Principles of ethical economy

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The theory of ethical economy examines the ethical foundations of the market economy, showing that ethics serves as the pre-coordination of motives among economic agents before the price system coordinates market actions. It presents a positive theory of economic, ethical, and religious coordination of self-interested actions, likened to a super-assurance game in prisoners' dilemma scenarios. Ethics is framed as a remedy for market failures, while religion addresses failures in ethics. This formal ethics of coordination is paired with a material-substantive ethics of value qualities. A key principle is the classical principle of double effect, which informs managerial and general decision-making. Unintended side effects (externalities) pose significant challenges in impactful decisions. Effective management must harness positive side effects while mitigating negative ones. The theory also explores just price and fair pricing principles, emphasizing their importance for modern firms. This framework synthesizes contemporary market theory with the natural rights tradition of ethics, offering fresh perspectives on market ethics and the economic implications of ethical duties, virtues, and goods.