Impact of the Financial Crisis on Banks and Banking

Impact of the Financial Crisis on Banks and Banking A bank is a financial intermediary that offers loans and deposits, and payment services. Its core activity is to provide loans to borrowers and to collect deposits from savers. Banks stock money, people need money; therefore, people need banks. Banks provide a home for peoples money, which is something accountants do not do; and banks also lend money, which accountants certainly do not do. There are three main kinds of banking: commercial banking, investment banking and central banking. Commercial banking is the traditional role of the banker as it relates to the taking of deposits and granting of loans. Commercial banking is split into two types: retail banks and wholesale banks. Retail banking relates to financial services provided to consumers and is usually small-scale in nature. Retail banks are often known as High Street banks, because they large branch networks, many of them comprising well over a thousand branches, usually located in the main shopping streets. Wholesale banks are found in the major financial centres of the world, eg London, New York, Frankfurt, Hongkong and Tokyo. They serve the major companies and have large-scale dealings with other banks throughout the world. The key different between these is that retail banks borrow from and lend to members of public and companies whilst wholesale banks deal with other banks and with governments (national and overseas). Investment banks are a US creation; and it could not be combined with commercial banks in one institution. The main role of investment banks is to help companies and governments raise funds in the capital market either through the issue of stock or debt (bonds). Typically, their activities cover the following areas: financial advisory; underwriting of securities issues; trading and investing in securities on behalf of the bank or for clients; asset management; other securities services. A central bank can generally be defined as a financial institution responsible for overseeing the monetary system for a nation, or a group of nations, with the goal of fostering economic growth without inflation. The core functions of central banks in any countries are: to manage monetary policy with the aim of achieving price stability; to prevent liquidity crises, situations of money market disorders and financial crises; and to ensure the smooth functioning of the payment system. Banks, as other financial intermediaries, play a pivotal role in the economy, channelling funds from units in surplus to units in deficit. Financial crisis: The financial crisis of 2007-2009 has been called the most serious financial crisis since the Great Depression by leading economists, with its global effects characterized by the failure if key businesses, declines in consumer wealth estimated in the trillions of U.S dollars, substantial financial commitments incurred by governments, and a significant decline in economic activity. The immediate cause or trigger of the crisis was the bursting of the United States housing bubble which peaked in approximately 2005-2006. High default rates on subprime and ARM (adjustable rate mortgages), began to increase quickly thereafter. An increase in loan incentives such as easy initial terms and a long-term trend of rising housing prices had encouraged borrowers to assume difficult mortgages in the belief they would be able to quickly refinance at more favourable terms. However, once interest rates began to rise and housing prices started to drop moderately in 2006-2007 in many parts of the U.S, r efinancing became more difficult. Defaults and foreclosure activity increased dramatically as easy initial terms expired, home prices failed to go up as anticipated, and ARM interest rates reset higher. In the years leading up to the start of the crisis in 2007, significant amounts of foreign money flowed into the U.S from fast-growing economies in Asia and oil-producing countries. This inflow of funds combined with low U.S interest rates from 2002-2004 contributed to easy credit conditions, which fuelled both housing and credit bubbles. Then, the global financial crisis really started to show its effects in middle of 2007 and into 2008. Around the .world stock markets have fallen, large financial institutions have collapsed or been bought out, and governments in even the wealthiest nations have had to come up with rescue packages to bail out their financial systems. Literature Review: The world economy is experiencing perhaps the most serious financial crisis since the breakdown of the Bretton Woods system in the early 1970s, in terms of both its scope and its effects. Its impact is much more global than that of the financial crisis we have seen in the past two or three decades. Today, global financial integration is much more pervasive, and the Asian countries have a much higher share of world trade and production. For some, the global nature of the current crisis has been unprecedented as several advanced economies have simultaneously witnessed declines in house and equity prices as well as difficulties in the credit market. The origin of financial crisis: As we know the current global financial crisis originated with losses on US subprime mortgage related securities, losses that first emerged with the slowing of the US housing market in the second half of 2006. The first origin of financial crisis is that the growth of housing bubble precipitated the beginning of financial crisis. Between 1997 and 2006, the price of the typical American house increase by 124. (Economist, 2007) During the two decades ending in 2001, the national median home price ranged from 2.9 to 3.1 times median household income. This ratio rose to 4.0 in 2006. (Steverman and Bogoslaw, 2008) This housing bubble resulted in quite a few homeowners refinancing their homes at lower interest rates, or financing consumer spending by taking out second mortgages secured by the appreciation. By September 2008, average US housing prices had declined by over 20% from their mid-2006 peak. (Economist, 2008) The other origin of financial crisis is easy credit, and a belief that h ouse prices would continue to appreciate, had encouraged many subprime borrowers to obtain adjustable rate mortgages. These mortgages enticed borrowers with a below market interest rate for some predetermined period, followed by market interest rates for the remainder of the mortgages term. Borrowers who could not make the higher payments once the initial grace period ended would try to refinance their mortgages. Refinancing became more difficult, once house prices began to decline in many parts of the USA. Borrowers who found themselves unable to escape higher monthly payments by refinancing began to default. The process of financial crisis: There is evidence that both government and competitive pressures to an increase in the amount of subprime lending during the years preceding the crisis. Major US investment banks and government sponsored enterprises like Fannie Mae and Freddie Mac played an important role in the expansion of higher-risk lending. In 1996,HUD, the department of Housing and Urban Development, gave Fannie Mae and Freddie Mac an explicit target: 42 per cent of their mortgage financing had to go to borrowers with incomes below the median income in their area.'