Personal Virtue and Economics

Reflections Professor Kenneth Stikkers’ October 28th lectures for the DLCC

On Friday 28th of October I had the pleasure of hearing Professor Kenneth Stikkers speak on the philosophy of economics for the DLCC. Both of Professor Stikkers’ talks focussed on the question whether, contrary to classical economic theory, personal virtue has a role to play in bringing about a just society or a desirable economy.

The talks traced the origins of modern economics to the common English practice of enclosure from the sixteenth century onwards. Enclosure, the act by which previously common plots of land were made personal property, either by purchase or parliamentary decree, has been famously described as a ‘revolution of the rich against the poor’. This led to a landless working class who would serve as labour for the growing needs created by the industrial revolution, beginning in the mid eighteenth century. These processes created economic conditions never seen before, and with them, the need for new economic theory.

At the same time the dawn of modern philosophy, and the scientific revolution led to unprecedented forms of thinking, both within, and beyond the natural sciences. Preeminent amongst the new theories to have gained acceptance was Newton’s mechanics, and in particular his success in explaining diverse phenomena such as the movement of the planets and the behaviour of bodies on the Earth’s surface by a single theory of gravity.

These trends, social and intellectual, came together in the work of Adam Smith, often considered the father of modern economics. Smith was deeply impressed by Newton’s explanation of the stability of the solar system in terms of the balancing of opposing forces. In fact, he first uses the term ‘invisible hand’—later to be famously employed in his economic theory—in a work on astrology. A central element of Smith’s theory would be the idea that society might be governed in the same way, by the balance of opposing economic forces.

This idea, Professor Stikkers argues, was one of both extraordinary genius, and revolutionary implications. If the economy could be governed well by market forces—by the profiteering of some and the consumption of others, all without personal guidance—then there would be no need for personal virtue. There would be no need for individuals be compassionate, courageous or self-disciplined in order to create a just and desirable society. This consequence would, he proposed, have been utterly alien to earlier moral and political philosophers.

Though emphasising the great admiration we should have for Smith, Professor Stikkers argued strongly against his conclusions. It is far from clear that the best society, economically speaking, can be brought about by vicious behaviour at the level of individuals. Moreover, empirical studies increasingly show that the kind of self-serving behaviour traditionally supposed to be characteristic of human beings by economic theorists, is far from the norm. Humans, the evidence suggests, may be naturally virtuous, a fact that might be utilised in organising our societies.

Professor Stikkers’ arguments struck me as highly compelling. Lacking a background in economics, I cannot say to what degree the origins of the discipline in its modern form have been accurately identified. But the novel economic conditions of the late eighteenth century on the one hand, and the enormous advances of natural science on the other, were clearly important factors. Moreover, the result—the idea that a just society might be founded upon individual selfishness—is undoubtedly widespread.

Suppose Professor Stikkers is right in claiming that this idea is wrongheaded—a conclusion that his talk, to my mind, made quite plausible. The immediate question is, how should we utilise virtues such as compassion in the organisation of society, and how do we ensure that these virtues are nurtured rather than stifled in the individuals that society comprises? Both of these questions may to be of the greatest urgency. The answers will no doubt demand hard thinking.

Professor Stikkers pointed to some examples that may be instructive. On the one hand these included novel commercial initiatives designed to make trade serve humanity. On the other they included examples of business leaders whose principles have run contrary to Smith’s conclusions. These include Kenneth Mason, whose conviction Professor Stikkers quoted more than once: ‘Making a profit is no more the purpose of a corporation than getting enough to eat is the purpose of life’. It is surely desirable that further thought be put into how personal virtue might be incorporated into our theories of how society ought to function.

Behind all this, of course, is the need to teach people, insofar as possible, to instantiate the virtues that will be conducive to a just and desirable society in the first place. This fundamental need was not touched upon by Professor Stikkers in his talks, but follows naturally from his conclusions. Whether virtue can be taught is an ancient and controversial question, going back at least to the writings of Plato. How it is to be done within modern societies and with their limited resources presents further practical problems. If it is true that the best society is one that is founded in personal virtue, there is clearly enormous work to be done bringing this about.