Dariusz, I doubt that this idea will work. The fundamental problem is complete separation of economic science from moral principles. Utility is self-regarding, and has no altruistic component. Many moral people do not have economic success today. Perhaps, the same is true for firms. Market forces cannot do that. And if morality is supported by a good dictator (who puts people with no moral in prison and penalizes firms without moral principles), this would not be a democracy.

Dariusz, I doubt that this idea will work. The fundamental problem is complete separation of economic science from moral principles. Utility is self-regarding, and has no altruistic component. Many moral people do not have economic success today. Perhaps, the same is true for firms. Market forces cannot do that. And if morality is supported by a good dictator (who puts people with no moral in prison and penalizes firms without moral principles), this would not be a democracy.

Unfortunately, only in the Campanella's world.

Dear Dariusz,

This is a serious topic. I will start with Adam Smith moral philosophy of sentiments built into capitalism. The Scottish enlightenment philosopher and economist, David Hume, stood happiness on the the foundation of moral sentiments. One of his follower, Adam Smith place economic on that sentimental moral pedestal.

Adam Smith believed that “the chief part of human happiness arises from the consciousness of being beloved”. (Smith, 1984, p. 41)Adam Smith translated his moral finding into is book “The Wealth of Nation” in 1776. As a model builder, Smith casted a wide net to include natural, psychological, and institutional assumptions in his economic vision. That vision was to grow a nation’s wealth continuously, and most rapidly. It that year, Jeremy Bentham, who admired Smith works, began his utility revolution by proposing to measure happiness in an axiomatic way. We can state his proposition as follows:

Proposition [Utilitarianism: Bentham] It is the greatest happiness of the greatest number that is the measure of right and wrong. (Bentham, 1962 [1776], p. 227)

Bentham adopted the “principle of utility” from David Hume (p. 242) for his “greatest-happiness principle”. (p. 272) Bentham does not distinguish between pleasure and pain. (Russell p. 775) Happiness is pleasure of pain: “The happiness of an individual is greater, in proportion as his sufferings are lighter and fewer in number. (Bentham, 1962, p. 301)

Proposition [J. S. Mill: From Individual to Group Happiness to Morality]: “each person's happiness is a good to that person, and the general happiness, therefore, a good to the aggregate of all persons. Happiness has made out its title as one of the ends of conduct, and consequently one of the criteria of morality. (Mill J. S., 1969 (V. 10), p. 234)

Mill proof on the principle of utility and its consequences (general happiness) pivots on consciousness (intuition?).

1. “The only proof capable of being given that an object is visible is that people actually see it… In like manner…the sole evidence…that something is desirable is that people do actually desire it” (Mill J. S., 1969 (V. 10), p. 234).

2. “No reason can be given why the general happiness is desirable, except that each person…desires his own happiness.” (Ibid)

3. “This, however, being a fact, we have not only all the proof the case admits of, but all which it is possible to require, that happiness is a good: that each person’s happiness is a good to that person, and the general happiness, therefore, a good to the aggregate of all persons” (Ibid).

So, moral is built into capitalist policy according to Smith and the utilitarians. What is not built in is the new effort toward equality. Indeed, Smith assumed inequality. So, to bring equality will change the assumptions of his system, i.e., consumation the tradition we have of capitalism.

Bentham, J. (1962 [1776]). A Fragment on Government. In J. Bentham, The Works of Jeremy Bentham. Edited by John Bowring (pp. 220-295). New York: Russell and Russell Inc.

Bentham, J. (1962). Principles of The Civil Code. In J. Bentham, The Works of Jeremy Bentham. Edited by John Bowring (pp. 299-365). Nuw York: Rusell and Rusell, Inc.

Mill, J. S. (1969 (V. 10)). Collected Works of John Stuart Mill Volume X. Edited by J. M. Robson. Toronto: University of Toronto Press.

Mill, J. S. (1970). A System of Logic. London: Logman Group Limited.

Mill, J. S. (1978 (V. 11)). Collected Works of John Stuart Mill Volume XI . Edited by J. M. Robson. Toronto: University of Toronto Press.