(Schwartz, 2009, pp46) Between 2000 and 2005 Fannie Mae and Freddie Mac met those goals every year, and funded hundreds of billions of dollars worth of loans, many of them subprime and adjustable-rate loans made to borrowers who bought houses with less than 10 per cent deposits. Finnie Mae and Freddie Mac also purchased hundreds of billions of subprime securities for their own portfolios to make money and help satisfy HUD affordable-housing goals. (Schwartz, 2009) Due to the deregulation loans, some borrowers could get loans under easy credit conditions. Predatory lending refers to the practice of unscrupulous lenders, to enter into unsafe or unsound secured loans for inappropriate purpose. When the housing bubble burst, USA housing and financial assets decli ne in value, and the subprime crisis was coming out. After that the financial crisis had been basically formed. There is a story of financial crisis stated by Butler (2009: p51): Once upon a time, greedy bankers, mostly in the USA, made fortunes by selling mortgages to poor people who could not really afford them. They knew these loans were unsound, so they diced and sliced them and sold them in packages around the world to equally greedy bankers who did not know what they were buying. When the housing bubble burst, the borrowers defaulted, and bankers discover that what they had bought was worthless. They went burst, business loans dried up, and the economy shuddered to a halt. The moral, accounting to this description of events, is that capitalism has failed, and we need tougher rules to curb bankers greed and make sure all this never happens again. This story could express accurately the process of finance crisis. The impacts of financial crisis in the world: A collapse of the US subprime mortgage market and the reversal of the housing boom in other industrialized economies have had a ripple effect around the world. Furthermore, other weaknesses in the global financial system have surfaced. Some financial products and instruments have become so complex and twisted, that as things start to unravel, trust in the whole system started to fail. First, it affected on financial institutions. Initially the companies affected were those directly involved in home construction and mortgage lending such as Northern Rock and Countrywide Financial, as they could no longer obtain financing through the credit markets. Over 100 mortgage lenders went bankrupt during 2007 and 2008. Concerns that investment bank Bear Steams would collapse in March 2008 resulted in its fire-sale to JP Morgan Chase. The crisis hit its peak in September and October 2008. Several major institutions either failed, were acquired under duress, or were subject to government takeover. These included Lehman Brothers, Merrill Lynch, Fannie Mae, Freddie Mac and AIG. Second, it affected the money market. During September 2008, the crisis hits its most critical stage. There was the equivalent of a bank run on the money market mutual funds, which frequently invest in commercial paper issued by corporations to fund their operations and payrolls. Withdrawals from money markets were $144.5 billion during one week, versus $7.1 billion the week prior. Third, wealth effects in the financial crisis. There is a direct relationship between declines in wealth, and declines in consumption and business investment, which along with government spending represent the economic engine. Between June 2007 and November 2008, Americans lost an estimated average of more than a quarter of their collective net worth. By early November 2008, a broad U.S. stock index the SP 500, was down 45 percent from its 2007 high. Housing prices had dropped 20% from their 2006 peak, with futures markets signaling a 30-35% potential drop. Total home equity in the United States, which was valued at $13 trillion at its peak in 2006, had dropped to $8.8 trillion by mid-2008 and was still falling in late 2008. Total retirement assets, Americans second-largest household asset, dropped by 22 percent, from $10.3 trillion in 2006 to $8 trillion in mid-2008. During the same period, savings and investment assets (apart from retirement savings) lost $1.2 trillion and pension assets lost $1.3 trillion. Taken together, these losses total a staggering $8.3 trillion. (Altman, 2009). Finally, it is the effects on the global economy. The crisis rapidly developed and spread into a global economic shock, resulting in a number of European bank failures, declines in various stock indexes, and large reductions in the market value of equities and commodities. Moreover, the de-leveraging of financial institutions, as assets were sold to pay back obligations that could not be refinanced in frozen credit markets, further accelerated the liquidity crisis and caused a decrease in international trade. World political leaders, national ministers of finance and central bank directors coordinated their efforts to reduce fears, but the crisis continued. At the end of October 2008 a currency crisis developed, with investors transferring vast capital resources into stronger currencies such as the yen, the dollar and the Swiss franc, leading many emergent economies to seek aid from the International Monetary Fund. (Landler, 2008). The impacts of financial crisis on US banking system: GDP, the output of goods and services produced by labour and property located in the US, decreased at an annual rate of approximately 6 percent in the fourth quarter of 2008 and first quarter of 2009, versus activity in the year-ago period. The US unemployment rate increased to 9.5% by June 2009, the highest rate since 1983 and roughly twice the pre-crisis rate. The average hours per work week declined to 33, the lowest level since the government began collecting the data in 1964. From time to time confidence in the USAs banks would weaken and banks note-holders would demand their specie (i.e. gold or silver) back. Banks could meet these withdrawals either from their own vaults or by taking back some of the bullion left with the clearing-house association. The lower the level of their balance the clearing system, the greater would be the likelihood that individual non-central banks would be overdrawn. (Congdon, 2009) There is an example from him: suppose bank Ys initial deposit with the clearing system was 30 pounds. If its customers instructed it to make net cash payments to other banks of 35 pounds, bank Y would have been overdrawn by 5 pounds. (2009: pp50). So financial crisis and the publics associated large-scale note redemptions would cause increased tension between members of the clearing house. The impacts of financial crisis on UK banking system: Just how serious the financial crisis was becoming, not only in the US but also in the UK, hit home late on September 2007 when news emerged that Northern Rock, had been forced into a bailout from the Bank of England. Northern Rock Bank is the most affected by financial crisis in the UK, and also the most typical bank for my study. Northern Rock is one of the top five mortgage lenders in the UK in terms of gross lending. As well as mortgages, the bank also deals with savings accounts, loans and insurance. In 2006 the bank had moved into subprime lending via a deal with Lehman Brothers. Although the mortgages were sold under Northern Rocks brand through intermediaries, the risk was being underwritten by Lehman Brothers. On 14 September 2007, the Bank sought and received a liquidity support facility from the Bank of England, following problems in the credit markets. This led to many customers queuing outside branches to withdraw their savings. Partly as a result of the run, on 22 February 2008 the bank was taken into state ownership. The nationalization was a result of two unsuccessful bids to take over the bank, neither being able to fully commit to repayment of taxpayers money within three years. Because of Northern Rock crisis, customers lost their confidence for any banks in the UK. They started withdraw money from their saving account, so that all banks in the UK were affected a lot. Aim Objectives and Key Questions: Aim and Objectives: Nowadays, the US Financial Crisis (2008) along with the subprime crisis (2007) seemed to have delivered a severe blow to worlds banking sector. Banks are thought to be central to business activity. Therefore, when they experience financial distress, governments usually come to the rescue, offering emergency liquidity and various forms of bailout programs. Then the aim of this dissertation is to determine impacts of financial crisis on banking and corresponding measures on these impacts. In order to achieve my aim, I need to achieve following objectives which are the steps towards my aim: To determine the impacts of financial crisis on banking in China. Achieving this objective will be much help as I would also understand different impacts of financial crisis on banking in comparing with other area. To analyse the measures to the impacts of financial crisis on banking. During the objective I will have the chance to recognize the process of central bank in each country. Therefore, I would realize the measures for banks under the financial crisis in two different views: financial views and political views. Key Questions: To achieve the aim and the objectives, the research was set out to answer the following key questions: What are the impacts of financial crisis on banking system in China? And what are the different impacts among China and other areas? What are the corresponding measures for these impacts in these countries? This paper is focus on banking sector under the financial crisis, and how banks faced the crisis. The importance of this topic lays on the impacts of banking sector under the financial crisis and what the best measure