The term ethics may refer to the philosophical study of the concepts of moral right and wrong and moral good and bad, to any philosophical theory of what is morally right and wrong or morally good and bad, and to any system or code of moral rules, principles, or values. The last may be associated with particular religions , cultures, professions, or virtually any other group that is at least partly characterized by its moral outlook.

Insider Trading by Congress

Table of Contents

References & Edit History Related Topics

Images

Insider Trading by Congress

Q: How is ethics different from morality?

Traditionally, ethics referred to the philosophical study of morality, the latter being a more or less systematic set of beliefs, usually held in common by a group, about how people should live. Ethics also referred to particular philosophical theories of morality. Later the term was applied to particular (and narrower) moral codes or value systems. Ethics and morality are now used almost interchangeably in many contexts, but the name of the philosophical study remains ethics .

Q: Why does ethics matter?

Ethics matters because (1) it is part of how many groups define themselves and thus part of the identity of their individual members, (2) other-regarding values in most ethical systems both reflect and foster close human relationships and mutual respect and trust, and (3) it could be “rational” for a self-interested person to be moral, because his or her self-interest is arguably best served in the long run by reciprocating the moral behaviour of others.

Q: Is ethics a social science?

No. Understood as equivalent to morality, ethics could be studied as a social-psychological or historical phenomenon, but in that case it would be an object of social-scientific study, not a social science in itself. Understood as the philosophical study of moral concepts, ethics is a branch of philosophy , not of social science.

Should Insider Trading by Congress Be Allowed?

Written and fact-checked by The Editors of ProCon

Article History

ARCHIVED TOPIC: This topic was archived on Apr. 18, 2012 and will no longer be updated.

The Stop Trading on Congressional Knowledge (STOCK) Act intended to prohibit members of Congress from buying or selling securities based on information gained on the job, but the bill died in House committee three times (2006, 2007, 2009) with only a few sponsors. On Nov. 13, 2011, 60 Minutes reported that several members of Congress allegedly used insider information for personal gain, and the STOCK Act received 84 additional House co-sponsors within five days. On Apr. 4, 2012, the STOCK Act was signed into law by President Obama.

Stuart P. Green, professor of law at Rutgers School of Law, wrote in a May 13, 2008 email to ProCon.org:

"People in many fields of endeavor are privy to valuable confidential information before it is made public: For example, business executives, investment bankers, and lawyers have access to information about impending corporate mergers and acquisitions; Judges, juries, and court personnel have access to information about the probable outcome of court decisions; and officials at the FDA [Food and Drug Administration], EPA [Environmental Protection Agency], and other administrative agencies have access to information about the likely outcome of regulatory proceedings. All of these individuals are prohibited by law from using such confidential information in the purchase and sale of publicly traded stocks. Likewise, members of Congress and their staffs are also privy to valuable confidential information not yet made public. They have information about the likely outcome of various votes, committee proceedings, and investigations. Such information can be extremely valuable to investors. Those who buy and sell stock on the basis of such non-public information will have an obvious advantage over those who lack such information. This is not the sort of information that even the most savvy and sophisticated investor would be able to obtain legally. From a moral perspective, such informational advantages are indistinguishable from those enjoyed in more familiar forms of insider trading."

Pro Quotes

Daniel Gross, senior editor of Newsweek and columnist for Slate Magazine, wrote in his May 21, 2007 article "Insider Trading, Congressional-Style," published in his Slate Magazine column "Moneybox"

"Given all the problems that demand congressional oversight and activity—the subprime lending mess, Iraq, the Justice Department—it’s difficult to see why this far-reaching legislation [the Stop Trading on Congressional Knowledge Act], which would direct the Securities and Exchange Commission to punish violators, is necessary...

Even if Capitol Hill is plagued by widespread trading based on a perceived informational edge, it doesn’t require the same sort of insider-trading charges that are filed against Wall Street malfeasants... In insider trading, the connection is direct, and the profit is sure.

But with legislation, the link between advanced knowledge of a senator’s position on an issue and the certainty that a specific stock will benefit as a result is much more tenuous... A lot of things can happen: Multiple committees weigh in; there’s the possibility of a filibuster or a veto...

Think about all the professionals who make their living peddling information about what goes on in Washington: law firms, consultants like this guy, lobbyists, and researchers pitching glorified tip sheets to investors. Oh, and news organizations. The ’political intelligence’ shops aren’t doing anything much different than, say, the Washington Post, National Journal, or the Wall Street Journal. After all, these companies employ Washington-based operatives who spend their days working government contacts to unearth information that isn’t available to the public."

