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Economics, Business Principles and Moral Sentiments

Published online by Cambridge University Press:  23 January 2015

Amartya Sen
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Abstract:

This essay discusses the place of business principles and of moral sentiments in economic success, and examines the role of cultures in influencing norms of business behavior. Two presumptions held in standard economic analysis are disputed: the rudimentary nature of business principles (essentially restricted, directly or indirectly, to profit maximization), and the allegedly narrow reach of moral sentiments (often treated to be irrelevant to business and economics). In contrast, the author argues for the need to recognize the complex structure of business principles and the extensive reach of moral sentiments by using theoretical considerations, a thorough analysis of Adam Smith’s work, and a careful interpretation of Japan’s remarkable economic success. Referring to the economic corruption in Italy and the “grabbing culture” in Russia, he further shows how deeply the presence or absence of particular features of business ethics can influence the operation of the economy, and even the nature of the society and its politics. Being an Indian himself, he warns against grand generalizations like the superiority of “Asian values” over traditional Western morals. To conclude, it is diversity—over space, over time, and between groups —that makes the study of business principles and moral sentiments a rich source of understanding and explanation.

Type
Articles
Information
Business Ethics Quarterly , Volume 7 , Issue 3 , July 1997 , pp. 5 - 15
Copyright
Copyright © Society for Business Ethics 1997

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References

Notes

1 I have tried to discuss these issues in Resources, Values and Development (Oxford: Blackwell, and Cambridge, MA: Harvard University Press, 1984), and in On Economics and Ethics (Oxford: Blackwell, 1987).

2 An excellent model of a community of persons with each pursuing their “comprehensive conception of the good” has been illuminatingly analyzed by John Rawls, A Theory of Justice (Cambridge, MA: Harvard University Press, 1971). Rawls does not claim that actual communities are exactly like this, and a substantial part of modern ethics seems to be primarily concerned with using that presumption to explore the “possibility” of “just social arrangements” (without committing itself on the nature of the observed world).

3 Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, (1 1776; republished, edited by R.H. Campbell and A.S. Skinner, Oxford: Clarendon Press, 1976), pp. 26–7.

4 Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (1776; republished 1976), and The Theory of Moral Sentiments (1759, 6th revised edition, 1790; republished, eds. D.D. Raphael and A.L. Macfie, Oxford: Clarendon Press, 1975).

5 See, for example, Ken Binmore, Playing Fair (Cambridge, MA: MIT Press, 1994), and Jörgen Weibull, Evolutionary Game Theory (Cambridge, MA: MIT Press, 1995).

6 On this, see Stefano Zamagni, ed., Mercati Illegali e Mafie (Bologna: Il Mulino, 1993), particularly his own paper on the economic circumstances that facilitate the persistence of a Mafiainclusive equilibrium. See also my “On Corruption and Organized Crime,” address to the Italian Parliament’s AntiMafia Commission, Rome, 1993; Italian translation in Luciano Violante, ed., Economia e criminalità (Roma: Camera dei deputati, 1993).

7 On these issues, see Armando Massarenti and Antonio Da Re, L’Etica de Applicare, with an introduction by Angelo Ferro, and comments of Giovanni Agnelli and Salvatore Veca (Milano: Il Sole 24 Ore Libri, 1991).

8 In Samuel Johnson’s Rasselas, Imlac identifies “the northern and western nations of Europe” as being “in possession of all power and all knowledge, whose armies are irresistible, and whose fleets command the remotest parts of the globe” (Rasselas, 1759, p. 47).

9 F.V. Moulder, Japan. China, and the Modern World Economy: Toward a Reinterpretation of East Asian Development (c. 1600 to c. 1918) (Cambridge: Cambridge University Press, 1977), page vii.

10 N. Jacobs, The Origin of Modern Capitalism and Eastern Asia (Hong Kong, 1958), page ix.

11 On this see Jack Goody, East in the West (Cambridge: Cambridge University Press, 1996).

12 Michio Morishima, Why Has Japan “Succeeded’? Western Technology and Japanese Ethos (Cambridge: Cambridge University Press, 1982).

13 Ronald Dore, Taking Japan Seriously: A Confucian Perspective on Leading Economic Issues (Stanford: Stanford University Press, 1987).

14 Masahiko Aoki, Information, Incentive and Bargaining in the Japanese Economy (Cambridge; Cambridge University Press, 1989).

15 Kotaro Suzumura, Competition, Commitment and Welfare (Oxford: Clarendon Press, 1995).

16 Eiko Ikegami, The Taming of the Samurai: Honorific Individualism and the Making of Modern Japan (Cambridge, MA: Harvard University Press, 1995).

17 The Wall Street Journal, 30 January 1989, p. 1.