for banks is. Basically, my research is based on the origin and process of financial crisis to find out the impacts for banks in each country. Therefore, I would investigate how to resolve these impacts. Research Methodology: As discussed in the sections above, the research objective is to determine the impacts of financial crisis on banking in China so that I could compare different impacts with other countries. The study identifies questionnaires and interviews as suitable research methods for the present paper. The general belief of research is often thought of as collecting data, constructing questionnaires/interviews and analysing data. But it also includes identifying the problem and how to proceed solving it (Ghauri et al., 1995). Questionnaire approach: A questionnaire is a research instrument consisting of a series of questions and other prompts for the purpose of gathering information from respondents. Questionnaires have advantages over some other types of surveys in that they are cheap; do not require as much effort from the questioner as verbal or telephone surveys, and often have standardized answers that make it simple to compile data. Questionnaires are also sharply limited by the fact that respondents must be able to read the questions and respond to them. Thus, for some demographic groups conducting a survey by questionnaire may not be practical. Usually, a questionnaire consists of a number of questions that the respondent has to answer in a set format. A distinction is made between open-ended and closed-ended questions. An open-ended question asks the respondent to formulate his own answer, whereas a closed-ended question has the respondent pick an answer from a given number of options. In this paper, I have used the ope n-ended questions into questionnaires. Because the impacts of financial crisis on banking which is an open discussion, it is more suitable to use open-ended questions to discuss. In this research, I have posted out 100 questionnaires for several banks in different positions of banking areas. But I only get 50 feedbacks from banks include: China Construction Bank with 11 copies; Bank of China with 23 copies; HSBC with 2 copies; China Merchants Bank with 2 copies; Shanghai Pudong Development Bank with 2 copies; Agricultural Bank of China with 3 copies; Bank of Communications with 2 copies; China Citic Bank with 3 copies; Bank of East Asia with 2 copies. The questionnaire is to undertake ideas from employees in each bank above. The employees have been selected in different job positions that include: account managers; customer managers; salesmen; managing directors; operation managers; accountants; channel managers; international clearing managers; administrations; marketers; product managers; staffs; retail managers; and others with no answers. There are four key questions amount those seven questions in this questionnaire: How much are you affected by financial crisis? Explain what affects you in financial crisis? What is different consumer behaviour between before financial crisis and after financial crisis? What do you think how to resolve the effects of financial crisis on banking? In the view of above questions, we can find out different effects of financial crisis on banking to employees in different positions and the correspond measures for the effects. Interview approach: An interview is a conversation between two or more people (the interviewer and interviewee) where questions are asked by the interviewer to obtain information from the interviewee. In most cases, interviews are only one of a number of qualitative/quantitative techniques that we are likely to use in a research project. The main types of interview include structured interview, semi-structured interview and unstructured interview. Semi-structured interviews are controlled interactions. However, this model enables the researcher to ask supplementary questions, for clarification and elaboration, whilst the use of open questions grants the participant greater freedom to discuss their experience. Unstructured interviews are relatively uncontrolled interactions where, once the question has been put, the researcher listens and do not prompt. This offers the participant the opportunity to discuss the subject using their frames of reference. Unstructured interviews can be very useful in studies of peoples information seeking and use. They are especially useful for studies attempting to find patterns, generate models, and inform information system design and implementation. For example, Alvarez and Urla (2002) used unstructured interviews to elicit information requirements during the implementation of an enterprise resource planning (ERP) system. Due to their conversational and non-intrusive characteristics, unstructured interviews can be used in settings where it is inappropriate or impossible to use other more structured methods to examine peoples information activities. For example, Schultze (2000) used unstructured interviews, along with other ethnographic methods, in her eight-month field study in a large company investigating their production of informational objects. What are the rationales for using semi-structured interviews? It can help us to obtain relevant information. It can give the freedom to explore genera l views or opinions in more details. It can use external organization so as to retain independence. The strengths of semi-structured interviews are that the researcher can prompt and probe deeper into the given situation. For example, the interviewer inquires about using computers in English language teaching. Some respondents are more computer literate than others are. Hence, with this type of interview the interviewers are able to probe or asked more detailed questions of respondents situations and not adhere only to the interview guide. In addition, the researcher can explain or rephrase the questions if respondents are unclear about the questions. A structured interview also known as a standardised interview is a quantitative research method commonly employed in survey research. The aim of this approach is to ensure that each interviewee is presented with exactly the same question in the same order. This ensures that answers can be reliably aggregated and that comparisons can be made with confidence between sample subgroups or between survey periods. A structured interview also standardises the order in which questions are asked of survey respondents, so the questions are always answered given to survey question can depend on the nature of preceding questions though context effects can never be avoided, it is often desirable to hold them constant across all respondents. Structured interviews can also be used as a qualitative research methodology. These types of interviews are best suited for engaging in respondent or focus group studies in which it would be beneficial to compare/contrast participant responses in order to answe r a research question. For structure qualitative interviews, it is usually necessary for researchers to develop an interview schedule which lists the wording and sequencing of questions. In this research, I have chosen structured telephone interview as main interview approach. There are three interviewees have been interviewed through telephone in three different banks which are Bank of China, Bank of Communications and Agricultural Bank of China. The positions of these three interviewees are Department Head in Bank of China, Branch President in Agricultural Bank of China and Financial Manager in Bank of Communications. The questions in the interviews are made quite same as to questions made in questionnaires. Findings and Analysis: Findings: From the view of all the questionnaires and interviews, I have organised the following points as findings: In China Construction Bank there are two staffs affected by financial crisis are a lot; seven staffs affected by financial crisis are medium; and each one staffs affected by financial crisis is a little and almost not. Nine of all eleven staffs answered that their incomes have been reduced during the financial crisis. Seven of all staffs realized that customers became more prudent after financial crisis compared before. In Bank of China there are nine staffs affected by financial crisis are a lot; ten staffs affected by financial crisis are medium; and each two staffs affected by financial crisis are a little and almost not. Almost half of all twenty-three staffs answered that their workings are much more difficult to handle such as some services closed, working period much