Jim Harper, director of information policy studies of the Cato Institute, wrote in his Mar. 16, 2008 post "Sunlight Is the Best Disinfectant," on the Technology Liberation Front blog:

"A bar on congressional-insider trading would most likely cause one of the following results:

It would be honored in the breach;
It would lead to endless (perhaps politically motivated) investigations of our representatives and their staffs; or
It would force many or most congressional employees to withdraw from investing as a prophylactic against 2.

None of these would be easy and fair, and compliance would deprive congressional staff of normal sources of income and of participation in investment that keeps their experience and thinking in line with other Americans. The law would not provide investors comfort."

Jeffrey Alan Miron, senior lecturer and director of undergraduate studies in the Department of Economics at Harvard University, wrote in his Mar. 28, 2006 article "Congress and Insider Trading," posted on his blog The Case for Small Government:

"Democratic lawmakers apparently want to ban insider trading by members of Congress and their staffs. Perhaps unsurprisingly, these groups have so far been exempt from the general prohibition against insider trading.

Rather than broadening the ban, however, Congress should repeal it entirely. The ban is problematic on efficiency and equity grounds.The ban is inefficient to the extent it delays release of relevant information, since this means delayed adjustment of stock prices. Markets cannot allocate resources properly unless they know which companies are doing well or badly.

The ban is inequitable because some corporate executives trade on inside information despite the law. Thus the ban rewards dishonest insiders."

Con Quotes

Kirsten Gillibrand, U.S. Senator (D-NY), wrote in her Dec. 1, 2011 testimony for the U.S. Senate Committee on Homeland Security and Public Affairs hearing on "Insider Trading and Congressional Accountability":

"Like millions of American’s all across the country, I was surprised to learn that insider trading by members of Congress, their families, or their staff, using non-public information gained through their Congressional work is not clearly and expressly prohibited by law and the rules of Congress.

The American people need to know that their elected leaders play by the exact same rules that they play by. They also deserve the right to know their lawmakers’ only interest is what’s best for the country, not their own financial interests.

Members of Congress, their families and staff shouldn’t be able to gain personal profits from information they have access to that everyday middle class families don’t. It’s simply not right -- and we need to change it by ensuring the proper oversight and accountability is in place. Nobody should be above the rules.”

Scott Brown, U.S. Senator (R-MA), wrote in his Dec. 1, 2011 testimony for the U.S. Senate Committee on Homeland Security and Public Affairs hearing on "Insider Trading and Congressional Accountability":

"Simply put, members of Congress should be held to the same standard as the general public and should not be able to profit based on nonpublic information…

As members of Congress, we have access to information that the public does not; classified briefings, closed conference reports and personal conversations with government officials. All of these sources can give us nonpublic information that may have a significant value if traded upon. But not only do we access information, we create information and policy. When we act on legislation or negotiate legislative language, frequently that legislation has real financial consequences to an industry or company. Because we have access to and we create information, we must not betray the public’s trust by using it for our own personal gain.”

Peter Schweizer, William J. Casey research fellow at the Hoover Institution, said in his Nov. 13, 2011 interview in the 60 Minutes news story "Congress: Trading Stock on Inside Information?":

"This is a venture opportunity. This is an opportunity to leverage your position in public service and use that position to enrich yourself, your friends, and your family... There are all sorts of forms of honest grafts that congressmen engage in that allow them to become very, very wealthy. So it’s not illegal, but I think it’s highly unethical, I think it’s highly offensive, and wrong...

For example insider trading on the stock market. If you are a member of Congress, those laws are deemed not to apply... [I]f you sit on a healthcare committee and you know that Medicare, for example, is considering not reimbursing for a certain drug that’s market moving information. And if you can trade stock off of that information and do so legally, that’s a great profit making opportunity. And that sort of behavior goes on...

It’s really the way the rules have been defined. And the people who make the rules are the political class in Washington. And they’ve conveniently written them in such a way that they don’t apply to themselves.”

ethics

Table of Contents

References & Edit History Quick Facts & Related Topics

Images

For Students

ethics summary

ethics

philosophy

Also known as: moral philosophy

Written by Peter Singer

Fact-checked by The Editors of Encyclopaedia Britannica

Last Updated: Feb 13, 2025 • Article History

Also called:: moral philosophy

Key People:: Socrates; Aristotle; Plato; St. Augustine; Immanuel Kant

Related Topics:: history of ethics; Trolley problem; legal ethics; biocentrism; optimism

See all related content

What is ethics?

