Problem: The present day economic systens are failing.

Solution: The solution to economic problems is spiritual in nature.


"Economics and Moral Values: Part I - Relationship between Morality and Economics"
William S. Hatcher, Steklov Mathematical Institute of the Russian Academy of Sciences, St. Petersburg, Russia.


There is a pervasive modern sentiment that economics and morality are peculiarly incompatible. Morality, it is felt, deals in intangible values. It treats of what is most human, personal, and emotional about man, whereas economics, by its very nature, dehumanizes and depersonalizes. It puts a price tag (tangible value) on everything and regards the individual primarily as a producing and consuming unit in a vast impersonal system.

The modern "business ethic" has contended in effect that this impersonal aspect of modern economics is unavoidable. To produce the abundance we all desire, it is said, the rate of production must constantly increase. That which does not contribute to constantly increasing productivity is considered irrelevant and harmful to the economy and thus to the public well-being. "What's good for General Motors is good for everybody".

In thus creating an opposition between economics and morality, between tangible and intangible values, those who put forth this point of view seek to buttress the economic system by riding it once and for all of extrinsic controls not germane to "purely economic" considerations. They see nothing to fear from public acceptance of the economics-morality opposition since it seems clear that, human nature being what it is (or rather what they conceive it to be), people generally would unhesitatingly chose tangibles over intangibles.

However, it is now clear that a considerable number of people, especially members of the current younger generation, are quite willing to make the opposite choice. If dehumanization is the inevitable result of the present economic system, they say, then let us be done with the system. Human nature, it seems, is not so clearly one-sided after all. One does not exaggerate by saying that the battles is joined and that the ultimate resolution of this opposition is neither certain nor inconsequential.

However, one can question the validity of this opposition of moral and economic values. It is just possible that the dehumanizing values associated with our modern economic system precede the system rather than flow from it. Perhaps it is not so much that money corrupts but that corrupt people are using wealth in corrupt ways for corrupt ends. Perhaps, in short, our economic system is simply an external and concrete reflection of our collective inner life which the immense resources of modern technology have allowed us to project and magnify to greater dimensions.

I do not claim that this hypothesis is so self-evident as to command immediate assent, but is plausible enough to be worth serious thought. There are things which immediately come to mind to reinforce this initial plausibility. For example, in recent years the business community generally has come to appreciate and acknowledge openly that may intangibles can severely affect productivity. Instead of yielding a greater concern for employees as individuals, this realization has given rise to a manipulative approach towards human relations in an effort to induce the "right" attitudes. The social sciences have been applied so as to produce instant "concern" and phony sincerity in order to reassure the individual that one is genuinely interested in him.

Thus, even when it became pragmatically useful to introduce intangible values into the production system, people chose impersonal substitutes, though these were not necessarily the most efficient. Surely this says something about our inner life, our psychological make-up, and our moral character independently of the system itself.

Viewing economics as primarily a concrete reflection of our morality has profound implications for understanding the dynamics of our economic system. For a consequence of this view is that one cannot change the economic system in any significant way without changing morality. It is thus all the more important to consider whether this analysis might be correct.

Let us begin with a thought experiment. Imagine an ideal starting point for our history at which there are only individuals and no social organization whatever. (Such a starting point surely never exited; but milennia ago, when man's consciousness was little above the animal state, there might have been something approaching it.) In this imagined state of affairs, man's freedom from social constraints is total since there is no society to impose constraints. The individual must produce all he consumes, and he is the sole consumer of everything he produces. The whole economic cycle is closed on the individual.

Generally speaking, an individual in society is subject to two types of constraints. First, there are personal ones imposed by the individual's internal needs which cry for satisfaction. There are partly tangible - the need for food, shelter, and the like - and partly intangible. Second, there are social constraints which are external demands placed on him by society in an effort to force him to play a certain role in its life. From the individual point of view, every form of social organization which man has developed can be viewed as a compromise between these two forces: the individual's need for a certain self-realization, on the one hand, and society's need for order and control, on the other. Thus the degree of freedom of an individual in society can be resolved into two components: his degree of freedom from his internal needs and his degree of freedom from external, social demands or constraints.