longer and more competitions etc. Seven of all staffs stated that their incomes have affected very much because of financial crisis. Ten of all staffs realized that customers became more prudent and rational during the financial crisis. Other staffs almost realized that customers had no any changes under the financial crisis compared before. In other seven banks there are five staffs affected by financial crisis are a lot; five staffs affected by financial crisis are medium; one staff affected by financial crisis is a little; and five staffs affected by financial crisis are almost not. Each five staffs answered that their workings are much more difficult to handle and their incomes have been reduced. Almost half of all sixteen staffs realized that customers became more rational and likely to transfer their money from some risky investments to a saving account or banking instruments. Analysis: From the findings of the study it emerges that: Most participants who are in different positions of different banks realized that they have been affected by financial crisis a lot or medium. And most customers they deal with became more rational and prudent. Before the outbreak of the financial crisis is not that customers apply for special financial management, the clients risk acceptance is very strong, and the abundant capital in the market. Most clients are seeking short-term immediate benefits, but did not fully take into account their own business and assets of the plan a long-term investment, life-long investment. But after the outbreak of the financial crisis, most customers whether it is their own operations and domestic and foreign investment had both a certain degree of loss. Customers will first consider the operating and investment risk, followed by another to seek profit; their sights would be to put the long-term, truly entered the era of the pursuit of long-term interests. Adverse impacts to the unit under the financial crisis: First, non-performing loans increased pressure. The financial crisis on the business impact of large bank customers, especially export-oriented enterprises. Declining in exports led to decline in client business performance, repayment pressure, and increased risk of deterioration in credit quality. Second, the lack of effective demand for loans. Financial crisis led to bad corporate management, so that effective demand for loans fell. Third, the financial crisis lead to an international settlement business, hosting business, and capital markets businesses in a substantial decline so that intermediary business revenue. Fourth, the time when the economy is down, and constantly cut interest rates, banks net interest yield was downward trend. The effects of the financial Crises on the banking industry and an evaluation of the measures for resolving the crises. Using evidence from the Great Depression and several other banking crises, Hoggarth and Reidhill (2003) concluded that banking crises can have a long term dramatic effect on the economy if left unresolved but the scale and character of any intervention should have as its prime objective to keep fiscal costs minimal and to prevent any future moral hazard. Moral Hazard in this case refers to the risk that bankers who are aware of the governments unwavering commitment to crop up dying banks may take too much unnecessary risk since they have a guarantee that their banks will never go burst. This section discusses the effects of the recent 2007-2009 global financial crises on the banking industry. It further evaluates some of the measures put in place by the UK and US governments to alleviate the crises. At every point Hoggarth and Reidhills 2003 conclusion will be my point of reference as I evaluate the Fiscal Cost and Moral Hazard issues related with the resolution of the crises. Finall y, I will also discuss other view points and make recommendations on how the crises could have been tackled more effectively. The United Kingdom and United States economies were the largest hit and probably the most affected by the crises. It is worth bearing in mind that even though this crisis began in the financial sector and real estate sectors of these economies, it rapidly spread to the manufacturing and retail sectors. Without much notice every sector of the economy had been affected by the downturn. A vicious cycle quickly develops where as companies lack credit, they slow manufacturing and layoff workers leading to high unemployment rates. As unemployment increases and consumer credit and purchasing power drops, the demand for goods and services plummets and the entire economy is further hit. At the end of the cycle, the main cause of the demise is soon forgotten and the problem actually becomes one of scepticism and mistrust widely termed consumer confidence and/or investor confidence. It is popular opinion that such a crisis should not be left unresolved by country authorities even though it is caused by individual businesses and public companies. After all, a rapid decline in business profits and an increasing rate unemployment means a plunge in the states tax revenue, a hike in unemployment benefit payouts, an increase in government debt and the crumbling of the economy. Politicians are therefore faced with the dilemma of whether or not to interfere with the free market economy, taking actions that will have serious implications on management and investor behaviour and spending public money to save private investors. As dreadful as this may sound, there appears to be no other viable way to resolve a banking crisis. Banks in particular, are generally not stand alone institutions. One view point to resolving a banking crisis amidst a recession emphasises that any measures designed to ensure that banks survive in a sustainable way will be aimed at reviving and supporting bank stakeholders (Customers and investors). This view point advocates that the best way

Student-Centered Learning Essay -- Education Students Educational Pape

Student-Centered Learning Student-centered learning is a broad teaching approach that encompasses replacing lectures with active learning, integrating self-paced learning programs and/or cooperative group situations, ultimately holding the student responsible for his own advances in education. Student-centered learning environments have a heightened advantage over the traditional teacher-centered, subject-centered environment in that they provide complimentary activities, interactive in nature, enabling individuals to address their own learning interests and needs and move forward into increasingly complex levels of content to further their understanding and appreciate subject matter. The student-centered learning environment has the student need satisfaction as its primary focus whereas the subject-centered environment has the transmission of a body of knowledge as the primary focus (Clasen & Bowman, 1974, p. 9). Student-centered learning, when used properly, can change the face of education into a life- long learning process in which the student seeks solutions to problems without complete dependency upon an instructor. The student learns to reason on his own to find a foundation for venturing out with successful experiences under his belt. The learning environment concept has been around for some time. Its roots can be traced back to "early apprenticeship, Socratic, and similar movements that have sought to immerse individuals in authentic learning experiences, where the meaning of knowledge and skills are realistically embedded" (Land & Hannafin, 1996, p. 396). As immigrants flooded the United States, educators sought methods of education for the masses and the creation of a universal, or national system. The fa... ..., Hill, J. R., & Land, S. M. (Winter 1997). Student-centered learning and interactive multimedia: status, issues, and implications. Contemporary Education, 68, 2, 94-97. Land, S. M., & Hannafin, M. J. (1996). Student-centered learning environments: foundations, assumptions, and implications. Proceedings of selected research and development presentations at the 1996 national convention of the association for educational communications and technology. (pp. 396-402). Indianapolis: Association for Educational Communications and Technology. Land, S. M., & Hannafin, M. J. (May 1997). The foundations and assumptions of technology-enhanced student-centered learning environments. Instructional Science, 25, 3, 167-202. Warmkessel, M. M., & McCade, J. M. (Spring 1997). Integrating information literacy into the curriculum. Research Strategies, 15, 2, 80-88.

