Morality and economics

Western societies are routinely denounced from within and without for the sin of selfishness - a sin attributed to them by the market system.

In its milder form, the anti-market demonology is fuelled by clerics and social scientists who bring up for discussion the moral basis of the market economy.

In its more energetic appearance, the assault upon the market system adopts the logic of Karl Marx. Thus one continues to hear statements like "the spirit of the market is based on the philosophy to amass capital", "under the market system, when 'A' wins, 'B' loses" and "one class produces a surplus and the other appropriates it".

The market system may be flawed if it were unregulated and allowed to flout the so-called rules of the game. What impoverishes and dehumanises is the collectivist state, democratic or totalitarian, or the mean rapacity and the monopolistic spirit of uncontrolled business buccaneers.

Adam Smith was clear and concise on this issue. In economic life, the individual tends naturally to use his talents and resources to ensure himself the greatest gain. Since the only lawful way of doing this in any tolerably run society is by answering the needs of others, he must provide goods or services which others will voluntarily choose to buy.

The individual thus contributes to creating generalised prosperity. It is not exceptional acts of private altruism but the system of free exchange (trade) and reliable contacts that channel individual enterprise to produce more, invent new ways of doing things, and thus increase national wealth. Greater wealth makes possible further investment as well as distribution of the new wealth so created.

Businessmen are mortals. They are not saints. Neither are they devils in their majority. Like the rest of us, they require the restraint of law and ethics.

So long as businessmen play by the rules, they are expected to perform to their optimum capacity. This is what serves the greatest social and economic good. In this context, self-interest is not the same as selfishness. It is, on the contrary, a positive good.

This needs stressing. It is necessary to develop a clear vision of how the social market system actually functions.

Man being fallible, there will always remain, as there are today, moral shortcomings of intentions and performances, worthy of critical scrutiny. But the concept that entrepreneurship is selfish leaves out a vast topography where most behaviour by decent and well-intentioned persons takes place.

The market system has uplifted millions of people from poverty and is capable of uplifting many more if it is allowed to function properly. Societies with a just pride in their freedom, including their economic freedom, and graced with a concern for the freedom of others, need all the self-confidence that will give them further momentum.

It is the creative, bold and even courageous character of those who ventured in uncharted waters that created wealth and uplifted living standards. Somehow, there is a tendency to respect explorers but begrudge the men who invested and marketed the first printing presses, electrical systems, mass-produced motor cars and the computer.

These deserve better from academic chroniclers of Western civilisation whose ignorance comes not from reading too much of Adam Smith but from failing to read him at all.

A market system with a social conscience implies a commitment to moral principles. If private morals are thrown overboard, the state increasingly finds reasons to step in and take over. Moral perceptions are a powerful force and if we were to allow the myth to stand that a social market system is inherently immoral, we shall, sooner or later, lose our freedom.

A social market system needs the state to ensure that society carries out of its obligations to assist citizens in need or in distress out of the wealth that is created - and this by a system of fair distribution. The state is needed to ensure that the rules of the market game are observed on a level playing field and to provide regulators that will operate the machinery of compliance with competition and fair trade.

Upholders of the principles of social justice who rightly demand that neither the state nor the market should dominate society and that both of these should be tools in society's hands would do well to highlight the advances registered, however belatedly, by way of legislation to regulate competition and protect consumer interests.

Even more courageous and, in its time, positively innovative was the decision to provide social benefits to the more deserving.

The social services edifice depends on the wealth that is created at national level. It needs reinforcement as much as it needs protection.

There is an economic and a social case for this edifice to be enhanced and possibly expanded. And there will be no shortage of politicians, trade unionists and social workers who will lend a helping hand towards this objective.

Where are the organised forces needed to make an ongoing moral case for the principles of social justice?

I believe that there is a need for theologians to apply religious morals to economics for the guidance of citizens and of the community with regard to liberty, work and the creation of wealth.

Although the Church has a corpus of social teaching it could not be claimed that is has spun out a general theology of economics. Citizens need guidance about such realities as scarcities, work, money, capital accumulation, production, distribution, technology, division of labour, inequality and so on. There must be guidance available to provide the answers as to what these realities mean to religion and vice-versa.

To think theologically about economics is to learn about economics - and this is not the forte of many theologians. Yet clear thinking on exact concepts is of the essence if people who hunger and thirst after moral rectitude are to have authoritative and reliable guidance.

There seems to be a vacuum that has to be filled. Whether one looks at the world in general or at the limited confines of these islands, there is a case for a defined moral-cultural base for the guidance of individuals and the community at large with regard to work, the creation of wealth and its just distribution, self-restraint and mutual co-operation and about the sins of the rich as well as the poor.