In the ideal situation we are imagining, the individual is totally free from social constraints because there is no society. But he is, at the same time, a prey to his personal internal needs and indeed the most basic, physical ones. The second component of his freedom is infinite while the first is nil. If sickness, or any slight natural calamity prevent him from being active for too long a period, he will die. Not only is the economic cycle of production and consumption closed on the individual but the cycle of life itself.

Having now acquired some idea of the economic state of an individual without society, let us consider precisely in what way social organization actually contributes to changing this state of affairs. Our ideal state was characterized by two basic facts; the individual produces all he consumes, and he is the sole consumer of all he produces. The only way to modify this pattern is for other men to produce some things the individual consumes or else for other men to consume some things the individual produces. Since the situation is symmetric as between two or more individuals, both of the alternatives really amount to the same thing - namely, division of labor.

Thus division of labor is the logical first step towards society, at least from the purely economic point of view. Division of labor is a tool of social organization which does not presuppose any given state of technology, thought is concrete expression in a particular society is obviously affected by existing technology. However, division of labor does presuppose certain kinds of human relationships. For example, in order that the individual accept to cease producing some items he needs, he must have confidence that others are going to produce them. Similarly, others must have confidence that he's going to produce things which they need. A mutual trust is the whole basis of division of labor and thus is a foundation stone of society itself. It is intangible values which produce the tangible ones.

This mutual trust is two-fold. It is first a trust in the individual, that he will honestly seek to fulfill his duty to produce a portion of what others need and are no longer producing. It is also a trust in the social organization itself, that it will require other individuals to play the necessary role and that it will assure each individual of receiving those things he needs but no longer produces. Thus all of the essential features of morality are implicit in the very beginning: individual discipline, obedience, trust, individual ethic, social responsibility, and so on. This mutual trust is two-fold. It is first a trust in the individual, that he will honestly seek to fulfill his duty to produce a portion of what others need and are no longer producing. It is also a trust in the social organization itself, that it will require other individuals to play the necessary role and that it will assure each individual of receiving those things he needs but no longer produces. Thus all of the essential features of morality are implicit in the very beginning: individual discipline, obedience, trust, individual ethic, social responsibility, and so on.

It is also the beginning of a basic tension because now the individual is forever subject to two distinct forces, the internal force of his own needs and desires and the external force of society which requires him to perform a certain function for society.

The individual, however, is relieved of the necessity of having to produce certain things he needs since others are now producing them. His degree of internal freedom has increased at the same time that his degree of external freedom has decreased. Social organization has allowed the individual greater internal freedom and self-realization at the expense of a decrease in external freedom.

In the original, purely individual state of affairs, the individual's self-realization never rose above that of pure physical survival since the struggle for survival took all his time and energy. There was no intellectual, spiritual, or other intangible development since the pure physical necessities forced the individual to live on a animal level. Nor was there "progress" from one generation to the next since each new generation began again at the same level.

This shows just how social are our most private feelings and thoughts. Everything which lifts us above an animal level of existence of a certain level of social organization which, in turn, depends on the existence of a certain level of moral functioning. We may, therefore, say that the particular form of social organization in a given society at a given time is an expression of this basic morality on which it depends. Economics depends on morality.

We can also see that the basic direction of social evolution is that it progressively maximizes the internal freedom of the individual, requiring a concomitantly more refined and delicately balanced level of social organization. The goal of society could hardly be taken to be the satisfaction only (or primarily) of the individual's purely physical needs as these were already more or less satisfied in the most primitive state.

Clearly, society is not just a collection of the individuals which make it up, but it is rather the individuals plus the quality of relationships that exist among them. Thus something approaching our original, imagined state can exist even in large collectivities if the mutual relationships of trust and so on are sufficiently absent. Since the existence of the relationships is, again, a function of the basic morality, we can summarize the situation as follows: Immoral and amoral collectivities, however large, tend toward a purely animal level of existence in which every man is for himself alone and internal freedom tends towards zero.

Division of labor is a tool of social organization which represents the first step above a purely animal level of existence. As society progresses, the division naturally tends toward greater individual expertise and therefore greater specialization. A second basic step in development occurs when the knowledge and skills necessary to maintain the social system became too greater to be handled by the individual alone. There is a need for a second level of organization to maintain the first one. There are teachers and intellectuals who concentrate on understanding the basic skills and in transmitting them from one generation to the next. There is a more explicit awareness of the importance played by the quality of human relationships necessary to the system. There are those whose duty becomes that of studying and understanding this morality and of transmitting it to each generation. These are priests, philosophers, moralists. Finally, there is a necessity for certain people to concentrate on the administration of the process. These are jurists, overseers, and administrators of various sorts.