Destiny, Fate, Free Will and Free Choice in Oedipus the King - Oedipus and Fate :: Oedipus the King Oedipus Rex

Oedipus the King and Fate D.T. Suzuki, a renowned expert on Zen Buddhism, called attention to the topic of free will in one of his lectures by stating that it was the battle of "God versus Man, Man versus God, God versus Nature, Nature versus God, Man versus Nature, Nature versus Man1." These six battles constitute an ultimately greater battle: the battle of free will versus determinism. Free will is that ability for a human being to make decisions as to what life he or she would like to lead and have the freedom to live according to their own means and thus choose their own destiny; determinism is the circumstance of a higher being ordaining a man's life from the day he was born until the day he dies. Free will is in itself a far-reaching ideal that exemplifies the essence of what mankind could be when he determines his own fate. But with determinism, a man has a predetermined destiny and fate that absolutely cannot be altered by the man himself. Yet, it has been the desire of man to avoid the perils that his fate ho lds andthus he unceasingly attempts to thwart fate and the will of the divine.. Within the principle of determinism, this outright contention to divine mandate is blasphemous and considered sin. This ideal itself, and the whole concept of determinism, is quite common in the workings of Greek and Classical literature. A manifest example of this was the infamous Oedipus of The Theban Plays, a man who tried to defy fate, and therefore sinned. The logic of Oedipus' transgression is actually quite obvious, and Oedipus' father, King Laius, also has an analogous methodology and transgression. They both had unfortunate destinies: Laius was destined to be killed by his own son, and Oedipus was destined to kill his father and marry his mother. This was the ominous decree from the divinatory Oracle at Delphi. King Laius feared the Oracle's proclamation and had his son, the one and only Oedipus, abandoned on a mountain with iron spikes as nails so that he would remain there to eventually die. And yet, his attempt to obstruct fate was a failure, for a kindly shepherd

Nature Imagery in Tennysons In Memoriam and Arnolds To Marguerite--Continued and Dover Beach :: Comparison Compare Conatrast Essays

Nature Imagery in Tennyson's In Memoriam and Arnold's To Marguerite--Continued and Dover Beach Two poets who used an abundance of nature imagery in the Victorian period were Alfred, Lord Tennyson and Matthew Arnold. In Tennyson's In Memoriam, he utilizes many different aspects of nature as metaphors to describe his emotions after the death of a close friend. Arnold's poetry uses different types of water as metaphors in To Marguerite--Continued and Dover Beach. In the beginning of Tennyson's poem, he describes an old yew tree. The tree, to him, is dead and at this early point of his grief he cannot find any life in the nature surrounding him. The old yew "which grapsest at the stones/ That name the underlying dead,/ Thy fibers net the dreamless head,/ Thy roots are wrapped about the bones" (2.1-4). Therefore he sees the tree as an extension of the graves it grew on. The roots are entangled around the dead bones and are as dead as the skull of the person, unable to dream ever again. The world around the tree and grave will begin again to bloom, but Tennyson feels the tree will not change and keep its gloomy appearance throughout the year. He is "sick for thy stubborn hardihood" (2.14) and seems to wish to be like the tree. For if he were also dead, he would not have to feel the pain he is experiencing. He likens his poetry to nature also. He uses "words, like weeds..." (5.9) to envelope himself from the pain. His poem is "this poor flower of poesy" (8.18) but he writes it anyway since it once pleased his dead friend. "I go to plant it on his tomb./ That if it can it there may bloom,/ Or dying, there at least may die" (8.22-24). At this point he is considering the possibility of life continuing, at least through his poetry. Yet he does not seem to care about this possibility strongly. If there is no life within his poetry, then he feels its proper place is dead with his friend. Further into the poem, the immediate frenzy of grief has subsided, and he reflects upon his grief more calmly. "Calm is the morn without a sound,/ Calm as to suit a calmer grief, And only through the faded leaf/ The chestnut pattering to the ground" (11.1-4). His natural surroundings are quiet, which he feels are suited to this stage in his grief.

Sexual Ethics Essay

1. There are a number of dilemmas in sexual ethics such as homosexuality, marriage and divorce and pornography. For instance homosexuality is a major problem within sexual ethics because homosexual sex cannot lead to reproduction. However sexual ethic it differs between denominations compared to government law. Therefore these issues are a concern to religious belief; different faiths have different view on homosexuality or marriage and divorce.Many religious beliefs do not encourage homosexuality in fact it is severely discouraged for example in the Islamic faith they do not allow this because there is no doubt that in Islam homosexuality is considered ‘sinful'. Homosexuality as far as Islam is concerned is a profound mistake (as are all sins if they are not intending to do wrong). For instance a quote from the Qur’an says â€Å"What! Of all creatures do ye come unto the males, and leave the wives your Lord created for you? Nay, but ye are forward folk. † Qur'an 26:165.The references relate to gay sexual activities; lesbian practices are not mentioned in the Qur'an, neither is it mentioned in the bible. Christians are divided over the issue of homosexuality. Due to natural law homosexual sex cannot lead to reproduction therefore the marriage would be considered invalid, however then a marriage between an older couple or couples who infertile would also be invalid, therefore all homosexual acts and relationships are sinful so many believe homosexuality is contrary to God’s will.However the Roman Catholic Church teaches that homosexual should be treated with respect, compassion and sensitivity and no discrimination, they believe the feeling aren’t wrong but the actions are sinful because they contrary to the will of God. The scriptures of the bible suggest that the only sexual relationship that God approves of is one between married heterosexual partners. The creation narrative describe woman as being created especially for man: â€Å"a helpful suitable for him† (genesis 2:18). The Old Testament said â€Å"If a man lies with a man as one does with a woman, both of them have done what is detestable.They must be put to death† (Leviticus 20:13) however there is still no mention on lesbian practices. Marriage is an important part of the Christian life a the purpose of Christian marriage is faithfulness to one another, many Christians teach than within marriage there is a natural hierarchy that reflects the relationship of Christ and the church. The Roman Catholic Church says â€Å"wives, in the same way be submissive to your husband†¦ Husband, in the same way be considerate as you live with your wives, and treat them with respect† (1 peter 3:1, 7).Whereas the Church of England argues that the relationship is based upon Christ’s headship over the church and is about love and sacrifice, not domination and power. This argument originally started as the bible said â€Å"a man will leave his father and mother and be united to his wife and they will become one flesh† (genesis 2:24). On the other hand, in the Islamic faith marriage is only a way to make sex and having children legal and lawful, the belief also states in the eyes of Allah both members of the relationship are treated equally even though they have separate duties. Whereas the Christian views on divorce are that marriage is for life.People take vows for better or worse so if they meant that then there should be no divorce. For instance the Roman Catholic Church believe there shouldn’t be any divorce unless the marriage has not been consummated or they are willing to get a divorce with the permission from the pope. Whereas the Church of England except divorce but some more traditional vicars don’t allowed divorces to remarry in church, the bible believes divorce is not favoured by God: â€Å"Therefore what God has joined together, let man not separate (Matthew 19:6) which means God joins them so the law cannot separate them.Even Jesus forbids divorce: â€Å"Anyone who divorces his wife and marries another woman commits adultery. And if she divorces her husband and marries another man, she commits adultery† (Mark 10:11-12) However in Matthews gospel it say â€Å"anyone who divorces his wife, except for marital unfaithfulness, and marries another woman commits adultery† (Matthew 19:9). Alternatively divorce in Islam is only when the male partner says Talaq 3 times can divorce the couple, however this banned in some countries which results in going to arbitration council and judicial intervention before the divorce is granted. . Due to the loss of faith in many denomination and cultures today, we as people no longer look to religion to guide our sexual ethics as we once did. It is no longer relevant because many people believe that anymore should be able to marry anyone they want, for example same-sex partners. The debate is still being waged be tween the church and government to offer this union. Many people believe if two people are happy together and want to join themselves in holy matrimony, then they should be allowed.Marriage has also undergone many changes as people are less likely to have a â€Å"traditional† wedding instead they are more likely to enjoy extended co-habitation. Also the concept of marriage has change because it is more of a legal act rather than a declaration of love to God. Whereas divorce is seen by the eyes of most people is all about the law rather than church. Church seems to have very little authority when a marriage has got to the divorce stage.A minority of people do still take guidance from the church and believe the once they have entered into holy matrimony then it is for life just as God ordained. In conclusion, like most of the civilised world I believe that the religious beliefs about sexual ethics are no longer relevant because civilisation has changed so much and people are wi lling to accept all that was once considered taboo by the church and are willing to open their mind about the change in religious beliefs and sexual ethics.