Smith, A. (1984). The Theory of Moral Sentiments. Edited by D. D. Raphael and A. L. Macfie. Indianapolis, IN: Liberty Fund.

Having ethical institutions for people to trust, such as the court system, can be helpful. There are other factors, such as availability of resources, a sound educational sytem. However, ethcis can mae such factors guided better. In the short run some ehtics can be circumented but in the long run ethics are important. One example is the failure of the Nazis in Germany. Another example is Stalinist Soviet Union. You have an interesting question.

This depends country population. In homogeneous societies can be derived norms from religion. But heterogeneous socities have various beliefs so thats why their individuals' dependant moral standarts gonna make high conflicts.

It can be the foundation and countries like Malaysia are examples of it but nothing is ideal. However, the life, ethical code and morality that you find in Malaysia is an example that ethics and moral standards are fundamental pillars in building a country that fosters socio-economic-political development. However, since it is a dynamic process to develop a country on that or any other basis, it takes great control via legal frameworks that are based on ethics and morality that set the rules of how institutions should behave. Without attempt to idealise, but Malaysia is a success from which the world can and shall learn. Its Islamic Economics, Banking and Finance industry is among the strongest in the world if not the strongest when observing the realities on ground and circumstances that led to its development. Hence, to your question, the answer is positive, yes it is possible but a responsible undertaking.

I would tend to agree, in general, with the framework presented by Mr. Ramrattan, but would like to add a few points. The science of Economics is in fact amoral, but the practical working of the Economy is the result of choices made by real people, who are moral actors. Therefore their choices are, by nature, morally oriented. So, Economics is amoral, but the Economy (people choices) works in moral context.

Alfred Marshall, for instance, in his Principles of Economics, wrote that "it is held that the Laws of Economics are statements of tendencies expressed in the indicative mood, and not ethical precepts in the imperative. Economic laws and reasonings in fact are merely a part of the material, of which Conscience and Common-sense have to make use in solving practical problems, and in laying down rules which may be a guide in life. But ethical forces are among those of which the economist has to take account. ... This Principle [of Continuity] is applied ... to the ethical quality of the motives by which a man may be influenced in choosing his ends" (Preface to the 3rd Ed., 1895).

And W. S. Jevons, one of the pioneers of the "marginalist revolution", also wrote that "I have no hesitation in accepting the Utilitarian theory of morals which uphold the effect upon the happiness of mankind as the criteria of right or wrong. But I have never felt that there is anything in that theory to prevent our putting the widest and highest interpretation upon the terms used. ... when the terms are used with a sufficiently wide meaning, pleasure and pain include all the forces which drive us to action. They are explicitly or implicitly the matter of all our calculations, and form the ultimate quantities to be treated in all moral sciences". (The Theory of Political Economy, 3rd edition, 1888, p. 23).

The Economy, for these authors, as well as for Adam Smith (among others), was always assumed to work within the moral context of concrete societies.

The problem implicit in your question is more complex, though. For starters, because there is not an easy general agreement about what are those "principles of ethics" or "high moral standards". Just to stay in theoretical ground, should they be defined from a consequentialist or from a deontological perspective of ethics? Then, supposing that Justice is the main ethical concern, what criteria of Justice should be applied: Rawls's or Nozick's? This is to say that trying to define a framework for those principles to be applied to political decision-making processes would pose (insurmountable?) practical problems.

What is really important is the social morality prevailing in the society (what the society regards as right and wrong and how it encourages behaviours aligned with the first and discourages or sanctions behaviours aligned with the second): how "elastic" are the moral precepts in the society, how complacent are the society with "bad behaviours", etc. This, embodied in the culture of the society, are the real moral factors that lead to more success or to failure in economic developments. It is part of what economists call the quality of the institutions, which is now recognised as one of the main factors, if the not the main, behind economic success.

I believe that whatever the good intentions would have had an institution, it can not be a surety for all its members. Especially if it happens at the country level. Theoretically - perhaps, but practically ... no. In my opinion, investigating this question should address the behavioral economy, psychology, ethics and, in particular, to neurology. That is, it would be interesting to see what results would be given during a particular experiment, taking into account the components of the above-mentioned disciplines.