How is ethics different from morality?

Why does ethics matter?

Is ethics a social science?

ethics, the discipline concerned with what is morally good and bad and morally right and wrong. The term is also applied to any system or theory of moral values or principles.

(Read Britannica’s biography of this author, Peter Singer.)

How should we live? Shall we aim at happiness or at knowledge, virtue, or the creation of beautiful objects? If we choose happiness, will it be our own or the happiness of all? And what of the more particular questions that face us: is it right to be dishonest in a good cause? Can we justify living in opulence while elsewhere in the world people are starving? Is going to war justified in cases where it is likely that innocent people will be killed? Is it wrong to clone a human being or to destroy human embryos in medical research? What are our obligations, if any, to the generations of humans who will come after us and to the nonhuman animals with whom we share the planet?

Ethics deals with such questions at all levels. Its subject consists of the fundamental issues of practical decision making, and its major concerns include the nature of ultimate value and the standards by which human actions can be judged right or wrong.

The terms ethics and morality are closely related. It is now common to refer to ethical judgments or to ethical principles where it once would have been more accurate to speak of moral judgments or moral principles. These applications are an extension of the meaning of ethics. In earlier usage, the term referred not to morality itself but to the field of study, or branch of inquiry, that has morality as its subject matter. In this sense, ethics is equivalent to moral philosophy.

Although ethics has always been viewed as a branch of philosophy, its all-embracing practical nature links it with many other areas of study, including anthropology, biology, economics, history, politics, sociology, and theology. Yet, ethics remains distinct from such disciplines because it is not a matter of factual knowledge in the way that the sciences and other branches of inquiry are. Rather, it has to do with determining the nature of normative theories and applying these sets of principles to practical moral problems.

This article, then, will deal with ethics as a field of philosophy, especially as it has developed in the West. For coverage of religious conceptions of ethics and the ethical systems associated with world religions, see Buddhism; Christianity; Confucianism; Hinduism; Jainism; Judaism; Sikhism.

The origins of ethics

Mythical accounts

Introduction of moral codes

When did ethics begin and how did it originate? If one has in mind ethics proper—i.e., the systematic study of what is morally right and wrong—it is clear that ethics could have come into existence only when human beings started to reflect on the best way to live. This reflective stage emerged long after human societies had developed some kind of morality, usually in the form of customary standards of right and wrong conduct. The process of reflection tended to arise from such customs, even if in the end it may have found them wanting. Accordingly, ethics began with the introduction of the first moral codes.

Virtually every human society has some form of myth to explain the origin of morality. In the Louvre in Paris there is a black Babylonian column with a relief showing the sun god Shamash presenting the code of laws to Hammurabi (died c. 1750 bce), known as the Code of Hammurabi. The Hebrew Bible (Old Testament) account of God’s giving the Ten Commandments to Moses (flourished 14th–13th century bce) on Mount Sinai might be considered another example. In the dialogue Protagoras by Plato (428/427–348/347 bce), there is an avowedly mythical account of how Zeus took pity on the hapless humans, who were physically no match for the other beasts. To make up for these deficiencies, Zeus gave humans a moral sense and the capacity for law and justice, so that they could live in larger communities and cooperate with one another.

That morality should be invested with all the mystery and power of divine origin is not surprising. Nothing else could provide such strong reasons for accepting the moral law. By attributing a divine origin to morality, the priesthood became its interpreter and guardian and thereby secured for itself a power that it would not readily relinquish. This link between morality and religion has been so firmly forged that it is still sometimes asserted that there can be no morality without religion. According to this view, ethics is not an independent field of study but rather a branch of theology (see moral theology).

There is some difficulty, already known to Plato, with the view that morality was created by a divine power. In his dialogue Euthyphro, Plato considered the suggestion that it is divine approval that makes an action good. Plato pointed out that, if this were the case, one could not say that the gods approve of such actions because they are good. Why then do they approve of them? Is their approval entirely arbitrary? Plato considered this impossible and so held that there must be some standards of right or wrong that are independent of the likes and dislikes of the gods. Modern philosophers have generally accepted Plato’s argument, because the alternative implies that if, for example, the gods had happened to approve of torturing children and to disapprove of helping one’s neighbours, then torture would have been good and neighbourliness bad.

Insider Trading by Congress

Britannica Chatbot

ethics

What is ethics?

How is ethics different from morality?

Why does ethics matter?

Is ethics a social science?

Mythical accounts

Introduction of moral codes

Britannica Chatbot