On the Necessity to Rebuild Economics on Moral Bases, and How the History of Thought Can Support this Process

Clara H. Whyte

Executive Director, Paideia Mundi

Economist and Political Scientist

Abstract presented to:

The 52nd annual meeting of the History of Economic Thought Society (THETS)

It is almost a platitude nowadays to state that inequalities are rising in the Western world, and the current COVID crisis is certainly not helping to sort out the problem. The history of thought can help us figure out how this situation came about, why it is so detrimental to all of us, and what we can do about it. 

In fact, in his Republic, Plato already stated that one of the worst evils of oligarchic regimes, “a government resting on a valuation of property, in which the rich have power and the poor man is deprived of it[1]”, is that “a man may sell all that he has, and another may acquire his property[2]” and that this “evil is certainly not prevented there; for oligarchies have both the extremes of great wealth and utter poverty.[3]” For this reason, in a later book, The Laws, Plato[4] stated that one, if not the most important duty of a good legislator, is to ensure that wealth is properly distributed within the city, and that it is prohibited either to sell one’s own share or to buy freely the one of another citizen, this to promote justice and to avoid the worst evil that can possibly affect a city: sedition.

Where did this good piece of advice go? It has been rejected to the darkest dungeons of history by a “capitalist nobility” whose only and main value is money and the constant quest for it. This state of things has long been known though, with diverse authors of the 19th century, ranging from A. de Tocqueville[5] to K. Marx[6] or even Pope Leo XIII in his famous encyclical “Rerum Novarum[7]”, denouncing the lack of ethical and social commitment of the new capitalist oligarchy.

So, how come we, in the 21rst century, seem to be coping with the same situation? Leo Strauss with his theory of the “waves of modernity[8]” might have put forward some answers to this question. He states that modernity, since the Renaissance, has been characterized by different waves of political thought that led to the progressive degradation of our moral values, substituting transcendence and virtue, with the quest for glory (Machiavelli), power (Hobbes), wealth (Locke), willingness of the people (Rousseau), and finally nihilism (Nietzsche). The current elite is the sad heir of this moral degradation, and it has been helped, L. Strauss claims, by social scientists, and particularly economists[9], who in the name of scientism have come to accept that moral values were outside of the realm of their research. In the economic field, that has resulted in the rise of so-called “neo-classical” economics that, relying on mathematical models, claims to be a science and relies on the basic hypothesis that if you let the market work by itself, the rational interests of the homo oeconomicus will lead to the best possible equilibrium. That long has been the argument used by neoliberal oligarchic regimes to justify the destruction of social institutions, and even the implementation of commercial practices, such as high interest loans, which have long been condemned by moral traditions from the Bible[10] to Aquinas[11], or Plato[12] and Aristotle[13], and that we, sadly, have come to take for granted and accept as perfectly fair and normal. It has also been used to justify the sacrifice of wide parts of the population – as we see today in Northern America with the so-called “opioid crisis”. In the belief of some neoliberal gurus, this sacrifice is due to the lack of “resilience” of those people which is a sign of their misadaptation to the rules of the market. As a consequence, their death is an unavoidable and fair sentence of the historical process – some sort of social Darwinism, we could say. Hence, this way of tackling socio-economic and political issues hides some form of historicism, the rule of the market being the rule of history, and justifies fatalism and political inaction. Yet, many authors, such as K. Popper, have long demonstrated the poverty of such analyses[14], which means that we, social scientists, and particularly economists, now have a moral responsibility to get back to work, review our tools, and rebuild moral and ethical thinking in our analyses so as to promote better socio-economic and political models, and hold our leaders accountable for their responsibilities, if we accept the general assumption that leadership is a responsibility before it is a right. Failure to do so, obviously has had, still has and will continue to have major consequences that may range from cynicism and poor economic development to totalitarianism[15], or even civilizational collapse.

Clara H. Whyte is an economist and a political scientist. She holds two Master’s degrees, including one from the Paris Institute of Political Studies (Sciences Po Paris). She has been working in her field for more than 20 years in Canada and internationally. She speaks fluently French, English, Portuguese and Spanish. She also has an advanced level in German and in Mandarin Chinese (HSK 5). What’s more, she is learning Quechua (the most widely spoken Indigenous language in the Americas), as well as Sanskrit and Russian. She is the Executive Director of Paideia Mundi, a non-profit organization dedicated to putting forward an ethics of political thought and action that is respectful of all human and living beings on the planet, this thanks to the promotion of world cultures and humanities. Very well versed in political philosophy, she currently focuses her research on the issues surrounding ethical leadership and political regimes.

[1] Plato.- The Republic, https://classics.mit.edu/Plato/republic.9.viii.html

[2] Ibid.

[3] Ibid.

[4] Plato.- The Laws, https://classics.mit.edu/Plato/laws.html

[5] Tocqueville A..- La démocratie en Amérique, Livre I, La Pléiade, Gallimard, Paris : France, 2004, p. 299

[6] Marx K., Engels F..- The Communist Manisfesto, https://www.bard.edu/library/arendt/pdfs/Marx-CommunistManifesto.pdf

[7] Rerum Novarum, Encyclical of Pope Leo XII on Capital and Labour, https://www.vatican.va/content/leo-xiii/en/encyclicals/documents/hf_l-xiii_enc_15051891_rerum-novarum.html

[8] Strauss L..- Qu’est-ce que la philosophie politique?, Paris : Presses universitaires de France, 2010, c1992, 296 p.

[9] Ibid.

[10] The Holy Bible, https://www.vatican.va/archive/ENG0839/_INDEX.HTM

[11] Aquinas T..- Summa Theologiae, https://aquinas101.thomisticinstitute.org/st-index

[12] Op. Cit., The Laws

[13] Aristotle.- The Politics, https://www.stmarys-ca.edu/sites/default/files/attachments/files/Politics_1.pdf

[14] Popper K..- The Poverty of Historicism, Boston:USA, The Beacon Press, 1957, 166 p.

[15] Arendt H..- The Origins of Totalitarianism, New York : USA, Harcourt Brace Jovanovich, 1973, 527 p