Ethics and Development

Dr L Krishnamangol Singh *

There is a view that the "mainline economics" basically neglected ethics or ethical considerations in human behaviour. This is because Economics is a separate subject and the individual or the behaviour of individual seeks to maximize utility function.

Likewise, the producer also tries to maximise profits from investment in production. Thus, "self-interest therory" is rooted in the origin of scientific economics developed by Adam Smith who, in his Wealth of Nations, explained that self-interest of human behaviour guided the individuals or the economic system.

Thus, Smith believed in the laissez-faire economic system or market economy in which there will be non-intervention of the government. In fact, according to Smith non-intervention of the government in the functioning of the economy encouraged the private individuals or enterpreneurs, who involved in lebel playing field (competed away with each other) and tried to maintain efficiency in the economy. What Smith believed is that while every individual tries to maximise self-interest without intervention of the government, there will be efficiency in the working of the economy.

Again, in the mainline economic theory, a consumer or an individual tries to act rationally in order to maximise utility function Likewise, the theories of production which received fair treatment in the process of production also explained how a producer tries to maximise profits. Thus, in a perfectly competitive market (where there are a large number of buyers and sellers), a firm or a producer (seller) is a price taker (given the price). He acted rationally because he will be loosers if he either increases or decreases the price.

Thus, the mainline economists believed that the consumer or the producer acted in a rational manner in the allocation of resources. The Walrasian economics also seeks to explain the attaiment of general equilibrium (a best or efficient economic system) in the economy without serious treatment on ethical questions. Thus, Amartya Sen (also used as Sen in short form) has pointed out that the mainline economics or standard economic theory did not pay attention to ethics or etihical considerations in the eocnomics science.

However, in welfare economics, the ethical factors or considerations are moderately included in promoting social welfare function. Therefore, Sen laid emphasis on ehtical values or morality of individuals/persons in the study of economics science. It is in the context that the present article seeks to examine/explore the relationship between ethics and economics (i.e. ethics and development).

According to Sen, the ethics-related tradition of the subject, economics goes back at least to Aristotle. In fact, Aristotle related economics to ethics, and it sought to promote the "common promotion of a good quality life" And his economic writings were blended with economics, politics and ethics. Aristotle also contributed to the constituion of ideal state. However, he was against the communist elements of Plato's ideal state. He also believed in the existence of the state for the whole system of the society.

It was also his philosophy on the ideal state that if the whole body is destroyed, there would be no foot or hand. Therefore, the state is prior to the family or to the individual. In fact, the state is above the man and it is for the welfare of the people or the welfare of all citizens. Thus, according to Aristotle, no individual can destroy the state. In fact, the state arises out of the necessity of the man or people.

Thus, Aristotle related economics to the ethics of the people (i.e for the promotion of good life of the people), However, the greatest weakness of Aristotle is that he failed to abolish the institution of slavery in developing his theory of ideal state, particularly in the Greek Society. Later, Karl Marx discovered the institution of slavery as the system of exploitation in the society, which is well known.

In fact, in spite of the limitations of his theory of ideal state due to the circumstances that prevailed in the Greek society during his times (which Marx also accepted although he wanted to abolish it), Aristotle focused his attention on mankind (i.e for the welfare of the people), and he believed that the state comes for the good of society. He also believed that the state is formed to make (human) life possible. He also believed that the citizens were essential for promoting the highest good of the whole society.

Thus, according to Aristotle, there is close relation between the state and the citizens, and the former is for the good of the latter Thus, the theory of state developed by Aristotle explains the need for transformation of the people (the man) into the good life of the people or the citizens, and also for meeting the their economic and social needs. In fact, the theory of deveopment of state is very vast, and it also falls within the domain of political science or science of politics.

However, Aristotle blended economics or his economic writings with politics and ethics. It is also generally believed that Aristotle laid the foundation of economics, and that he had made distinct contributions in the field of various economic ideas including the management of the family or household and the role of state in promoting the welfare of all the citizens of the society. In his ideal state, he also emphasised the role of the state in promoting the principles of good life of all the citizens.

