Managing the economy is about moral issues too

Morality is not a question that crops up very much in economics. It is not that economists are immoral people, just that they see their expertise as lying in technical questions rather than value judgements.

But moral questions have been on the frontline of economic debate this week, and with a vengeance. Figures showing how much inequality, pollution and crime have reduced economic well-being have been produced by the New Economics Foundation.

The election campaign focuses on how much Britain is booming or can boom, and politicians engage in puerile debate about how big their tax cuts will be. But the new figures reveal that taking account of all the economic changes that affect our quality of life, we have become worse and worse off.

Conventional economists have very little to say about income inequality. Like the electrician who can't help you with a small plumbing problem, most members of the profession say: "It's nothing to do with me love. You'll need a sociologist for that." Or as one standard introductory economics textbook puts it: "There is no correct solution for any problem involving value judgements."

But, laden as it is with value judgements, an assessment of income inequality is an essential part of the economic debate we ought to be having during this election campaign.

The New Economics Foundation's report was followed by a broadside from the Council of Churches. It criticised all parties for not stressing the problem of unemployment enough, although it also gave Labour - or at least Old Labour - plenty of ammunition by favouring a national minimum wage and a job creation programme, and stressing the importance of workers' rights and trade unionism.

This Christian coalition is in no doubt that morals have some very clear consequences for economic policy.

Apart from these specific reports, there has also been a growing sense that all is not well with our booming economy. It is the sense that made Will Hutton's book, The State We're In, and no doubt his new sequel, The State to Come, a best seller, and that aroused so much interest in George Soros's recent recantation of his unqualified faith in free markets.

In fact, gloomy predictions that unfettered global capitalism will provoke riots and disaster have become all the rage; and such a short time, too, after the definitive defeat in 1989 of the economic systems based on Marx's hypothesis that capitalism contained the seeds of its own destruction.

Our politicians nourish the doom-mongering by imposing such narrow terms of reference on the day-to-day political debate. They will cheerfully hurl marginal rates of taxation at each other, and even argue about setting new priorities within the public spending total, but are very edgy when it comes to moral rather than technical choices. Do they believe that higher tax revenues are needed to fund some aspect of the welfare state that we believe is an essential part of a civilised society?

John Major certainly stuck to his view that the managerial problem of getting the economy to grow is more important than all this moral nonsense. "There's no point in wearing your heart on your sleeve if you have nothing in the national wallet with which to help them," he said, asked to reply to this week's reports.

But in the context of most people's feeling that there is more to life than the contents of your wallet, it is illuminating to look at a book first published three years ago but newly released in paperback.*

Philosopher David Haslett uses the classic tools of moral philosophy to come to the rescue of capitalism. Private ownership and freedom from central economic planning are essential for freedom, and he concludes that capitalism trumps socialism on this criterion.

Yet capitalism with morality "is a form of capitalism that differs significantly from any current forms", he writes. And some of the differences he identifies would be welcomed with glad cries by Old Labour types who would be happy to describe themselves as socialist despite the fact that it has gone so horribly out of fashion.

They include worker control of the businesses they work for, a limit to the amount that can be inherited, an earned income credit that would lift almost everybody above the poverty line, and measures to assure full employment and government provision to ensure equal access to health care, education and child care.

Before those of a free-market inclination condemn this list out of hand as a crypto-socialist agenda, it is worth spelling out that some of the consequences of this check-list are unexpected. For example, Professor Haslett argues that minimum wages, labour market regulation and most existing welfare systems tend to cost jobs and are incompatible with his full employment requirement. He would scrap all of that traditional type of safety net. He would also exclude unions, progressive taxation, government ownership of capital goods and any state planning of the economy.

The keys in this moral framework are freedom, equal access to basic necessities and the spread of power in a democracy through the dispersion of wealth.

He wraps up the book by saying: "The critics of capitalism see the extreme inequalities of wealth and opportunity that it breeds, the burdens it places on ordinary working people, and they conclude that capitalism is immoral ... It is not capitalism per se that is immoral but current capitalism."

Now, Professor Haslett's specific conclusions might differ from those our own value systems would lead us to. But he presents a case that engages with political and moral philosophy.

Hard as it is to imagine any of the party leaders adopting such a radical package as that proposed in this book, it would help most of us feel that they were a bit more in touch with the concerns of their electorate if they could admit that there might be one or two non-technical and even moral issues in economic policy.

*Capitalism with Morality, DW Haslett, Oxford University Press. Paperback price pounds 16.99.

Sport
David Moyes and Louis van Gaal
football
Sport
New Zealand fly-half Aaron Cruden pictured in The Zookeeper's Son on a late-night drinking session
rugby
News
Liam Payne has attacked the media for reporting his tweet of support to Willie Robertson and the subsequent backlash from fans
peopleBut One Direction star insists he is not homophobic
Arts and Entertainment
A bit rich: Maggie Smith in Downton Abbey
tvSeries 5 opening episode attracts lowest ratings since drama began
PROMOTED VIDEO
News
ebooksAn unforgettable anthology of contemporary reportage
News
Jacqueline Bisset has claimed that young women today are obsessed with being 'hot', rather than 'charming', 'romantic' or 'beautiful'
people
Sport
Greg Dyke insists he will not resign as Football Association chairman after receiving a watch worth more than £16,000 but has called for an end to the culture of gifts being given to football officials
football
Life and Style
A new app has been launched that enables people to have a cuddle from a stranger
techNew app offers 'PG alternative' to dating services like Tinder
News
people
Arts and Entertainment
Jake Quickenden sings his heart out in his second audition
tvX Factor: How did the Jakes - and Charlie Martinez - fare?
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Quantitative Risk Manager

Up to £80000: Saxton Leigh: My client, a large commodities broker, is looking ...

COO / Chief Operating Officer

£80 - 100k + Bonus: Guru Careers: A COO / Chief Operating Officer is needed to...

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

Day In a Page

A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments