TY - CHAP

T1 - Prices, Self-Interests, and the "Invisible Hand" - Reviewing Ethical Foundations of Economic Concepts in Times of Crisis

AU - von Müller, Camillo

PY - 2009

Y1 - 2009

N2 - In light of the recent crisis in 2008-09 the essay researches into the relationship between ethics and economics by investigating into the history of economic thought. The goal of the essay is to challenge separationist views of economics and society by demonstrating that classical economists did not regard economics as value free system that excluded guide-lines of ethical behavior. As far as it concerned the development of economics as own branch of thought, none of the Authors who will be quoted in this essay – from Thomas Aquinas in the 13th century to John Locke, Bernard Mandeville, Jeremy Bentham and Adam Smith in the 17th and 18th centuries – explicitly denied the existence of a given set of social, moral (and very often religious) values as precondition for the functioning of the economy. Their belief in the necessity of moral values may help to understand why scholars like Smith and Bentham could have faith in the stability of the liberal systems they promoted. Since both scholars had witnessed a number of crises in the 18th century such as the “South Sea Bubble” in England (1720), the “Mississippi Bubble” in France (1720), the “Wissel-ruiterji-Crisis” in the Netherlands (1763-1773) and the “Canal Mania” again in England (1772-1797) , their conclusions concerning the self-organizational power of markets could well have been different. The fact that in light of these crisis former scholars did not reject but rather promoted liberal economic concepts demonstrates their trust in the social abilities of men. This essay argues that this trust was not solely based on economic but also on ethical dimensions of individual behavior.

AB - In light of the recent crisis in 2008-09 the essay researches into the relationship between ethics and economics by investigating into the history of economic thought. The goal of the essay is to challenge separationist views of economics and society by demonstrating that classical economists did not regard economics as value free system that excluded guide-lines of ethical behavior. As far as it concerned the development of economics as own branch of thought, none of the Authors who will be quoted in this essay – from Thomas Aquinas in the 13th century to John Locke, Bernard Mandeville, Jeremy Bentham and Adam Smith in the 17th and 18th centuries – explicitly denied the existence of a given set of social, moral (and very often religious) values as precondition for the functioning of the economy. Their belief in the necessity of moral values may help to understand why scholars like Smith and Bentham could have faith in the stability of the liberal systems they promoted. Since both scholars had witnessed a number of crises in the 18th century such as the “South Sea Bubble” in England (1720), the “Mississippi Bubble” in France (1720), the “Wissel-ruiterji-Crisis” in the Netherlands (1763-1773) and the “Canal Mania” again in England (1772-1797) , their conclusions concerning the self-organizational power of markets could well have been different. The fact that in light of these crisis former scholars did not reject but rather promoted liberal economic concepts demonstrates their trust in the social abilities of men. This essay argues that this trust was not solely based on economic but also on ethical dimensions of individual behavior.

KW - Economics

UR - http://d-nb.info/994760604

M3 - Contributions to collected editions/anthologies

SN - 978-3-7272-2283-2

T3 - Universität St. Gallen: Schriften der Assistierenden der Universität St. Gallen (HSG)

SP - 317

EP - 344

BT - Auswirkungen von Krisen auf Wirtschaft, Recht und Gesellschaft

PB - Stämpfli

CY - Bern

ER -