced in the United States during the presidency of Benjamin Harrison with the Sherman Antitrust Act in 1890, named for Senator John Sherman. At that time, there was growing public concern about giant corporations, particularly oil and tobacco companies.

Sherman Antitrust Act

The Sherman Antitrust Act provided a definition of unfair business practices and established an investigative body to observe and monitor corporate activity. In 1914, under the leadership of President Woodrow Wilson, the Clayton Antitrust Act clarified the existing antitrust laws and specifically prohibited predatory price-cutting, price-fixing, ownership of stock in competing companies, and individuals from serving as directors of competing companies.

Clayton Antitrust Act

Furthermore, the Clayton Antitrust Act supported workers and labor organizations and specifically stipulated that boycotts, strikes, and picketing activities were legal. The Federal Trade Commission (FTC) was established in 1914 as the regulatory agency empowered to investigate corporate practices.

These legislative acts reflect the humanitarian approach, which is recognized when the outcomes of actions support the affected person’s (in this case the consumer) human value. The humanitarian approach requires the outcome to benefit the person, not just the intention or the means.

Federal Trade Commission

In the fashion industry, apparel and home furnishings labeling rules are overseen by the Federal Trade Commission. Accuracy in labeling can affect the well-being of the consumer when potential allergies to certain fibers might be known or when costs for care (such as dry-cleaning) are stated upfront. Companies that comply appropriately when providing information labels support a humanitarian approach to ethics, as well as a rights-based approach.

Creating fair labor practices

The ongoing relationships between business leaders and laborers continue to create tension in the marketplace and work environments. Unions, also known as bargaining units, have been established in many industries to create and regulate fair labor practices.

Although unions are well entrenched in the US manufacturing sector, there have been relatively few successful unionizations of retail employees. The debate continues regarding the need for unionization and with respect to the value of the outcomes that bargaining units contribute to retailers and other companies. In general, corporations clearly resist employee movements to unionize, yet many employees view unions as vehicles to receive increased fair employment and benefits. The ethics of union and anti-union activities are connected to perspectives and interpretations of fairness, justice, and humanitarianism.

There are various approaches to ethical dilemmas, and it is important for you to know how you can apply these approaches when making decisions with ethical implications.