The Four Basic Food Molecules

A molecule is a group of atoms bonded together that represent the smallest unit of a chemical compound that can take part in a chemical reaction. (http://www. dictionary. com) In kitchen chemistry today, there are many types of food molecules such as minerals, vitamins, fiber, and water. But there are four molecules that people refer to as food, also known as the four basic food molecules, which can be used to produce energy which are carbohydrates, lipids, proteins, and alcohol which is not considered a basic nutritional component of food.Protein is a compound that’s made up of amino acids that are joined by peptide bonds. It is considered the most important molecule which can come in two forms, complete proteins and incomplete proteins. A complete protein includes all of the amino acids that we humans can’t produce ourselves. An incomplete protein only includes small proportion of one or more amino acid.Our bodies can make use all of the amino acids we obtain from foo d for synthesizing new proteins, but the inessential ones don’t need to be supplied because our cells can make them. They play a big role to the structure and function of all living cells and viruses. Many proteins are enzymes or subunits of enzymes. They are very important in our food and our body. One major reason is because they form struts and joints of our skeleton or cytoskeleton. Although many people don’t think proteins are useful and effective they are.A lack of proteins can result in having symptoms such as fatigue which is tiredness and mental exertion, insulin resistance which is a physiological condition where your cells don’t respond to the normal actions of the hormone insulin, hair loss, loss of hair pigment which your hair that should be black becomes reddish black, loss of muscle mass where your proteins repair muscle tissue, low body temperature, hormonal irregularities or even death from not having enough proteins.But be careful not to overdo it on proteins because even though you think having more proteins than usual is good it’s not. Too much protein can cause problems like causing the immune system to overreact, liver dysfunction from toxic residues, and bone loss due to increased acidity in the blood. So All in all, get the right amount of proteins in your body to keep it healthy. Second, is a lipid which is also known as fats. They are a big group of organic compounds that are related by their solubility in nonpolar organic solvents.  (http://www. chemistry. msu. edu).All fats are insoluble in water which means they can’t be dissolved and they have a density meaning most fats float on water. Most fats are mostly made up from triglycerides, and very little monoglycerides and triglycerides are mixed in. Products that have a lot of saturated fats are usually solid at room temperature and the products that have unsaturated fats are liquid at room temperature. Saturated fats include all animal fats like milk fat, coconut oil, cocoa fat, and vegetable oil.Both vegetable and animal fats contain saturated and unsaturated fats while some oils contain fats that have a one double bonded carbon in the molecule which is also known as a monounsaturated fats while other fats have a high percentage of polyunsaturated fats which are fats that have more than one double bonded carbon in the molecule. Next we have Carbs which is the next most important molecule in your body because it is the main source of energy. Carbs are polyhydroxy aldehydes, keytones, or compounds that can be hydrolyzed to form compounds.There are two major kinds of carbohydrates; polysaccharides and monosaccharides. A Polysaccharide is a carbohydrate is molecules that consist of a number of sugar molecules bonded together whereas a monosaccharide is any sugars that cannot be hydrolyzed. Carbs that are composed of monosaccharide’s break down under hydrolysis which can also be classified under disaccharides, oligosacch arides, or polysaccharides, depending on how many monosaccharide units are present. Carbs can also be called simple or complex carbohydrates but this depends on their chemical structure.Simple carbohydrates only include sugars that are found in foods like fruits, vegetables, milk, and milk products. They also include sugars that are added during food processing and refining. Complex carbohydrates include whole grain breads and cereals, and starchy vegetables such as green beans, broccoli, peppers, cucumbers, carrots, mushrooms, or celery which are also good sources of fiber. Last, we have vitamins. These are organic compounds that are essential in our diet. They fall into two categories and those categories are fat soluble and water soluble.The fat-soluble vitamins, Vitamins A, D, E, & K all dissolve in fat and can be stored in your body. The water soluble vitamins which are vitamin B & C need to be dissolved in water before your body can absorb them. Because of this, people’ s bodies can't store these vitamins and any B or C vitamin that your body doesn't is lost. So it is highly recommended that you have these vitamins every day. Vitamins help the immune system work; support normal growth and development, and help cells and organs do their jobs. Not enough vitamins can damage your body and cause serious problems.For example lack of Vitamin D can soften bones which can cause a person to become bow legged or maybe cause your bones to break easier, Pellagra which is a disease caused by a lack of niacin, or different types of anemia such as folate deficiency anemia, Vitamin B-12 deficiency anemia, and Vitamin C deficiency anemia. (http://www. mayoclinic. com). So Vitamins is another very important food molecule needed for your body to keep it maintained and healthy. To sum it all up, Carbohydrates, lipids, proteins and vitamins are all essential to our diet and our body. They keep our body functioning, healthy, and able to live our everyday lives.

