SAT Reading: How to approach a Social Science passage | The Complete SAT Course - Class 10 PDF Download

This passage is adapted from Iain King, “Can Economics Be Ethical?” ©2013 by Prospect Publishing.

Recent debates about the economy have rediscovered the question, “is that right?”, where “right” means more than just profits or efficiency.

Some argue that because the free markets allow for personal choice, they are already ethical. Others have accepted the ethical critique and embraced corporate social responsibility. But before we can label any market outcome as “immoral,” or sneer at economists who try to put a price on being ethical, we need to be clear on what we are talking about.

There are different views on where ethics should apply when someone makes an economic decision. Consider Adam Smith, widely regarded as the founder of modern economics. He was a moral philosopher who believed sympathy for others was the basis for ethics (we would call it empathy nowadays). But one of his key insights in The Wealth of Nations was that acting on this empathy could be counter-productive—he observed people becoming better off when they put their own empathy aside, and interacted in a self-interested way. Smith justifies selfish behavior by the outcome. Whenever planners use cost-benefit analysis to justify a new railway line, or someone retrains to boost his or her earning power, or a shopper buys one to get one free, they are using the same approach: empathizing with someone, and seeking an outcome that makes that person as well off as possible—although the person they are empathizing with may be themselves in the future.

Instead of judging consequences, Aristotle said ethics was about having the right character—displaying virtues like courage and honesty. It is a view put into practice whenever business leaders are chosen for their good character. But it is a hard philosophy to teach—just how much loyalty should you show to a manufacturer that keeps losing money? Show too little and you’re a “greed is good” corporate raider; too much and you’re wasting money on unproductive capital. Aristotle thought there was a golden mean between the two extremes, and finding it was a matter of fine judgment. But if ethics is about character, it’s not clear what those characteristics should be.

There is yet another approach: instead of rooting ethics in character or the consequences of actions, we can focus on our actions themselves. From this perspective some things are right, some wrong—we should buy fair trade goods, we shouldn’t tell lies in advertisements. Ethics becomes a list of commandments, a catalog of “dos” and “don’ts.” When a finance official refuses to devalue a currency because they have promised not to, they are defining ethics this way. According to this approach devaluation can still be bad, even if it would make everybody better off.

Many moral dilemmas arise when these three versions pull in different directions but clashes are not inevitable. Take fair trade coffee (coffee that is sold with a certification that indicates the farmers and workers who produced it were paid a fair wage), for example: buying it might have good consequences, be virtuous, and also be the right way to act in a flawed market. Common ground like this suggests that, even without agreement on where ethics applies, ethical economics is still possible.

Whenever we feel queasy about “perfect” competitive markets, the problem is often rooted in a phony conception of people. The model of man on which classical economics is based—an entirely rational and selfish being—is a parody, as John Stuart Mill, the philosopher who pioneered the model, accepted. Most people—even economists—now accept that this “economic man” is a fiction. We behave like a herd; we fear losses more than we hope for gains; rarely can our brains process all the relevant facts.

These human quirks mean we can never make purely “rational” decisions. A new wave of behavioral economists, aided by neuroscientists, is trying to understand our psychology, both alone and in groups, so they can anticipate our decisions in the marketplace more accurately. But psychology can also help us understand why we react in disgust at economic injustice, or accept a moral law as universal. Which means that the relatively new science of human behavior might also define ethics for us. Ethical economics would then emerge from one of the least likely places: economists themselves.

Question 1: Analyzing purpose

Q.1. The main purpose of the passage is to
(a) consider an ethical dilemma posed by cost-benefit analysis.
(b) describe a psychology study of ethical economic behavior.
(c) argue that the free market prohibits ethical economics.
(d) examine ways of evaluating the ethics of economics.

Correct Answer is Option (d)
This is the best choice. After introducing the idea of ethics in economics, the author states that “there are different views on where ethics should apply when someone makes an economic decision.” The passage then goes on to describe several different perspectives on ethical economics, including the views of Adam Smith, Aristotle, and John Stuart Mill.

Q.2. In the passage, the author anticipates which of the following objections to criticizing the ethics of free markets?
(a) Smith’s association of free markets with ethical behavior still applies today.
(b) Free markets are the best way to generate high profits, so ethics are a secondary consideration.
(c) Free markets are ethical because they are made possible by devalued currency.
(d) Free markets are ethical because they enable individuals to make choices.

Correct Answer is Option (d)
This is the best choice. The author points out that people object to criticizing ethics in free markets because they believe free markets are inherently ethical (because they "allow for personal choice"). To combat this criticism, the author points out various other perspectives on the issue.

Q.3. Which choice provides the best evidence for the answer to the previous question?
(a) "Some argue that because the free markets allow for personal choice, they are already ethical."
(b) "But before we can label any market outcome as “immoral,” or sneer at economists who try to put a price on being ethical, we need to be clear on what we are talking about."
(c) "Smith justifies selfish behavior by the outcome."
(d) "When a finance official refuses to devalue a currency because they have promised not to, they are defining ethics this way."

