The human world in which ethics advances and in which there is justice operates through reward and punishment. But reward and punishment are not one-dimensional. They can be very subtle and yet still very effective. For example, a glance of disapproval from a beloved friend or family member can be a very powerful punishment just as an encouraging and loving pat on the back can be a very powerful reward. With this in mind then it is easy to come to agreement that ethics advances and justice operates through reward and punishment.
Another example of reward and punishment that occurs naturally and that should not be interfered with is the reward and punishment of profit and loss as part of the market process. Absent the distortions caused by interventionism this is a sufficient condition for ethical economics and economic justice. For example, incentives and disincentives tied to productivity in any and all of its manifestations within the framework of the division of labor create an honorable work ethic. Those who have a weak work ethic would feel first-hand the disincentive from being unproductive and if it happens that their lack of productivity is truly because they have a weak work ethic then it is only justice that they can make their complaints against. The incentives and disincentives will help them to strengthen their work ethic.
Within a firm the same thing applies. Inside the firm there is a structure within which reward and punishment operates in all of its subtleties. Unlike with an individual the firm may have internal layers that move the productive efforts of the individuals away from direct interaction with market prices. Within the firm the incentive and disincentive strategy may or may not be reflective of the real world market. The further away the incentive/disincentive strategy of the firm is from the real world market the more likely there will be errors that will ultimately affect the viability of the firm.
And so it is necessary for the firm to create a culture of entrepreneurship in such a way that there are ties to the market process ideally at every locus of decision/action. Alertness must include detecting the closeness to market prices and discovering ways to stay close. If a firm has this as its goal it will inherently be innovative and a source of bounty for those within the firm. At the same time this kind of firm will be able to render service optimally to those people who desire what the firm has to offer.
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