Corporate Social Responsibility and Business Law Essay

Introduction Our assigned topic deals with a phenomenon that has taken the corporate world by storm rather recently, particularly in Pakistan. It entails the dilemma that every corporation faces when they have to make decisions regarding the firm’s profitability and their corporation’s social responsibility. The term â€Å"corporate social responsibility† came into common use in the late 1960s and early 1970s after many multinational corporations formed the term stakeholder, meaning those on whom an organization’s activities have an impact. It was used to describe corporate owners beyond shareholders. The field of corporate social responsibility (CSR) has developed exponentially in the last decade. Nevertheless, there remains a lingering debate about the legitimacy and value of corporate reaction to CSR concerns. There are different views of the function of the firm in society and disagreement as to whether wealth maximization should be the sole goal of a corporation. An escalating number of shareholders, analysts, regulators, activists, labor unions, employees, community organizations, and news media are asking companies to be accountable for an ever-changing set of CSR issues. There is rising demand for transparency and growing expectations that corporations measure, report, and continuously improve their social, environmental, and economic performance. According to Business for Social Responsibility (BSR), corporate social responsibility is defined as â€Å"achieving commercial success in ways that honor ethical values and respect people, communities, and the natural environment.† Each company is at variance in how it implements corporate social responsibility, if it does so at all. The differences depend on such factors as any particular company’s size, the particular industry involved, the firm’s business culture, stakeholder demands, and how historically progressive the company is in engaging CSR. Some companies focus on a single area, which is regarded as the most important for them or where they have the highest impact or vulnerability—human rights or the environment, for example—while there are others who endeavor to incorporate CSR in each and every one facet of their operations. For successful execution, it is fundamental that the CSR principles are part of the corporations’ values and strategic planning, and that the management and employees, both are committed to them. Furthermore, it is important that the CSR strategy is aligned with the company’s specific corporate objectives and core competencies. As CSR comes into contact with many of the problems conventionally addressed by government, like human rights and community investing, there is strong censure that societal problems are best solved by freely elected government bodies as the resources of a corporation are poorly matched for addressing those social problems, and therefore, it is argued, they should not be misallocated. According to Friedman (1970), in a free society, â€Å"there is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.† The idea is that the state should address social problems, supported by the argument that an executive, by taking money and resources that would otherwise go to owners, employees, and costumers, and allocating them according to the will of the minority, and will fail to serve the interests of her or his principal. In this way, the executive imposes a tax and spends the proceeds for â€Å"social† purposes, which is insupportable, since she or he has neither the skills nor the jurisdiction to do so. On the other hand, there are many demands by others for corporate adoption of the CSR principles. Although the government is chiefly responsible for addressing those issues, the contribution of private firms can be substantial. There is also the argument of the shifting balance of power. According to the Organization of Economic Co-operation and Development (OECD), of the 100 largest global economies, as indicated by their respective GDP, 51 of them are US corporations, and only 49 are nation states. So economic supremacy has shifted to the corporations; they, therefore, should have an increasing role in and accountability for addressing social problems. For example, the government sets the regulations and the minimum standards for the workplace, but a company can further improve the work environment and the quality of living of its employees. A firm cannot stay oblivious to the problems of the environment in which it functions. The poverty of a nation state’s citizens, political unrest, and the exhaustion of natural resources can have destructive effects for a corporation. For example, resources that are inputs in the production process and which, at the foundation of the industrial revolution, were plentiful are now scarce, polluted, or diminishing in many regions of the entire planet. As one would expect, this imposes an extra cost to the corporations and may force them to reposition or to cease operations. From one perspective, companies may be poorly equipped to address some of the social or environmental problems, but from another perspective, no matter how poorly equipped, companies may still be best positioned to improve the problems. Undoubtedly, adopting the CSR principles involves costs. These costs might be short term in nature or continuous outflows. They may involve the purchase of new environmentally friendly equipment, the change of management structures, or the implementation of stricter quality controls. Since being socially responsible involves incurring costs, it should generate benefits as well in order to be a sustainable business practice. A corporation could not continue a policy that constantly generates negative cash flows. The shareholders invest their money in a corporation, expecting the highest possible risk adjusted return. Therefore, being socially responsible should have bottom-line benefits in order to be sustainable. Socially responsible corporate performance can be associated with a series of benefits with the final outcome. But in a lot of cases, it seems that the time frame of the costs and benefits can be out of alignment—the costs are in the near future, whereas the benefits are not often realized until long periods of time have lapsed. Nevertheless, many benefits can be identified. Firstly, socially responsible companies have enhanced brand image and reputation. Consumers are often attracted towards brands and companies with good reputations in CSR related issues. Therefore, a corporation’s brand equity is automatically enhanced. A company regarded as socially responsible can also benefit from its reputation within the business community by having increased ability to attract capital and trading partners. However, reputation is hard to quantify and measure; it is even harder to measure how much it increases a company’s value. But since companies have developed methods to measure the benefits of their advertisement campaigns, similar methods can and should be able to be applied in the case of corporate reputation. Socially responsible companies also have less risk of negative rare events. Furthermore, companies that adopt the CSR principles are more transparent and have less risk of bribery and corruption. In addition, they may execute stricter and, thus, more costly quality and environmental controls, but they run less risk of having to bear in mind defective product lines and pay heavy fines for excessive polluting. They also have less risk of negative social events which damage their reputation and cost millions of dollars in information and advertising campaigns. The scandals about child–labor and sweatshops that affect the clothing industry are two fine examples. Thus, socially responsible businesses should have more stable earnings growth and less downside volatility. Since companies that adopt the CSR principles carry less risk, when valuing those companies, a lower discount rate should be used. In the company valuation this lower tail risk should be taken into account. There are also other cases in which doing what is good and responsible converges with doing the best for the particular business. Some CSR initiatives can dramatically reduce operating costs. For example, reducing packaging material or planning the optimum route for delivery trucks not only reduces the environmental impact of a company’s operation, but it also reduces the cost. The process of adopting the CSR principles induces executives to reconsider their business practices and to seek more efficient ways of operating. Companies perceived to have a strong CSR commitment often have an improved ability to attract and to retain employees (Turban & Greening 1997), which leads to reduced turnover, recruitment, and training costs. Employees, too, often evaluate their companies CSR performance to determine if their personal values conflict with those of the businesses at which they work. There are many known cases in which employees were asked, under pressure of their supervisors, to overlook written or