However over simplified this sketch may be, one point is beyond dispute: This secondary level of specialization of labor is characterized by the fact that its members no longer directly produce anything. The teacher, the priest, the intellectual, the administrator consume but do not produce tangibles. The secondary level of organization, therefore, necessitates for its maintenance a greater level of economic production. Modern industry has furnished society with certain powerful tools to accomplish this. But in pre-industrial societies, there seemed to be only one answer - namely, the creation of a class which produced considerably more than it consumed in order to compensate for the intellectual class which consume more than it produced. Thereby did some form of slavery or serfdom become a basic institution of human society.

This seeming inevitability of some form of involuntary servitude is confirmed by the fact that it has been a feature of every society before the twentieth-century level of industrialization was attained. There are no exceptions. It was only in the nineteenth century that the slaves were freed in North America, that the serfs was liberated in Russia, and that the slave trading was prohibited in the British Colonies. Moreover, industrial bondage has continued in Europe and North America well into the twentieth-century.

One could try to argue that it really was possible to eliminate enforced labor in pre-industrial society. Nevertheless, it is one of the most pervasive facts of history that no pre-industrial society ever did.

None of the great religious Prophets of the past, neither Moses nor Jesus nor Muhammad, forbade slavery. Perhaps the existence of the secondary level of social organization depended on slavery to such an extent that to forbid it would have been tantamount to forbidding society.

However, if the great Prophets did not abolish slavery, they took very strong steps to humanize the institution as much as possible. Besides giving various minor laws that rended to ensure the good treatment of slaves, Moses assured them at least some leisure by requiring a total cessation of work every seven days. This latter principle He made one of the ten commandments, coeval which the most basic moral principles of His system. Jesus stressed the intrinsic worth and value of the individual by teaching that each individual was capable of establishing a certain internal relationship with God, a relationship unconditioned by social or economic status. The outward form of this relationship involved a certain reciprocity based on a new kind of love (agape). The early Christians viewed this new relationship primarily as between individuals and as one that did not seem to imply any necessary change in social status. Nevertheless, we can see in Paul's request that Philemon accept the slave Onesimus as a brother an attitude towards slaves (if not towards slavery) that was doubtless significantly different from the one usually found in Roman society. Let modern social reformers be cynical if they will, but slaves in Roman society no doubt appreciated the difference.

The attitude of white Christian slave masters towards black slaves in nineteenth-century America further illustrates the force of Jesus' teaching in a strangely negative way. Realizing that the perpetration of brutal enslavement on a fellow "human" was contrary to the Christian persuaded themselves that black were not men - that is, that they were a subhuman species. This allowed them to enslave blacks and salve their consciences at the same time. It also explains why superficial racial differences were so important in the white view of slavery. It was the only way that slavery could be morally justified in Christian terms.

A similar belief in the subhumanness of blacks developed among with settlers in Australia towards the aborigines who were hunted for sport.

Islam made slavery a self-liquidating institution, by encouraging the conversion of all men and acknowledge any child born to a Muslim a free man. This undermined hereditary slavery and provided an avenue for the integration of freed slaves or children of slaves into society. Moreover, in the society into which Muhammad was born women were virtual slaves. They were bought and sold both for sexual pleasure and economic servitude. In marriage Muhammad gave women strong rights which could not be easily put aside by men, and required the protection of women by men.

These few examples serve not only to illustrate something of the relationship between the revealed religious and the economic aspects of man's life but to give a general idea of the role and purpose of religion. The Prophets and Founders of religious have taught that which, given the level of technology existing in their society, tended to produce the greatest possible social unity and progress with maximum individual self-realization.


Resume: William S. Hatcher is a mathematician, logician, and philosopher who currently divides his time between his duties as professor of mathematics at Laval University in Quebec City, Canada and his activities as visiting researcher in logic at the Steklov Mathematical Institute of the Russian Academy of Sciences, St. Petersburg, Russia.



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