For example, for Ukraine, the global problem is corruption and the shadow economy, which hinder development and investment attraction (for example, agribusiness). Will ethics help here...?

Ethical principles and high moral standards improve the economy of the whole country only if we exit the capitalist system. The capitalist system is based on accumulation, accumulation and wealth are immoral because the one benefits from the other. Exiting these standards would be ideal for an ideal society.

The building of an effectice and efficient legal system is required for your purpose. https://www.whichcountry.co/which-country-has-best-economy-in-the-world/ Countries in this list, based on World Economic Forum criteria, do practice such secular legal ethics, based on reasonable moral principles. I tend to the arguments of Yuri Yegorov ; if we give priority to the spontaneous (dis) order of market processes for economic value creation, ethical compliance is an posteriori task of the legal order, i.e. there is a dynamic contra-polarity between economic success and moral behavior in this world (prices vs. values).

Market Economy, I prefer this term over "capitalism", is a producer of trust. It involves People and countries into specialisation which led to an unprecedented Wealth. We drive Japanese cars, eat fruit from Marocco, and go to the barber in whatever country we spend our holiday, without being afraid to have an accident, to be poisoned or even killed. The reason is that market economy has produced a very simple Fairness rule: (good) Performance for (my) Money. And it works! Trust, which is in collectivist societies restricted to families or Clans (that is one of the reasons of cousins' marriage), has spread all over the world. The market economy has produced such a wealth worldwide that so many indicators for a good life are improving rapidly, like improving health, Wealth, and education.

Even with some people, politicans and firms acting criminal cannot Change the ethical side of market economy, but teaches us that we need some institutions (law, media, elections…) to overcome this.

Yes, for example, the mortgage that shook the United States and caused a major shake-up in world stock exchanges in 2008 and the aftermath of several years

Being religious does not always mean someone or some soceity is ethical. Often such societies are closed to modern ideas wiich have lessened poverty and illness. There are many people who believe in a higher power of ethics and who think relgion has too many con artists in it, who say they know God better than others and so these con artis who feel entiteld to extra money and power. I am not saying all clergy are con artists but a large number of them are. As economists we have to be critical thinkers in search of truth.

Read about M.K. Gandhi's economic philosophies. These were more than just to reflect on his experience in U.K in times of Industrial Revolution. If you are interested I can send you some references....

When read your question I got curious if China can be regarded as an example case of such developing economy with strong culture of Confucius philosophy ?

Yes but not in the current society where only money counts.

Interesting question, but impossible to answer with yes or no. From a complex systems approach, the question should be: "Under what conditions can ethical standards and democracy contribute to economic success?"

In the previous replies, some of those 'conditions' have been mentioned. The main one is the current (bank-controlled) money system. Banks designed money in a scarce way: due to interest, there is always less money around than we collectively owe them (money created as debt), so 'to make money' becomes the main aim of the economy. So capital, instead of being a means for economic transactions, becomes its aim (= capital-ism); people and planet are treated as means for making money, which is unethical - even if it is 'made legal' by democratically chosen governments.

So a second condition is for those governments and public institutions to design more ethical rules, and to allow for new (community-oriented) monetary systems to emerge. In the current global market economy this is very hard, for if a national government imposes stricter social and ecological rules, companies can move overnight to countries with lower ethical standards. So no government dares to raise the ethical standards for fear of collapsing the local economy. A prisoners' dilemma, a race to the bottom. A sollution for this is proposed by Bunzl, J. & Duffell, N. (2017). The SIMPOL solution. London & Chicago: Peter Owen.

In short the 'capitalist' vision of what economics is, has been so embedded (in our minds, institutions, language, that it requires changing many conditions for the economy to become ethical again. Yet, many of those changes are currently underway (see e.g. http://foundationgolden.org/).

In summary, what it takes is this:

1. Frame "the economy" as a societal function again, viz. 'to allocate in a wise way the available/renewable resources of the planet to the real needs of all living beings and ecosystems". Since human life depends on a thriving ecosystem, caring for other species and a stable climate is a real human need. Economic infrastructure can help to achieve this function, or it can destroy it; so not all of 'the economy" (sectors, metrics, GDP etc) is automatically functional or successful for "the (function of the) economy" (don't be fooled by language!)