moral laws in order to achieve higher profits. These practices create a culture of fear in the workplace and harm the employees’ trust, loyalty, and commitment to the company. Companies that improve working conditions and labor practices also experience increased productivity and reduced error rates. Regular controls in the production facilities throughout the world ensure that all the employees work under good conditions and earn living wages. These practices are costly, but the increased productivity of the workers and improved quality of the products generate positive cash flows that cover the associated costs. Thus, firms may actually benefit from socially responsible actions in terms of employee morale and productivity (Moskowitz, 1972). Literature review CSP is a global concept that encompasses those of Corporate Social Responsibility and Corporate Social Responsiveness. It provides a coherent framework to explore business-society relationships by looking at the social impact of corporations with business criteria of performance measurement, such as quality, efficacy, effectiveness, innovation (Carroll, 1991; Wood, 1991). The challenge for corporate social responsibility (CSR) in developing countries is framed by a vision that was distilled in 2000 into the Millennium Development Goals—‘a world with less poverty, hunger and disease, greater survival prospects for mothers and their infants, better educated children, equal opportunities for women, and a healthier environment’ (UN, 2006: 3). The penetration of the social realm into corporate strategy has gathered momentum in the last years. The movement for CSR has â€Å"won the battle of ideas† (Crook 2005). By now, most well managed companies have adopted th e practices and certifications mandatory in their industries, having gone through what Zadek (2004) calls the â€Å"defensive† and the â€Å"compliance† stages of CSR. Managing the social and environmental footprint of economic activity is generally accepted as part of the cost of doing business. But much remains to be done. If companies are to move their CSR activities from satisfying behavior and take their commitment to society and the environment to the next level, they will need to rethink their current approaches to CSR, tapping into the creativity of every individual. CSE, like all entrepreneurship, is not about managing existing operations or CSR programs; it is about creating disruptive change in the pursuit of new opportunities. It combines the willingness and desire to create joint economic and social value with the entrepreneurial redesign, systems development, and action necessary to carry it out. Accelerated organizational transformation faces a host of obstacles well-documented in the change management literature. Some people argue that media pressures the corporate managers and directors to behave in ways that are â€Å"socially ac ceptable†. Sometimes this coincides with shareholders’ value maximization, others not (Zinagales, 2002). Although there are several contested notions of what CSR should be and how it should work, there is some agreement upon what it broadly entails. A number of concepts and issues are subsumed under the heading of CSR, including human rights, environmental responsibility, diversity management, sustainability, and philanthropy (Amaeshi & Adi, 2006), meaning that it is a complex area with an interdisciplinary focus. It is generally agreed that CSR involves corporations voluntarily exceeding their legal duties to take account of social, economic and environmental impacts of their operations. Consideration of the social, economic and political context demonstrates how CSR forms part of a wider strategic direction being taken internationally with regard to market relations and the pursuit of a range of objectives and goals. The context is in part provided by concerns about the numerous examples of irresponsible behavior on the part of corporations, ranging from colluding with oppressive regimes and in the overthrowing of governments (Alston, 2005) to issues relating to working conditions and the impact of unethical marketing practices (Richter, 2001). Such examples have demonstrated the need for the worst excesses of business to be curbed. The globalised economy is understood to raise important issues for businesses and governments due to changes in patterns of production and consumption. In particular it is noted that the manufacturing of goods is â€Å"highly mobile† (Cassell, 2001:263) and that supply chains are often dispersed in various countries, creating difficulties in terms of legislation and regulation. Moreover, economic globalization presents challenges to the ability of states to protect people’s rights (Cassell, 2001). The notion of corporate social responsibility is part of the ‘third way’ (Gond & Matten, 2007), where the role of the state is now to provide â€Å"steering for the promotion of social development and social justice† (Giddens, 2001: 6). There is increased involvement of the private sector in traditionally statutory provision through privatization and public/private partnerships (Meehan, 2003). Economic policies have created a need for markets and business to self-regulate in order to continue to pursue an international free market economy, but also to ensure sustainability of economic, human and other resources, and of the environment. CSR is seen as a solution to these problems of regulation. The private sector is increasingly seen as a key player in the achievement of many national and international strategic objectives for governments, which is also enabled by CSR. Methodology To gather information, we used secondary research as our main source of information. Various academic journals and internet sources were pursued to cater to the important aspects of the given topic. Moreover, since we thoroughly researched this topic, personal opinions were formed and using those and logic, we justified our opinions accordingly. How can business persons act in an ethically and socially responsible manner and at the same time make profits? Suppose clear-cutting is profitable and legal, but is nonetheless regarded as environmentally irresponsible under prevailing social norms. Can management of a timber corporation decline to clear-cut its timberland even though that sacrifices profits? One might be tempted to evade the question by claiming that being environmentally responsible is profitable in the long run, either because it preserves the forest for future harvesting or because it maintains a public goodwill that aids future sales. But suppose, in an incautious moment, management admits that the present value of those future profits from not clear cutting cannot hope to match the large current profits that clear-cutting would produce. Or, more realistically, suppose a takeover bid by a firm known to clear-cut establishes precisely that proposition by offering far more than the stock price that reflects the current stream of profits. Can management reject the profitable takeover bid on the grounds that it will lead to socially undesirable clear-cutting? The answers to these questions will challenge the canonical law and economics account on corporate social responsibility, which goes something like this. Unless modified by statute, traditional fiduciary duties require corporate managers to further the interests of shareholders, and thus require them to maximize corporate profits subject to the obligation to comply with independent legal constraints. Ethics and social responsibility are very important values in business ventures. This is particularly essential in decision making process. Ethical conscience reminds business persons to make trustworthy and profitable business decisions. Likewise, the social responsibility component requires business persons to make entrepreneurial decisions that can enhance benefits and repelling harms to the stakeholders. The canonical law and economics view holds that corporate managers do and should have a duty to profit-maximize because such conduct is socially efficient given that general legal sanctions do or can redress any harm that corporate or non-corporate businesses inflict on others. If certain conduct imposes excessive harm on others or merits taxation, then an independent law should regulate and impose liability or taxes whether or not the actor is a corporation, and if the conduct does not impose any impermissible harm or merit taxation, then the most socially desirable thing for corporations to do is maximize profits. Other stakeholders could either legally protect themselves by contract with the corporation or have their legal protection provided by judicial gap-filling of such contracts. Part of what makes this account canonical is that it helps define the boundaries of the corporate law field. It leaves corporate law scholars free to ignore issues about any effects the corporation may have on the external world as topics best addressed by other legal fields, and to focus on more tractable models about which corporate rules would maximize shareholder value.