The Role of Morality in Economics

The relationship between economy and morality has always been a subject of significant debate. In this article, we explore the viewpoint of Valentin Katasonov, who asserts that the economy and morality are closely intertwined. Katasonov believes that it was not Adam Smith who separated economics and ethics, but rather the creative work of Smith encompasses both spheres.

After his experience in the stock market, Adam Smith wrote his first book, "The Development of Moral Sentiments." In this work, he conducted a deep exploration of human qualities, their development, and distortions. Smith's second book, "An Inquiry into the Nature and Causes of the Wealth of Nations," shifted the focus to wages and profit distribution. According to Katasonov, nothing affects the moral state of society as much as fair wealth distribution.

It is likely that Adam Smith was familiar with the works of Aristotle, especially "Ethics and Virtue Doctrine," where aggression is defined as absolute evil. If we examine world history, unjust distribution is indeed the main source of evil. Smith, who worked for many years in the financial sector, pondered how the two main components of the balance sheet are formed: wages (currently account 70) and profit (currently account 22).

The creation of the first accounting plan by a monk is not accidental. Our expenses should match our incomes, and additional income should not be spent solely on personal consumption but on the restoration and development of productive forces. Smith elegantly explains how value is created in the process of production. For example, a suit costs more than the material it is made from because it involves the skilled labor of a tailor, which adds value. Smith also emphasizes that profits should be used not only for capitalists' personal consumption but for reinvestment in production, improving working conditions, and infrastructure. Failure to adhere to this principle leads to the enrichment of a few and the impoverishment of many, resulting in the decay of society and social unrest.

Personal and private interests are important, but they should not contradict the public interest. Adam Smith, who was skeptical of government intervention, saw it as a problem rather than a solution. Administrators often lack experience in running businesses and understanding real complexities.

Nevertheless, one of the main goals of the state is to promote progress. To achieve this goal, governments must promote scientific achievements and social development through the right tax policy, limiting the working day, prohibiting child labor, regulating minimum wage rates, providing accessible healthcare, and ensuring educational opportunities for all. In the 18th century, Europe was engulfed in socialist ideas, driven by harsh working conditions in factories and manufactories. French Enlightenment thinkers and Napoleon's wars, which abolished feudal relations, also contributed to a wave of constitutional reforms aimed at liberating people from feudal oppression and expanding the civil rights and freedoms of individuals, regardless of their social status.

Karl Marx recognized Adam Smith as the father of political economy because Smith explored how the economy could be an instrument of societal development and prosperity. This led Marx to call political economy "scientific communism." The term "communism" comes from the English word "commune," signifying progress and collective development for all.

In his magnum opus "Capital," Marx dedicates many pages to the lives of laborers, excessively long working hours, child labor, low wages, and poor living conditions. The main point is that workers do not participate in the receipt or distribution of profits in any way. Marx concludes his work by presenting a society where science becomes a productive force, creating a utopia where everyone receives according to their needs and contributes according to their abilities.

However, in the end, Marx points out that the driving force of change is not just the proletariat but scientific and technical thought. Perhaps that's why he liked to say, "I am not a Marxist."

Since, in the Manifesto, he asserts that only industrial workers are a revolutionary force and, by uniting, they can change the current situation. History demonstrates that new means of production are usually invented by engineers, not laborers. The term "engineer" originates from the Latin word "ingenium," meaning inventiveness. Marx specifically mentions the invention of the steam engine, which revolutionized production and led to the emergence of factories.

It can be argued that underestimating the role of engineers contributed to the collapse of the Soviet system. Low salaries for engineers in the Soviet Union caused dissatisfaction among both working engineers and young people interested in technical specialties. Interestingly, the highest-paid individuals were literary translators, who were generously paid per line of translation. This explains why the famous quartet of Naiman, Brodsky, Bobyshev, and Rein paid special attention to Anna Akhmatova, who wrote poetry.

In conclusion, the interaction between economy and morality has deep historical roots. Adam Smith, often considered the father of modern economics, recognized the importance of both moral principles and economic principles. Similarly, Karl Marx explored political economy, emphasizing the role of science and technology in shaping a fairer society. The path to social progress lies in recognizing the importance of scientific and technical thought, valuing the work of engineers, and ensuring equitable wealth distribution for the comprehensive and all-encompassing development of every member of society