Religious Ethics in the Market Economy

A New Approach to Business and Morality

Karl G. Jechoutek

• Publisher: Palgrave Macmillan
• Year: 2018
• Print ISBN:
  9783319765198
• eBook ISBN:
  9783319765204
• Topic: Business
• Subtopic: Business Ethics
• Index: Business

- Provides a fresh perspective on religious attitudes to business ethics and the market economy

- Includes aspects from Christianity, Judaism and Islam

- Demystifies outdated business ethics theory

© The Author(s) 2018

Karl G. JechoutekReligious Ethics in the Market EconomyHumanism in Business Serieshttps://doi.org/10.1007/978-3-319-76520-4_1

Begin Abstract

1. Prologue

Karl G. Jechoutek¹ 

(1)

Independent Scholar, Baden, Austria

 

Abstract

Setting the scene for the book, the increased complexity of the dialogue between religious ethics of the Abrahamic religions of Judaism, Christianity, and Islam and participants in a free market is highlighted. The blurred boundaries between virtues and vices, the transition from static to dynamic economies, and the debate between the open and closed global orders are identified as issues to be dealt with.

Keywords

Business and religionMarkets and religionReligious economic ethicsBusiness virtue ethics

End Abstract

A new world has been dawning during the first decades of the twenty-first century. A world that is ready to discard the political, social, and economic consensus forged after the demise of the last major collectivist regimes of the previous century. What seemed to be an agreed achievement of utopian harmony where business was to be conducted in an increasingly globalising, market-oriented, and cosmopolitan environment has slowly morphed into a resentful cacophony of world views. An isolationist, nativist, and protectionist paradigm has claimed its place among the plurality of possible ways to order the global set of societies and economies. This is not to say that the “closed” world view is replacing the “open” one. But it is now clear that multiple possible paradigms are competing for the attention of the public and of decision makers. Choosing among them is not as easy as was once thought: weighty arguments are employed on all sides, and the moral high ground does not belong exclusively to just one of them. The “open” end of the spectrum relies on efficiency, diversity, individual creativity, and the free exchange of goods, services, people, and ideas to ensure a better life for all. At the “closed” end, the focus is on fairness, justice, equality, homogeneous identities, and a zero-sum competition for resources, which requires group solidarity. Bafflingly, both sides invoke moral principles to make their case. Can virtues be located only on one side of the argument, relegating the other side to be driven by vices? Or do we have a problem defining virtues and vices?

It is understandable that moral philosophers and religious authorities enter this fray. Who else would be the first port of call in matters of ethics when moral considerations are applied to economic, social, and business decisions? But there is a problem: in the search for a better life, now commonly and broadly known as human development , the strategies recommended by economic and religious thinkers have been diverging for two centuries. Economic analysis has focused on the improvement of efficiency and the maximisation of utility in free markets; religious ethics has stressed the need for fairness, compassion, equality, and justice. Can they be reconciled? How does this dichotomy overlap with the open versus closed argument? And is there room for a broader interpretation of virtues and vices that interact in the marketplace? The old dilemma of reconciling only efficiency and fairness has been replaced by the multi-dimensional space of open and closed societies, the transition from static to dynamic economies, and the degrees of virtue and vice, all overlaid on the original binary choice. At least three dimensions compete for attention.

This calls for creative thinking. John Stuart Mill noted that “a person is not likely to be a good political economist who is nothing else”.¹ Similarly, we could argue that nobody can be a good moral philosopher who is nothing else. In the competition of world views that uses moral arguments, interdisciplinary thinking is called for. Many attempts have been made to explore the linkages between individual choice, self-interest, and markets on the one hand, and ethical, moral, and spiritual considerations on the other hand in the functioning of the economy and in the process of change defined as human development . The obstacles that prevent a sound synthesis often are semantic ones: definitions of what is ethically sound diverge among disciplines. The open paradigm favoured by economics relies on individual liberty, freedom of choice , open outcomes, and uncertainty about where the process of change leads. The more closed paradigm embedded in monotheistic religious ethics prefers an eschatological, linear narrative that is normative and designed to lead to an outcome that is a moral improvement over the flawed status quo. Karl Popper ’s open society meets Hegel ’s historical destiny and scripture. The freedom of the individual comes up against the needs of the community. Self-interest and self-fulfilment collide with altruism and duty to society. The gradual emergence of the “buffered self”, in the words of the philosopher Charles Taylor , has highlighted the potential for conflict between individual self-fulfilment and a higher order governing social interaction.²

A well-meaning entrepreneur, trying to do the right thing in conducting business in this intellectual environment, could be forgiven for reaching back to the pragmatism of the Scottish Enlightenment . Based on the bedrock of the works of Francis Hutcheson, David Hume , and Adam Smith , a path towards practical synthesis opens up. It is not the path of confrontation between secular reason and religious dogma that is so characteristic of the continental European Enlightenment. It is the ingenious skill of observing human nature and steering a course that embraces both self-interest and altruism within an overall human instinct (or “sentiment”, to put it in Smithian terms) of socially compatible behaviour and the pursuit of happiness as enshrined in iconic documents such as the American Declaration of Independence. “The whole magic of well-ordered society”, said the Physiocrats, precursors of the Scottish Enlightenment, “is that each man works for others, while believing that he is working for himself”.³ We arrive at a “pragmatic ethics” that understands human frailty as well as the obligation to act properly and with common sense.