2. Investigate why our current economy (also in democratic market economies) has become dysfunctional, pursuing its own growth at the detriment of social well-being and environmental health. You will discover that the design of the monetary system plays a key role in this, strengthened by the fact that the money-system is hardly ever called into question (See Lietaer, B. et al. (2012). Money and sustainability: the missing link. Axminster: Triarchy Press. But also other drivers, such as legislation (see Capra F. & Mattei, U. (2015), The ecology of law. Toward a legal system in tune with nature and community. Oakland (CA): Berrett-Koehler), education, media, etc. currently keep us locked into a dysfunctional (unsuccessful) economics.

3. Start from the ethical question: "what kind of society do we want?" A strong leverage is the UN-global agenda 2030; the 17 SDGs clearly express what kind of world we want, and all governments world-wide have adopted them in 2015. Next ask what kind of socio-economic infrastructure (SDGs 8 through 12) we need to achieve those goals, or what economic systems, structures, rules, exchange systems etc. will allow us to "increase" (or "grow" - SDG8) our economic functionality again and achieve the goals. This then is 'economic success'.

4. With that in mind, explore the myriad of alternatives that are seeing the light today (Regenerative ownership, Responsible financing, Community currencies, cooperative businesses, real sharing economy, Complexity Based Responsible R&I, Gemeinwohl-Ökonomie etc - the list is endless)

5. The main point is: STOP talking about 'the economy' as if it's a monolithic term, but from now on talk about EITHER 'extractive' economics (aiming at extracting money / profit from people and planet) OR 'regenerative' economics (offering means for humans to co-evolve in a regenerative way with the rest of life). Since the industrial revolution, 'democratic states' have mainly supported extractive economics (which is why they have been unmasked as 'corpocracies', fooling the people into believing that pursuing private profit is good for society). Since the 'great accelleration' (globalisation from the 1950s on) the 'minor errors' of this extractive model have become so massive that they now threaten our very survival.

Today many regenerative alternatives are being explored - also in 'democratic' countries. It is true that no one gets sent to prison because of that, yet the institutional resistance of established (extractive) powers is so huge that the transition may well be too slow for humankind to survive (given that the window of opportunity for changing course - in terms of biodiversity loss, climate change, entropy etc - is getting smaller every day).

NB A more responsible way of doing business is also emerging in former communist economies, yet the 'conditions' for its scaling may well be different from those of traditional market economies. See Zollo, M. & Renate Mele (Eds.) (2013). The shared value debate.

See also the article attached.

After a careful retrospective analysis, our conviction is that insufficient attention is paid to a changing society, that we do not have time to properly understand the world, maybe we need a "new paradigm" of other hypotheses, and why not, maybe we "feel the need of a paradigm shift". For this, we should first understand the world. Yes, it is complicated, we often do not realize this, but it is easier to let us be controlled, manipulated, or we think we are too small for such a grandiose project. A delusional solution in order to serve meek interests. It is enough to list the 17 Objectives of Sustainable Development[1] (ODD), also unified informally as Global Objectives, to address the challenges faced by mankind today. Through them, an ambitious action agenda (Central Agenda 2030) was set for the next 15 years to eradicate extreme poverty, combat inequalities and injustice and protect the planet by 2030. But let's not be too optimistic; let’s remember what happened with the First Report of the Rome Club in 1972 entitled "The Limits of Growth[2]". It's been 40 years since then, almost all the predictions have come true, but it seems that people do not really take into account the lessons of history. The nature of the debate has shifted from "the limits of growth" to the concept of sustainable development. But the Western world is marked by a huge illusion. There are more, but this one is essential: "laissez faire". The economic model that tells us that the market is regulating everything and, as a result, the economy expects to make a qualitative leap, towards knowledge and innovation, that this is the future. The fact that the market does not think strategically, except where it sees profits, is ignored.