Thus, in his writings, he linked economics, politics and ethics. In fact, Aristotle believed in the existence of the state for the whole system of the society. Therefore, according to Aristotle, the political role of the state needs to focus on promoting economic and ethical values within the whole society or polity. In fact, his ideal state is for an ideal society.

In short, in his ideal state, Aristotle emphasised the needs for existence of state in order to meet the economic and social needs of the citizens and promote the good life of the people. Thus he linked economics with ethics or ethical considerations in order to promote the principles of good life of the people or the citizens in the society and economy.

Although, there were many thinkers on economic thoughts or issues in different parts of the world prior to Aristotle, it is believed that he laid the analytical and fundamental ideas of economics before the birth of the classical political economy or economics science. Thus, according to Sen, there are two origins of economics : one related to politics and ethics and another related to engineering approach. As Sen has pointed out, the ethics related tradition of economics goes back at least to Aristotle.

In examining his book, Ethics and Economics, it is also found that economics related ultimatley to the study of ethics and that of politics and this point of view is further developed in Aristotle's Politics (Amartya Sen 1987, P.3) And Sen further pointed out, " He (Aristotle) sees politics as the master of art. Politics must use the rest of the sciences including economics" And Sen also further pointed out that it (politics) legislates as to what we are to do and what were are to abstain from and that the end of this science must include those of the others so that this end must be the good for many.

Thus economics, which seeks to promote the society and economy or the welfare of the people (i.e welfare of all the citizens) relates to poltics and ethics. And, Smith had scientifically developed economics in his book, An inquiry into the Nature and causes of the Wealth of Nations (1776) and emphasised on the policy of providing economic freedom for every individual, which need not be hampered in any manner by state action (i.e the government action).

Smith based his analysis on self-interest theory for promoting the well-being and welfare of the whole society in the process of development. Smith's self -interest theory is developed on the basis of a set of rules of rights or justice and morality. Thus Smith also practically linked economics to ethics as his theory of economic developement assumed natural justice and morality.

However, as the two subjects are different, he laid emphasis on maximising the aggregate wealth or economic development of the nations on the basis of enlightened self-interest of the individuals. Thus, ethical considerations, need to be reasonally included in the study of modern economics or modern economic development though they are not treated sepeartely. And, many of the ethical questions are covered in the study of modern economics.

As Sen further pointed out, "The study of economics, though related immediately to the pursuit of wealth, is at a deeper level linked up with other studies, involving the assessment and enhancement of more basic goods". "(Amartya Sen, 1987, P.3). Thus, the study of economics can now be integrated with ethical values and considerations in different areas or fields of the subject.

We may now touch on enginnering approach to economics. Sen used the concept of "engineering" approach to economics and analysed the second aspect of the origin of economics. In fact, in the Indian context, Sen pointed out that the origin of economics dates back to the first book ever written with anything like the title economics namely, Kautilya's Arthasastra, which was translated from Sanskrit (Sen, 1987 : 5).

He further pointed out that Kautilya wrote the book, Arthasartra in the fourth century BC, and that it broadly deals with the four fields of knowledge including 1.) metaphysics (philosophy dealing with the nature of existence, truth and knowledge (i.e a philosophyical doctrine on the supersensible principles of being/existence or abstract theory of existence etc). 2. knowledge of "the right and the wrong" but it settles down to discussing more practical types of knowledge dealing with 3) the science of government and 4) the science of wealth.

Thus Sen reveals that, in the ancient document of early economics such as Arthasastra, there were practical discussions on statecraft, including the practical problems from building of villages, land classification etc. to diplomatic manoeuvres, strategy for vulnerable states, pact of colonization, influencing parties in an enemy state etc. He further pointed out that the attention of this ancient early document of economics is very firmly on engineering problems.

There were also many economists (e.g. Leon Walras) who worked on the engineering approach to economics And, modern economists have also analysed the logistic and engineering problems within economics. In fact, logistic economics needs to address a wide range of practical problems of development with ethics It also needs to narrow down the distance between ethics and economics.

Thus, it is high time to think of a paradigm shift in economic policies with the conceptual changes in the field of the two aspects of economics i.e. i) the ethics related economics and ii) engineering-based economics in order to address the logistic development issues happening inside and outside economics.