But what about the virtuous life recommended by Aristotle and the towering founding fathers of the Abrahamic religions of Judaism, Christianity, and Islam? There seems to be no room for sins, great or small, only for the cardinal virtues of courage, temperance, wisdom, justice, faith, hope, and charity. Pursuing a sustainable enterprise by generating and re-investing profits can easily be branded greed and usury. Sponsoring the arts and sciences can be criticised as vanity and ostentation. Highlighting one’s achievements elicits a charge of pride and ego-centrism. The opening up of new markets exposes the first movers to the charge of exploitation and of creating unnecessary desires. The discourse of the discipline of economics focuses on the positive interpretation of such activities; the religious discourse (and that of many moral philosophers) drifts towards the negative view. Can we find a common denominator acceptable to both? Can we have a virtuous society that tolerates and perhaps even needs a mild leavening by vice? Can the closed and open paradigms be reconciled by putting virtues and vices in a common framework?

The realisation that private vices have a role to play is, of course, not new. Thomas Aquinas , Al-Ghazzali , and Rumi already recognised that both vices and virtues are normal and perhaps necessary ingredients of a functioning society. Bernard Mandeville made this a necessary principle in his Fable of the Bees in the early eighteenth century, a concept that was picked up in a milder form by the utilitarians and Smith . Defenders of free markets from the Austrian school of economics, through Friedrich von Hayek to Milton Friedman, implicitly argued that private self-interest generates the public good of efficient resource allocation. What is disparaged today by critics from the moral high ground as “neo-liberal” fantasy has a long pedigree, even in religious thought. We will return to this below. The question here is one of degree. What is the dosage of vice that is acceptable as the yeast that creates an overall virtuous society and economy? Should it be homoeopathic, a pinch, or a robust helping? We need to investigate the spectrum of virtue and vice to arrive at a judgement.

Hence, this essay explores the possibilities of accommodating the quirks of human behaviour within the ethics of a functioning open market economy. Religious ethical thinking about markets is examined for signs of pragmatic acceptance of conduct somewhat removed from the purely virtuous end of the behavioural spectrum. Economic argument, on the other hand, can do with an expansion into the realm of moral philosophy, to get away from the exclusive focus on efficiency and prudence.⁴ A synthesis of language and concepts can not only unify the economic and religious discourse (resurrecting the unified moral philosophy of Smith ) but also contribute to the solving of the moral dilemma in the open versus closed society debate by establishing the range of virtues and vices necessary for the pragmatic functioning of an economy and society. The application of “pragmatic ethics” may cut through the tangled web of competing moral arguments.

Why limit this exploration of the interface of religion and the market to Christianity, Judaism, and Islam? After all, other world religions have weighty things to say on ethics, and the “Global Ethics ” movement inspired by Hans Küng seeks to distil common moral principles from all of them. But it is the three monotheistic world religions that have accompanied the development of Western thinking on economics and markets in lockstep throughout history, and their scrutiny of market conduct has been driven by a normative urge to instil morality into secular action, guided by scripture. Specific attention is devoted to economic activity in all three religions, culminating in laws, interdictions, and prescriptions for proper market behaviour. Hence, a focus on the Abrahamic religions presents a picture of market activity and religious ethics joined at the hip.

Footnotes

1

Mill, John Stuart, Essays on Ethics, Religion, and Society, Collected Works of John Stuart Mill, Vol. 10, 306. Quoted in Tomas Sedlacek , Economics of Good and Evil, Oxford: Oxford Univ. Press, 2011.

 

2

Charles Taylor , A Secular Age, Cambridge, MA: Belknap Press, 2007, passim.

 

3

Peter Gay, The Enlightenment , NY: Norton 1969, p. 350.

 

4

Much useful recent work has been done on this issue, for example, Deirdre M. McCloskey , The Bourgeois Virtues, U. of Chicago Press 2006; Tomas Sedlacek , Economics of Good and Evil, Oxford U. Press 2011; John Portman (ed), In Defense of Sin, Palgrave 2001; Paul J. Zak (ed), Moral Markets: The Critical Role of Values in the Economy, Princeton U. Press 2008; Nicholas Capaldi (ed), Business and Religion: A Clash of Civilizations?, M&M Scrivener Press 2005; Amelie Oksenberg Rorty (ed), The Many Faces of Evil, London: Routledge, 2001; Ross Poole, Morality and Modernity, London: Routledge 1991; Philippa Foot , Virtues and Vices and Other Essays in Moral Philosophy, Oxford: Basil Blackwell, 1978; and many others.

 

© The Author(s) 2018

Karl G. JechoutekReligious Ethics in the Market EconomyHumanism in Business Serieshttps://doi.org/10.1007/978-3-319-76520-4_2

Begin Abstract

2. Religion and the Market: A Tour d’Horizon

Karl G. Jechoutek¹

(1)

Independent Scholar, Baden, Austria

Abstract

A review of the take of moral philosophy and religious ethics on the functioning of the market over the centuries yields a broad spectrum of attitudes and guidelines, ranging from hostility to realistic acceptance. Over time, religious thinking on commerce in the monotheistic religions has evolved, and some convergence with the business mindset is evident.

Keywords

Jewish market ethicsChristian market ethicsIslamic market ethicsScholastic market ethicsEnlightenment and markets

End Abstract

Concepts, principles, and values relevant for human flourishing overlap in economic and religious thought. The concepts of justice, fairness, equality, trust , altruism , compassion, truth, honesty, duty, responsibility, goodness, and righteousness are explicitly or...

Table of contents

• Cover
• Front Matter
• 1. Prologue
• 2. Religion and the Market: A Tour d’Horizon
• 3. Vices and Virtues Revisited
• 4. From Static to Dynamic
• 5. Between Open and Closed
• 6. Conclusion
• 7. Epilogue
• Back Matter