[1] 2030 Agenda for Sustainable Development, https://www.mae.ro/node/35919

[2] Growth Limits (LTG) is a 1972 report on computer simulation of economic growth and exponential population with a finite supply of resources.

Following

Well, morality is also a term and as such becomes disputed.

When you move to different issue areas such as "corruption" you get the impression that morality is a good thing. Corruption is, of course, related to economy, so...

Dear Friends and Colleagues of RG

Investigating the economies of countries in which the social market economy develops in the political system of democracy, economy open to international economic cooperation, knowledge-based economy and technological development, economy in which an important element of the host development is effective shaping of pro-development socio-economic policy and sustainable pro-ecological development, an economy in which various types of commercial enterprises and public institutions are developing, including social economic entities, the issue of effective socio-economic development may be observance of the principles of ethics and high moral standards.

Do you agree with my opinion on this matter?

Please reply

I invite you to discussion

Best wishes

I think talking about ethics and morals in politics and business is almost naïve. Regretfully, it is good to be realistic.

In any event, it is important to have a list of "ïmmoral practices", just to know what we are talking about.

Dear Joana Cassi, thank you for your opinion. You are a beautiful young woman with special concerns. Congratulations. It is natural to be optimistic. However, in order to understand the reality I think we need to look deeper, maybe we need more experience. Or maybe I'm an incurable pessimist. Anyway, I congratulate you and I wish you much success. Cornel

We should not, however, forget that ethical principles most of the time guide our laws. In other words, ethics are embodied in our law, e.g. anticorruption law. You may escape it sometimes, but at other times you have to pay the bill in terms of money, or reputation which is symbolic money. So...

I hope I have made a little contribution to the topic as cleverly put by dr. Prokopowicz whom I thank for his recommendations. I tried to find a particular path to "the road to Damascus".

Демократическая форма правления в современном понимании и соотношении с современными экономическими проблемами взаимоувязана с либеральной экономикой. В этом контексте мы должны понимать, что этические принципы у различных участников экономических отношений могут быть разными. Тем более, жизнь подсказывает, что этические принципы на каком-то этапе экономических отношений могут деформироваться под давлением различных как внешних, так и внутренних факторов. Это особенно четко стало видно из современной внешнеэкономической политики США. Разве кто-либо из руководства США возмется утверждать о том, что их современная политика лишина этических принципов? Или не соответствует моральным стандартам?

Мы с Вами, уважаемые коллеги, понимаем, что ни кто из руководства США не осмелится это утверждать. Учитывая это, этика либерализма заключается, прежде всего, в отстаивании личных прав и свобод граждан (например, экономических).

Высокие моральные стандарты, как правило, основываются на других принципах: заботы о соблюдении интересов коллектива, интересов общества и в конечном итоге - государства. В этом плане, для ответа на поставленный вопрос мы должны четко понимать:

1. Мы говорим о экономике государства к каким типом хозяйствования??...

2. Мы говорим об этических принципах какой социальной группы (класса)?

3. Мы говорим о кем утвержденных (в каком государстве) моральных стандарах ?

И только лишь ответив на эти вопросы можно рассуждать о том, могут ли этичексие принципы и моральные стандарты детерминировать экономические успехи какой-либо страны....

If ethics will be given more priority than economics the outcomes will be satisfaction and while economics will get more priority the outcome will be conflict. It is tangible nature of economics which gives more priority and major reason dissatisfied life. So it's better to promote ethics

Democracy and capitalism cannot coexist. They are antithetical.

Democracy is in search of others, capitalism is in search of itself.

Leonardo Andriola We are indeed far from economic democracy.

Research ECO-LOGIC DEMOCRACY -The Geonomic Argument-

A market economy can exist very well without crony (rentier) capitalism; democracy works very well with open markets, but not with economic rentierism (embodied by the 'unholy trinity' of the land/money/tax monopoly).

Historically "capitalism" served democracy, by effecting a widespread egalitarian effect, starting from the countryside and the big urban centers. The history of industrial revolution-in England-testifies to this. The term "bourgouis democracy" coined by its opponents is also characteristic. If such readings of economic and social history are right, then our proposition is probably right too.