Editing Business ethics (section)

===Finance===
Fundamentally, finance is a social science discipline.<ref name="Dobson, p. xvii">{{harvnb|Dobson|1997|p=xvii}}</ref> The discipline borders [[behavioral economics]], [[sociology]],<ref>Cetina, K. K., & Preda, A. (Eds.). (2005). The sociology of financial markets. Oxford University Press {{ISBN|0-19-929692-8}}</ref> [[economics]], [[accounting]] and [[management]]. It concerns technical issues such as the mix of debt and [[equity (finance)|equity]], [[dividend policy]], the evaluation of alternative investment projects, [[options strategies|options]], [[futures exchange|futures]], [[swap (finance)|swaps]], and other [[derivative (finance)|derivatives]], [[portfolio (finance)|portfolio]] [[diversification (finance)|diversification]] and many others. Finance is often mistaken by people to be a discipline free from ethical burdens.<ref name="Dobson, p. xvii"/> The [[2008 financial crisis]] caused critics to challenge the ethics of the executives in charge of U.S. and European financial institutions and financial regulatory bodies.<ref>Huevel, K. et al., (2009). Meltdown: how greed and corruption shattered our financial system and how we can recover. New York: Nation Books {{ISBN|1-56858-433-4}}.</ref> Finance ethics is overlooked for another reason—issues in finance are often addressed as matters of law rather than ethics.<ref name="a153">Boatright, J. R. [https://books.google.com/books?id=PDXVnfyKHBIC&pg=PA153 Finance ethics]{{harvnb|Frederic|2002|pp=153–163}} {{webarchive |url=https://web.archive.org/web/20130510023456/https://books.google.com/books?id=PDXVnfyKHBIC&pg=PA153 |date=May 10, 2013 }}</ref>

====Finance paradigm====
<!--"finance paradigm" needs a definition -->
[[Aristotle]] said, "the end and purpose of the polis is the good life".<ref>Aristotle 1948 Politics E. Barker, trans. Oxford: Clarendon, p. 38.</ref> [[Adam Smith]] characterized the good life in terms of material goods and intellectual and moral excellences of character.<ref>{{harvnb|Smith|1759|p=Virgin Islands.i.15}}{{Dead link|date=March 2011|There is no Book Virgin Islands!}}</ref> Smith in his ''[[The Wealth of Nations]]'' commented, "All for ourselves, and nothing for other people, seems, in every age of the world, to have been the vile maxim of the masters of mankind."<ref>{{harvnb|Smith|1759|p=III.iv.448}}</ref>{{Wikiquote|Adam Smith}} However, a section of economists influenced by the ideology of [[neoliberalism]], interpreted the objective of economics to be maximization of [[economic growth]] through accelerated [[consumption (economics)|consumption]] and [[Manufacturing|production]] of [[goods and services]]. Neoliberal ideology promoted finance from its position as a component of economics to its core.{{Citation needed|date=March 2011}} Proponents of the ideology hold that unrestricted financial flows, if redeemed from the shackles of "financial repressions", best help impoverished nations to grow.{{Citation needed|date=March 2011}} The theory holds that open financial systems accelerate economic growth by encouraging foreign capital inflows, thereby enabling higher levels of savings, investment, employment, productivity and "welfare",<ref>{{cite news|url=http://ipezone.blogspot.com/2007/07/fts-wolf-in-defense-of-neoliberalism.html|date=July 24, 2007|newspaper=[[The Financial Times]]|last=Wolf|first=Martin|title=Wolf: In Defense of Neoliberalism|access-date=March 11, 2011}}</ref><ref>welfare in terms of preference satisfaction {{harvnb|O'Neill|1998|p=56}}</ref><ref>Hayek F.A. 1976 Law, Legislation and Liberty: Volume 2 London: Routledge and Kegan Paul, pp. 15–30.</ref> along with containing corruption. Neoliberals recommended that governments open their financial systems to the global market with minimal regulation over capital flows.<ref>{{cite journal|last1=Lewis|first1=P.|first2=H.|last2=Stein|year=1997|title=Shifting fortunes: the political economy of financial liberalization in Nigeria|journal=World Development|volume=25|issue=1|pages=5–22|doi=10.1016/S0305-750X(96)00085-X}}</ref><ref>Grabel, Ilene (2003), 'International private capital flows and developing countries', in Ha-Joon Chang (ed.), Rethinking Development Economics, London: Anthem Press, pp. 325–45</ref><ref>{{Cite journal|last1=Eichengreen|first1=B.|title=Capital Account Liberalization: What Do Cross-Country Studies Tell Us?|journal=The World Bank Economic Review|volume=15|page=341|year=2001|doi=10.1093/wber/15.3.341|issue=3|citeseerx=10.1.1.551.5658}}</ref><ref>Valdez, J. G. (1995). [https://books.google.com/books?id=-oJq_Rpcs_AC Pinochet's Economists: The Chicago School in Chili] Cambridge University Press {{ISBN|0-521-45146-9}}</ref> The recommendations however, met with criticisms from various schools of ethical philosophy. Some [[pragmatism|pragmatic ethicists]], found these claims to be unfalsifiable and a priori, although neither of these makes the recommendations false or unethical per se.<ref>Samuels, W., J (1977). Ideology in Economics In S. Weintraub (Ed.), Modern Economic Thought (pp. 467–484). Oxford: Blackwell.</ref><ref>Charles, W., & Wisman, J. ([1976] 1993). [https://books.google.com/books?id=PqpBdykSrEEC&pg=PA79 The Chicago School: Positivism or Ideal Type] In W. J. Samuels (Ed.), The Chicago School of Political Economy New Brunswick Transaction Publishers {{ISBN|1-56000-633-1}}</ref><ref>{{harvnb|Duska|2007|pp=51–62}}</ref> Raising economic growth to the highest value necessarily means that welfare is subordinate, although advocates dispute this saying that economic growth provides more welfare than known alternatives.<ref>{{harvnb|O'Neill|1998|p=55}}</ref> Since history shows that neither regulated nor unregulated firms always behave ethically, neither regime offers an ethical [[panacea]].<ref name=salinger>Salinger, L. M., Ed. (2005). Encyclopedia of White Collar Corporate Crime. California, Sage Reference {{ISBN|0-7619-3004-3}}.</ref><ref>Dembinski, P. H., Lager, C., Cornford, A., & Bonvin, J.-M. (Eds.). (2006). Enron and World Finance: A Case Study in Ethics. New York: Palgrave.</ref><ref>Markham, J. W. (2006). [https://books.google.com/books?id=Z7qTGiF8FCgC A financial history of Modern US Corporate Scandals]. New York: M.E. Sharpe {{ISBN|0-7656-1583-5}}</ref>