Correct Answer is Option (a)
This is the best choice. In these lines, the author states that some people believe that free markets are “already ethical” because they “allow for personal choice”. This statement provides evidence that some people believe evaluating the ethics of free markets is unnecessary.

Q.4. As used in the third sentence, “embraced” most nearly means
(a) lovingly held.
(b) readily adopted.
(c) eagerly hugged.
(d) reluctantly used.

Correct Answer is Option (b)
This is the best choice. The author is describing how some individuals have willingly accepted and supported the idea of corporate responsibility. "Readily" means "gladly" or "voluntarily".

Q.5. The main purpose of paragraph 5 (beginning with "There is yet another approach...") is to
(a) develop a counterargument to the claim that greed is good.
(b) provide support for the idea that ethics is about character.
(c) describe a third approach to defining ethical economics.
(d) illustrate that one’s actions are a result of one’s character.

Correct Answer is Option (c)
This is the best choice. The third and fourth paragraphs present Adam Smith’s and Aristotle’s approaches to defining ethics in economics. The fifth paragraph offers a third alternative: “instead of rooting ethics in character or the consequences of actions, we can focus on our actions themselves".

Question 6: Words and phrases in context

• Cover up the choices
• Go back to the passage to find the word/phrase
• Make up your own version of the word/phrase using context clues in the surrounding sentences
• Uncover the choices, and find a match to your prediction in the choices

Q.6. As used in the first sentence of paragraph 6, “clashes” most nearly means
(a) conflicts.
(b) mismatches.
(c) collisions.
(d) brawls.

Correct Answer is Option (a)
This is the best choice. While discussing the "three versions" of ethical economics, the author uses "clashes" to point out how the ideas might disagree, or conflict, with one another.

Question 7: Citing textual evidence

• Simplify the question as much as you can, using your own words
• Then, apply that simple "test" question to the quotations in the choices
• With each choice, ask yourself: "Is this quotation doing that thing the question wants it to do?"

Q.7. Which choice best supports the author’s claim that there is common ground shared by the different approaches to ethics described in the passage?
(a) Paragraph 3: "There are different views on where ethics should apply when someone makes an economic decision."
(b) Paragraph 5: "From this perspective some things are right, some wrong—we should buy fair trade goods, we shouldn’t tell lies in advertisements."
(c) Paragraph 6: "Take fair trade coffee (coffee that is sold with a certification that indicates the farmers and workers who produced it were paid a fair wage), for example: buying it might have good consequences, be virtuous, and also be the right way to act in a flawed market."
(d) Paragraph 7: "We behave like a herd; we fear losses more than we hope for gains; rarely can our brains process all the relevant facts."

Correct Answer is Option (a)
This is the best choice. As described in these lines, fair trade coffee is ethical in the view of all three of the perspectives described in the passage: it has good consequences, is based in virtuous character, and is a moral action. This is a clear example of "common ground" between these perspectives.

Question 8: Central ideas and themes

• Rephrase the question using your own words
• Answer your version of the question using your own words
• Find a choice that matches your prediction

Q.8. The main idea of the final paragraph is that
(a) human quirks make it difficult to predict people’s ethical decisions accurately.
(b) people universally react with disgust when faced with economic injustice.
(c) understanding human psychology may help to define ethics in economics.
(d) economists themselves will be responsible for reforming the free market.

Correct Answer is Option (c)
This is the best choice. The author focuses the paragraph on psychology, stating that psychology can help “define ethics for us”, which may help explain why people behave and react in the ways that they do.

Questions 9 and 10: Analyzing quantitative information

• Remember: the info you need is in the graphic!
• Take note of the title of the graph, as well as the labels and units on the vertical and horizontal axes
• Look for trends and patterns and try to say in your own words what they suggest

Q.9. Data in the graph about per-pound coffee profits in Tanzania most strongly support which of the following statements?
(a) Fair trade coffee consistently earned greater profits than regular coffee earned.
(b) The profits earned from regular coffee did not fluctuate.
(c) Fair trade coffee profits increased between 2004 and 2006.
(d) Fair trade and regular coffee were earning equal profits by 2008.

Correct Answer is Option (a)
The data in the graph show that in Tanzania between the years 2000 and 2008, fair trade coffee profits were around 130 cents per pound, while profits of regular coffee were in the range of 20-60 cents per pound.

Q.10. Data in the graph indicate that the greatest difference between per-pound profits from fair trade coffee and those from regular coffee occurred during which period?
(a) 2000 to 2002
(b) 2002 to 2004
(c) 2004 to 2005
(d) 2006 to 2008

Correct Answer is Option (b)
This is the best choice. From 2002 to 2004, the per-pound difference in profits between fair trade and regular coffee was never less than 100 cents.