Economics and Morality: How to Reconcile Economic Thinking with Broader Social Thinking

Abstract

In contrast to the neo-liberal ideology which dominates much of modern economic discourse, virtue ethics embraces the same set of morality for both private and public sphere. In this paper we argue that virtue ethics need nevertheless not at all be in clash with contemporary economic theory. Linking the preferences represented by utility functions in neoclassical economics and the system of values which inspires them can in our view align economic thinking with broader social thinking. Using this novel approach, we demonstrate that many economic and social problems can be solved so as to arrive at efficient outcomes and a higher expected level of utility compared to a case with separate public and private moralities. For addressing the problems characteristic of small open economies, our virtue ethics perspective on economics supports some government intervention as well as cooperation and solidarity between societies in a similar situation.