Neoliberal recommendations to developing countries to unconditionally open up their economies to transnational finance corporations were fiercely contested by some ethicists.<ref>Escobar, A. (1995). [https://books.google.com/books?id=mK2bzANQ4_gC Encountering Development: The Making and Unmaking of the Third World]. Princeton, New Jersey: Princeton University Press {{ISBN|0-691-00102-2}}.</ref><ref>Ferguson, J. (1997). [https://books.google.com/books?id=NueOngvzwK0C&pg=PA150 Anthropology and its Evil Twin: ''Development'' in the Constitution of a Discipline]. In F. Cooper & R. Packard (Eds.), International Development and the Social Sciences: Essays on the History and Politics of Knowledge (pp. 150–175). Berkeley: University of California Press {{ISBN|0-520-20957-5}}.</ref><ref>Frank, A. G. (1991). [http://www.druckversion.studien-von-zeitfragen.net/The%20Underdevelopment%20of%20Development.htm The Underdevelopment of Development]. Scandinavian Journal of Development Alternatives(10), 5–72.</ref><ref>{{cite journal|last=Graeber|first=David|title=The Anthropology of Globalization (with Notes on Neomedievalism, and the End of the Chinese Model of the Nation-State): Millennial Capitalism and the Culture of Neoliberalism. Consumers and Citizens: Globalization and Multicultural Conflicts. The Anthropology of Globalization: A Reader|journal=American Anthropologist|volume=104|page=1222|year=2002|doi=10.1525/aa.2002.104.4.1222|issue=4}}</ref><ref>Smith, D. A., Solinger, D. J., & Topik, S. C. (Eds.). (1999). [https://books.google.com/books?id=oxK58B5zTdUC States and Sovereignty in the Global Economy]. London: Routledge {{ISBN|0-415-20119-5}}.</ref> The claim that deregulation and the opening up of economies would reduce corruption was also contested.<ref>Fisman, R., & Miguel, E. (2008). [https://books.google.com/books?id=AFdIJh1Z7roC Economic Gangsters: Corruption, Violence and the Poverty of Nations]. Princeton: Princeton University Press {{ISBN|0-691-13454-5}}.</ref><ref>Global Corruption Report 2009: Corruption and Private Sector. (A Report by Transparency International) (2009). Cambridge: Cambridge University Press {{ISBN|0-521-13240-1}}.</ref>

Dobson observes, "a rational agent is simply one who pursues personal material advantage ad infinitum. In essence, to be rational in finance is to be individualistic, materialistic, and competitive. Business is a game played by individuals, as with all games the object is to win, and winning is measured in terms solely of material wealth. Within the discipline, this rationality concept is never questioned, and has indeed become the theory-of-the-firm's sine qua non".<ref>{{harvnb|Dobson|1997|p=ix}} "Experts of finance tend to view business firm as, 'an abstract engine that uses money today to make money tomorrow'</ref><ref>{{Cite journal|doi=10.1086/296380|author=Miller, M. H. |year=1986|title=Behavioral Rationality in Finance: The Case of Dividends|journal=Journal of Business|volume=59|pages=451–468|id=see p. 452}}</ref> Financial ethics is in this view a mathematical function of shareholder wealth. Such simplifying assumptions were once necessary for the construction of mathematically robust models. However, [[signalling (economics)|signalling theory]] and [[Principal–agent problem|agency theory]] extended the paradigm to greater realism.<ref>{{harvnb|Dobson|1997|pp=xvi, 142}}</ref>