Ethics in Economics!
In economics and politics, there are two possible ways to do this:
Reduce poverty by raising incomes, and keep individual commodity
prices low to improve peopleís purchasing power.
In justifying their failures in economics, politicians neither value
science, nor economists, the blame goes to science that is not human or
economists who are far from the people. And this indicates nothing but the
helplessness of politicians. Masoud Nili, an economist, says the problem is
not that if a politician listens to the advice of economics, he will
definitely achieve the goal; the problem is that if he ignores them, he will
most likely fail.
It seems that politicians in our country, for what became the fashion
probably since the 1350s (1970s), blame the economists for the failures and
disappointments of their wrong policies; sometimes they consider the failed
policy as the advice of economists and other times in justifying a wrong
policy and not giving in to scientific advice depict the whole of economics
and economists away from the human component and the people. Why is this
relationship so one-sided?
Economics based on the need that has always existed and is felt today more
than ever, has been introduced as a very important science and has drawn
attention worldwide; because economics issues are important to both the
general public and politicians in particular. Politicians are the main
audience for economics and economists; thus, an inevitable connection is
formed between those who work and research in the field of economics and are
engaged in the promotion of economics and are economists with the
politicians as the applicants to examine the consequences of policy options.
Economists without politicians do not have a specific audience. However,
politicians can work without economists; because their decisions do not have
to be in the context of economics, just as a patient does not have to use
medical science to treat himself and, for example, can heal himself, he can
use astrolabes and other things. Ultimately, it is the people themselves as
applicants for medical science who must heed the prescriptions of
physicians, and except in special cases, they cannot be required to pursue
On the other hand, it can be seen that the patient may fully follow the
instructions of a competent physician who has a great deal of knowledge in
medicine and often gives effective prescriptions and recommendations, but
eventually the patient dies because adherence to medical requirements does
not guarantee treatment. In science, it is not that if the recommendations
and prescriptions are followed, we will definitely achieve the desired
result, the problem is that if we do not follow, we will most likely achieve
the undesirable result.
Thus, just as people choose to use science in their treatment, politicians
can establish the same relationship with economics. While economics has no
prescription within itself; the characteristic of economics is that it
explains the consequences of a decision. The demand for economics comes from
outside, for example, the politician states that he wants to take action to
improve the situation of the poor and what is possible in this regard. In
economics and politics, there are two possible ways to do this: Reduce
poverty by raising incomes, and keep individual commodity prices low to
improve peopleís purchasing power.
Here the economist says that the second path, which is price control and has
inevitable consequences such as quotas, conflicts with producers and
distributors, and corruption, does not hit the target, and policies should
be pursued in the first way to raise the general level of revenues; however,
this method is hard and difficult and can have consequences in the field of
politics. Economics says this and advises the politician that the method of
stabilizing prices, even with good intentions to reduce poverty, does not
achieve the goal and has even more destructive effects. Now, if a politician
insists on his incorrect method, he includes his actions under another
heading, such as humanity and attention to human issues.
Consider, for example, that in the foreign exchange market, prices are
rising due to declining supply as well as increasing liquidity. If people
have a vision for the future that the problem of supply shortages will not
be solved and inflation is rising, then forex is no longer just a foreign
exchange tool for them but becomes an asset and as a result the demand for
the foreign currency increases and the price goes up. Normally, no economist
sees this as desirable and does not like the exchange rate to rise, but
advises the politician that the conditions created for the exchange rate
determinants now require a higher rate than what the politician likes.
Here the politician may oppose the acceptance of the new rate and, in his
own discretion, set a price with expediency and expect the goods and
services to be offered at a lower price at the rate he has set aside to
provide them and reach the consumer. In this situation, the politician has
to create a large administrative system of supply, allocation and
supervision for his demand, which is not fulfilled, but the result is the
same that has been experienced many times and the welfare intended for the
consumer, despite spending a lot of money is not provided.
Basically, what is the relationship between economics and ethics? Can we say
it is an ethical science?
Science is science. Ethics also has a field for itself, and we have moral
scholars who are knowledgeable and active in this field. What I can say is a
reference to the facts. Between 1393 (2014) and 1395 (2016), suitable
greenhouse conditions were formed in our economy. Itís like putting flowers
in a greenhouse and enjoy looking at them. The outlook was positive, public
confidence and hope for improvement increased, inflation declined, and
during that time there was no need for market regulation and pricing
sessions and regulatory and control systems. Because inflation was declining
and there was no need for such behavior at all.
We experienced these greenhouse or laboratory conditions for a very limited
period. Economic corruption also decreased because there was no incentive
for corruption and there were no corrupting routes such as two-priced goods.
In a society with low inflation and macroeconomic stability, ethics can be
genuinely promoted. People are thinking of helping each other, charities are
expanding, and the relationship between people is getting healthier. You can
compare the scale of corruption in developed economies with our own. In
those countries, a politician accused of corruption is usually charged with
a low figure of $2,000 to $3,000 and is charged with receiving a gift, while
the average per capita income in that community is over $15,000 or $20,000.
But what are the figures of economic corruption in our country? How
different is it from our average per capita income?
This is because a stable macroeconomic environment with low inflation has
enormous moral consequences. People are forgiving more to one another
because the cost of the opportunity to forgive is not high. But now that the
value of money is falling sharply, all people are worried about the high
risk that threatens their assets, so naturally no one thinks of helping
others. In other words, in this situation, both the number of people in need
is increasing sharply and the donor population is decreasing sharply;
because donors are either under financial pressure or fearful of the future.
In such economic conditions, the society gradually loses those moral values
to which it previously adhered. At the same time, the great corruptions
that have taken place during this period and the court trials being held
currently are creating great negative effects in the direction of moral
decay in the society. For many years, our society has been filling the gaps
of modern institutions that have the duty to supply public goods with their
morals and values, such as earning lawful sustenance and respecting the
rights of others; but with the rise of corruption and poor economic
conditions, these tendencies have gradually disappeared and become very
weak. Macroeconomic instability has caused our society to lose many of its
valuable moral assets.
Economics can provide the conditions for moral and human values to take
their place. We have seen how simple technology such as queuing systems in
referral centers improves behavior. For example, when people lined up at
bank counters to do banking, those who were taller, more powerful, or more
familiar did their job more easily, and older, weaker, or younger people
faced many difficulties and failures. Now, with the push of a button and
receiving a number queue ethics is observed and developed.
Similar to this micro technology at the macro level is controlling
inflation, creating growth, stabilizing the macroeconomic environment and
eliminating the multi-price system that ensure ethics to a very good level.
Like a patient with shortness of breath who is given pure oxygen. For years,
it has been said in our country that the capitalist economy is usury, and
developed countries whose economies are based on this system have been
formed on the basis of usury.
interest rates in large industrialized countries have long been close to
zero. With the proper functioning of economics, interest rates have reached
zero. But in our country, there is still a dispute over whether the banks
are usurious or not. Certainly ethics with full adherence to economics can
be promoted in society. If our officials are really interested in a moral
society and the development of human standards, they should definitely be
much more committed to economics.