Mainstream economists now consider their discipline to be a technical one that is free from ethical concerns. I argue that this view only arose in the twentieth century. In this paper I set out a brief history of economics as a moral science. First, I sketch the evolution of economics before Adam Smith, showing that it was generally (with the exception of the mercantilists) conceived of as a part of moral philosophy. Second, I present elements of the new interpretation of Smith, which show him as a developer of economics as a moral science. Third, I show that even after Smith, up to the beginning of the twentieth century, a number of leading economic theorists envisioned economics as a moral science, either in theory or in practice. Fourth, I sketch the decline of economics as a moral science. The key factor was the emergence and influence of positivism. Overall, I show that the current view of the detachment of economics from morals is alien to much of the history of the discipline.
The conventional interpretation of Adam Smith is that he is a prophet of commercialism. The liberal capitalist reading of Smith is consistent with the view that history culminates in commercial society. The first part of the article develops this optimistic interpretation of Smith's view of history. Smith implies that commercial society is the end of history because 1) it supplies the ends of nature that he identifies; 2) it is inevitable; and 3) it is permanent. The second part of the article shows that Smith has some dark moments in his writings where he seems to reject completely such teleological notions. In this more civic humanist mood he confesses that commercial society does not supply the ends of nature, nor is it inevitable, nor is it permanent. Both views exist in Smith and the commentator is forced to choose between passages in Smith's work in order to support a particular interpretation of the former's view of history.
PurposeEconomics had a strong linkage to ethics up to the 1930s but this has virtually disappeared today. Amartya Sen first sketched the historical relationship in his book On Ethics & Economics. This article seeks to explore the ethical foundations of economics in ancient Greece, focussing on Socrates and Xenophon.Design/methodology/approachVarious ancient Greek primary sources are used to investigate the foundations of economics as an ethical enterprise. For Socrates, the primary sources are the reports of his conversations by two students: Plato and Xenophon. For Xenophon, one has to rely upon his own writings, which are extensive and have survived in good condition.FindingsFor Socrates, human flourishing (eudaimonia) was the goal, rather than great accumulation of material goods. Xenophon accepts private property and the division of labour within certain ethical limits. In his work, the development of the ethical approach to household management (oikonomia or oikonomikē), or microeconomics, within the context of the Greek city (polis) can be seen. Friendship (philia) and gentlemanship (kalokagathia) are discussed together with oikonomia as a united package. Further, Xenophon anticipates several elements of Sen's understanding of good human functioning. There is a strong linkage between ethics and economics in Socrates and Xenophon.Originality/valueWhile great efforts have been devoted to tracing the origins of Sen's capability framework back to Aristotle, this article represents the first attempt to trace that framework back further, to Socrates and Xenophon.
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